In 2018, fund managers deployed $502 billion dollars towards socially impactful causes in impact investing funds. That same year, individuals and institutions donated $427.71 billion to U.S. charitable organizations. Together, we collectively diverted $1 trillion dollars to support impactful organizations or other beneficiaries.
And yet, the wealth gap between the ultra rich and everyone else in the United States continues to worsen. The failures of our economic system have yet to be mitigated.
It’s no secret that our well-intentioned dollars aren’t working hard enough.
The more pronounced this disparity becomes, the more necessary impact investment and philanthropic dollars are to mitigate the problems that come along with it. Leaders and thinkers across disciplines have become united around a similar narrative: We need to make serious changes to business as usual. The political, social and economic problems of today are too urgent to wait any longer. Our future literally depends on it.
Through our work with community leaders, we’ve found that a number of solutions for a more equitable economy already exist. Still, there is an immense need for greater communication and collaboration between funders and those leaders who are building and retaining wealth within communities.
We have 18 years of experience supporting leaders in philanthropy, investing, and business to develop collaborative, systemic solutions for economic change. Through running our Local Economy Fellowship, Foundation Circle, and Investors Circle, we’ve found that these groups consistently miss one another.
Because of this, almost all of the brilliant leaders within our network remain underfunded, even though funders consistently struggle to identify community opportunities to support.
By holding both sets of relationships, we understand the barriers that hinder communication and authentic relationships.
These barriers for funders include:
- Lack of clarity around what’s considered a socially impactful investment
- A pipeline problem for good investments, especially at the local level
- Too much legwork to give and maintain funding to small scale recipients
On the opposite end, community leaders are facing:
- Difficulty finding funders who are aligned with their work
- Insufficient resources to fundraise
- Tight budgets that limit innovation and scale
There is a relational and infrastructural chasm within the impact space.
Community leaders know where to find impact deals. They understand where points of transformation are within their communities. Most importantly, they are deeply aware of what their communities need to make lasting change. Given limited time, resources and relationships with funders, they are unable to source capital to fully realize this impact.
Where we come in:
Given our unique position and powerful set of relationships, we have the tools to bridge this divide. We see a tremendous opportunity to double down on our identity as a bridge-builder in this space.
In order to combat the complex problems rooted in our current economic system, we must build our capacity to do this collaboration work at scale. Our futures are inextricably tied — the only way forward is to work together towards our shared goals.
What we’ve done:
We’ve spent five years testing this approach, facilitating connections in our Network as we ran the Local Economy Fellowship (for community leaders) and the Foundation Circle (for foundation leaders) concurrently.
One notable example is a collaboration between one of our Foundation Circle members and one of our Fellows. Lisa Pinckney of Footprint Foundation and Hal Bowling, Executive Director of LAUNCH: they worked together in 2018 to rethink equitable development in Chattanooga.
Leveraging their individual networks, they cultivated a two-day accelerator for public and private community stakeholders who are working towards equitable development and improving the ways they resource entrepreneurs and small businesses. The program was attended by more than 60 ecosystem players, many of whom were meeting for the first time. It’s said that there’s a Chattanooga “pre- and post- BALLE.” [BALLE is now Common Future] Thanks to their work, the landscape of funding and economic innovation in Chattanooga has been shifted for the long-term. We’ve since hosted similar convenings in Little Rock, AK and Clarksdale, MS.
Where we’re going:
Though ecosystem accelerators like this have proven effective (and we will continue to host more like them), we know that they are just one piece of a larger strategy needed to build more equitable local economies.
We’re asking ourselves: Where are the most impactful opportunities to bridge connections across this funding divide?
Key to rebalancing this power dynamic is our ability to be nimble, responsive and capitalize upon emerging opportunities in front of us. As part of this orientation, we’re considering how we can continue to shift capital and shift power,
Sean Campbell, one of Common Future’s Social Entrepreneurs in Residence (SEIR) and a Rhodes Scholar with 15 years of experience in investment management, is currently working to directly bridge the relational divide between community-driven wealth building projects and investment capital. By engaging in translation work, Sean is helping community leaders become investment-ready and building a pipeline for community-centric impact deals in the process.
Looking towards the future, we’re ideating on potential pathways to bring this work to scale.
We’re asking questions like:
What if wealth holders interested in impact funds could easily gain access to the brilliance of community consultants to assist on investment and grantmaking decisions?
How can we surface a larger number of community deals for national funders?
How can we leverage democratic processes like those modeled by the Ujima Project to shift decision-making power to community members?
As our organization emerges from the last few years of change and iteration, these questions are motivating our refreshed direction. We see our role as the intermediary, advocating for the most promising ideas and solutions that arise from our network leaders and helping build pathways to increase collaboration and exchange.
There are countless missed connections and opportunities. We cannot afford to miss one another any longer.