A Massachusetts community is putting the Slow Money philosophy into action.
By Joanne Sunshower
“Slow Money is about feeding the soil of the economy." – Eliot Coleman, farmer, author of The New Organic Gardener & Four Season Harvest
Slow Money is also about feeding the economy of the soil. Woody Tasch is the author of Inquiries into the Nature of Slow Money, the book that launched the conversation and led to the founding of the Slow Money Alliance, a national nonprofit based in Boulder, CO, whose mission is “to bring money back down to earth.” And he means this literally.
Tasch asks, “What would the world be like if we invested 50 percent of our assets within 50 miles of where we live?” The answer, he believes, is that we would be saving ourselves and our future.
“We must learn to invest as if food, farms and fertility mattered…connect investors with where they live, creating vital relationships and new sources of capital for small food enterprises.” Slow Money Principle #4
Slow Money has in common with the Slow Food movement an emphasis on the conscious engagement of local communities supporting local farmers to grow healthy food. But while Slow Food focuses on re-inhabiting the pleasure of eating, saving traditional seeds and foods, Slow Money’s focus is on the generative, reciprocal relationship of human enterprise with the soil. “The soil teaches us that we must put back as much as we take out to ensure long term health and a strong, secure, restorative economy. When we erode our soil, we erode our social capital, we erode community.”
One Million Investors Investing In Local Food Systems
Therefore, The Slow Money Alliance aims to save farmland, support small and mid-size organic farmers, and rebuild local and regional food processing and distribution, in order to “improve nutrition and otherwise remedy the imbalances of a food system that is too consolidated, too global and too industrial.” The goal is to get one million investors investing 1 percent of their assets in local food systems.
Many people had their eyes opened by the financial crisis to understand that purchasing from a local company keeps the money circulating within their community, and that depositing with a community bank or credit union does the same. Small and large investors are beginning to realize the power they could have for promoting stability and restoring a healthy economy by investing in their own communities.
The Slow Money Network
Membership is open to everyone, and in just two years, the nascent network has been making loans in thirteen states across the US -- from Maine to Missouri to California --through individuals, investing clubs, and entrepreneur showcases. Links to these are on the website, as are 21 professionally managed funds available to individual investors. The story of the newest of these illustrates the potential of the movement, and readiness of communities to nurture it.
The PVGrows Loan Fund in Western Massachusetts
The PVGrows Loan Fund in the Pioneer Valley of Western Massachusetts is a collaborative effort of 11 local organizations, including:
- Four lenders: Common Capital, Franklin County Community Development Corporation, Equity Trust and Cooperative Fund of New England;
- Three foundations: Solidago Foundation, Frances Fund Foundation, and Lydia B. Stokes Foundation;
- Two nonprofits: New England Small Farm Institute and CISA; and
- The Massachusetts Department of Agricultural Resources.
The collaboration grew from a working group formed at the Pioneer Valley Sustainable Investment Summit, a 2008 gathering of people in the private, public, and nonprofit sectors wanting to analyze the opportunities for financing small and community-based businesses, and strategize how to increase and diversify potential sources. The working group became PVGrows, now a network of over 350 people and 250 organizations that meets twice a year to talk about the vitality of the Pioneer Valley food system. The Loan Fund developed from a sub-group on finance.
Funding The Local Food System – And Local Beer
The PVGrows Loan Fund has brought added, flexible capital to Pioneer Valley agriculture by offering loans that range from $35,000 to $250,000, competitive interest rates, and flexible terms for borrowers who may not qualify for traditional bank financing. Funding may be for start-up expenses, working capital, equipment, or other needs. Business development services may also be provided by one of the partner organizations or other providers. The Loan Fund particularly looks for projects that fill gaps in the infrastructure of the regional food system, expand the market for Pioneer Valley agricultural products, or increase the availability of nutritious food to local underserved communities.
Valley Malt is run by a husband and wife team who are working to build a New England infrastructure for beer production. As the only malt house in the Eastern United States, they are the missing link between locally grown grains and locally brewed beer.
Their loan through the PVGrows Fund in conjunction with Common Capital is being used to substantially upgrade their equipment and quadruple their production. They have also been awarded a grant from the Massachusetts Department of Agricultural Resources — another PVGrows partner -- to install a fuel-efficient heating system for the malting vessels.
Jeff Rosen, the Solidago Foundation’s Finance Director and representative on the Fund, points out:
"This type of collaboration is unique in the lending field and highlights the potential for food to be a strong economic driver. Our work is being watched around the country as more regions become interested in local agriculture and local food systems."
Bringing The Individual Investor To The Table
Now some members of the Loan Fund are ready to start a Slow Money Chapter. Currently people support local farmers and producers as CSA shareholders, customers at the farmers market or stores that carry local produce. But increasingly, individuals as well as financial professionals are interested in a fund that they or their clients can invest in.
“The resources available through the PVGrows Loan Fund will allow us to have a more specific focus than chapters that aren’t near these kinds of complementary resources,” observes Rosen. “Instead of an investment club, we will focus on equity, and possibly crowd-funding. We are also looking at other vehicles to create a pooled fund open to all investors, accredited and non-accredited, that will offer professional management and risk diversification.”
As Woody Tasch said, "Slow Money is bringing people together around a shared vision about what it means to be an investor in the 21st Century. If we share the belief that we don’t have another generation to wait, then we have to roll up our sleeves, sink our hands into the soil of the economy and start planting.”
About the Author:
Joanne Sunshower, M.Div., is a consultant for nonprofit & community organizations. She is a member of PVGrows and the Pioneer Valley Sustainability Network.