Can investors appreciate opportunities that are small-scale, ethical, beautiful, and balanced and have permanence?
by Lori Barian
In the world of capital investment, investors want big, fast returns–the bigger, the faster, the better.
Instead of looking for the “super-sized” fast return, can investors appreciate opportunities that are small-scale, ethical, beautiful, and balanced and have permanence?
Woody Tasch, chairman and CEO of Investors Circle, which helps investors integrate their personal values with their investing, hopes so.
Tasch, with a grant from the Kellogg Foundation, is working to make the idea of “Slow Money” attractive enough to establish a Slow Money Fund. This fund would be used primarily to invest in early-stage sustainable food enterprises.
“This is the missing piece of the puzzle,” according to Tasch. Such businesses otherwise fall through the cracks. As for-profit enterprises, they do not qualify for grants. As an option to traditional investors, they lack the appeal of high-tech, shooting-star style businesses with the potential for huge payoffs.
Traditional venture capitalists, even the so-called “angel” investors who are individuals with large sums of personal money to invest, expect 20% profit in 10-12 years, Tasch said. With Slow Money ventures, they may anticipate 5-14% return in possibly 15 years.
Tasch presented these ideas to nearly 400 members of The Practical Farmers of Iowa at their annual conference in Des Moines this January, giving a glimmer of hope to those who are struggling to find creative markets and strategies that will support sustainable agriculture. He is passionately hopeful about the future for these farmers who use sustainable practices, despite economic obstacles.
In 2001, shortly after 9/11, Tasch came to a sense of “Ground Zero” being the “farmer’s field, the vegetable garden, the place where every day the battle between the economy and ecology plays out.” He writes of this inexorable connection between the way we grow our food and the health of our society, our true wealth and the prospect for future generations in a discussion paper called The Pursuit of Zero.
It is from this Ground Zero that the idea for the Slow Money Fund sprouted.
Farmers Diner in Barre, Vermont is an example of the type of venture that the Slow Money Fund might invest in. Farmers Diner serves old-fashioned hamburgers, fries and milkshakes, along with other homey diner fare, made with primarily local meat, milk, eggs, and produce.
No investor is going to get rich quick, but socially conscious investors can find satisfaction in fostering such a community-based, sustainable enterprise. Though it does take a shift in thinking.
“Sometimes, I think of this as the age of shareholders and owner entitlements,” Tasch said in an interview during the conference. “Our culture’s systems postulate the inalienable rights of shareholders to get profits. The age that is trying to be born is the stakeholder age, which rediscovers that owners do not have the only claim and that a healthy enterprise satisfies the needs of a whole lot of stakeholders.”
“That’s a radical change in consciousness,” Tasch said.
Farmers Diner, established by Tod Murphy in 1999, spends 65¢ of every food dollar with farmers and small-scale food producers who live and work within 70 miles of the diner. Their goal is a national network of Farmers Diner restaurants, trusting that fresh food tastes superior and that people prefer to support their neighbors and communities.
Significant social returns are calculated as follows. Every $1,000,000 in annual sales at a diner translates into 350 acres of farmland in production, 15 farmers with gross sales of $50,000, 13 new farm jobs, and $1,200,000 in land conservations costs saved. Local production and shortened delivery routes saves at least 10 tons of carbon dioxide emissions annually. (Johnson School of Business, Cornell University Social Venture Competition study 2001/2002)
Most of us participating in this money culture are WIMPs, Tasch said. “White, Itinerant Money People.” The itinerants are not only farm workers, the affluent are also itinerant and disconnected from place, said Tasch. They travel to visit nice places and move to follow their careers.
“We are all being displaced by the economy,” he said. “It’s as if we belong to the economy rather than a place. The change is to become connected to place and people.”
He sees the effort of Investors Circle and others promoting this Stakeholder Capitalism movement working against the status quo like the Spanish Armada versus England. “We are seeding small businesses that will be more nimble and robust in the face of the monolithic structure that seems powerful but cannot change direction fast enough.”
“The economic way of producing lots of things cheap was fabulous for a time (1850-2000), but now it’s like Roadrunner going of a cliff. We need to go in a new direction.”
Woody Tasch and some others are also talking about another fund. This one they are calling a Newman Venture Fund, named after Paul Newman and his practice of giving away 100% of Newman’s Own profits in donations.
Tasch says they are talking with a few companies like Newman’s Own that are dedicating 100% of their profits to charity.
“Free enterprise isn’t all about shareholders getting unlimited returns,” Tasch said. “I (for one) am trying not to be a WIMP.”
More information about Investors Circle can be found at investorscircle.net. Farmers Diner information can also be found on line at farmersdiner.com.
Lori Barian uses her educational background in English literature, writing and journalism and her professional experience in nonprofit administration and development to promote the healthy growth and success of socially-conscious organizations and initiatives locally and nationwide. She runs Word Weaver, LLC, her business, from her home in Milwaukee, WI.
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