Talk Newspaper: By Jeff Golden: Don't let me be alarmist here, but I'm coming to think that not everything is hunky-dory with the global financial and lending system.
Don't let me be alarmist here, but I'm coming to think that not everything is hunky-dory with the global financial and lending system. Maybe it was this past week's story about AIG that tipped me over. As a writer of fiction I don't think I'd ask readers to believe the storyline we've been watching. If Charles Dickens were writing today, could his jaded imagination stretch to take in such oblivious greed?
So I'm pretty sure it's broken. And a couple of the fragments lying on the floor are 1) An equities market that has smashed many of our nest eggs, with prospects for more damage in sight and 2) An emerging set of creative people whose fertile ideas and plans for making Ashland more resilient, self-sufficient and prosperous could take off with some startup or early-stage funding.
Okay. So what we have side-by-side are people watching their capital melt away, a drip each day, wondering what they should do with what's left of it, and other people chomping at the bit to launch enterprises and create jobs in food growing and preservation, healthy transportation, non-carbon fuels, health products and benign building materials — who are hamstrung by lack of capital. "Somebody" should start putting the pieces together, don't you think?
I recently set out to look for those somebodies. What I found was a wealth of creative ways for people ready to shift their dollars from the global matrix to their own communities (with room here for just a slight taste, I include web addresses for those who want to dig deeper.). All of what follows involves some form of lending, as opposed to equity investing, where shares of companies trade hands. There's ongoing talk of creating "local stock exchanges," but so far the regulatory and structural hurdles have been too high to clear.
There's no single clearinghouse for community investing, but RSF Social Finance (www.rsfsocialfinance.org) comes close. RSF doesn't think small. It wants to "use the tools of finance to bring about positive, real-world change. Our goal is not only to make capital available to innovative projects; it's to fundamentally transform the way the world works with money." Connecting would-be investors with projects they can value and appreciate firsthand is a practical way to do that. RSF works with Community Loan Funds (stretching back to the 1980s, these are the pioneers of the current generation of localized investment vehicles) like TRF (www.trfund.com), which began in inner-city Philadelphia and now finances neighborhood revitalization across the mid-Atlantic states. They aim to "identify the 'point of impact' where capital can deliver its greatest financial and social return. Our investments in homes, schools, and businesses reclaim and transform neighborhoods, driving economic growth and improving lives." And in the process they award individual investors with an interest rate that looks better and better in the current market.
"Vermonters stick to their roots and values," says the homepage of the Vermont Community Loan Fund (www.vclf.org), "but have always embraced innovation and new ways to make life better." One of the fund's core practices to make their non-FDIC-insured loans as safe as possible is "active lending," which means they support their small business borrowers through the rough patches with technical and other non-financial services. They never forget that the ultimate goal — a healthy local economy — is only advanced when businesses succeed.
Newer strategies for community investing are advancing all the time, one of the silver linings of the dark global finance cloud. Community banks, whose federal charters require more "conservative" investing (though recent events might make "traditional" a more accurate word), are looking for ways to partner with community groups willing to assume lending's risk. Massachusetts' SHARE (Self-Help Association for a Regional Economy) program lets you support good projects and businesses that wouldn't otherwise qualify for bank financing. You get CD-scale interest on your savings, which is then used as partial collateral for loans that you approve (www.smallisbeautiful.org).
And if you've become comfortable with sharing a local farmer's risk in the form of Community Supported Agriculture (CSAs), then how about Community Supported Enterprise? CSEs are taking root in Vermont (www.ptvermont.org), where customers can help launch or expand undercapitalized businesses in return for a flow of products and services — clothes, furniture, paper goods, plumbing or electrical work — over time.
This is just the thinnest sample of how people in hundreds of communities like ours are fortifying their economies. You'll find plenty more online. None that I saw claim to have a silver bullet. But it feels pretty good about now to discover that hope has realistic underpinnings.
Jeff Golden, a Jackson County Commissioner from 1987-91, is the author of "Forest Blood," "As If We Were Grownups" and the recently released novel "Unafraid," with excerpts available at www.unafraidthebook.com.