Beyond Grant Capital: What the Buen Vivir Fund Experience Teaches Us

In 2023, after five years of experimentation and collaboration, Thousand Currents decided to close the Buen Vivir Fund (BVF) and end its programmatic investment work. Rooted in the principle of buen vivir or “right living,” the participatory impact investment loan and grant fund was widely lauded as “transformative.” By bringing together 18 members from 10 grassroots organizations from Mexico, Guatemala, India, Nepal, and South Africa; seven US-based philanthropies; and an impact-investor collective, the BVF sought to reshape how capital flowed.

Buen vivir is…a balanced way of being and operating that promotes the overall wellbeing of oneself, one’s family, the community, the natural world, and generations past, present, and future.

As former directors of the BVF, we feel compelled to share highlights of what we learned and how to build forward on those lessons. This feels particularly important in the current context of rapidly shifting funding and political landscapes, in which it is essential to build creative resourcing flows that meet the complexities of this moment.

What Is Buen Vivir?

Buen vivir is a complex concept that is central for numerous Indigenous peoples across Latin America and beyond. The term denotes a balanced way of being and operating that promotes the overall wellbeing of oneself, one’s family, the community, the natural world, and generations past, present, and future.

As the grassroots members from Latin America so often reminded us, the BVF cannot be about achieving buen vivir in the future, it must instead be about being on the path of buen vivir every step of the way. These principles guided our culture, funding decisions, and learning.

The Creation of a Codesigned Global South–Led Fund

First off, we acknowledge that the “Global South” is an inherently problematic phrase for many reasons, but we use it here begrudgingly to highlight that impact investing has been predominantly driven by actors in the Global North, a script that the BVF explicitly sought to flip.

The BVF departed from the premise that grassroots groups in the Global South are often far more advanced in their “alternative” economic practices, analyses, and structures than their Global North counterparts, even if they are often short on capital. As Jessica Gordon Nembhard noted recently in NPQ, “Rather than being an alternative, cooperation was actually the first economic system of human beings.”

The yearlong codesign process began in 2016, when Thousand Currents convened a Founding Circle of 18 member groups and a handful of allied advisors. To ensure a Global South grassroots majority, 10 member groups were grassroots organizations from Latin America, Asia, and Africa, while eight were investor/funder organizations based in the United States.

Grassroots groups in the Global South are often far more advanced in their “alternative” economic practices, analyses, and structures than their Global North counterparts.

Across the board, all members needed to demonstrate leadership in developing solidarity economy supportive practices and a readiness and desire to hold space in a cross-class, cross-race, cross-geography codesign process.

The premise was that an intentional, participatory fund creation process would open possibilities for a different approach to investments. To accomplish this goal, the Founding Circle identified the following strategies: 1) a Members Assembly co-governed by its Founding Circle members instead of an investment committee; 2) reliance on solidarity contributions called aportes instead of interest (a kind of “paying forward” by successful projects to avoid weighing down start-up projects with interest payments); 3) financial investors willingly taking on the majority of the financial risk rather than minimizing risks for investors; and 4) a focus on generating impact and “upskilling” for loan recipients and investors, instead of assuming that “impact” is all about benefiting populations that have less economic wealth and need “help” and expertise from those with more wealth.

In 2018, the impact investment fund launched into a landscape eager for something different. Governance materials like the Guiding Framework were made public and received as groundbreaking by the field. Invitations to speak on panels, features in publications, and requests for advice began arriving, even as the fund was still in its early stages.

Launching into a Global Pandemic

Between 2018 and 2020, the BVF made its first impact investments, deploying six loans across three countries and providing grant support for all of them.

Then, in 2020, the pandemic changed everything. For the BVF members, many of whom were part of communities already on the fringes, things were worse. Meanwhile, US billionaire wealth nearly doubled.

In this crisis, the BVF became a critical source of support for its grassroots members, even though it was itself a new fund still in its experimental early stages.

As the crisis worsened, the BVF community offered solidarity, and Thousand Currents stepped up by raising and sharing “abundance grants”—unrestricted funds that kept organizations afloat and, in many cases, ensured the survival of the people and communities behind them. This financial support was necessary, but many members saw the solidarity and care within the BVF community as their true lifeline.

At the same time, adding unrestricted grants exacerbated tensions in the BVF’s financial model, skewing its financial structure. Those were extraordinary times, and the BVF was navigating uncharted territory. It wasn’t just about moving money differently; it was about showing what shared risk, mutual care, and community support really looked like in practice.

