"The innate
value of this kind of investing is so obvious to me," stated a woman from
Ashland, OR during a Slow Money workshop, "that I don't care how much money I
make."
That's a
stopper. No way around it. An unhittable knuckleball in the
fast-pitch world of Buy Low/Sell High.
Innate value? Not caring about how much money we make? What in the world does this mean?
In the case of
the woman who said it, it means that that the benefits to her and to her
community — more organic farms, more organic food available locally, a more
robust local economy — are so tangible and so direct that she doesn't need a new
benchmark or a new asset class or a fiduciary to explain them.
The word
"innate" struck me, when I heard it in this context, as beautiful. Investors talk about the intrinsic
value of a company, as distinct from its market cap. But innate
value? When I made it to the
dictionary, the idea only became more beautiful, rich with connotations of
"nature" and "inner," suggesting a confluence of personal values and ecological
awareness.
The word
"innate" pops up in another most interesting place: E.O. Wilson's term biophilia, which describes the "innate
affection humans have for other living organisms." Another of Wilson's terms, biodiversity, is now part
of the vernacular. Perhaps
biophilia will never become as popular.
Or perhaps the
time has come to splice biophilia into the DNA of a new kind of fiduciary
responsibility. The kind of
fiduciary responsibility that informs the emergence of nurture capital — a new
generation of intermediaries and financial products organized around principles
of soil fertility, sense of place, economic, cultural and ecological diversity,
and nonviolence.
The kind of
fiduciary responsibility
A New Vision
Such talk of
biophilia, nurture capital and fiduciary responsibility would have been rather
far-fetched as recently as a few years ago. Today this is not the case. It is right in front of us, as plain as day, as
confusing as Goldman Sachs' billions made from ultra-fast trading and as
tangible as a CSA. We are moving
away from hundreds of trillion of dollars of derivatives towards a new way of
thinking about money that integrates social capital, natural capital and
financial capital as simply as a CSA.
How "innately beautiful," the prospect of investors connecting more
easily with one another and with enterprises near where they live, with fewer
layers of intermediation and less financial razzmatazz.
This is the work
of Slow Money, a non-governmental organization now nearing the end of its
second year, 1,200 members strong, 12,000 signatories strong, more than a half
dozen regional slow money initiatives strong, with millions of dollars
beginning to flow into dozens of small food enterprises. What we have found during our launch is
that people are ready, remarkably eager, in fact, to engage in a new
conversation about money, culture and the soil.
"Slow Money is
one of the most remarkable initiatives I've seen in decades," says Tom Miller,
former head of Program Related Investments at the Ford Foundation, and an early
funder of Grameen Bank. "It is the
basis for a fundamental revision of our concepts of fiduciary
responsibility."
Food and the
soil are the entry point for the discussion, but at its heart it is about a new
vision of restorative economics, about what comes after industrial finance and
industrial philanthropy and industrial agriculture, about what it means to be
an investor in the 21st century.
The energy that
people are bringing to these concerns is nothing short of remarkable. In March, 2009, when Slow Money had 40
members, NPR called this a "movement." In November, when there were 400
members, ACRES USA called it a
"revolution." In December, Business Week
reporter John Tozzi cited Slow Money as "one of the big ideas for 2010."
"Slow Money gets
right to heart of everything that's wrong with our economy and our culture,"
wrote Kerry Trueman in the Huffington Post. "It offers a new kind of capitalism in which both farmers
markets and stock markets can flourish."
The
strength of this response reflects a number of fundamental trends: concern
about the volatility of global financial markets and the self-promotion of Wall
Street is widespread; frustration
with government policies and programs is equally widespread; awareness
of problems in the food system is growing; the
organic sector is growing; the
localization movement is emerging; and, the
amount of philanthropic and investment capital going to sustainable agriculture
and small food enterprises remains calculated in fractions of a percent.
The task of
rebuilding local food systems and local economies is beyond the capacity of
venture capital and philanthropy.
The vast majority of small food enterprises lack the proprietary
technology or scalability that venture capitalists require. Philanthropy is insufficient as well,
because farms and processing plants and distribution businesses and restaurants
and seed companies and niche organic brands need investment capital. The billions of dollars a year that are
needed to rebuild local food systems and local economies, and to restore
fertility in the soil of the economy, are going to have to come from somewhere
else.
