Ownership investing, also known as the ownership economy, represents a paradigm shift in the financial industry. Traditionally, investors have owned most equity in businesses, while communities and workers were often left out of the equation. However, new models are making it possible for families of color to own an asset to grow in value to build wealth over time. Ownership investing helps to build momentum toward closing our racial wealth gap in new, bold, and innovative ways.
Specific strategies can exist in various categories, including ownership in individual financial assets, such as expanding access to stocks, bonds, and other tools; home ownership; employee ownership; tenant equity and renter wealth; and community ownership, such as neighborhood real estate investment trusts and community investment trusts. By involving more people in the ownership of businesses, these models have the power to reshape industries and entire sectors. For example, community-owned renewable energy projects can ensure that locals benefit from the economic opportunities created by the green energy transition. Similarly, employee-owned businesses can foster more equitable workplace cultures, where workers have a say in decision-making and a stake in the company’s success.
Investors come to ownership investing motivated by a range of ways they can use this tool to effect positive change, including giving power and agency to communities, improving economic wellness, and strengthening democracy, to name a few. While investors who engage in ownership investing share a common vision for shared prosperity and security, ownership investing is not limited to one asset class. This model is particularly impactful in marginalized communities, where access to capital and ownership opportunities have historically been limited. By democratizing ownership, these models ensure that the wealth generated by successful businesses is shared more equitably, helping to close the wealth gap and create more sustainable economic opportunities.
The growth of investor interest in ownership investing was evident at SOCAP24, a premier gathering of the global impact community, where it was the topic of a mainstage session. At SOCAP24, the discussion centered around the growing importance of ownership in creating a more inclusive and equitable economy. For decades, investing with purpose has been about directing capital to ventures that aim to solve societal problems while generating financial returns. But now, a new frontier is emerging—one where the focus is not just on funding social enterprises, but on rethinking who gets to own and benefit from these ventures.
As we move forward, the rise of ownership investing signals a new era for impact investing. It challenges traditional notions of ownership and wealth creation, advocating for a more inclusive financial system that works for everyone, not just the few at the top. By incorporating ownership models into the broader impact investing ecosystem, we can create a more just, equitable, and sustainable world—one where individuals, communities, and businesses can all thrive together.
Reluctance to engage in ownership investing is often a result of inertia of the status quo than to actual risk, even though these investments have been proven to work for decades. At SOCAP24, the conversations and innovations on display gave a glimpse of what a future might look like. It’s clear that ownership investing will be a key driver in shaping the next generation of impact, if investors have the courage to take the leap.
To see Gary Community Ventures' report back from SOCAP, click here.
Disclaimer: Confluence blogs may contain external links to other resources and comments or statements by individuals who do not represent Confluence Philanthropy, Inc. Confluence Philanthropy, Inc. makes no representation whatsoever regarding the content that you may access as a result of our blog, nor the statements of any third parties whose comments may be expressed therein.
