Social Investment By Design. Challenging power with participation in the social investment market

It sounds obvious, but everything around us is the result of design. Even the way we work in the social investment sector is ‘designed’ through a series of conscious and unconscious choices made under a framework of values. The most dominant influence of these design choices is of course the existing financial system. In many ways, the social investment sector has been created in the shadow of traditional finance. But this is a problem as the social investment market is not there to mirror the traditional financial market. It has the much broader, more imaginative (and more difficult to measure) goal of social value.

The mechanisms of traditional finance are designed for purely capitalist businesses — where the single axis is to make profit. Since the VCSE sector is designed to solve social and environmental challenges, it is well-equipped with ‘multi-axis’ thinking to address systematic inequalities. As such, the value of social innovation, charities and enterprise to support communities is becoming well-established in emergent design practice. The design of the supporting financial infrastructure, however, frequently uses the same traditional tools and framing. This results in a reproduction of the values coded into that system. So where does that leave us? The processes and tools we use need to be redesigned to suit the goals we are trying to achieve.

At the Connect Fund we are really interested in digging deeper into methods of participatory or community-led investing that unpick the design of traditional finance and reimagine investment for the benefit of communities first. That is, ‘the practice of investing with meaningful input, decision-making power, and ownership from grassroots stakeholders’.

In the same tradition of participatory action research and co-design, participatory investment essentially means including end-users in design and delivery of investment decisions in a meaningful way. It is important to differentiate here from processes which employ user-centred design, where the client or end-user is the subject of observation as a source for improvements. In the participatory or co-creation process, the end-user is understood as an equal partner and is actively involved throughout the creation process.

At Connect Fund we are really excited to announce funding the first of our projects in the Challenging Power with Participation strand:

Democratic Money

Barking and Dagenham Giving (B&D Giving) will work with The Curiosity Society (TCS) to give ordinary people more control over how money is generated, distributed, and used. B&D Giving will extend the work of their Community Steering Group — CSG, a group of residents that has led the design of their Investment Policy, by onboarding new members and creating an alumni community. It will create a dashboard to monitor the impact of the investments and a digital learning platform to increase community engagement and expand participation. Their long-term partner, Curiosity Society will support partners in different geographical areas to learn from this model and build their own versions of democratic money. This will include testing in three new locations and delivering shareable tools for those seeking to engage in re-imagining financial decision-making.

Impact Custodian Investment Committee

This pilot project from Shift Design will focus on the structure of social investment committees, which predominately favours ‘learned experience’ rather than the ‘lived experience’. The project will mitigate the potential for decision-making bias to misjudge the potential risks and returns and will form an Impact Custodian Investment Committee of individuals with relevant lived experience acting as stewards on behalf of their community. Working with Trust for London to trial using improved assessment criteria and insights that better balance ‘lived experience’ and the ‘learned experience’ of the investment team and due diligence process. Alongside this work, it will assemble a social investor Consortium of 5–7 organisations interested in changing how they make decisions.

If you are interested in applying to the Connect Fund’s Challenging Power with Participation strand take a look at our guidelines.