BD Giving Notes – #18 ‘Help! Understanding the Investment World?!’

But why would we want someone sitting in a swanky high-rise office in central London deciding where this money goes. It’s not their money and it's not even BD Giving’s, it's for the residents of Barking & Dagenham... 

As many of you may be aware, BD Giving has been given a £1.5 million Endowment Fund from the local council. It is the job of our Community Steering Group (CSG) and Board of Trustees to make decisions on how that money is going to be invested. With the creation of an Investment Policy, we are well on our way to making big decisions… To put it clearly and candidly, we are trailblazing community-led Investment

Community-led investment is a term that I was not aware of before starting here at BD Giving. We believe that we are in a very exciting yet daunting position, in being the first to pioneer such an approach to investment in the U.K. (that we’re aware of!). 

So, buckle up and get ready to learn all about investment…

I’m just kidding! I’m not an expert and trying to pretend I am will get me nowhere. Brilliantly as my colleague, Adeshola, mentioned in his blog post about ‘the imposter syndrome’ and the motto ‘fake it to you make it’, I feel as though I’ve had a little bit of that. 

So why have I decided to talk about investment in this week’s blog post? 

By the time this is published, I would have completed two months in my role as an Administrative & Project Officer with BD Giving, and yes, I know a lot more about investment and endowment funds than when I first started. On my first day, I was thrown into a meeting about the Community Endowment Fund and outlining a decision-making process etc etc… 

Erm, what? – were my initial thoughts.

I didn’t vocalise that, I didn’t want to disappoint Cameron and Géraud on my first day. While I should have asked a few more questions to settle my nerves, looking back I don’t regret it. I don’t usually shy away from asking questions and being my curious and inquisitive self. This time I realised it was a big thing to digest and slowly I would get the hang of what investment really was. To be honest, it was nerve racking knowing I was onboard something I didn’t truly understand. I guess this is similar to how our Community Steering Group (CSG) felt in some of  their monthly workshops. 

Like them I am an everyday person with a limited knowledge about investment. 

A realisation about what ‘community-led’ means

The focus is on the community rather than the investment. We want to revolutionise  investment processes, to turn them on their head and place the community at the centre – not on gaining large amounts of financial return with a fund manager in place to attain that. Our process of investment should be accessible, inclusive and participatory – sharing power and decision making – to democratise a typically top-down capitalist convention. 

That said, we are still playing the game to an extent. The Endowment Fund comes from a levy on new development in the borough, collected by the council, so in effect we then become a part of this capitalist convention. There is no denying that. Although it’s a little different, as we want to shift things around and rethink the way investment can be done. 

Yet, we want to make sure that the Endowment Fund is put to good use and felt by those in the borough. Community Steering Group (CSG) members, Trustees, and BD Giving staff are in the process of nominating organisations for low to medium indirect investment. We will use the quadrilateral and bullseye models outlined in our Investment Policy to guide these nominations as well as the decisions on who to pick for investment. These models follow a total-impact approach, with investments achieving social and environmental impact – this is as important as financial return. 

The bullseye model is intended to prioritise location, structure, community, issue and preventative and systemic investments by a four-tiered ‘system’. We are committed to investing in tier-4 investments, those which include charities and social enterprises seeking to deliver Borough Manifesto social impact for disadvantaged communities.

The quadrilateral is used next, helping to score these investment proposals against risk, liquidity, return, and impact.

While we have an outline of what happens next, it is an iterative process and we are ready to embrace that! In fact, we already have. We are in a very privileged position in that we get to shape this process from the very beginning, leaving a framework for others to use; more importantly, for others to build upon, to improve, and to push it even further to its limits. 

Why make this harder for ourselves?

Yes, we could have got a fund manager to manage our portfolio (terms I have only recently learnt!) –  that would have been the easy option. But why would we want someone sitting in a swanky high-rise office in central London deciding where this money goes. It’s not their money and it’s not even BD Giving’s, it’s for the residents of Barking & Dagenham. 

That’s what we are setting out to do; to shift power in the borough to those who  will be affected by the decisions that are made. 

Basically to tie this all together – I am very excited for what’s to come, both for the borough and for BD Giving. 

If you had told me a year ago I would be working on something as big as this, I would not have believed you. For me, it feels as though we are defining what community-led investment can look like for the U.K. We’re moulding something great and I can’t wait for us to show the world!

But what is ‘community’?

For the analytical types, one could now question how we define ‘community’. In one of our recent workshops with partners, Curiosity Society, Andy Schofield, the company’s director, observed rather interestingly that we must now think wider and deeper about what ‘community’ means. 

This has led us to start succinctly unpicking this further and what ‘community’ means to BD Giving, in its granular detail. Andy’s comment resonated with me as it got me thinking about how nebulous the term really is. We want to unravel the nuances of the language, especially within the context of community-led investment, and answer some key assumptions. 

Let’s ‘literally’ pick this apart – who defines community? What is community? 

Wait, wait…this now goes beyond the scope of my note here, and is really showing the organised mess of my brain right now! 

Maybe it’s something to talk about in my next blog post?

See you there!

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