When Residents Control Investment in Neighborhood Businesses
- Impact Stories
- Network Leaders
Aaron Tanaka was working with the Boston Impact Initiative and the Center for Economic Democracy when his 2014 Fellowship lent him the time, space, and collaborators to explore a radical idea: what if communities had the final say over the development that impacts their neighborhoods and their families?
Today, the Boston Ujima Project is one of the best-known examples of democratizing control of capital in the United States. Ujima has created an impact investing fund where the community has decision-making power over investments to uplift local, people of color owned enterprises and grow community wealth.
The fund is governed by voting members, all of whom are local residents and have a stake in Boston’s working class communities of color. Membership only requires a $25 fee, and Ujima seeks to build the fund to $5 million by 2020, with community residents, local foundations and wealthy people as investors.
Boston remains one of the most unequal cities in America. African-American households have a median net worth of just $8, compared to $247,500 for white households. As Aaron Tanaka reflected to HuffPost, “This is about recognizing the history of the racial wealth gap and where that comes from. It’s about overcoming a history of no access to capital and extraction of wealth from the community.”
After a successful pilot in 2016 where local funders and 175 community members pooled $20,000 to make zero-interest loans to local businesses, the Boston Ujima Project has grown to over 500 members and made its first investment in 2019. Ujima is now exploring ways to bring this ground-breaking model to other communities, leveraging the coverage of the Common Future network as a launching pad.