The Buen Vivir Fund is a participatory impact investment fund operating internationally. The Fund promotes a financial model that broadens the definitions of return to include community wellbeing, while avoiding the traditional focus on maximizing capital accumulation.
Problems and Purpose
The Buen Vivir Fund, LLC is a subsidiary of Thousand Currents, an international non-governmental organization based in Oakland, California. The Buen Vivir Fund is based on the concept of buen vivir, or ‘right living’, which originates from indigenous peoples in Latin America; the term denotes a way of living that is in balance with the natural world, community, and generations past, present, and future.
Background History and Context
Thousand Currents was founded under the name IDEX in 1985 with an original mission to support self-determined community initiatives in the Global South through grantmaking as a public foundation. To date, the organization estimates it has worked with over 1,000 grass-roots projects in 40 countries with a staff of 20 based throughout the globe.
In the past decade, indigenous movements in Latin America have increasingly focused on the concept of buen vivir as a counter to economic development models imposed on their countries and communities that focus heavily on economic indicators and growth . The idea for focusing the Buen Vivir Fund on this concept came from initial exploratory conversations with long-time Thousand Currents partner organizations. Thousand Currents initiated the Buen Vivir Fund with grass-roots groups with whom it had a pre-existing relationship through its grantmaking. These grass-roots groups were in turn sharing with and investing in their local communities, either through overseeing innovative revenue-generating projects that benefit their communities (such as health clinics and affordable housing) or through operating their own lending vehicles such as revolving funds or community savings and credit circles – all based upon a deep contextual understanding of what works within those communities.
In 2015, Thousand Currents approached the former Buen Vivir Fund Director Joanna Levitt Cea about establishing an in-house impact investment fund. At the time of the initial conversations, a 2014 G8 report projected impact investments to surpass government overseas aid, estimating that more than US$400bn would be invested by 2020 . Levitt Cea brought her experience of championing policies to ensure citizen participation and human rights safeguards at global financial institutions to Thousand Currents’ unique approach to grass-roots grantmaking. Between October 2015 and January 2016, Levitt Cea conducted a landscape review of impact investing and baseline research, which included interviews with more than 40 actors in diverse realms of the impact investment space as well as Thousand Currents staff, board, and grantees. The scoping study concluded that ‘For better or worse, impact investing is fundamentally changing the way that aid, philanthropy and even mainstream investment are perceived and practiced’ .
Thousand Currents determined that there were two major gaps in the field of impact investment in which their organization was uniquely positioned to add value. The first was the systemic lack of participation of the ‘beneficiaries’ of impact investment in any decision-making or agenda-setting on that investment. The second was the fact that, in spite of the rapidly growing diversity of entities seeking and receiving impact investment, the terms of this investment tend to remain strikingly unvaried. One interviewee that Levitt Cea spoke to summed it up: ‘At the end of the day, everyone is just slightly tweaking the same old terms from Wall Street and Silicon Valley’.
Thus, Thousand Currents decided to create an investment vehicle that would center on the full participation of grass-roots organizations receiving investment capital and innovate investment terms and practices that dramatically depart from the standards of Wall Street and Silicon Valley. Instead, the Buen Vivir Fund draws from the time-honored lending and investment practices of grass-roots organizations in the Global South that place the wellbeing of people, planet, and ecology before profit.
Organizing, Supporting, and Funding Entities
The Buen Vivir Fund, LLC is a subsidiary of Thousand Currents, an international non-governmental organization based in Oakland, California. Thousand Currents was founded under the name IDEX in 1985 with an original mission to support self-determined community initiatives in the Global South through grantmaking as a public foundation.
Within the Buen Vivir Fund, the Buen Vivir Fund’s Members Assembly is the governing authority, making decisions on Fund investments and direction. The Members Assembly is made up of one representative from each grass-roots organization and investor organization. This governing body is supported by the Buen Vivir Fund Management Team, staffed by Thousand Currents, which implements the decisions of the Members Assembly and operates the Fund. The due diligence process of the Buen Vivir Fund includes peer evaluation by Fund members.
