Local economies (investing where you live)

Leighton Buzzard

Leighton Buzzard, Ava Lily

Local investing (often called ‘locavesting‘) is the idea that if you have money to invest, you invest it in your community, rather than on the stock market.

For instance, instead of investing in a big corporate supermarket, you would invest in a locally-run grocery store or bakery. Then hopefully you would get a good return. But if not, you would still hopefully get a nice bakery on the corner, so you still win, even if you lost a few pounds.

Think of the café down the road funded by local supporters. Or a community solar panel built by friends pooling local money. This can then provide free energy to the community, perhaps even the investors  that invested. So they have no energy bills!

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. Especially when councils say they have no funds.

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’.

Charity Bank (funds community projects)

Charity Bank is like having a savings account and donating to local charities at the same time. Because your savings are used to invest in small community projects.

The account opening process is really simple, then your money can get to work, creating change for local communities. So far Charity Bank has donated over £629 million to over 1,460 causes nationwide.

You can open a personal, business, charity or credit union savings account. Some examples of what these savings have funded:

  • Transforming an old hotel into supported living for 11 vulnerable adults
  • Funding the headquarters of an Air Ambulance
  • Funding a refuge for families escaping domestic abuse
  • Helping to renovate social housing properties

Credit Unions are also a good way to invest in communities. These member-owned banks lend your money to local people are affordable rates, only if they have a history of saving, to avoid debt. They can be used for home improvements to small business, instead of money going to global banks.

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 thriving, thanks to now-paid-off ‘bread bonds’. Instead of receiving money, investors received good bread in return! Today, it bakes thousands of loaves a week, supporting the local economy.
  • Spacehive is a community fundraising site. These are ‘pots of money’ that can be raised for local shops and projects.

Michael H Shuman is the author of the book Put Your Money Where Your Life Is. He says the issue is that millions of people with savings 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.

How to invest in your local council

Abundance Investment is a great idea. Rather than invest in the stock market, you fund your local council, to invest in your area. It’s also safer (to date, no council has ever failed to pay back the money). A council is unlikely to go bust and run off with your money to buy yachts in the Caribbean).

Most are using your money (over 5 years) to tackle climate change and reduce carbon emissions. This is by planting trees, investing in green energy and making better public transport.

All investment has risks. But this is less risky, a bit like ‘crowdfunding for your council’. A survey found that 73% of people would be interested in lending money to councils, if it provided 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 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 18 councils are involved.

  • 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), 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 reduce carbon emissions and power a school, but leftover energy can be sold to the national grid. This means  helping to pay bills for those in fuel poverty.

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