SlowMoney

Nothing Could Be Simpler

by Woody Tasch, founder of Slow Money

In April New Society Publishers will release “Financing Our Foodshed: Growing Local Food With Slow Money,” by Carol Peppe Hewitt. As the founder of Slow Money, I was asked to write the book’s introduction. It was my privilege to do so and share with GreenMoney readers a glimpse into some whys and wherefores surrounding the emergence of Slow Money.

With what can only be called meta-fiduciary gumption, Carol has rolled her sleeves up to facilitate over $600,000 in loans from 59 individual lenders to 30 small food enterprises in North Carolina over the past few years. Homegrown City Farms, Dandalia Bakery, Lilly Den Farm, Bella Donna Restaurant, Lula’s Café, Reliable Cheese Company, TS Designs and Chatham Marketplace are just a few of the recipients of support via Slow Money North Carolina. Their stories, and those of the other investees, are presented at http://slowmoneync.org

A few months ago, I got a call from a New York Times columnist who was working on a column entitled “Investing For The Truly Fed Up.” He said, “I’ve been speaking to a lot of folks who don’t want their money sloshing around in the great global casino any more. They are sick of the excesses on Wall Street and scared by global financial uncertainty. But they need to make 7 percent on their money. What would you tell them?”

The wonderful, sad, crazy, sane truth is this: We of the Slow Money persuasion don’t know how much money we are going to make, when all is said and done, with the money we are putting into local small food enterprises. Most slow money investing takes the form of low interest loans. But some are direct equity investments. What will a portfolio of such investments yield over time? How risky are they? Compared to what? Put another way: Slow Money has a long way to go before it generates anything approaching the arithmetic predictability of an asset class.

So why do we do it? Partially because we want to see healthy food in our schools, clean water in our aquifers, more organic matter in our soil and less carbon in the atmosphere. Partially because we believe that organic farms and seed companies and restaurants and grain mills and creameries and cheese makers deserve our support for reasons that go far beyond economics, all the way to culture. And partially because we recognize a less wonderful, less sane, but equally sad, crazy truth: That which our wildly abstract capital markets make apparently simple is really wildly complicated. We give our money to people we hardly know to invest in things they don’t fully understand in distant lands none of us will ever visit. Then we securitize into billions of derivative pieces. Is this the recipe for a healthy future?

We of the Slow Money persuasion don’t think so. What follows is a peek at the ways some of us are working to put a little of our money to work differently. . . right now. . . on our way to our goal: a million people investing 1% of their money in local food systems.

* * * * * * * * * * * * * * *

INTRODUCTION From Financing our Foodshed

The search for antidotes to Wall Street excess and global financial uncertainty and the search for good things to do with our money take us to screened mutual funds and shareholder activism, credit unions and coops and community banks, Washington regulators, impact investing and triple bottom line metrics and microfinance.

And, as of the recently emerging Slow Money network around the country, these searches also take us to another place: back to our own neighborhoods where, one loan at a time, investors are connecting with local food entrepreneurs and rebuilding local food systems to fix our economy from the ground up.

In a way, nothing could be simpler.

I can still hear Carol Peppe Hewitt at a national Slow Money gathering: “It really isn’t complicated. There are local food entrepreneurs who need money and local investors looking for good places to put their money. We just need to connect them.” [Note to reader: The 2013 Slow Money National Gathering is April 29-30 in Colorado. See details below]

Carol’s work in North Carolina doing just that is a vital part of a process that has facilitated the flow of more than $21 million to 180 small food enterprises around the country since 2010. As of the end of 2012, Slow Money has 17 chapters, including one in France, and six investment clubs. Some 24,000 people have signed the Slow Money Principles (see them at the end of this article).

In a way, nothing could be simpler.

“Combine poisonous factory-farm tomatoes with disgraced investment banker Bernie Madoff. Throw in a stock market disaster. You get a public spooked by the dangers of industrial food production and investors wary of risky business. This may just be a recipe for a Slow Money revolution.”

   –David Gutnick, CBC News

During the past few years, traveling the country on behalf of Slow Money, I’ve come to believe there are a few million of us out there who feel in our bones how important and rewarding this “nothing could be simpler” really is. That’s why many observers have called Slow Money a movement, the website entrepreneur.com has listed it as one of the top five trends in finance, and some have called it a revolution.

Slow Money numbers are still very small in the scheme of things, but they point in a promising direction. Not just in the direction of more, but also in the direction of investing that offers a fundamental alternative to invisible, anonymous financial transactions.

Are we witnessing the slowing of a great historical pendulum, still on its way towards the peak of an economy based on extraction and consumption, but about to swing back in the other direction, towards an economy based on preservation and restoration? Perhaps.

This can be a frightening prospect—for what could be more alarming than the wake of a quadrillion McDonalds burgers? Or it can be a hopeful prospect, carrying with it all manner of emergent economic possibilities. Author Paul Hawken lays out the vision for an “ecology of commerce.” Our friends at BALLE point to the emergence of “local, living economies.” Journalist Amy Cortese and economist Michael Shuman point to locavesting. And lately, there’s been talk of insourcing that comes after decades of irrationally exuberant outsourcing.

Are we witnessing the early stages of the emergence of a nurture capital industry? After venture capital comes nurture capital, concerned less with the pursuit of extraordinary financial returns, courtesy of capital intensive high tech innovation, and concerned more with carrying capacity, sense of place, care of the commons, nonviolence, and ecological, cultural and economic diversity.

