If you build it, will they still come?

Union membership, club activities, church attendance, and community meeting participation are declining, signalling a loss of social capital. 

Investment firm Just Futures organized a screening of the documentary Join or Die during this year’s SOCAP conference, which takes a deeper dive into what social capital is.

The documentary features Harvard professor Robert Putman. His definition of social capital combines social bonds and civic commitment.

For example, social capital could be as simple as telling your neighbour about the delicious new pizza place down the block. It could also be door-to-door volunteers explaining a candidate’s platform or a neighbourhood building a community garden using shared tools.

For Putnam, social capital allows individuals to work together effectively to achieve a common purpose. 

While attending SOCAP, I met with Just Futures CEO George Guerrero to understand why he wanted to broaden the participants’ vision of social capital and present “Join or Die.”

The questions and answers have been edited for clarity and brevity.

Q: Why did Just Futures organize a screening of the documentary “Join or Die” at an impact investing conference?

A: My colleague Lisa introduced me to the documentary. One of the producers is an ex-classmate. I found it interesting that social capital has two different meanings. On one side, it defines positive impact investments. On the other side, it refers to the fabric that binds communities. 

But when you think of it, they are not two separate definitions. They are two components of one definition. How can positive impact investment be efficient without sufficient social capital in communities? 

Q: What is happening with the social capital that binds us?

A: It is declining. People enroll less in clubs and attend fewer public meetings; union membership and church attendance are declining. The more we isolate ourselves and spend time alone, the more we close ourselves to different ideas and don’t give our voice to contribute to the perspective of others. 

As what binds with other humans weakens, so does the consideration of our impact on others. If you take it to the next level, so does the consideration of the impact of businesses and governments on society.

Q: How does the social capital binding us influence the social capital market?

A: The investment chain needs money, robust projects, and intermediaries. Is it critical that those of us doing positive impact investing remember that intentionally deploying capital in a particular space is just one part of the equation. The infrastructure around it and how it is supported dictates success. Positive impact projects don’t grow in a community with a social capital deficit. And community organizations hardly thrive. Thus, impact investors struggle to find a market for their money.

Q: Can a community rebuild its social capital?

A: There are avenues. In Canada and the U.S., the United Way is suggesting “Community conversations.” These conversations allow community members to discuss hope and fear for the present and the future. Participants will not always agree with each other, but how these conversations are framed helps galvanize the community, creating momentum for projects to flourish.

Q: What is Just Futures?

A: We are a people of colour-led investment advisory firm accountable to social justice values. We are a public benefit corporation owned by a trust of five non-profits.

Q: What are your services?

A: Just Futures has three business lines. First, we propose retirement solutions for non-profit employees. These individuals work hard, but their retirement benefits often do not align with their work. So, the money they’re saving for their retirement is positioned in a manner that is counter to their work. We provide more value-aligned solutions that still adhere to our fiduciary responsibility as stewards of their assets.

Second, we manage non-profit reserves or endowments with the same value-aligned principles as the retirement solutions.

Third, we design, build, and operate impact funds for our clients. Our first fund is the Just Future Transition Integrated Capital Fund, which we are capitalizing on for a possible launch in 2025. So far, $7 million have been raised, mostly from foundations and some high-net-worth individuals. 

Q: What is unique about the Just Transition Integrated Fund?

A: It is a demonstration fund. We are testing an investment chain where the agency is transferred to the community. In a traditional investment chain, the interests of the lenders, who hold the capital, are protected. What if we consider the interests of the borrowers, those who need the capital to deploy change in the communities? Consider not the risk of the borrowers losing money but the risk to these communities if they don’t receive the necessary capital. What happens to them? What human return outcomes may come to bear within those communities without these investments? 

Q: How will funds be allocated?

A: Like I said, we give agency to the borrowers. There is a governing body of five community impact funds. Each runs its own fund, and together, they will access the money pooled in the Just Transition Integrated Fund.

Q: What does a just transition fund invest in?

A: Transition is a horizontal theme, encompassing investments in social justice, climate justice, people of colour, reskilling, housing, and redistribution of capital to communities. We are in the early days of defining what a just transition implies. 

Q: A few years ago, you were selected for a David Rockefeller fellowship. It was a lesson in overcoming bias. Tell us about it. 

A: This fellowship convenes leaders from different universes to build a more effective dynamic between the business and civic sectors. My cohort included some pretty big names you would recognize in large organizations. 

I always asked them the same question: What quality do you look for when hiring your leadership team? Time and again, they brought up empathy. I did not expect that from titans of capitalism; it was surprising and refreshing.

It brings back the ties binding us. Michael Bloomberg, who had a media company and was a three-term mayor of New York City, would have the heads of its departments spend a week interchanging roles with their colleagues. The head of legal would lead communications, for example. This would create a certain level of empathy for each other’s situations. 

Understanding the different perspectives is an avenue to empathy. Empathy contributes to social capital in communities, whether a business, a neighbourhood, or a town.  

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