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Helpful prior knowledge and learning objectives
Helpful prior knowledge and learning objectives
Helpful prior learning:
Section 1.1.1 The economy and you, which explains what an economy is and how it is relevant to students’ lives
Section 1.1.2 The embedded economy, which explains the relationship between the economy and society and Earth’s systems
Section 1.1.4 Regenerative economies, which explains how circular, distributive and caring, needs-based and sufficient economies can meet human needs within planetary boundaries
Section 4.1.1 The commons as a system, which explains the parts, relationships, and functions of the commons and the relationship between the commons and other provisioning institutions
Section S.1 What are systems?, which explains what a system is, the importance of systems boundaries, the difference between open and closed systems and the importance of systems thinking
Section S.2 Systems thinking patterns, which outlines the core components of systems thinking: distinctions (thing/other), systems (part/whole), relationships (action/reaction), and perspectives (point/view)
Learning objectives:
discuss strategies for financing the commons
In the 1970s, the city government of Fortaleza, Brazil relocated low-income families from informal settlements near the city center to make way for expensive business and residential buildings. These families were resettled in Conjunto Palmeiras, an area on the edge of the city lacking basic infrastructure like paved roads, clean water, schools, and health services. Public transport was scarce, leaving residents isolated from jobs and opportunities. Over time, poverty and unemployment increased.
In 1998, the community founded Banco Palmas, a community bank to meet local needs. It offered micro-loans to start small businesses and introduced a community currency, the Palma, to keep money circulating within the neighborhood. These efforts sparked the creation of shops, green spaces, and community centres. By pooling resources and acting on their shared values, the residents of Conjunto Palmeiras transformed into a vibrant local economy.
Figure 1. Example of local business which accepts Palmas ("Aceitamos Palmas," meaning "We accept Palmas")
(Credit: Pmorizio, CC BY-SA 3.0)
Why is financing commons a challenge?
Why is financing commons a challenge?
Commoning requires funding for essentials like repairs, tools, and shared spaces. But financing commons differs from financing businesses in markets. Businesses in markets can take out loans (debt finance) or sell partial ownership in the business to investors (equity finance) to raise money. The lenders or investors can be paid back with the profits earned from selling the business’s products (Section 3.3.5).
Commons, managed for shared use rather than profit, often lack revenue streams to attract banks or investors. Instead, commoners turn to creative strategies, known as relationalised finance or solidarity finance, that work with shared responsibility and collective benefit.
Figure 3. Relationalised finance supports commoning, aligned with values of care and distributed value.
Note: the ¤ symbol is used to represent a generic currency
What are some types of relationalised finance?
What are some types of relationalised finance?
Relationalised finance usually pools smaller contributions from many sources to cover costs, and usually, though not always, comes from those who directly benefit from the commoning activities.
Crowdfunding
Crowdfunding
Crowdfunding gathers small contributions from many people, often online. Platforms like Goteo support civic projects, while Patreon aids creative commons. There are several forms of crowdfunding:
donation-based: supporters give without expecting anything in return;
reward-based: supporters receive incentives like products or event access;
equity-based: supporters become shareholders, may be used for larger projects and is suitable for commoning projects with some revenue;
debt-based: supporters lend money to the project, which can be repaid with or without interest, also known as peer-to-peer lending.
The short video below describes how the Magrana Vallesana food cooperative in Spain used debt-based crowdsourcing to fund a cold room.
Cooperatives
Cooperatives
Cooperatives, like Magrana Vallesana mentioned in the video above, are member-owned organisations that pool resources for shared projects. Members make financial contributions, like paying membership fees, and manage the cooperative together.
In agricultural cooperatives like those in Kenya and India, small-scale farmers collectively buy seeds, tools, and land. In community supported agriculture (CSA) (Section 4.2.2) members pay farmer(s) upfront, a kind of guaranteed income, for a share of the farm’s products each week. In both types of farming cooperatives, the wider community shares both risks and rewards.
Another cooperative example is Spain’s Mondragon, a federation of worker cooperatives across various sectors, including manufacturing, retail, finance, and education. Workers own shares of Mondragon, and make decisions about distributing and investing profits such as funding renewable energy and community education projects.
Figure 4. Shared Harvest Farm in Beijing is an example of Community Supported Agriculture (CSA)
(Credit: Ian Teh for Panos Pictures/Food and Land Use Coalition)
State financial support
State financial support
State support for commoning can provide financial stability, but may also come with rules. Successful state-commons partnerships ensure that the community retains control of the commons. Some types of state support include:
grants / subsidies: funds from the state that do not have to be paid back;
tax breaks: donors to commons projects may receive tax benefits, giving them the incentive to donate more’
commons-public partnerships (CPPs): Governments offer funding along with materials, or infrastructure while respecting community control (Section 4.4.3).