If this sounds a bit abstract, improbable or highfalutin, well, then, sit back and enjoy the pages that follow. Relax your inner fiduciary. Because nothing is more beautifully back down to earth than the experiences Carol Peppe Hewitt shares.

Warmth, common sense, compassion, courage, social entrepreneurship, fiduciary activism, and even a few dashes of American Dreamism and In Soil We Trustism—elements of all shine through these stories of small food businesses, the entrepreneurs who create them and the local investors who are supporting them. If we take these stories to heart, we will know that what is at work here is more subtle and beautiful than merely adding social capital and natural capital to financial capital to rejigger our accounting.

What do we hear when food entrepreneur Abigail Wilson says that “opening and operating the bakery is, for me, synonymous with graduate school”? First, we hear something that would make most professional investors run for the hills. Second, we hear a call to get beyond the false specializations of the global and return to the true generalizations of the local. We hear a call to reconnect to the places where we live, to take some of our money out of ever-accelerating and increasingly complicated and volatile global markets, and put it to work in things that generate tangible, immediate value to our families, our communities and our bioregions.

And of the risks?

An economist or a financier would have a field day deconstructing what you are about to read as a manual of High Risk, Low Return investing. To which I would offer the old aphorism: To a hammer, everything looks like a nail. To an economist, everything looks like an opportunity to Buy Low and Sell High.

Happily, Lyle Estil, one of the cast of characters to whom you are about to be introduced, is neither an economist nor a financier. He is an entrepreneur, philanthropist and author, and his vision says much about where we’ve been as a culture (Wall Street) and where we need to go (Main Street). Here’s how he addresses some of the most fundamental fiduciary issues on the Q&A page of Slow Money North Carolina’s website:

Question:  How are you qualified to handle my money?

Answer:  We are not. We have a deep seated belief that we can use capital to increase the resilience of our local economy, and we feel we need to try to do something. . .We are not “money managers,” or “loan officers,” or particularly skilled in finance. But we know people. And we have built successful ventures the hard way. We know the local food players in our community. And we understand business in Chatham County. Finally, we have some time on our hands, so we want to give this a try.

Wow. Come on. Let’s all let out a great big old Apple’s-Stock-Price-Isn’t-The-Measure-Of-All-Things “Wow!”

Each of the small food businesses that Slow Money investors in North Carolina are supporting is a perfectly imperfect meeting place of what E.F. Schumacher called “meta-economic,” what Wendell Berry calls “economics for a renewed commonwealth” and “imagination in place,” and what Carol Peppe Hewitt calls “a helluva way to run a produce section.”

Can we find the gumption to carve out a few dollars and some time to support this new economic imagination, this grassroots economic activism? Will it make a difference?

 

Carol’s experience in North Carolina suggests, laughs, imagines, dares, demonstrates and encourages us that we can and it will.

Written by Woody Tasch, February 2013

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The Slow Money Principles

In order to enhance food security, food safety and food access; improve nutrition and health; promote cultural, ecological and economic diversity; and accelerate the transition from an economy based on extraction and consumption to an economy based on preservation and restoration, we do hereby affirm the following Slow Money Principles:

I. We must bring money back down to earth.

II. There is such a thing as money that is too fast, companies that are too big, finance that is too complex. Therefore, we must slow our money down — not all of it, of course, but enough to matter.

III. The 20th Century was the era of Buy Low/Sell High and Wealth Now/Philanthropy Later—what one venture capitalist called “the largest legal accumulation of wealth in history.” The 21st Century will be the era of nurture capital, built around principles of carrying capacity, care of the commons, sense of place and non-violence.

IV. We must learn to invest as if food, farms and fertility mattered. We must connect investors to the places where they live, creating vital relationships and new sources of capital for small food enterprises.

V. Let us celebrate the new generation of entrepreneurs, consumers and investors who are showing the way from Making A Killing to Making a Living.

VI. Paul Newman said, “I just happen to think that in life we need to be a little like the farmer who puts back into the soil what he takes out.” Recognizing the wisdom of these words, let us begin rebuilding our economy from the ground up, asking:

* What would the world be like if we invested 50% of our assets within 50 miles of where we live?

* What if there were a new generation of companies that gave away 50% of their profits?

* What if there were 50% more organic matter in our soil 50 years from now?

Slow Money’s 4th National Gathering

April 29-30, 2013  Boulder, Colorado

“Slow Money is one of the keys to a healthy future.”

—Bill McKibben, founder, 350.org

Money and soil: Did you know they are intricately connected? Join us at Slow Money’s fourth National Gathering, April 29-30, in Boulder, Colorado, to explore a new kind of investing in which we all shift a small percentage of our money into local food.

Slow Money’s National Gathering is a nexus of inspiration, collaboration, and meaningful action sparked through the sharing of ideas and experiences. Speakers include Carlo Petrini, the founder of Slow Food; and Mary Berry, Wendell Berry’s daughter who is leading the charge for the newly established Berry Center, along with a robust program of thought leaders, change-agents, investors, farmers and local food entrepreneurs.

Be part of this forward-thinking group and help redefine our relationship with money and with food. For details and to register, click here.

https://www.slowmoney.org/national-gathering/2013/register

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