Sustainable Community Investment Clubs

Investors and financial advisors are making impact investments without the input of those closest to the social and environmental challenges that the investments are working to address. Without a mechanism to engage low and moderate-income communities these investments will fail to reach their full potential. 

Sustainable Community Investment Clubs (SCICs) provide a space for low to moderate-income community members, impact investors, and financial advisors to come together to enhance sourcing and due diligence around impact investments to obtain better and more impactful results. SCICs are virtual self-directed investment clubs that meet once a month online to socialize, strategize and promote positive and equitable community-based solutions to community-based issues.

Billions of dollars are flowing into communities around the world through impact investments. These investments are intended to yield a positive financial return as well as achieve positive social and/or environmental outcomes. Impact investors are typically high net-worth individuals or organizations that are dependent on databases and advisors who generally come from traditional investing backgrounds. The problem is that by functioning in this way the impact investing industry runs the risk of perpetuating the blind spots of traditional investing that have contributed to inequality. 

There is also a power dynamic in impact investing that has been challenging to restructure. Funders and fund managers keep their networks tight and a select few make decisions about where and how investments are made. The dependence on traditional investing methods and networks prevent the field of impact investing from truly being innovative and move the needle on issues such as the racial wealth gap. With an expanded conversation and process around sourcing, investing, and due diligence there is the potential for people who are most affected to provide valuable insight and participate in the investment process.

Low and moderate-income individuals live in communities where most impact investments are made. Their lived experience is the missing piece to making truly informed decisions around what would positively impact a community. Unfortunately, these transactions are happening without valuable input from those most affected.

Sustainable Community Investment Clubs (SCICs) are intended for three specific populations: low to moderate-income individuals interested in learning more about the principles of investing with a focus on sustainable investing or impact investing, high net-worth impact investors, and financial advisors. The first phase of SCICs will focus on English speaking United States residents. As the SCIC network grows and capacity increases it will add more languages and look to other countries where the model would translate well. 

Sustainable Community Investment Clubs (SCICs) provide a space for low to moderate-income community members, impact investors, and financial advisors to come together to enhance the sourcing and due diligence process for impact investments to obtain better and more impactful results. 

How SCICs Work

A person interested in expanding their financial knowledge and learning more about how to invest, with a special focus on impact investing, will register online for membership in a Sustainable Community Investment Club. The SCIC is structured as a self-directed investment club. Members pay monthly dues and meet once a month over an online video conferencing platform where they learn the fundamentals investing, strategize about how to direct their own investments for the betterment of their communities, and provide technical assistance to impact investors and advisors about impact investments in their region.

Impact investors and financial advisors can register as partner members of the SCIC network. Once they pay their membership fee they have access to all the SCICs around the country. The SCIC facilitator helps connect impact investors and financial advisors to SCIC members in the regions they intend to make impact investments. The three parties work together to source and monitor impact investments in the region. 

Outcomes

Sustainable Community Investment Clubs will produce the following outcomes:

• Increased financial literacy among low and moderate-income communities
• More accessible financial education on the topic of investing and sustainable investing practices
• Increased capacity for low and moderate-income to advocate for themselves and their communities through partnership with investors and advisors
• More effective and successful impact investments
• Increase impact investor and financial advisor capacity to engage in innovative approaches to impact investments

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