Figure 5. States can finance commoning in a number of ways. Note: the ¤ symbol is used to represent a generic currency
(Credit: HAZHA, Noun Project)
Community currencies
Community currencies
Community currencies are used for exchange only between local residents, encouraging more production and spending within the community. Local currencies can also help finance commons by enabling people to pay for community projects and services without relying on national money or outside investors.
As mentioned earlier, Banco Palmas’ Palma currency is used by local residents to buy goods and services locally, supporting neighbourhood businesses. The currency is also used to finance commoning projects like gardens and public spaces. Banco Palmas strengthens local ties and builds a resilient economy, even though residents have limited access to outside sources of finance.
Figure 6. The local Palma currency enables residents of Conjunto Palmeiras to fund projects independently of access to national currency or traditional finance
(Credit: Camille Meyer, original source unknown)
Philanthropy and donations
Philanthropy and donations
Philanthropy involves wealthy individuals or foundations funding commoning projects for the long term, like a multi-year grant. For example, the Global Greengrants Fund supports grassroots work in Ecuador by funding local seed banks. This steady funding allows the commoners to plan long-term without constant financial worries.
Individual donations are great for covering smaller, immediate needs. Local donors might give one-time funds for things like materials or repairs. These donations aren’t as steady as long-term philanthropy, but they’re still important. Together, philanthropy and donations offer both long-term support and quick fixes, helping communities fund shared goals.
Figure 7. The Global Greengrants Fund is an example of philanthropic funding often directed at commoners
(Credit: Global Greengrants Fund)
Bioregional financing facilities
Bioregional financing facilities
Bioregional Financing Facilities (BFFs) (Figure 8) fund local grassroots projects aligned with ecological and social needs in bioregions, like regenerative farming or reforestation. By raising funds from grants, impact investments, and local contributions, BFFs group and channel resources to initiatives that restore ecosystems and strengthen communities. This approach ties finance to local well-being, bridging local economies and ecosystems.
Figure 8. The role of Bioregional Financing Facilities between grassroots organisations and pools of financial capital
(Credit: Bio-Fi Project, CC BY-SA 4.0)
Mutual aid and self-financing
Mutual aid and self-financing
In some cases, commoners rely on mutual aid networks and self-financing to sustain their projects. Mutual aid involves community members helping each other with resources or services, without money changing hands. In Cuba, urban farmers exchange seeds and tools for agriculture. In India, communities maintain water reservoirs (johads, (Section 4.3.1)) through household contributions to communal funds for repairs, ensuring shared access to water.
The methods of finance support community wealth building, a strategy that focuses on strengthening local economies by keeping resources, wealth, and decision-making within the community. It aligns with the principles of commoning by ensuring that local assets, like land, businesses, and public spaces, are managed for the collective benefit of all members rather than being exploited by external investors or centralised institutions.
Activity 4.4.4
Activity 4.4.4
Concept: Regeneration
Skills: Thinking skills (transfer)
Time: 40 minutes
Type: Individual, pairs, or group
Option 1: Considering relationalised finance for commoning
Note: if you did the Option 2 activity in Section 4.4.3, this can be a continuation of that work. In that case you could skip the first two steps and start with discussing sources of finance.
Imagine that you live in a neighbourhood with a large vacant building with some land, like the one in Figure 9.
Think about what needs there are in the community and what you and others might like to do with the space to meet those needs.
Consider the information from this section.
Discuss how each source of financing might work in your commons.
Are there some that might work better than others? Or some that wouldn’t work at all? Why?
Note: if you are discussing one commoning idea as a class, the students could break into groups and each group takes one type of finance to consider, then reports back out to the group.
Ideas for longer activities and projects are listed in Subtopic 4.5 Taking action
Figure 4. What would you do with a vacant building and lot in your community? How could the state support commoning with this shared resource?
(Credit: Antonio Friedemann, Pexels licence)
Checking for understanding
Checking for understanding
Further exploration
Further exploration
Banco Palmas: Solidarity Finance in Conjunto Palmeiras (Brazil) - a website that describes the history and strategies of Banco Palmas, an early example of solidarity finance (relationalised finance). Difficulty level: medium
Global Greengrants Fund - the website of a philanthropic foundation that provides funding for grassroots movements around the world, many of which are commons. Difficulty level: easy
Goteo - a crowdfunding platform focused on commoning and supporting projects that create social, cultural, or environmental value. Difficulty level: easy
Patreon - a platform where supporters fund creators through regular contributions. It helps creators sustain their work by offering exclusive content or perks to patrons. Difficulty level: easy
Reimagining finance to regenerate our planet - a book that presents a model for decentralising finance to support ecological restoration and community resilience. There are case studies of bioregional finance in the book that students could examine to see how this works in practice. Difficulty level: high
Biofi Project - the website of a project to promote bioregional financing facilities. Includes videos about bioregional financing. Difficulty level: high
Scene on Radio, Season 7: Capitalism Episode 12 Reimagined Economies - this episode of a full series on capitalism discusses regenerative businesses. The first 40 minutes focuses mainly on the Mondragon cooperative. Difficulty level: easy
REScoop - a short video about cooperative ownership of energy producers in Europe. Difficulty level: easy.