The Fund Closes

As the pandemic restrictions began to lift, investors faced very different economic contexts. Many were now grappling with conditions that fundamentally called into question the viability of their BVF projects. By late 2022, only one member could offer an aporte—the fund’s practice of solidarity contributions over and above return of principal—while the remaining were struggling, putting the BVF’s sustainability at risk. Some considerations at this time included:

1. How do we offer responsible exits for members who wish to exit or opt for loan forgiveness if they were unable to repay?
2. How do we ensure an objective and realistic assessment of members’ capacity to repay?
3. What are the implications to investors not receiving full principal back?

During the second half of 2022 and early 2023, the BVF team and members spent months determining how to wind down the fund’s initial phase and design a new approach, informed by the BVF’s initial years of investment and learning.

Close to launching the revised investment approach in 2023, however, Thousand Currents announced it had decided to end all future programmatic investment. For the BVF, that meant that all outstanding loans were converted into grants. While the decision was communicated with utmost care, the decision to entirely terminate investments caught the BVF community by surprise.

Key Learnings

Reflection and learning were core to the ethos of the BVF from the beginning. The learning we highlight here emerged originally from an exercise led by Siva, who worked closely with the BVF community and led research into new groups in Southeast Asia and Latin America. While the opportunity to apply these learnings to the programmatic investment work at Thousand Currents did not materialize, we believe the lessons are still relevant.

Collectively, over the past three years, the two of us, in partnership with over 60 organizations in the Global South, have learned and dreamed into enacting new ways to use nonextractive, integrated, or blended capital to bolster the resilience and autonomy of organizations working to advance just and thriving futures. The six takeaways we share here have been affirmed for us in the various work we have each done since the BVF closure:

1. Don’t ignore “investment as a strategy” in systems change work.

BVF’s member Kate Poole, a BVF founding investor based at Chordata Capital, sums up this lesson eloquently: “Philanthropy or interventions in philanthropy alone will not be enough to reshape the economy….Capital and control of capital needs to shift from wealthy investors to movements, and a part of working towards that transition is movements building the muscle of stewarding capital.”

Poole’s comment centers on the need to build what the BVF community calls a “non-charity option” that shifts the focus from charity to agency, creating opportunities for marginalized communities to generate and steward wealth on their own terms. While Poole’s comment is rooted in the Global North context, it is important to note that movements across the Global South must continue to contend with the absence of enabling infrastructure to steward capital.

2. Not all work is suitable for investments or loans.

While this statement may seem obvious, there are challenging nuances. A key learning was that we should not underestimate the challenge of determining the right groups and work to invest into.

While we found that core, flexible grant funding remains necessary, many groups also were eager to experiment with alternative financing to move past their long-term dependency on aid and charity. Here, investing into infrastructure that builds enabling environments for movement groups is critical. We also found that cooperatives, community-led collectives, and social enterprises are often leading actors in actively shifting how capital moves and who controls it.

Educación para la Paz (“EduPaz” or Education for Peace) in Mexico was one of the groups that did well with loans, despite the pandemic. Javier Inda, a leader and elder from EduPaz, shared his reflections: “For grassroots groups, credit has always been a necessity….Credit that comes with a low interest rate, or better yet, with a small [grant that] fosters a sense of responsibility while upholding the dignity of individuals and communities. This discipline is what we wanted to foster in our community.”

EduPaz was able to extend loans into their communities and receive timely repayments; they continued practicing their organization’s governance model, implemented accountability measures at the local level, and were poised to meet their loan repayment obligations—even amid the challenges of the pandemic.

Within the BVF, a key observation was that among the groups who were able to continue to service their loans, several characteristics stood out:

• • They had strong and deep community relationships.
  • Their internal structure and practices were flexible yet resilient.
  • They were committed to uplifting democratic models of participation and decision-making, even during the pandemic.
  • The work had income-generating activities that underpinned the project’s mission.

The groups that struggled seemed to do so for these reasons:

• • They hadn’t adequately figured out their income-generating strategy.
  • Their internal structures weren’t built or prepared to absorb loans.
  • A heavy reliance on artisanal or cultural production, which was labor-intensive and market-reliant.

Notably, several of the most successful BVF loans were investments in local funds, in which BVF capital served to grow locally administered loan funds.

3. Aligning responsibility with readiness.

BVF’s Founding Circle was brought together to codesign the impact investment fund, drawing on members’ collective wisdom. While the group composition worked well for the fund’s codesign, complexities emerged as it shifted into operational mode. That is, not all the organizations were equally well-suited for what the fund offered. Some groups were ready for investment—with strong governance, transparency, and accountability structures—while others were not.

