Written by Marta Madigan
Where do your investment dollars go? Woody Tasch, founder and president of Slow Money, envisions where our money could go. Inspired by the Slow Food movement, he has created a strategy embracing more ecological, human and direct approaches toward investing. A former venture capitalist and entrepreneur, Tasch came to the conclusion that there should be room in anyone’s portfolio to patronize smaller, regional enterprises.
Focusing on sustainable food and agricultural producers, Tasch thinks we can make return on investment (ROI) on healing broken relationships starting, literally, from the ground up. His blue chip tip: reintroducing organic matter into the soil. He challenges our conventional, past-century way of thinking about money and earth, asking the following three questions:
- 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?
Mind-blowing or common sense? Woody Tasch suggests in his answers simple ways to rebalance agriculture. One of his goals is to get a million people to commit 1% of their assets to local food systems within the next 10 years.
To “slow” part of your money down, Tasch first invites us to sign the Slow Money Principles—a six-point “reduction” of his book entitled Inquiries Into the Nature of Slow Money. He also proposes to join the Slow Money national network through which we can learn about investing possibilities showcased at the Slow Money regional and national meetings. Finally, he encourages sustainably minded groups to start their own Slow Money chapters and keep the momentum going locally.
Marta Madigan: What is Slow Money? Is it an investment strategy or a movement?
Woody Tasch: It is both. And that is what makes it fun. There are two parts. One is a conversation. You can call it a movement if you want, but I really think of it as a conversation that is emerging nationally about the extent to which our global financial market and our global economy has become disconnected from sense of place, from community and, in our case, we go all the way down to actually the dirt itself, to the land, the life in the soil. And that conversation has lots of ramifications that have become very vibrant in light of the financial volatility of the last several years.
The investment strategy part drops way down to something relatively very simple. We need to take a little of our money and start investing near where we live, in things that we understand, and food being the most important place to start.
MM: In your book Inquiries Into the Nature of Slow Money: Investing as if Food, Farms and Fertility Mattered, you stress the fact that soil erosion exceeds soil production. Can we really run out of dirt?
WT: Soil erosion and loss of organic matter in the soil is an environmental challenge of global proportions. And yes, we are losing it. We are losing topsoil to erosion. We are not maintaining organic matter in the soil. If we don’t change the way we are farming and living, we are going to destroy the fertility base that agriculture depends on. The estimates from Worldwatch and other environmental monitors say we are losing somewhere between half a percent to a percent of arable topsoil globally every year.
MM: What is your dirt solution?
WT: The solution is actually, again, very simple. I am not anti-technology. I am just anti-making believe that technology can solve all the problems all by itself, because in addition to new technologies we have to change behaviors. The bottom line is we have to put back organic matter in the soil. Nature is a cycle but we have been acting, in terms of what we take out and how we use it, as if it were a straight line.
The good news is that relatively simple changes in farming practices can put us on the right track. This is pretty much what organics is all about. Instead of dumping chemicals on, to try to make up for the fact that we are working in a linear way, you actually farm in a way that is more in keeping with natural cycles, putting organic matter back in the soil.
MM: Describe the ideal candidate to receive a Slow Money loan. Must this enterprise be small, sustainable, local and beautiful?
WT: We are focused on direct investing from individuals into small, sustainable, locally placed businesses, where the intent is not to focus on gaining national market share or becoming an international company as quickly as possible. The intent of the enterprises is to serve the local market first. Local and regional first and foremost.
MM: And what is beautiful to you?
WT: I love to talk about the beautiful part because the book that set me on my course was Small Is Beautifulby E. F. Schumacher. It was written in the 1970s and I think it is one of the seminal works of the 20th century. Schumacher was an economist for the British Coal Board after WWII. He was the first major industrial economist to raise his hand and say: “I think we are on a collision course with the environment. Unlimited economic growth on a finite planet is, to my thinking, an impossibility.” And he added something equally important: “Increased consumption is not synonymous with improved well-being.” I think it is beautiful because it raises all kinds of questions about quality of life and purpose of life and something that is of greater importance than economic growth or the economy.
MM: You wrote a poem in which you conclude: “Poetry is the portal/ through which capitalism can return.”