When a project is approved by the Members Assembly for investment by the Fund, this investment can include grant support, investment capital (to date, all investments have been in the form of debt), and ‘beyond financial investment’, such as specific advising support that the project may be seeking. In the lending model of the Buen Vivir Fund, projects borrow and return 100 per cent of the principal received. Additionally, a solidarity contribution, referred to as an aporte payment, is made, over and above return of principal. Different from fixed interest payments, the amounts of these aporte payments are self-determined by organizations and made during or upon completion of successful projects.
When proposals for the fund were circulated, discussions took place to decide who would become members of the ‘Founding Circle’ of the Buen Vivir Fund. The Fund prioritized two inclusion criteria for organizations: those whose current work included a focus on alternative economic or financing practices, and those with existing relationships to Thousand Currents or strongly recommended by trusted contacts. In total, ten grass-roots organizations were invited. All had established track records of operating a loan fund or building solidarity economies within their communities in other ways. As the Buen Vivir Fund Director, Joanna Levitt Cea, described, ‘We picked ten grassroots organizations that had conducted ground-breaking work in developing and testing models for lending and sharing wealth among the communities they served and in utilizing financial capital to create economic initiatives that really pay attention to well-being’ .
In addition to the Founding Circle, eight financial investors – identified as those having grantmaking or investment practices that deliberately seek to balance power dynamics between funders and grantees/investees, as well as an orientation toward humility, patience, and willingness to experiment – were invited to join. Thousand Currents chose to maintain an aforementioned commitment to start small and grow incrementally in order to make membership in the Fund ‘a transformational experience for all and not a transactional one’  An investor in the Buen Vivir Fund can expect to contribute investment as well as grant capital and to receive the principal investment returned during a time period agreed upon with the grass-roots organization, as well as to receive non-financial returns that include the lessons learned from participating in the Fund.
The Fund currently has a waiting list and will be opening to new members in 2020. The eager desire from many in the impact investment community to join the Buen Vivir Fund makes clear that the value being offered is unique to the space.
Participant Recruitment and Selection
Participants in the Fund are the organizing members as described above, as well as the investors, Thousand Currents staff, and the grassroots organizations and projects that receive funding.
Methods and Tools Used
Cooperative management and collaborative co-design .
What Went On: Process, Interaction, and Participation
Collaborative Design Process
In October 2016, 20 representatives from the ten participating grass-roots organizations joined eight investors, five advisers, and six Thousand Currents staff in Mexico City for the Buen Vivir Fund’s inaugural learning event. This event was structured as a five-day workshop to collaboratively spark the design of the Fund’s terms of investment, financial practices, and governance structure. Over the course of five days, the participants learned about each organization’s work, and they reviewed a backgrounder on different approaches to investment, which had been prepared in advance of the event by Thousand Currents. This backgrounder was a summary of learnings from Thousand Currents’ initial interviews and learning calls with Fund advisers and Founding Circle members, as an input to the discussions on how the Buen Vivir Fund was to move forward. A team of translators and translation equipment were made available to all attendees and a video documentary was created in order for the grass-roots representatives to return and share the workshop experience with their constituents at home.
After the Mexico City learning event, members of the Founding Circle opted into six sub-groups to tackle different operational and strategic topics in order to develop the Buen Vivir Fund’s Guiding Framework. People joined sub-groups according to interests and preference; they were not assigned. Group sizes varied from eight to two or three members who had a particular interest or unique skillset to bring to an issue at hand. The topical areas of interest initially revolved around broad questions such as ‘How to set up loan terms’ and progressively narrowed with subsequent meetings. Sub-group meetings were captured in synthesis notes that were put through a validation process in which content was presented back to the sub-groups for confirmation and amendment.
The collaborative design also included dozens of one-to-one consultations with the Fund Director or other Thousand Currents staff during which individuals or small groups reflected upon specific issues or new iterations as the Guiding Framework began to materialize. These iterative reflections were also synthesized and validated by the participating members before being incorporated into the draft framework. Often, both grass-roots and investor members took draft documents to their staff, community constituents or board meetings to get input from their broader teams as well. In total, the Fund estimates that 81 people from six different countries spent a collective 2,934 hours over the span of one year to arrive at the final design of the Fund.
