For many decades we have seen that the Indigenous communities have been constantly underfunded and were overlooked in global finance, even after they were stewarding over 80% of the world’s bio diversity. If we look at current conditions, we will find that less than 2% of the climate finances have reached the Indigenous folks directly.
Most of such funding often flows through lots of intermediaries and NGOs. Now in order to solve this problem we are seeing the rise of the Indigenous led investment funds. These new funds are designed, governed and operated by the Indigenous people themselves.
The aim of such funds is to finance sustainable development. Today in this blog we will learn about such Indigenous Investment Funds.
What Are Indigenous-Led Investment Funds?
As the name suggests the Indigenous led funds are those investment funds that are governed, managed and administered by the indigenous organizations and coalitions. Unlike traditional donor programs, such funds are made with long term impacts in mind, cultural resilience and self determination.
These particular funds can range from grants and revolving funds to blended investments and outcome based financing. These funds are used for various goals such as restoring ecosystems,building clean energy infrastructure, and protecting language and culture. The usage of these funds can be best described as the Indigenous Communities know best what they need.
Indigenous-Led Funds in the Amazon, Asia & Beyond
All over the world we will find that the Indigenous communities are launching their own investment funds that are tailored to their specific community needs. Below we have mentioned some of these funds:
Mesoamerican Territorial Fund (MTF):
This particular fund is led by the Indigenous communities and supports Indigenous led projects in countries like Mexico, Panama and Central America. Till now they have funded over 32 initiatives that are focused on land rights, agroecology and cultural preservation.
Nusantara Fund – Indonesia
This particular fund is managed by the national indigenous alliance called AMAN. They pool and channel their resources into community forest management and ensuring climate resilience.
Podáali Fund – Amazon Basin
The Podáali Fund for Amazon Basin is being operated by COICA and it represents over 511 Indigenous nations. All the funds here go towards defending the Indigenous territories from the extractive industries and to promote the Indigenous science.
Now these funds are not just financial tools, they are the vehicles of resistance, Indigenous identity and environmental justice.
Merging Profit with Indigenous Values
Now the Indigenous funds that we have discussed above are grant based, which means that most of them do not work for profit. However, there are some Indigenous investment funds that are not grant based. Many of them turn returns from the investment and blend them with social and environmental goals.
Native American Venture Fund (NAVF) : This is a US based for profit impact fund. This particular fund was created in partnership with the sovereign tribal nations in the USA.
The investment fund mainly invests in renewable energy, carbon credits and job-generating enterprises. The returns generated through the investment are reinvested into tribal economies for the growth and prosperity of these communities.
Métis Settlements Impact Fund (Canada)
This particular fund was launched in Alberta and has an initial pool of $100 million. The whole fund currently focuses on the community led energy, housing and economic development.
These particular funds are designed to attract the institutional investors while maintaining the Indigenous control alignment in the organization.
Key Features of Indigenous-Led Investment Funds
Below we have discussed some of the key features of the Indigenous led Investment funds. You can use these features to identify these particular funds:
- Self-Governance : In the decision making boards of such investment funds you will find councils, elders and youth serving. This ensures that the investments made by the funds are in accordance with local priorities and knowledge.
- Long-Term Capital
Most of these funds are structured for strategic planning for decades. Here you will find endowments and recurring revenue that sustain them for many decades. - Direct-to-Community Funding : These particular funds are known for bypassing the traditional intermediaries and they go straight to the Indigenous led organisations. Now, this way they reduce the delays and administrative waste that might occur.
- Cultural Alignment
Now, the projects that come to these particular funds are not evaluated on the basis of financial ROI only, but also on their impact on cultural revival, language protection and ecological regeneration. - Multi-Sectoral Goals
One investment might support food security, youth education, climate action, and job creation, creating holistic development.
Challenges Ahead
Even after such huge successes the Indigenous led funds currently face several challenges that certainly needs to be addressed:
- Limited Access to Global Capital: While such funds receive money from Indigenous communities, their access to the global funds is limited or almost non-existent. As most of the international climate funds are still directed towards the governments or large NGOs.
- Mismatch of Metrics: Donors while donating to such funds are looking for Key Performance Indicators, however, these metrics are not used by the Indigenous communities and often fall short to measure the Indigenous worldviews or success.
- Capacity Gaps: Even though the Indigenous funds are performing well, they still lack various technical, legal and financial skills that need to be there in order to manage the complex investments.
- Political and Legal Barriers: While countries are now actively recognizing Indigenous Sovereignty, in many countries the land rights of the Indigenous remain contested or go unrecognized, this certainly limits the fund deployment.
Now if you want to overcome these challenges, then these indigenous funds will be allyship, trust building and policy reform so that they can connect with the global financial community.
Indigenous Led investment funds are more than just a financial innovation. They are remaining the financial futures, by taking into account the factors such as justice, ecological balance and equity.
These particular funds are a great alternative to extractive capitalism. These institutions promote sustainability, cultural survival and the collective well-being.