Slow Money
That somewhere
else is you and me — millions of individuals who sense that every time we move in
and out of the stock market we are complicit in an economy that is based on a nineteenth-century view of the world and the economy, a view that equates
progress and well-being with maximum consumption and which recognizes no
ecological limits to growth, a view developed a century or so before we saw the
earth rising over the moon and so felt in our bones for the first time that
there is no away to which we can
throw our waste. Now, it is time
for us to rediscover here with our
investment capital. To consider
the places where we live, and our land, itself, as much as we consider sectors
and distant markets and asset classes when we make our investment decisions.
To catalyze this
process, Slow Money is building a national network and local networks,
developing a family of new investment products, and creating the Soil Trust, an
innovative non-profit fund.
National Network
We start with social capital, so that our transactions will be
disciplined by relationships — farmers, food entrepreneurs, donors, NGO leaders
and investors all working together to nurture co-investment relationships,
develop deal flow and build shared vision. Slow Money's inaugural national gathering, in September,
2009 in Santa Fe, NM, hosted over 400 attendees from 34 states and six
countries. $260,000 was invested
in four of 26 presenting small food enterprises. Our second national gathering was held in June, 2010 in
Shelburne Farms, VT, drawing 600 people and facilitating the flow of more than
$3 million into eight presenting enterprises (as of early October), with more
expected. 24 entrepreneur
presentations from this event can be viewed here.
Local Networks
Slow Money groups are meeting regularly
in many regions. In Pittsboro, NC, small loans are being made to food
enterprises with help from a family foundation. In Austin, TX a steering committee meets weekly and has
hosted one public meeting that was attended by more than 150 people. In Madison, WI, a series of workshops
are leading to the design of a local fund. Members of Slow Money Maine have collaborated to make a few
small loans. Slow Money Northwest is organizing a Microloan Development Fund and hosted its first meeting for angel investors and entrepreneurs this past fall.
Slow Money Investment Products
Slow Money is exploring with Portfolio 21, RSF Social
Finance, Calvert, Mission Markets and BSW Wealth Advisors the creation of
for-profit Slow Money products for non-accredited investors, opening the
playing field to everyday citizens who want to make sustainable food
investments. Investments in
these vehicles will promote Slow Money's mission in two ways: first, the portfolios themselves will
be as proactively targeted at organic food and soil fertility as possible; and,
second, the buying and selling of these securities will have structured into
them small contributions to the Soil Trust (described below). Feasibility work is underway on "Slow
Munis" (bonds dedicated to local food investing), in collaboration with leading
investors and land trust professionals.
A number of Slow Money Alliance founding members are launching funds,
including Farmland L.P. and the Vermont Sustainable Jobs Fund.
The Soil Trust
The Soil Trust, a non-profit fund currently in formation, will pool a
large number of small donations to create a permanent, philanthropic investment
fund dedicated to small food enterprises and soil fertility. The Trust will provide guarantees,
co-investment capital and seed capital to local slow money investors.
Why the Soil
Trust?
Because our goal
is not only to catalyze the flow of capital to small food enterprises and local economies, but to do so in way
that "puts back into the soil what we take out." These were Paul Newman's words. We take them to heart. They are integral to the Slow Money Principles, which you can see and sign here.
The Soil Trust
is a vehicle through which individual buy/sell decisions in Slow Money
investment products, as well as small individual donations, will be aggregated
slowly, over a generation, building a substantial pool of investment capital
that is permanently dedicated to the preservation and restoration of the
soil. Donations in,
investments out. Returns stay in
the fund and are reinvested.
"Putting back into the soil what we take out" at work. In foundation lingo, a "100% mission
aligned foundation." Put another
way, a foundation whose primary purpose is investing, not grantmaking.
The prospects
for such a structural innovation are exciting. "Slow Money is not only planting
inspiring seeds, but also creating the conditions and the relationships for
fundamental change and lasting impact," stated Barry Hollister, of Pittsfield,
MA. "I was, and am, therefore,
extraordinarily pleased to have been able to make the first contribution, right
there on the spot in that tent in Shelburne Farms that was brimming with so
many wonderful and talented folks, to the Soil Trust. In Soil We Trust."
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 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?
To sign the
principles, please go here.
To find out
more, visit here.
Image by katerha, courtesy of Creative Commons license.