The Buen Vivir Fund uses a general assembly model that draws from governance models used primarily by indigenous organizations in Latin America. Founding members from Mexico and Guatemala contributed significantly to envisioning and shaping the Fund’s governance model. The Members Assembly is comprised of one representative from each of the ten grass-roots organizations, eight financial investor organizations, and one Thousand Currents representative. The Members Assembly follows a protocol for decision-making and collective reflection and requires a majority vote for all investment-related decisions within the Fund. Each member has equal voting rights in a decision-making process that steers all decisions made related to investment, strategy, membership, and conflict resolution. Examples of decisions made by the Members Assembly include approval of new members (financial or grass-roots organizations) and approval of terms under which capital is lent. Efforts are made for the Members Assembly to reach consensus but membership is structured so the majority aggregate position is held by borrowing organizations. This is a structural manifestation of the commitment to participation. Issues are brought to the attention of the Members Assembly during two virtual meetings held per year and an in-person Learning Exchange held annually. In total, it is estimated that representatives commit ten hours per year to the Members Assembly, not including the annual four-day Learning Exchange in person.
An example of an issue presented to the Members Assembly is a proposal brought forth by a grass-roots organization in mid-2018 to raise the Fund’s maximum investment level. Prior to the vote, members received a summary of the proposal prepared by Thousand Currents staff of the Buen Vivir Fund Management Team, which framed the issue. The day of the vote, the proposal was presented via video conference to the entire Members Assembly, then small breakout groups held separate virtual meetings to discuss the benefits and challenges to raising the maximum level of investment. The Members Assembly then reconvened in a virtual meeting to hold the vote. The measure did not pass, with the members reaching a consensus to wait until the Fund completed its first two-year Cycle of Investment and Learning, which will conclude at the close of 2019, before changing terms finalized through the collaborative design process.
The Buen Vivir Fund loan agreement is unique in that, while complying with regulations of the various countries in which the Fund operates, the loan agreement is not designed to be enforced in courts and specifies that any disputes are to be resolved by the Members Assembly. For instance, if a borrower is unable to make an agreed-upon principal repayment, resolution takes place within the Members Assembly. First the borrower is asked to describe in writing the reasons for an inability to repay. If the Members Assembly determines the borrower is acting in good faith according to the Fund’s guiding principles but, for example, due to environmental conditions outside the borrower’s control repayment is not possible, two options are available: the borrower can create an updated, viable plan to complete principal repayment which will be amended to the loan agreement; or the Members Assembly will forgive the loan in its entirety. If the Members Assembly decides the borrower is acting in bad faith to the Fund’s guiding principles, the Members Assembly collectively determines what penalty will be applied. To date, no conflicts that require such remedial action have arisen.
Prior to a final vote from the Members Assembly, investment applications undergo a peer-review process that includes both peer applicants and financial investors. Project proposals are initially submitted to the Buen Vivir Fund Management Team, which works with the organization applying to undergo initial clarifying and strengthening of the project plan. In the first round of due diligence, a proposed project is peer reviewed via a Project Support Team – a group of three to five strategically selected individuals from the Members Assembly. The Project Support Teams include assigned advisers who are chosen based on their technical expertise in a field related to the applicant’s project. Applications are reviewed and feedback provided in order to strengthen the applications, and applicants are then able to submit supplemental material and amend applications in light of the feedback provided by reviewers. In addition, all applications are accessible by anyone in the Fund through a shared cloud drive. The Project Support Team reviews the project materials compiled for them by the Fund Management Team and holds a virtual meeting with the applicant organization, in which they share questions, recommendations, trouble-shooting, and coaching, to help the group further strengthen their project plan. The Project Support Team then makes a recommendation to the Members Assembly regarding approval of the project for investment. To date, Project Support Teams have sometimes made a recommendation for approval after one meeting; and on other occasions asked the group to undergo one or two additional steps and meetings before the Team felt able to make a recommendation for approval.
Influence, Outcomes, and Effects
At the time of writing (2019), the Buen Vivir Fund has made four loans with two in the immediate pipeline worth a total of US$465,000 to grass-roots partners in Latin America, Southern Africa, and South Asia. With US$1m committed, the Buen Vivir Fund expects to release the second tranche of capital in mid-2019. Examples of projects which are benefiting from these loans are varied and encompass a wide range of approaches that include:
- Strengthening and expanding markets for fair-trade cooperative suppliers in Mexico;
- Building a medical clinic and training center to promote and preserve Mayan traditional medicine practices in Guatemala
- Building affordable housing for migrant women and children in South Africa.
