This article appeared in This Week in Palestine’s January 2013 issue on the theme of investment.

Investors want their assets to multiply. They buy shares in companies or funds and expect financial returns in the form of periodic dividends or growth in the value of their shares. Our economy revolves around investment – investors accept stakes in other people’s ventures; entrepreneurs grow their initiatives with others’ resources and support.

“Community investment” is a little different. It also involves inputs, but the inputs are not limited to money. They include expertise, material goods, moral support, and more. Community investment is profitable, but it brings a social return on investment (SROI) instead of simply financial gain.

The social return on community investment in Palestine can be measured in stronger community institutions, lower poverty, better education, improved livelihoods, personal security, hope for the future, and other collective benefits. Moreover, making a profitable community investment in Palestine is less risky than almost any other kind of investment if you keep these five guidelines in mind:

1.    Focus on the potential return. If you invest in a community group that becomes empowered and effective, how will it impact children’s life chances, equality for women, sustainable farming, cultural expression? Isn’t it an honour to play a small role in the development of Palestine?

2.    Show faith in the management. If managers are credible and if they are learners, support their leadership, even when they take risks. Community leaders are not contractors to be hired to implement activities. They are the dedicated front line of social change. Believe in them, even when they doubt themselves.

3.    Consider your capacity. Are the resources you have to invest the ones that are needed? Do you have contacts you can use to mobilise other resources? Never think that what you have to offer isn’t enough. If you listen to local priorities, you will find a valuable way to contribute.

4.    Make a long-term commitment. One-time transactions may feel good to the giver, but profits from community investment don’t accrue short term, and they rarely lead to sustainability. Are you ready to participate in Palestinian community development for the long haul?

5.    Work collectively. No one investor can solve community problems alone. Are you willing to combine your investment with others’ investments in order to capitalise the Palestinian community? One way to do this is through a philanthropic organisation such as Dalia Association, Palestine’s only community foundation.

Saeeda Mousa, director of Dalia Association, took me to Zawiya, a village of about 5,500 residents on 23,000 dunams in Salfit Governorate to see one of Dalia’s community investments. As the road from Ramallah twisted and turned for nearly an hour, I left pieces of my stomach in each Israeli settlement and in each Palestinian village we passed. But it was worth it when I sat with community members and we started talking.

Dalia had already worked intimately with the village, implementing a small-grants programme that empowers community members to decide which of their own community groups to fund and to hold those community groups accountable. It made sense, then, for Zawiya to be a pilot site for Dalia’s “village funds” concept – a kind of resource bank into which local residents, the private sector, and the diaspora could invest in community-led development.

The first contribution of $2,500 came from The Abraaj Group, headquartered in Dubai, which maintains a “company fund” with Dalia Association. That first contribution was a vote of confidence, but it still took more than a year to inspire enough trust to raise more. The next $400 came from Adam, a local Zawiya resident who wanted to be part of launching the new idea. Then Ismail, a Zawiya native living in Brazil, added $1,000 to leverage more funds, and that was followed by a $1,000 contribution from Abdul Qader Mustafa Abu Naba’a, a philanthropist originally from Zawiya who now lives in Jordan. When Adam submitted the idea to Dalia’s philanthropy contest and was one of three winners, it brought another $1,000 to the Zawiya Village Fund. This example demonstrates that “community investment” means both investment in the community and investment by the community. It’s a model that values the financial contribution of investors and the sweat equity of local community workers. They become true partners in the success of their joint venture.

Zawiya residents considered several ideas before deciding to use the $5,900 in the Zawiya Village Fund to provide revolving loans. Seven men and five women took small loans of NIS 1,300 (less than $450) interest free. The municipality contributes by providing the repayment system: they take NIS 100 every month when loan-takers pay their electricity bills. Those payments are set aside for another round of loans. Dalia Association has already committed to adding another $2,500, also from The Abraaj Group company fund at Dalia Association, for the next round of revolving loans.

Abu Majdi was among those very satisfied with his loan. “I had a small store that brought in about NIS 400/month. I expanded it and now it brings in NIS 1,000/month. Now that there’s more work, my mother runs the store. She benefits personally and socially by having something important to do.” Abdel Mi’em used NIS 400 of his loan to buy seeds and dirt, and he planted them in plastic bags that he cut from sheets. “Come back in May and you’ll find 400 small trees; each one selling for NIS 10,” he said proudly.

Zawiya was a philanthropic community before Dalia’s involvement. Abu Naba’a invested $135,000 in a cultural centre that was the first in Salfit. It works closely with the municipality offering sports and cultural activities, Islamic education, and other training courses. Many community members are also involved in the village’s nine active groups. Hiyam, who has served on the city council for seven years, says, “When I give, I feel happy. I sacrifice, but I feel I have made a difference.” They stay in contact with villagers who have moved away through an active Facebook page.

“All villages have resources of some kind. Many local residents are ready to give, but they can’t give a lot and they think that their small contribution won’t matter. Business folk like to give to their villages, but only if they have confidence that their contributions will be used well. And there are Palestinians in the diaspora who love to give to their villages, but they want a safe, easy, transparent way to give,” Saeeda says. Village funds housed at Dalia Association provide these benefits. She adds, “Companies can also open corporate social responsibility funds in the name of the company. Groups or individuals can establish funds in the name of a family or on behalf of a specific issue.”

“But community investment is not only about money,” Saeeda says. “Sometimes you just need to believe in people and help them to believe in themselves. Don’t push them onto your timeline or in the direction you think is best for them. Follow their lead and they will find solutions to their own problems.”

We drove back to Ramallah from Zawiya on a different road. We passed Qarawa Beni Zaid, Nabi Saleh, and so many other Palestinian villages ripe for the idea of a village fund. We passed stunning valleys and terrace after terrace of tenderly pruned olive trees. The clouds, puffy against the baby blue sky, were so low you could scoop them up in your hands. Palestine is truly abundant. There are many resources to be mobilised through investment; there is much potential for high social return.