Access to Capital is Economic Justice

At the Clinton Global Initiative Annual Gathering in New York City, we announced our Commitment to Action—our Community Credit Lab (CCL) Fund. With this fund, we are raising $35M—over the next three years—to invest directly in emergent economic models and practices that advance racial and economic equity, and are led by Black, Indigenous and other communities that are most proximate to the challenges of our current economy. Common Future’s Community Credit Lab (CCL) Fund is not just expanding access to capital— it’s reshaping how capital flows by prioritizing justice and reparative finance for communities most impacted by systemic inequities.

As an intermediary, we have the flexibility and agency to invest in people and models that are community-rooted and led but are often underfunded, unseen, or unrealized due to systemic barriers. We recognize that these communities possess deep knowledge and proximity to solutions and offer vital support and care to those they serve.
 

The Problem We’re Solving

Throughout our nation’s history, access to capital has enabled long term wealth building and upheld the promise of prosperity.

Long before the creation of advanced banking systems in the early 1800s, the accumulation of wealth has always been a matter of ownership. When banking systems were created, slavery was still legal and Indigenous Peoples were being colonized. Despite being kept from accruing wealth, Black Americans were an asset class which grew to four million enslaved people valued at over $3 billion, and Indigenous lands were parceled, commoditized, and stolen away and are today valued at an estimated $23 trillion.

The deliberate exclusion of Black and Indigenous communities from access to capital lasted for centuries. From redlining to subprime lending, the targeted exclusion upheld by financial institutions touched nearly every point of entry to financial freedom and economic opportunity. Though Black and Indigenous communities have since received greater access to wealth building opportunities, the cards are still stacked against them. Before we can begin to improve financial outcomes for Black and Indigenous communities—and ensure the depository system is equitable and sustainable—trust must be restored.

The upswell of racial equity efforts over the past 60 years is evidence that shared power is still possible. But unless we reimagine these systems rooted in exclusion, Black and Indigenous people will not get the access to capital or resources that they deserve or that they need to build wealth for themselves, their families, and their communities.

How We’re Doing Things Differently

Not only do Black and Indigenous communities face discrimination when applying for loans, but they are communities that are traditionally under- or un-banked. In fact, Native households account for the highest unbanked percentage. Further, banks have steered away from placing branches in Black neighborhoods and on Tribal Lands. Changing Capital Flows means putting capital into the hands of trusted partners whether through our intermediated investments or through our lending partnerships.

We provide non-extractive capital while trying to imagine new community-centered financial systems because we want to see financial systems prioritize community well-being and equity. Changing Capital Flows not only means getting more capital into communities, it means expanding the sector's definition and notions around risk and return. We work with partners who want to lend to people who have traditionally been barred from getting loans due to low or absent credit or lack of collateral. We design our underwriting criteria based on relationships and character rather than credit and we don’t require collateral.

Changing Capital Flows

Not only do Black and Indigenous communities face discrimination when applying for loans, but they are communities that are traditionally under- or un-banked. In fact, Native households account for the highest unbanked percentage. Further, banks have steered away from placing branches in Black neighborhoods and on Tribal Lands. Access to capital means putting capital into the hands of trusted partners whether through our intermediated investments or through our lending partnerships. 

Common Future directly invests money into organizations who have cultivated trustful relationships with Black and Indigenous communities. By investing in community rooted organizations Common Future ensures that communities with little to no access to capital have dedicated pools of capital. Access to capital not only means getting more capital into communities, it means expanding the sector's definition and notions around risk and return. We work with partners who want to lend to people who have traditionally been barred from getting loans due to low or absent credit or lack of collateral. We design our underwriting criteria based on relationships and character rather than credit and we don’t require collateral. 

Building Power and Influence

By fostering  collaboration across the economic justice ecosystem In mainstream financial institutions, loan officers or credit committees (often far removed from communities) reserve the right to tell a borrower whether they are worthy of capital or not based on traditionally racist and discriminatory practices. Underwriting criteria and process usually include heavy amounts of bias and objective measures of risk. These practices have become commonplace in our financial system.

At Common Future we believe that decisions should lay in the hands of community rooted organizations who have built trusting relationships with their borrowers or communities served. This decentralized approach empowers communities with the lived experience to deploy capital how they see fit. 

Creating New Narratives 

We’re amplifying community voices and solutions and collectively developing shared values-driven narratives to drive national policy and narrative debates, because we want to see the values of an equitable economy and multiracial democracy are mainstream, leading to sustained popular demand for equitable policies and practices. Many of our Intermediate Investments and Lending Partners have built democratic decision making by shifting power to community advisory groups or councils of people representative of the communities they serve.

What You Can Do

Through this, we are able to support and respect communities’ autonomy and agency to self determine their economic futures. But we can’t do this alone. Investing in and uplifting new economic models requires community and a shared vision of shared power. We invite you to join us in this work by learning more about the CCL Fund and connecting with us to build this new economy together.