In addition to loan disbursal, the Buen Vivir Fund has piloted a completely new practice of impact investment built collaboratively from the bottom-up with its grass-roots partners. The holistic and thorough nature of this endeavor cannot be overstated. From an application process which is peer-reviewed, to an inclusive, democratic governing body, to a definition of returns that encompasses community wellbeing, the Buen Vivir Fund has brought transformative participation, in which people partake in decision-making, into impact investment. As one impact investor noted, ‘When I look at the investments we have made in terms of a participatory model, really this is the only one. This is the only one that I’ve been engaged with where it’s really from the bottom-up that is international in focus’ .
The Buen Vivir Fund places value on what is ‘life-giving not resource-amassing’, and thus envisions a full spectrum of non-financial returns for investors. Investors in the Founding Circle of the Buen Vivir Fund Members Assembly have characterized the experience as investing ‘a relatively small amount of money in the Buen Vivir Fund [that] is now changing how we approach our entire portfolio’ . Investors have been inspired to apply practices they learn from grass-roots members to their own offices, meetings and investment policy statements, prompting one investor to explain, ‘I’ve just thought about ways to slow down meetings and make them more purposeful’ . Non-financial returns for these investors might include:
- an increase in the quality of time spent with colleagues due to utilizing new meeting practices learned from grass-roots peers in the Fund;
- new deal flow and opportunities for values-aligned investment that come from conversations with their newly diversified peer network via the Members Assembly;
- More effective due diligence and impact evaluation of their portfolio via applying innovative practices learned from fellow Members.
Analysis and Lessons Learned
The Buen Vivir Fund has been able to build participation into the impact investment process and is on the path to achieving the full spectrum of returns outlined above thanks in large part to a few key ingredients of success, strategies, and enabling factors. These include an organizational culture that values participation; recruiting Founding Circle members with open mindsets and long-term vision; and a history of established partnerships and practice.
Thousand Currents has an organizational culture that is holistically committed to equitable grass-roots partnerships, and participation within the Buen Vivir Fund is steered by leaders who prioritize guidance and knowledge from their partners in the Global South. Thousand Currents uses its position and influence as a vocal and visible advocate for grass-roots-led social change, bridging emerging approaches and learnings from the Global South with philanthropic models and practices from the Global North. Given the flood of resources into the impact investment space, staff at Thousand Currents felt they had both an obligation and a responsibility to advocate for alternative models in the emerging impact investment field with the aim of influencing the practice of others by demonstrating a participatory model themselves. From the outset, funding and time were earmarked explicitly for participatory approaches to be a central pillar of the Fund’s design to demonstrate how we can shift power in the sector of impact investing.
To maintain a rich culture that values participation, Thousand Currents recruited Founding Circle members who had established relationships of trust with the organization and who were willing to risk and experiment in search of an equitable impact investing model. This included financial investors who were ready to embrace whatever terms and practices emerged from the co-design process, including the concepts of a zero-interest policy, non-financial returns, and investors shouldering the majority of risk. Among the founding investors, ‘the common denominator is that people have been really thoughtful and had been iterating their model [for grantmaking and/or investment] and thinking about what works’ . Many of the Founding Circle investors were associated with institutions, mostly foundations, which were committed as institutions to experimental and values-aligned applications of their investment resources. The Founding Circle members also included grass-roots partners who were willing to enter into new kinds of agreements with investors who might traditionally have been viewed with suspicion, given historically exploitative approaches of the financial and development sector. Grass-roots partners were more amenable to entering into an investment deal because Thousand Currents challenged investors to absorb more risk than in more traditional investment relationships. Additionally, grass-roots partners were afforded the choice in the amount of the solidarity contribution (aportes) committed to benefit the continuation of the Fund instead of a set rate interest payment returned to investors.
