Imagine if every pound you spent in your community made your local area stronger. That’s what community wealth building is all about. It means giving people a fairer shot by keeping money close to home, not in the pockets of big national chains. This approach helps support jobs, local businesses, and everyday people where you live.
Local investing is a key part of this movement. Writer Amy Cortese helped bring the idea to life through her work on locavesting. She showed that when neighbours back small businesses or co-operatives in their own towns, everyone benefits.
Think of the café down the road funded by local supporters or a community solar project built by friends pooling resources. These real stories prove that ordinary people can help shape the places they care about.
If you want to see stronger shops, greener parks, and fuller town centres around you, community wealth building and local investing can make a real difference. This guide explains how, with easy examples and practical tips to help you get started.
At the moment, the entire global economy seems to be built on the model of digging things up from one hole in the ground on one side of the earth, transporting them around the world, using them for a few days, and sticking them in a hole in the ground on the other side of the world. George Monbiot
Economist John Kenneth Galbraith says ‘trickledown economics’ (cutting taxes for rich people to give jobs to the ‘little people’) just means the rich get richer, and the poor get poorer. He says ”If you feed enough oats to the horse, some will pass through to feed the sparrows’.
Invest in Your Local Council
Abundance Investment is a great resource. Here you can pool your savings with others to invest in local councils, instead of on the stock market. It’s also much safer (to date, no council has ever failed to pay back the money, as a council kind of can’t go bust and run off with your money!)
Most are using your money (over 5 years) to tackle climate change and reduce carbon emissions. This is through initiatives like planting more trees and investing in green energy and better public transport.
As with any investment there are risks. But this company adheres to all the proper rules, and it’s kind of like ‘crowdfunding for your council’, where a survey found that 73% of savers and investors would be interested in lending money to councils, if it helped with environmental and social benefits. Especially as the average group of 100,000 people in the UK holds £4 billion in savings.
So instead of cash-strapped councils asking government for help (that often says no due to lack of funds), this is kind of do-it-yourself-improve-your-community instead. Locals lend the money (and get back something in return in the form of interest and also better communities).
You can invest from £5 (and can also choose to donate interest back to community projects). This is a fantastic idea, why is this not more widely-known?
So far, just four councils are involved. Here is what your investments would be funding. Learn more on ideas on how visionary councils can improve communities.
If planting green spaces, read up on pet-friendly gardens and wildlife-friendly gardens. If planting trees, know of trees to avoid near horses (including yew, oak and sycamore).
- Hounslow Council – community energy, grants to local community projects and places of worship, upgrading air, energy and transport for schools, cycle paths, reuse and repair events, transform unused land to grow local free food.
- Hammersmith & Fulham Council – Rain gardens to protect against floods, ‘greening the grey’ schemes (presumably making urban areas greener?), and secure bike storage.
- Greenwich Council – more LED wildlife-friendly public lighting, solar panels, improving public parks and greener public buildings.
- Southwark Council – creating more cycle spaces, transition lampposts and parks to LED lighting, run pools and gyms on green energy, replace boilers with heat pumps at a local school, expanding a local tool library, nature projects for local green spaces and cemeteries and again installing rain gardens, to prevent floods.
Are you feeling enthusiastic yet? And there’s more!
You can also choose to invest in community energy, like solar panels on schools. These cannot only reduce carbon emissions and power a school, but leftover energy can be sold to the national grid.
This means investments to improve schools and communities (and possibly helping to pay bills for local people in fuel poverty). It’s all rather exciting stuff!
What is Community Wealth Building?
Community wealth building is a way for towns and cities to hold onto the money that moves through their streets. Rather than seeing cash swept up by big chains or sent off to distant shareholders, this approach keeps money in the hands of local people.
It is about more than just shopping locally. It’s a practical effort to help everyone living and working in your neighbourhood benefit from the area’s economic activity.
The Heart of the Movement
At its core, community wealth building puts everyday people first. It recognises that strong communities are built when jobs, services, and profits stay local. By prioritising local shops, independent businesses, and co-operatives over larger chains, towns keep more of their earnings at home.
You can think of it like tending a community garden. If each person waters their corner, the whole patch thrives. When communities invest in themselves, they get more out of every pound spent.
Main Principles of Community Wealth Building
Here are the main building blocks that make community wealth building work:
- Supporting Local Shops and Businesses: Money spent at the bakery or corner shop stays in the area. This creates reliable revenue, protects local jobs, and often improves service quality.
