The financialization of community development: the role of social finance

Local community organisations, many of which began life as agents of community self defence and regeneration during a Post-Fordist era of massive job losses in the 1970s and 1980s, are now being transposed into low-cost deliverers of public services in competition with the private sector. More recently, this process increasingly involves injections of “social finance” from external private sources. This article offers a brief history of how the voluntary and community sector has been corralled into a marketized and financialized role where the primacy of business management replaces community need. As in other spheres, there has been a paradigm shift from Keynesian demand management to a neoliberal perspective of community and voluntary organizations’ role in society where they gradually replace the state—in many cases with their encouragement and willing participation. As third sector organizations deliver public services, private investors are rewarded on a payment per output basis. Three case studies show how financialization through external shareholder interests is becoming a force in public service delivery.