What do poetry and capitalism have in common?
WT: Capitalism per se may not be very poetic. But there’s a bit of poetry in Slow Money. Poetry is a way of communicating that forces the mind to slow down. It says as much about what isn’t said as what is. For me all of the arguments in the world, all the facts in the world, just like all the new technologies in the world, won’t get us where we need to go. What we need, if I can borrow some inspiration from Wendell Berry, is a new kind of imagination. We need to rediscover our place in the scheme of things. We need to rediscover awe in the face of nature. By nature, I mean everything from looking up at the night sky to looking down into the soil where there are billions of microorganisms in every gram of soil. This is fundamental to the life that sustains us, yet we almost never pay attention to it. Wendell Berry talks beautifully about how we need a new kind of imagination to reconnect to nature. Poetry is about imagination.
MM: What is the rate of return for a Slow Money investment?
WT: There is no one rate of return for a Slow Money investment. In fact, Slow Money can even mean philanthropy. It can be low-interest loans. It can be 0% money, the kind of investment that Muhammed Yunus calls for. Or it can be private equity. The point is that we are moving in a new direction, moving towards small food enterprises, not because of arithmetic. We are doing it for many reasons, and perhaps the least of these is the arithmetic. That said, we can justify the move on many financial grounds, as a hedge, a diversification, an interesting alternative to the increasingly volatile thing we call the stock market.
MM: How do you entice investors to park their money for a long period of time?
WT: Our job it not to entice or convince. It is more about giving people permission to do something that they already want to do.
How many people will do it? We say in shorthand that one of our goals is to have a million Americans investing 1% of their money in local food systems, within a decade. Both of those numbers are important. It is a lot of people taking a little of their money and starting to put it to work directly in things that they understand, near where they live, starting with food.
MM: Can you tell me about the Soil Trust that you plan to launch in 2012?
WT: The idea emerged for a nonprofit fund called the Soil Trust which would allow people to put in as little as $25. It would be a tax-deductible donation but it would be an investment in the sense that those dollars would be aggregated with lots of other small donations and then it would be invested alongside Slow Money investors around the United States. This capital would be used as catalytically as possible—for instance, to provide guarantees and co-investment, alongside Slow Money investing around the country. Think of it as a new kind of foundation, in which all of the assets are used to invest, rather than to generate income that is used as grants.
If we are going to build a new food system and a new restorative economy, we are going to need billions upon billions of dollars. Where is this money going to come from? Wall Street? Washington? Foundations? Whatever they can do, it won’t be enough, it won’t be direct enough and there won’t be enough of it. The only place it can come from is from all of us, who have a direct, vested interest in the places where we live. The investment returns of the Soil Trust will come back to the Trust, to be re-invested for the benefit of future generations. It is a very forward-looking “compost”-oriented form of investing, if you want to use that metaphor. It is all about putting back more than we take out.
MM: Scott Savage—a Quaker farmer and a publisher of Plain Magazine from Barnesville, Ohio—is one of your heroes. Although we can’t all revoke our driver’s license like he did and move in with the Amish, how can we simplify our lives?
WT: A lot of what Slow Money is about is just saying: “Hey! Don’t let somebody tell you that money has to be so complicated.” It gets complicated when there is layer after layer of intermediation, veils of security laws and the distance between you and what you are investing in is so great that you need legions of experts to tell you where your money is and what it might be doing.
In 1900, of every dollar that was spent by a U.S. consumer on food, about 40 cents went to the farmer. The rest went to processors, shippers, retailers, etc. Today, the farmer gets around nine cents. What happened? The system has become so complicated, the distance between the producer and the consumers has become so great, that all the steps between producer and consumer are taking more and more of our money. The quality of our food and the quality of our investing both suffer.
So your question has the answer in it. We need to simplify, we need to get closer, we need to get more direct—we need to take back control of some of our money and, in so doing, reshape our food system, our economy and our culture.