- Investing in Local Services: Going to a community-run post office or leisure centre strengthens local networks and means services aren’t taken away at short notice.
- Backing Small Enterprises: Encouraging growth for start-ups and family-run firms keeps storefronts filled and offers more choices on the high street.
- Encouraging Social Enterprises and Co-operatives: These types of businesses often reinvest profits into community projects, youth programmes, or upgrades for neighbourhood facilities. Profits are used for shared goals, not distant shareholders.
A Few Inspiring Case Studies
Community Wealth Builders is based in Baltimore, USA. It helps local businesses with crowdfunded, no-interest loans to succeed in an area that suffers from high unemployment.
The Handmade Bakery (Yorkshire) is now thriving, thanks to local people investing in ‘bread bonds’, which have since been paid off. Instead of receiving back money, investors received good bread in return! Today, the bakery is thriving, baking thousands of loaves each week, while staying true to its roots. And supporting the local economy.
Spacehive is a community fundraising site. These are ‘pots of money’ that can be raised for local shops and projects.
How Community Wealth Building Benefits the Area
Keeping wealth circulating locally offers real-life rewards:
- More Steady Jobs: Local businesses are more likely to hire from their own towns, offering steady work and fairer conditions than many chain outlets.
- Boosting Local Spending: People who work nearby tend to spend their wages in the area, which leads to healthier shops and services.
- Keeping Profits at Home: When local groups own their businesses, any profits stick around. This can fund new projects, fix park equipment, or bring fresh life to community events.
For example, a local indie shop not only employs local people, but the taxes go to your local council, not to some faraway place. The shopkeeper and staff likely use a local sandwich shop and pub for lunch, and the signwriter is also likely local (the big Tesco signs are not being made down the road, that’s for sure!)
The knock-on effect is a stronger sense of pride and teamwork, the sort that keeps parks busy, shops buzzing, and people looking out for each other.
Key Features at a Glance
Here is a simple table showing how community wealth building stands apart from the usual way money moves through a place:
Community wealth building isn’t just about economics. It’s about pride in your home town, trust between neighbours, and having the power to shape daily life right where you live. By supporting this way of thinking, you help build a town where people and places grow stronger together.
And unlike usual investing (where if you do lose your investment, you don’t gain anything), it’s different with locavesting. Even if you don’t get back your investment financially, you may well end up with a nicer town to live in, and that’s worth more than money!
How Local Investing Works
You do not need to be a financial expert to help shape your local area through thoughtful investment. Local investing is about putting your hard-earned money directly into the people, projects, and businesses that matter most to your neighbourhood.
This might look like pooling funds to help a local bakery expand or buying shares in a community solar project. It is hands-on, personal, and often much more rewarding than sending savings to faceless corporations. Here is what you should know about how local investing grew from a niche idea to a mainstream movement, and how you can get involved today.
The Rise of Locavesting
Before locavesting, most people thought investing was reserved for those with piles of cash or a stockbroker on speed dial. The world of finance felt distant, complicated, and often out of touch with real life.
Amy Cortese changed that by shining a light on how ordinary people can support their communities while aiming for a fair return. She followed small towns where neighbours joined forces to finance shops, co-ops, and clean energy schemes.
And showcased projects from bakeries and pubs to independent cinemas, where local backers had a real say in what mattered. Put your money where your heart is and get involved with the future of your local area.
Michael H Shuman is the author of the wonderful books Put Your Money Where Your Life Is and The Local Economy Solution,
He’s American, but his ideas could transform the world. He says the issue at present is that millions of people with savings to invest, are limited to putting them into big companies and global corporations. He believes that in the future, these funds will instead be invested in local funds to build affordable housing (not destroying the countryside to do it), food and clean energy funds.
Ways to Invest in Your Community
There is no single way to get started with local investing. Below are some of the most trusted and accessible routes for everyday people who want to make a difference:
- Community Shares: These are shares in co-operatives or community benefit societies. You buy a small stake, and your investment often supports places like local pubs, green energy, or community shops. Usually, these schemes set a minimum and maximum contribution to keep things fair and inclusive.
- Local Business Crowdfunding: Some small shops and start-ups raise money through crowdfunding platforms. In return for a small investment, you might get interest, future discounts, or shares. This is one of the simplest ways to back businesses you actually use and care about.