And yet, there was an intention and expectation that all the Founding Circle members would receive loans. In retrospect, rather than positioning this first group as a Founding Circle of BVF members, we could have set it up as a codesign committee, with a clear start and end point, as well as an explicit understanding that future loan recipients would be determined once the fund became operational.

4. Participatory governance can be “messy and time-consuming,” but effective when done with care.

Participatory governance is complex and often requires significant time investment, but it offers invaluable spaces for generating insightful and long-term solutions—as well as for building solidarity. The BVF’s Members Assembly, which met twice a year, had protocols to guide decision-making and implementation. While members appreciated the structure, they also wanted more time for informal connection and learning from each other’s practices. Logistically, this was difficult to achieve, given members’ wide geographic spread from Latin America to Southeast Asia.

When the pandemic hit, the focus shifted. Instead of a space for governance and decision-making, meetings became spaces for members to share their pandemic realities—grief, coping strategies, and solidarity. Many expressed how vital these exchanges were. But this shift raised critical questions: Did the governance structure fail, or did it adapt to meet the moment? And how should the intermediary’s role evolve when governance takes a back seat to solidarity?

These questions remain unanswered. Yet the experience highlighted a deeper learning: that spaces and structures that practice participatory governance can be messy, imperfect, and more time-consuming than top-down ones. But, at its core, it is about creating space for breaking down the barriers of our dominant systems and constructing in their place systems that allow all involved—including peoples and communities typically left out—to contribute their brilliance to enhance outcomes.

5. Operating in current regulatory contexts is difficult and expensive.

In most of the countries where the BVF invested, especially in Nepal and India, it faced barriers because their regulatory environments were shaped by systems rooted in extractive global capitalism, where financial interests were prioritized above community needs. These frameworks made carrying out community-centered investments costly and difficult.

Even within the United States, the financial system and its regulatory compliance framework posed challenges to BVF’s work. For example, auditors required the BVF to justify nonmarket rate loans and complete a nonstandard valuation exercise that was cost-prohibitive for a small fund like the BVF. Too often this aspect of the work remained invisible.

6. Power does not disappear.

The BVF set out to do something radical: shift decision-making power over capital to the people most affected by investment decisions.

A key learning was that participation did not make power disappear. In fact, power dynamics were inherently present. While we aimed to break down the typical hierarchy between investor and investee, a lesser-named dynamic was that many grassroots participants recognized that the BVF was a crucial financial lifeline for them.

The host organization’s role as both funder and facilitator often blurred these lines. Many of the groups had been longtime grantees of Thousand Currents, but loans were new. At times, it was hard to tell whether the process supported participation or unintentionally created barriers or gatekeeping. This became clearest when Thousand Currents chose to stop hosting the BVF. Many were disappointed and hoped it could continue in another form, yet no one challenged the decision.

In hindsight, this reflects the complexity of power dynamics in participatory governance. Everyone acted with care and integrity, but the closure felt abrupt. Still, one thing endures: the commitment to shared leadership and lasting ties it created. Two years later, even without funding or a host, many in the BVF community remain connected and continue to carry its values forward.

Can the Buen Vivir Fund Live On?

This past September, Thousand Currents convened many BVF community members for a virtual reflection process. During two half-day sessions together, it became clear that tremendous energy and enthusiasm remain for the spirit and substance of the BVF to live on.

Around the same time, the two of us, along with our colleague Ari Sahagún, formerly of Regenerative Finance, who supported the initial BVF codesign process, launched an exploration of how and if the work could continue. For example, this could occur in a new organizational home (or multiple homes) and in a new format that builds on its learnings.

Cooperatives, community-led collectives, and social enterprises are often leading actors in actively shifting how capital moves and who controls it.

We felt compelled to do this exploration because the BVF taught us a critical truth: To build a more equitable economic system, we must fully commit to risk-taking for the long term. This means allowing mistakes, learning, constructions, and reconstructions to happen.

We are excited to share that we are now working in partnership with Gender Funders CoLab to launch a new fund, with membership from a wide array of foundations. Along with our colleagues Alicia DeLia and Hafsa Mustafa, we are designing a new movement-focused pooled integrated capital resource.

Today, as we consider how best to build upon the BVF’s learnings and legacy, these questions will be key:

1. How do we create powerful and meaningful spaces for investor/investee collaborations that acknowledge the inherent power dynamics and structures, yet build for resilience, long-term engagement, and mutual learning?
2. How do we work through the tensions that arise and continue to iterate and build together?

As we build the new fund together, answering these questions wisely will help us stay on the path of buen vivir.

Note: This article reflects the views of the coauthors alone and not any organization.