Established in 2009, Slow Money plays a catalytic role, connecting investors to local entrepreneurs and money to place. Since its inaugural gathering in Santa Fe, 15,000 people have signed the Slow Money Principles, 2,000 have become members, 11 Slow Money chapters have emerged around the country and nine million “slow” dollars changed hands. And in February 2012, Woody Tasch will attend the Ohio Ecological Food & Farming Association 33rd Annual Conference as a keynote speaker and workshop leader. For more information about Slow Money visit slowmoney.org. For more information about OEFFA’s conference, visitoeffa.org.
Sign the Slow Money Principles NOW by clicking here!
O SOLE Mio: Spend local, save local, invest local!
As Slow Money chapters begin budding throughout the country, SOLE is engaging the conversation in Central Ohio. SOLE, which stands for Support Our Local Economy, is a coalition of locavores, independent businesses and locally bred organizations such as Simply Living, Local Matters, SBB, ECDI and KEMBA. For over a year, they have worked together to keep our dollars circulating in our community. In their ongoing “Think Columbus First” campaign, launched during Comfest this year, Chuck Lynd—interim director of Simply Living and the soul of SOLE—emphasizes the importance of buying local. “For every $100 spent at independent, locally owned and operated businesses, $68 stays in our community,” he says. “The same $100 spent at nonlocal chains retains only $43.”
Supporting one neighborhood business helps other local enterprises. “Fresh Connect,” a local food guide published online by Local Matters, lists Columbus restaurants and grocers committed to buying their produce from Central Ohio farms. “We are interested in stronger local economy, even beyond food and farming,” says Todd Mills, director of development and marketing of Local Matters, as well as the organization’s representative at SOLE. “The main thing is just wanting to see more local businesses choosing to support other local businesses with their sourcing and business practices,” he adds.
Small Business Beanstalk (SBB), another shining ray of SOLE and a B2B matchmaker, connects local companies to each other as well as to consumers. Serving as a concierge desk for their member businesses, if a coffeeshop needs to print a menu, SBB will match them with one of their printers. Free of charge, SBB also offers “save local” community cards with all kinds of deals and discounts in over 400 businesses all over Columbus. “At The Hills Market, for instance, if you spend $50 or more, you will get 10% off your entire purchase,” says Wolf Starr, the founder of SBB. “With over 100,000 SBB cards out, it is a better way for us to connect as community,” he believes.
To keep money where we live, we can also move our savings to a local bank. Kroger Employee Mutual Benefits Association (KEMBA), the largest credit union in Central Ohio, has been providing financial services since 1933. “By banking with KEMBA, all of our profits are shared with you and other members within our local communities,” says Vincent Neal, KEMBA’s business development officer.
Economic and Community Development Institute (ECDI), a small business micro-lender and SOLE’s fiscal agent, takes us to the next level with its new, Slow Money–like, program. Launched in April, “Invest Local Ohio” is a vehicle for corporations and individuals like us, to put our money directly into Central Ohio small businesses. The minimum investment of $1,000 goes to a special fund where ECDI leverages it with at least a double of the invested amount and then makes it available for local entrepreneurs.
To receive up to a $100,000 loan, the candidate can but does not have to have lengthy business experience. ECDI offers its services even to complete beginners, giving them a hand with start-up capital and training. Giving money and expertise to help purchase additional equipment for Luna Burger and facilitate in the opening of the Jury Room are just a couple of many success stories at ECDI. “Our goals have always been to help people build assets, become sustainable, create jobs and businesses,” says Steve Fireman, president and general counsel of ECDI.
As to the potential of playing the part of a small investor, people like us would receive a 2% to 3% return for our slow-return investment (in three- and five-year terms, respectively) as well as a great opportunity to actively participate in developing our local economy.
So why not invest local, Ohio?
Resources for those interested in SOLE and its initiatives:
SOLE is a part of a large international network called the Business Alliance for Local Living Economies (BALLE) comprised of over 80 community networks in 30 U.S. states and Canada. For more than a decade, BALLE has been promoting sustainable local economies by catalyzing and connecting independent businesses in North America through workshops, gatherings and webinars. Slow Money is a partner of BALLE’s very popular “Accelerating Community Capital” webinar series.
For more details about BALLE, visit livingeconomies.org
Editor’s note: For more information about emerging Slow Money Columbus initiatives, please contact Flippo Ravalico of Food System Bonds at email@example.com.