- Credit Unions: These member-owned financial groups pool people’s savings and lend within the local area. Depositing money in a credit union means your savings help fund neighbours’ home improvements, cars, or small business ventures instead of propping up global banks.
- Local Investment Funds: Sometimes called community development funds, these raise money to invest in a cluster of small businesses or social projects. Returns are often more modest, but you get the chance to back several ventures at once and watch your neighbourhood improve.
Here are a few tips that every local investor needs to keep in mind, before signing up or parting with their savings:
- Do Your Homework: Always check the background of the group or business you are backing. Ask for business plans, financials, and past results.
- Understand the Risks: Local investing is not risk-free. You can lose money, especially if a small business struggles or closes.
- Start Small: It is fine to test the waters with a smaller sum, especially if you are new to investing.
- Get to Know Your Neighbours: The best local investments often come through personal connections or recommendations. Trust and honesty count for a lot.
- Read the Fine Print: Whether buying shares or joining a crowdfund, make sure you know the terms, including how and when you can get your money back.
By following these simple steps, anyone can begin to put their savings to work in ways that benefit both themselves and their neighbours. Local investing can feel more personal and connected than most other forms of financial support, making it a great choice for people ready to build stronger communities together.
Benefits of Supporting Local Businesses
Designing for Local Communities
When you spend your money with local businesses, the rewards go far beyond the immediate purchase. Every pound you invest or spend in your neighbourhood helps build a place where everyone can thrive.
This approach supports families, brings neighbours closer, and keeps towns alive with new ideas and possibilities. Below, you’ll find how backing local businesses leads to real, lasting change in your area.
Job Creation Right Where You Live
Small businesses form the backbone of local employment. When people support their local shop, bakery, or pub, they help create and keep jobs that might otherwise disappear.
- Independent shops tend to hire local staff and often pay fairer wages compared to large chains.
- These jobs stay in the area, meaning local people are less likely to have to move away for work.
Take Hebden Bridge in Yorkshire as an example. Locals rallied behind their high street retailers, driving a revival that filled once empty shops and boosted jobs for local families. More jobs in town means shorter commutes and chances for young people to stay where they grew up.
Stronger Social Ties and Friendlier Communities
Supporting local services brings people together. When you know the owner of the pub or the baker down the street, there’s a sense of trust and friendship.
- Regular customers build real relationships with business owners.
- Events, sponsorships, and community groups get a boost from local business support.
In Totnes, Devon, businesses chip in to sponsor local events and support food banks. People feel more connected. The faces behind the service are often neighbours or even friends.
Better and More Personal Services
Local businesses care about what their community wants. Unlike big chains tied to faraway head offices, local owners can listen and adapt. You’ll often get:
- Personalised service, including custom orders and special requests.
- Quicker problem-solving, since the decision-makers are right there in the shop.
If you’ve ever had a greengrocer set aside your favourite vegetable, or a shopkeeper order an item just for you, you’ve seen this in action.
Increased Community Pride and Identity
A town’s charm often comes from its small businesses and local character. When you back these businesses, you keep your area unique.
- Distinctive shops, cafés, and markets set your neighbourhood apart from anywhere else.
- Local art, food, and events celebrate the culture and heritage of the area.
Wigtown in Scotland revived itself through bookshops and festivals, turning into “Scotland’s National Book Town.” Now, people come from all over the country, boosting local pride and the economy.
More Stable Local Economies
Local investment keeps money circulating close to home. This creates a buffer when national chains close or global markets take a hit.
- Money spent locally stays in the community longer, supporting dozens of families and other businesses through the local “multiplier effect.”
- Diverse local businesses help the area ride out tough times, since the community isn’t dependent on just one big company for jobs or services.
A great example is Frome in Somerset. By launching community co-ops and supporting independent traders, Frome has built a lively market town. This attracts more visitors and keeps the local economy ticking.
Backing Young Entrepreneurs and Fresh Ideas
Small towns often need new energy to keep growing. Local support helps young people try out new ideas and launch their own ventures without needing to move to big cities.
- Funding or mentoring from established local businesses gives young entrepreneurs a foot in the door.
- New start-ups keep the local economy full of fresh choices and new jobs.
Whether it’s an eco-friendly refill shop run by a young family or an app developed to help local delivery, backing these ideas can lead to success stories that inspire others.
Backing local business is about much more than economics. It’s about building a place people want to call home, where new ideas can grow and everyone has a hand in shaping the future.
