“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.
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.
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.
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?
courtesy of reality sandwich