As locally owned and controlled companies become the exception rather than the rule, how can a city restore the local benefits such firms once bestowed, spark investments in the region, and unite residents with the business and philanthropic sectors under a shared sense of destiny?

Social impact investing may well be part of the answer. The idea is to invest money in companies that deliver social returns as well as financial ones—and it’s really taking off. New financial tools are available and investors are seeing profitable returns in developing social good.

It’s estimated that $1 in $5 of assets under management falls into the broad category of responsible investing. Most of this involves screening investments for renewables over fossil fuels, for example. Within this category are mission-related or social impact funds, which are targeted toward certain objectives, like affordable housing or microfinance, and most of this investment is international. In line with standard practice, these funds are broadly diversified and include a host of projects with a range of risk. And the returns for these funds so far have been good. Looking at investment funds made in the 1990s, we’ve seen promising returns of 6.9 percent compared to 8.1 percent for similar non-social impact funds. There is a real opportunity to wed financial and social impacts with good economic value.

The environment for mission investing is also improving. Millennials are embracing social entrepreneurship. The regulatory environment has changed, allowing fiduciaries to consider social as well as financial returns in their investment calculus. New metrics are being constructed to lend credibility and trust to social impact investing—like measuring impact returns or giving credit ratings to such funds. Gigantic swaths of capital could soon be redirected with a double bottom-line: one for profits and one for social impact.

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City leaders could certainly do more to help. They could, of course, take the lead in setting up city-based investment portfolio intermediaries or set up online portals for local capital to find local deals. They could do an education campaign letting local residents know how to use their savings or pension to help their community. Cities could build on the steps of Tucson and Phoenix and move their daily banking operations to financial institutions already heavily invested in that community. Or they could create a tax break for investing stocks in local businesses or the local place-based fund. This is common practice in Canadian provinces, where investing locally gets you as much as a 50 percent tax credit. To my knowledge, nothing like this exists in the United States.

Place-based investing has never been easy, but attitudes are changing and financial instruments are being developed. If cities can deploy a local community’s total financial firepower to critical, mission-related activities, the overall impact will be transformative.