Sources
Sources
Bollier. D. (2021). The Commoners Catalog For Changemaking: Tools for the Transitions Ahead. https://commonerscatalog.org/
Bollier, D. (2025). “10. Relationized Property and Finance”. Think Like a Commoner: A Short introduction to the Life of the Commons, 2nd edition. https://www.thinklikeacommoner.com/
Kognity. (2022). “3.2.3 External sources of finance: Debt and other finance.” IB DP Business Management HL FE2024. https://kognity.com/
Parry, Lucy J. and Participedia Team (2020). “Banco Palmas: Solidarity Finance in Conjunto Palmeiras”. Participedia. https://participedia.net/case/6662
Plana, Bart Grugeon. (n.d.) Commoning in Catalonia. https://commoningcatalonia.org/
Power, S., & Seefeld, L. (2024). Bioregional financing facilities: Reimagining finance to regenerate our planet. The BioFi Project; Dark Matter Labs; Buckminster Fuller Institute. https://drive.google.com/file/d/1yznJ324biVX_RyVcTKNB96vNMqFbYUI3/view
Terminology (in order of appearance)
Terminology (in order of appearance)
Link to Quizlet interactive flashcards and terminology games for Section 4.4.4 Financing the commons
informal settlement: residential areas where the people who live there do not own their property and have no formal legal right to settle there
infrastructure: large scale physical systems that a society needs to function (roads, railways, electricity networks, etc)
poverty: the state of being poor
unemployment: when someone is willing and able to work but does not have a paid job
community bank: a deposit and lending institution that is typically locally owned and operated
microloan: a small sum of money lent at low interest to a new business
community currency: a type of money that is created and adopted by individual communities to meet their own needs for cooperation and exchange within a locality
loan: a sum of money that an individual or group borrows from banks or other financial institutions
debt finance: finance that comes from borrowing money from banks or other financial instiutions
investor: an individual that puts money into an entity such as a business for a financial return
equity finance: financing that involves the business giving part ownership to investors in exchange for funding
profit: total revenue minus total cost
revenue stream: the various sources from which a business earns money from the sale of goods or services
relationalised finance: also called solidarity finance, involving pools of small contributions from many sources to cover costs of an activity, usually coming from those who directly benefit
solidarity finance: also called relationalised finance, involving pools of small contributions from many sources to cover costs of an activity, usually coming from those who directly benefit
crowdfunding: a financing method that raises small amounts of money from many people, often through online campaigns on platforms
peer-to-peer lending: when a person borrows money directly from another person, without a bank or other financial institution involved
cooperative: an organisation owned and controlled by people to meet their common economic, social, and/or cultural needs
community supported agriculture (CSA): where people from a neighbourhood or town pool their money to support a local farm; they pay the farmer upfront at the beginning of the season, and in return, they receive a share of the farm’s produce each week
renewable energy: energy from sources that are continuously available or regenerate quickly
grant: a sum of money given by a government or other organisation for a particular purpose
subsidy: a payment made by the state to a business or individual to encourage certain behaviour
tax: payment from individuals or organisations to the government, used to provide public infrastructure and services
commons-public partnership (CPPs): where the state partners with commoners to provide goods or services, or manage resources
infrastructure: large scale physical systems that a society needs to function (roads, railways, electricity networks, etc)
resilient: able to recover after a disturbance
philanthropy: charitable giving by individuals and organizations
foundation: a type of nonprofit organisation or charitable trust that usually provides funding and support to other charitable organisations
grassroots: a movement that uses the people in a given district, region or community as the basis for a political or continent movement
bioregional Financing Facilities (BFFs): organisations or programs that provide money to support projects that help people and nature in a specific region
bioregion: a region defined by characteristics of the natural environment rather than by human-made divisions
regenerative farming: farming in balance with and strengthening natural systems
reforestation: the process of replanting an area with trees
economy: all the human-made systems that transfer and transform energy and matter to meet human needs and wants
ecosystem: the interaction of groups of organisms with each other and their physical environment
mutual aid: when people in an area, or a community, come together to support one another, collectively meeting each other’s needs without the help of official bodies like the state or NGOs
urban farmer: someone living in a city or town who uses their green space to grow food and/or raise smaller animals
community wealth building: a range of strategies that help communities become stronger and more independent by supporting local businesses, working together to build assets and create local jobs
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