Innovative Financing Solutions

Communities affected by agricultural, forestry, and other resource investments urgently need increased funding for legal and technical support. Without support, communities risk losing access to critical land and resources, suffering human rights violations, or missing opportunities to benefit from investments. A lack of community support can also lead to conflict and challenges that are damaging for companies and host governments.

Donors and support providers have found ways to finance support for communities, but such efforts can only extend so far. Promising new opportunities exist for filling the financing gap, yet they will require sustained efforts by a range of actors. This report presents a call to action to help communities secure the support they so crucially need.

The report explores options for tapping new funding sources for community support. These include:

• Government marshaling of funding from companies and others, through taxes, fees, and penalties
• Basket funds, operated by independent, trusted entities and funded by contributions from multiple actors
• Market-based impact investments and social impact bonds
• Direct company funding
• Third party funding
• Other solutions for increasing funding or reducing costs, including crowdfunding, generating profits from social enterprises, affordable user fees or in-kind services, contingency and uplift fees, and court-ordered fee shifting.

The report also presents overarching considerations for developing a new financing initiative. These include: the initiative’s likely cost, efficiency and financial sustainability, political complexity and obstacles, political economy implications, the importance of strong governance mechanisms, and the logistics required to link funding, communities and support providers.

This work is part of a series of projects and activities, supported by UK aid from the Department for International Development, looking at legal support gaps in the context of land investments.

CCSI is working to advance basket funds for community support in different contexts. Interested in participating? Contact us at ccsi@law.columbia.edu

This work is part of a series of projects and activities, supported by UK aid from the Department for International Development, looking at legal support gaps in the context of land investments.

See also: 

• Our op-ed, co-written with Namati, for SDG Action: Leaving no one behind? Development finance and the need for community support (2021)
• Our guest blog on innovative financing solutions for The Elders: How can we support communities trying to protect their land and natural resources?

Authors

Sam Szoke-Burke

Themes

• Land Governance