Challenges and What to Watch For
Building community wealth and backing local projects sounds rewarding, but it is not always easy. Anyone thinking about investing in their neighbourhood or changing how money moves locally faces hurdles that can slow things down or lead to mistakes.
Knowing what stands in the way helps you prepare and make smarter choices. Below, you’ll find the main challenges and some practical ways to tackle them.
Limited Knowledge and Confidence
Many people feel out of their depth when it comes to investing, especially close to home. The world of finance can seem like a members-only club, packed with jargon and hidden rules. This makes it hard for newcomers to know where to start or who to trust.
- People often worry they do not have enough experience or money.
- Some fear looking foolish if things go wrong.
- Misinformation or lack of clear advice can keep people from taking the first step.
How to get around it:
- Join local workshops or free classes aimed at beginners. These are usually run by community groups, credit unions, or the local council.
- Look for easy-to-read online guides about local investing. Keep an eye out for case studies from other communities.
- Reach out to local leaders or people already involved. Most are happy to answer questions or share tips.
Access to Capital
Raising money for local projects is often much harder than it sounds. Many small businesses and community plans need a bit of cash upfront, but traditional banks usually prefer safer bets or larger ventures.
- Local founders may not meet strict lending criteria or lack collateral.
- Smaller projects often fall under the radar of national banks.
- Some people want to invest but only have limited savings to spare.
What helps:
- Use local crowdfunding platforms that accept small amounts from many people. These often have lower barriers and stronger ties to the community.
- Credit unions and community development funds often have a better understanding of local needs and may offer fairer terms.
- Consider pooling resources with friends or neighbours to make a larger impact together.
Assessing and Managing Risk
Risk is part of any investment, but local projects can feel even less certain. Unlike well-known companies, many local businesses have shorter track records, and economic shocks can hit small towns hard.
Some common risks include:
- Businesses closing down or struggling in slow periods.
- Projects missing deadlines or failing to reach targets.
- Poor management or cost overruns in community-led schemes.
Smart moves:
- Start with smaller investments and spread them across different local projects instead of putting everything in one basket.
- Take time to understand each business plan, and ask for honest numbers.
- Build relationships with trusted community members who can help with due diligence.
Finding Trustworthy Projects
It can sometimes be tricky to separate great ideas from risky bets. Some projects have strong backing and good leadership, while others might promise more than they can deliver.
- Transparency varies from group to group.
- Scams or poorly planned ideas do show up from time to time.
- Some projects lack proper oversight or checks.
What to do:
- Stick to projects with open books and clear communication.
- Ask for references or track records if possible.
- Support efforts where community boards, local leaders, or experienced co-operatives are involved.
Old Habits and Mindsets
Long-standing habits can hold people back. Many are used to spending money at big chains or saving in large banks, not thinking about what their pounds could do closer to home.
- Some believe investing needs to be complicated or left to professionals.
- Others worry about going against family or friends’ advice.
- Changing shopping or investment habits can take time and encouragement.
How to shift thinking:
- Share success stories and highlight neighbours who have made a difference.
- Work with schools, clubs, and local media to spread the word about the benefits of investing locally.
- Create spaces for open conversation, like coffee mornings or town meetings.
Practical Steps to Overcome Common Hurdles
Tackling these challenges often calls for small, steady actions rather than big leaps. A few simple ideas can set things in motion:
- Try a local investment for a modest sum, even if it’s just £10 or £20, to learn the ropes.
- Get advice from local charities or groups already active in community wealth building.
- Use online tools and apps that help track both investments and impact.
- Partner with community leaders who know the lay of the land and can connect you to trustworthy projects.
- Volunteer or attend meetings to get a feel for what’s working and what to watch for.
Building stronger communities takes time, trust, and some trial and error. Each step you take, no matter how small, helps set up a solid future for your neighbourhood. Pay attention, ask questions, and lean on your community for support. The journey is easier together.
Conclusion
Small steps matter more than you might think. A single chat with a local shop owner or dropping a few pounds into a community project can spark bigger change. Every bit you keep in your neighbourhood builds trust, supports friends, and keeps your home full of life.
You do not need to be an expert or have deep pockets to get involved. Start with something easy, like supporting a local event or joining a community meeting. Each effort adds up and helps your area grow stronger.
Thanks for reading. If you have ideas, stories, or tips to share, let others in your community know. Your voice can inspire someone else to take their first step too.
