Giving Compass' Take:
- Donors should utilize catalytic capital that can mobilize solutions by investing in local people and local strategies to gain momentum.
- How do traditional approaches to philanthropy and impact investing fall short when supporting social movements?
- Read more about what philanthropy can learn from social movements.
What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
The simple physics equation, momentum = mass x velocity, tells us that momentum is a value we can control. In the realm of social change, community-based leaders are skilled at influencing and using momentum to advance local solutions but often lack all the financial resources they need to push those solutions to their full potential.
What would be possible if investors and funders of all types boldly supported local leaders’ abilities and solutions in new ways? What if leaders could access significantly more and better-suited impact investment and grant capital for their communities? With community-based leaders as a full part of the equation, is it possible to generate enough mass and velocity to equal the momentum needed to solve entrenched social and economic problems?
Tools that can fuel solutions to inequity, exclusion, and extreme concentration of wealth, and push toward inclusive, equity-building impact investing and its intersection with grant funding, are at hand. By embracing new strategies and mindsets, asset owners can deploy more innovative catalytic capital to local, regional, and national contexts.
The reality is that impact investment and philanthropy can’t advance racial and economic equity and justice without taking risks and making bets on people they don’t know, and investing in localized strategies, solutions, and leaders. This speaks directly to the central paradox: While the traditional approach to money management is part of the problem in philanthropy and impact investing, chosen strategies have also played an outsized role in where we are.
Put simply, to get momentum, the movement to deploy more innovative, catalytic capital to leaders and local solutions requires greater financial depth and scale (mass), and agility and speed (velocity). What if capital got to leaders and solutions that have been historically overlooked and excluded, at scale and in a form that is designed and structured to build on community assets and address local needs? Local communities and community-based leaders are calling for this—and the appeal pre-dates 2020. They’re waiting to be seen and invested in.
Read the full article about social movements by Lisa Nutter and Tim Freudlich at Stanford Social Innovation Review.