Conventional lending institutions often fall short of providing the kind of financing needed to build viable sustainable farming operations, community renewable energy projects, worker cooperatives, and affordable housing. For those enterprises, accessing capital by crowdfunding can also be challenging, because the average person doesn't have time to thoroughly research and manage a portfolio of local enterprises to invest in. Even larger institutions, like foundations seeking to invest their endowments in ways that advance their missions, have limited capacity to research local enterprises and manage many small investments.

Thus, we see a critical role for organizations that can aggregate investments and loans -- both from community members and from large institutions -- and fill the gap in lending to smaller enterprises. We believe that communities need more investment funds and other intermediaries to do this work, and we believe those intermediaries should be nonprofits and cooperatives, in order to maximize the return of benefits to the community. 

What We're Working On

Guide to starting an investment fund: To encourage the creation of more investment funds, we are writing a guide to enable organizations to more easily start their own investment funds. The guide will provide a roadmap to the applicable laws related to investment funds, and will also discuss related topics, such as becoming a Community Development Financial Institution (CDFI). See California FarmLink for one example of a loan fund that helps farmers finance farmland.

Piloting decentralized and participatory organizations to channel capital: Imagine that your community is filled with medium-to-large land trusts, cooperatives, CDFIs, and other organizations that can readily take your money and channel it to various enterprises throughout your community. The Sustainable Economies Law Center is helping create such channels, and we’re asking: How do you create an organization with the administrative capacity to receive and manage hundreds of millions in assets, that is also led from the grassroots and enables economic development decisions to be made at the most local level possible? We believe the answer lies in creating decentralized and highly participatory organizations, which is why, for example, we are currently working to pilot Permanent Real Estate Cooperatives and Permanent Community Energy Cooperatives.