Description
Community funding consists of funds established and managed by a community, sometimes with external assistance, to raise funds to invest in low-carbon and resilient infrastructures, such as flood management, water and sanitation, mini-grid renewable energy and natural resources management.
Instrument category
Individual and community financing
Implementation status
Low - limited evidence available
Enabling conditions and success factors
- Strong local community dynamics, ideally with an existing framework for gaining consensus and decision-making. This is important for identifying and prioritising climate actions and coordinated and accountable financial management and procurement of services.
Instrument benefits
- Community funds can play an important role in funding local infrastructure where public funds are unavailable, the risks are too great, and the return is likely to be too small for most private sector actors. This is particularly beneficial for informal settlement upgrading.
- Such funds can provide resilient investment in highly unstable economic environments.
- Community funds can allow communities to engage with local government and donors.
- Funds can disaggregate finance to local levels – levels that larger development agencies and foundations often cannot reach.
Challenges and risks to implementation
- It can be challenging to build consensus and make decisions among community stakeholders.
