State & Local Investments

Over the past several decades, U.S. city, county, and state governments have increasingly adopted a wide set of policy tools to spur community wealth building. Most commonly, local and state governments are investing directly in local businesses through economic development programs, which make loans to or investments in local enterprises, and through the active targeting of pension fund monies to support businesses within their regions.

State and Local Investments play a critical role in building community wealth for several key reasons:

  • They provide needed capital to local businesses, which helps create and preserve local jobs and ensures healthier, local economies.
  • Local business success generates increased tax revenues for localities, which can be used to support important community needs and amenities.
  • Since local businesses are likely to rely on local suppliers and service providers,such investments also have a positive economic multiplier effect that helps ensure that local dollars will remain and recirculate within the community.
  • Investing a portion of pension fund investments in area businesses helps local enterprises succeed, and thus, also generates greater tax revenues that can be used to enhance infrastructure and services. houses an extensive collection of resources focused on State and Local Investments and this strategy’s role in community wealth building. Below is a glimpse of the rich array of materials you will find as you explore our site:

Our Support Organizations section highlights major organizations working to advance State and Local Investments. One such group is the National Association of State and Local Equity Funds (NASLEF), a nonprofit professional association that promotes the efficient management of state and local equity funds and works to raise equity capital for rental housing developments across the country.

Key Facts & Figures

States with Venture Capital programs approved by the U.S. Dept. of Treasury (2018)

38 *

Percent of surveyed local governments with revolving loan fund programs (2014)


Percent of surveyed local governments with community development loan funds (2014)


NY state pensions fund’s investments in NY firms (2009-2013)

$624 million*

Jobs created through NY state pension fund’s investments (2009-2013)


Our Best Practices section showcases exemplary organizations, such as the State of Wisconsin Investment Board, which actively invests in and supports Wisconsin companies. It not only has current investments of over $16.3 billion in companies with economic ties to Wisconsin, but also works to support the state’s venture capital industry and small business development efforts.

Our Research Resources section highlights web-based resources focused on State and Local Investments. For example, Governing Magazine’s website provides some of the most in-depth analysis available of state and local policy innovation.

Our Articles and Publications section includes links to a diverse selection of articles, reports, papers, and books focused on State and Local Investments. One such report is the Center for American Progress’s Using Pension Funds to Build Infrastructure and Put Americans to Work (2013), which highlights the potential benefits of investing pension fund assets in infrastructure projects and suggests policies and resources to encourage such investments.

Lastly, our Toolbox features resources designed to help on-the-ground practitioners interested in State and Local Investment strategies. For example, the Ford Foundation’s The Double Bottom Line Handbook: A Practitioner's Guide to Regional Double Bottom Line Investment Initiatives and Funds (2007) provides practical guidance to those interested in using private investment equity funds to generate market-rate returns for investors while achieving economic, social, and environmental returns, such as job and wealth creation, for low and moderate income communities.