Local Investing (Backing Your Neighbourhood)
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.
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.
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.
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.
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.
