Why we must rewire, recast and reclaim the multi-trillion dollar market that funds bold public works.
Public finance was designed to serve community visionaries — the builders who sought better lives for themselves, their communities and future generations. Financing more than two centuries of impactful public projects — schools, parks, libraries and the roads connecting them — the humble municipal bond is the original impact investment, and it helped build our nation.
The multi-trillion dollar market touches our lives in countless ways every day: directly via the roads and bridges we use; the sewers and water pipes upon which we build our cities; the connections within and between our communities and the global economy. And in subtle, though no less direct, ways through the fabric and strength of our public institutions: the quality and quantity of public school education; the ways we generate and consume energy; the ways we create and capture value from the resources of the Commons.
Public finance invisibly guides the nature and scale of our communities: their economy, their ecology, their equity. This hidden economic engine that builds vital public projects is the subject of our relentless efforts at Neighborly.
In this era of unprecedented environmental, social and economic change, public finance must return to its roots and once again serve the needs of local visionaries.
It could and should be funding innovation — like thousands of community broadband networks, so communities can secure their own access to information, and community microgrids, so communities can own their energy while decarbonizing our planet.
And yet, it doesn’t.
What looks from the outside like a well-oiled engine is too slow, too cumbersome, too costly, too paternalistic to work for innovative public projects — the kinds that defined our nation as a rich tapestry of self-reliant places.
It doesn’t serve the bold public works we need to unleash, at scale, to ensure we thrive as a single planet species.
And so we must ask ourselves: Who should control public finance? Who should it serve?
In our communities — the change makers, the local leaders and the Doers on the ground — are increasingly asked to do more with less.
They are forced to navigate unprecedented, accelerating economic and environmental change, and to solve problems — sometimes global in scale — not faced by prior generations: aging infrastructure, rapidly changing economic circumstances and mounting environmental dangers requiring all-new resiliency solutions. All with slashed federal funding, growing pension obligations, and rapidly changing tax bases.
At the same time, a global shift in consciousness is underway: more communities want to take control of their future, and more investors than ever want to earn returns through world-positive investments.
It’s clear to us that communities must control public finance — that communities must put this massive, centralized market to work for them.
We also believe that investors deserve direct access and the full value of their returns for empowering innovative public projects. Without investors who stake up capital for the projects and programs communities need, and their investment managers, entrusted to decide where the capital goes to work, there would be no such thing as public finance.
It is for the civic visionaries and the investors — the communities and the capital — that we go to work every day. They protect what’s worth keeping, repair what needs fixing and build new what we need in order to prosper.
Our quest to more seamlessly connect communities with capital is guided by three central questions:
1. How can new technologies improve the centuries-old financial infrastructure in the market that finances infrastructure? Can we build and embrace advances in technology that globalize, atomize and standardize the public finance market?
2. With more than two centuries of schools, libraries and economic connections, the humble municipal bond is the original impact investment. What if we could embrace this mechanism to harness global appetite for impact investing?
3. The municipal bond remains one of the most effective devices ever devised to transfer value between the public and private realms. How can we bring back the simplicity of the original system in which the community owns its assets from day one?
We as a planet are at a critical inflection point. Our communities must have direct, responsible access to capital in order to realize the public works innovations needed to become economically and environmentally resilient.
With our help, the system we’ve relied on to fund critical collective projects can bring about the next generation of public innovation: on-demand, capable of rapidly, responsibly deploying capital toward higher good and returns.
Let’s rewire public finance so it’s more responsive to the fast-changing needs of our communities, so capital flows to and from outcomes more resilient, more enduring.
Let’s recast public finance so investors do well financially by doing good in the world; communities investing in resilience might outperform their short-sighted counterparts.
Let’s reclaim public finance for, of, and by we the people, to once again unleash bold visions for a more just and prosperous future.
The future of public finance is in our hands. Let’s get to work.