Community investment trusts have emerged as an innovative way for local communities to collectively invest in projects that benefit the community. By pooling capital from community members, these trusts allow people to have a direct say in how money is invested in their neighborhoods. Drawing on global case studies, this article will explore how community investment trusts can foster economic inclusion, resident engagement, and community wealth building. With over 100 community investment trusts in the UK alone, this participatory investment model is gaining popularity across the world as a tool for community finance and empowerment. By democratizing investment decisions, trusts strengthen communities from the grassroots.
Community Investment Trusts Democratize Local Investment
Historically, major investment decisions have been controlled by corporations, governments, and wealthy elites. Community investment trusts disrupt this dynamic by enabling ordinary residents to steer investments in their locality. Shares in the trust are sold to community members, providing them ownership and decision-making power over how funds are allocated. Whether it’s investing in affordable housing, small businesses, or clean energy, people gain influence over projects that stand to directly benefit them. This grassroots approach stands in stark contrast to traditional ‘top-down’ urban development led by outside interests.
Trusts Unlock Access to Investment for Regular People
Setting up an investment trust throws open the doors of investing to populations normally excluded. By selling shares at a low cost (often £1), trusts remove financial barriers that lock out low-income households. And trusts don’t require investing expertise; management is done democratically through member voting and local committees. This enables ordinary people to have a stake in their community’s future, not just the wealthy few.
Pooling Local Capital for Community Development
What makes community investment trusts so powerful is their ability to aggregate numerous small investments into sizable community funds. For example, the Brixton Green Solar Cooperative in London raised £58,000 from just 158 local investors to install renewable energy on community buildings. Even very economically marginalized neighborhoods can raise tens of thousands this way. By financing projects collectively, investment trusts let communities develop self-reliance and regenerate themselves from within.
Fostering Inclusion and Active Citizenship
Investment trusts provide a pathway for building community wealth inclusively. Low-income households, immigrants, and minority groups traditionally lack access to wealth-building assets. Trusts change this by welcoming diverse community investors as shareholders, turning them into active citizens with a common stake in their community’s future. This helps build inter-group understanding and collective solidarity.
By pooling together capital from local residents, community investment trusts empower regular people to have a meaningful voice in how their neighborhoods develop. This participatory model provides an inclusive alternative to traditional top-down development and engages people as active citizens in shaping their shared future. With community investment trusts gaining global momentum, this might be the future of resident-led investment and community building.