Move $35M to Black and Indigenous-Led Economic Solutions

Summary

In 2024, Common Future committed to launch the Community Credit Lab (CCL) Fund to put capital and power in the hands of Black and Indigenous communities across the United States. Over five years, the CCL Fund will provide $35 million in capital to support innovation and entrepreneurship and fund 1,700 community projects and entrepreneurs who have been historically marginalized and undercapitalized, with over 50% of the funding supporting women-owned businesses. The CCL Fund will offer both direct and intermediated investments, providing a back-office option to communities that can raise capital but lack infrastructure to deploy funds. Common Future’s direct investments offer unique options for investors and enterprises and include philanthropic grants, recoverable grants, and fully recoverable impact-first investments. By leveraging different funding mechanisms, Common Future is pioneering an equitable investing ecosystem that prioritizes the needs of those who have been and are currently locked out of wealth and power.

Approach

To scale their ongoing work built on the tremendous success of Common Future’s Community Credit Lab (CCL) Fund, Common Future is now committing to deploying $35 million to 1,700 Black and Indigenous community innovators over the next five years. By publicly launching the CCL Fund in October 2024, they will move it from a pilot and leverage the launch as an opportunity to call for new ways of investing. The CCL Fund eschews the focus on return, risk, and capital accumulation for the investor and will only invest in opportunities that do the following: increase access to capital by creating more pathways than barriers to investment; increase affordability of capital by providing the most cost effective and flexible capital to enable innovation, wealth creation, and the flow of equitable capital; and, build power, ownership, and choice by enabling choice and self-determination and creating pathways to ownership of both tangible and intangible assets. Common Future will focus their work in the Blackbelt, industrial Midwest, Southwest (The Four Corners) , and Northeast corridor regions of the United States.

Common Future will raise their funds through two general strategies: direct and intermediated investments. For direct investments, they offer options across the capital stack that include grants, recoverable grants, and promissory notes to the CCL Fund. Their grants are philanthropic capital, with -100% of capital returned; recoverable grants are catalytic capital that offer -50% return of capital over a five year term; and their promissory notes are impact first investments that over 100% return of capital over 10 years, with the latter two offered to accredited investors only. For their intermediated investments, they have found that communities are often able to raise capital but lack the lending infrastructure to deploy funds. CCL Fund will provide a critical back-office option for community funds to be deployed through Common Future’s partners.

Action Plan

By 2030, Common Future will deploy $35M to Black and Indigenous led initiatives that make capital accessible and affordable, and put power, ownership, and choice in the hands of these communities. This requires Common Future to announce the fund and its mandate, share models of what’s working with these types of funds, and identify areas for investment and lending partners.

In Q4 of 2024 Common Future will announce the CCL Fund and its mandate. They will then focus on capitalizing the fund to bring transformative impact to the communities the fund was developed to support. Each quarter for the next five years, they will release an investor report with key investment and impact metrics, as well as sharing AUMs, making evident the impact of the fund. Additionally, each year, they will host storytelling workshops with partners to strengthen their abilities to tell compelling stories. By the time of full deployment in 2030, they will have reached at least 1,700 borrowers and be able to tell their stories across Common Future’s and their partners’ platforms.

By the end of each year, Common Future plans to raise and deploy the following amounts: 2024, $12M AUM, $4M deployed; 2025, $16M AUM, $9M deployed; 2026, $22M AUM, $15M deployed; 2027, $30M AUM, $22M deployed; 2028, $35M AUM, $30M deployed; 2029, $35M AUM, $35M (fully deployed) .

Background

The current economic system does not work for everyone. Generations of Black and Indigenous communities have been and are currently intentionally locked out of wealth and power. In fact, without a change to the status quo, research from McKinsey & Company has shown that the Black-white wealth gap will cost the U.S. GDP 4-6% or $1 trillion by 2028.

Common Future has been working to address this wealth gap and effectively advance racial and economic equity by partnering with leaders who have the imagination and courage to rethink the current economic system. As part of this work, they have been piloting their Community Credit Lab (CCL) . Community Credit Lab has two primary goals. First, to provide catalytic capital and back office lending support to emerging funds and fund managers that build economic power and ownership. Second, to be an investment model for others in the ecosystem that showcases the type of capital and non-financial resources needed to invest in solutions designing the next economy.

Through CCL, Common Future has supported innovators across the country, tackling food and farm justice, property ownership, and business development – all of which put capital and power in the hands of Black and Indigenous communities. For example, in collaboration with Kitchen Table Advisors, Common Future co-designed and implemented a $200,000 revolving loan fund pilot that advanced the economic resilience of female farmers by providing access to 0% interest short-term loans. In 2023, Common Future invested $1 million to support the trailblazing work of the Kensington Corridor Trust and Jane Place, community-owned real estate and land trusts based in Philadelphia and New Orleans, respectively.

These models demonstrate what is possible in the pursuit of economic justice but more work remains to scale the impact of these localized efforts and make these models mainstream.

Progress Update

Partnership Opportunities

Common Future is seeking financial resources and media support to amplify their work, the work of their partners, and, most importantly, the insights and stories of transformational impact that will be generated when they deploy capital in communities. They hope to leverage the media and financial support these partners bring to compellingly demonstrate how to shift money and power to equitably transform economic systems., In addition to providing funds for lending, Common Future works closely with partners to help them craft compelling narratives and share the impact of their work. Common Future also focuses on offering other forms of insight and industry expertise to all partners.