While there have been notable positive social impacts from blended finance to date, these initiatives tend to be limited by assumptions of what finance should be and how it historically operates. In “Community-Centered Blended Finance: Towards a Transformative Approach” we raise the bar and explore the transformative potential to change the system of finance through blended finance strategies that place communities at the center.
Blended finance – when public or philanthropic capital is provided to incentivize or catalyze additional private investment – has been used for decades to try and achieve positive social change within specific regions or demographics. However, we believe that it is an underutilized strategy for impact. Blended finance has a role to play in reframing how risk is determined, how value is measured, and whose expertise is important in investment. If wielded differently, blended finance can serve to reshape the power dynamics inherent to the structures and terms of investment processes that carry embedded bias.
In this report we examine ways that blended finance is currently being deployed to address unequal dynamics of power and promote flourishing communities, and offer some new perspectives and alternative approaches to using this tool.