Why Participatory Investing:
The people closest to problems have the most relevant perspectives on solutions, but they require true and meaningful access to power in order to have an impact.
"A resilient and equitable community is one that is inclusive, built on relationships and trust, and puts people at the center.“
Why Participatory?
Participatory Investing at its best ensures that models, solutions, and community-rooted innovations are uplifted and prioritized in investment decisions.
Investment decisions are rarely made by the communities the capital aims to serve. Those who do make decisions often lack lived experience around the challenges being addressed. Community participation in decision-making de-risks investments by centering the experiences of those who are closest to the challenge an institution is seeking to address. This leads to more informed investment decisions.
The communities that funders serve have unique insights and knowledge about what works for them, what doesn’t, and what possible solutions could help them prosper. Additionally, participation cultivates buy-in and a level of community stake in approved deals.
Active participation means building trust and relationships. It means facilitating connection and creating opportunities for self-determination within communities. Participation means both communities and institutions bring their strengths to the table.
Why Investing?
Foundations in the United States hold over $1 trillion in assets—93% of which are invested in Wall Street rather than being used for the common good.
The vast majority of capital within philanthropy is held in investment vehicles far removed from the communities funding institutions aim to serve. If an institution isn’t consciously working to align these assets with its mission, its impact is often limited, extractive, and detrimental.
Decisions on the allocation of these assets are regularly made behind closed doors. Investment capital allocations are often shrouded in secrecy, and decisions lack transparency.
These billions of dollars are both a responsibility and an opportunity. Charitable institutions receive tax-exemption status on all of their capital—not just their grant capital. In order to be good stewards, institutions have a responsibility to leverage all of their assets toward their mission. Leveraging investment capital also provides an opportunity for institutions to scale their grant impacts and make powerful, systemic changes in the communities they serve. Choosing to activate an institution’s entire portfolio of capital changes the conversation on what’s possible.
Participatory investing is an institutional investing approach that ensures communities who have been institutionally excluded and harmed by existing investment structures hold power and/or ownership over capital strategy, design, implementation, and outcomes.
The definition above was created to establish common language for the Action Lab. Participants, advisors, and facilitators jointly drafted this definition in order to set the foundation for codifying our work together.
“It is really important to be mindful of who gets to come into the room, and strive to open that door for people who don't get into these rooms.”
________________
Bobby Cochran
"In these discussions, trustees were also asked to consider traditional versus emergent systems. A foundation of Footprint’s size simply cannot solve climate change or eradicate systemic racism. However, it can be a model for difference, break philanthropy's traditional mold, and be part of an emergent system. And it can do so by sharing power with those closest to the work that Footprint funds.”
________________
Lisa P