Reciprocal trust and authentic relationships between these two primary groups of actors was key. Trust was established in large part due to the ‘hidden collateral’ found in both actors’ long-term relationships with Thousand Currents. With the investees, these relationships span upwards of ten years of grantmaking meant to support their innovative and established lending practices at the grass-roots level. In other words, the investees are not expected to invent approaches in order to suit investor mandates but are instead further building out existing approaches and sharing them with investors as well as other grass-roots partners. Investors trusted in this hidden collateral because either they or someone in their network had a positive experience previously working with Thousand Currents, which afforded a greater willingness to assume risk.
Other enabling factors for the success of the embeddedness of participation with the Buen Vivir Fund are discernible in direct feedback from the Founding Circle members. For example, some investors felt that a lot of attention and focus was devoted to building the governance processes, but that in the initial round of investment there was not sufficient attention dedicated to robust due diligence and strengthening of the business plans at the centre of each grass-roots investment. The Fund Management Team sought out feedback after the disbursement of the first series of loans and is continuing to iterate and enhance the due diligence process accordingly. Some but not all funders were willing to extend this timeline, leading one investor to call for greater flexibility: ‘If we’re going to be truly transformative as a foundation and we want to work on transformative projects like this, we need to find money that is not that tied so that you can have the least restrictions associated with it’ . Similarly, the desire for more time was echoed by the grass-roots partners, who valued the co-creation of the Fund’s governance but felt that due diligence was, at times, rushed. This was felt most acutely on conference calls with many Members. Yet, all Members were struck by how committed the Thousand Currents team was to ensuring that every voice was provided with the space to be heard.
Currently, Thousand Currents has a growing list of both financial investors and grass-roots groups who are awaiting the opportunity to join the Fund, having heard about the unique model at impact investment conferences or through grass-roots networks. The current Members Assembly will determine a path for expansion that will retain the relational and participatory nature of the Fund, while ensuring that governance is effective and not unwieldy.
While the Buen Vivir Fund is positioned to grow in both membership and volume of capital shared, this is not the primary means by which it aims to scale its impact. As one of the Fund ally-advisers stated, ‘Don’t try to be a billion-dollar fund; be a billionaire of influence’. The Buen Vivir Fund seeks to strategically share its practices to broaden the sense of what is possible and legitimate in impact investment – and to remind the field that Wall Street and Silicon Valley are not the only sources of effective investment models. The Buen Vivir Fund shares its practices via presentations at relevant conferences; through virtual and in-person events convening professionals that are part of the Buen Vivir Finance Learning community; through publication of written and multimedia materials; and making all of the practices of the Fund open source on its website.
This aim to shift practice in the field of impact investing comes back to the concept that guides the Fund: buen vivir. This concept recognizes that the wellbeing of one is tied to the wellbeing of all; that the wellbeing of a system is linked to that of the actors composing the system. The Buen Vivir Fund’s long-term aim is to model how investment can contribute to the wellbeing of grass-roots groups receiving capital as well as to the financial investors sharing that capital, offering them opportunities to bring back into balance financial practices emanating from an economic system that is unjust. In this way, the Buen Vivir Fund hopes to plant seeds that can help all its members – from indigenous organizations in rural Guatemala to private foundations in New York – be agents of change towards an economy of greater balance and wellbeing.
 Social Impact Investment Taskforce (2014) Impact Investment: The Invisible Heart of Markets, available at: http://gsgii.org/reports/impact-investment-the-invisible-heart-of-markets/
 Levitt Cea, J. (2016) ‘Our Proposal for a New Approach to Investment: The IDEX Buen Vivir Fund’, unpublished
 Personal Communication, 7 December 2018.
 J. Levitt Cea, Buen Vivir Fund Director, interview, 8 February 2019.
 J. Astone, The Swift Foundation Executive Director, interview, 16 November 2018.
 J. Levitt Cea, Buen Vivir Fund Director, interview, 8 February 2019.
 J. Astone, The Swift Foundation Executive Director, interview, 16 November 2018.
The first submission of this Participedia entry was adapted from a case study by Grace Higdon at the Institute of Development Studies as part of the research project 'Linking Participation and Economic Advancement’ licensed and reproduced under Creative Commons (CC BY 3.0). Original source, including the full original case study and methodology can be found here: