Walking away from the myth of the rugged individual
Author: kevindoylejones
Founded and sold the SOCAP conference with my wife Rosa Lee. We live on a farm on the river with kids and grandkids. I am co teaching the Act Local school with my daughter B.J. Harden Jones
My daughter B.J. Harden Jones and I are co teaching a class called the Act Local School at the Asheville Poverty Initiative/12 Baskets. It’s scheduled to start March 20 and have 11 sessions. It’s open to people who can show up in person and to a limited number of people via zoom. We will also bring in national expert practitioners who are healing their local economies virtually.
We will use the classes to explore the issues that should turn into themes when we bring a regional Neighborhood Economics to our adopted home town Asheville. We ourselves live in Swannanoa, North Carolina, an unincorporated community along the Swannanoa River between Asheville and Black Mountain.
BJ will make the class interactive, and focus on listening to all the people in the room. I will bring in content experts, both local and from around the country.
We are planning to asking for a suggested donation of $100 for all 11 sessions; they will be recorded and available online on youtube afterwards.
Neighborhood Economics is also planning to host a regional conference here in Asheville in September. The Act Local class is experimenting with themes we think will be popular to the people from here in September. While we are localizing the content we are keeping to our focus on helping bring the new platforms and funds that bring economic justice to people who’ve been dealt out of the game.
Workforce housing is a critical need; last year a teacher of the year got her award and announced that she had to move because she couldn’t afford to live near her school and her commute cost too much time. There are solutions to that, some focusing on creating rental houses on church land with the churches continuing to own the land.
Here in Southern Appalachia, hurt by the death of local tobacco and the effect of the coal industry, the white folks in the trailers on the mountain side are at risk of displacement because they can’t pay the taxes as biodiverse gated communities raise the tax base. Barbara Kingsolver tells the story of poor white folks victimized by the opioid industry in her book Demon Copperhead. We have the added problem that our land, our mountains and our rivers, the beauty of this place, is pricing local people out, and leaving it to tourists and people who buy houses but only live here a bit of the year, and air bnb’s.
We will also continue to highlight promising initiatives focused on bridging the racial wealth gap in all sectors, including farming and our region’s massive outdoor recreation and tourism industry. We will also focus on rural health investment linked to opioid recovery, with a software lens.
For more information email kevin@neighborhoodeconomics.org
One of our attendees, a well connected social sector consultant in economic development in Memphis, who is attending, said she wanted to talk about why her city would be a great fit for a local economy meets economic justice conference like Neighborhood Economics.
Thinking of Memphis made me think of cotton and the Delta, and the way Mississippi was treated like a colony by those places which processed her raw materials, from the cotton exchanges and dealers in Memphis, to the mills creating community wealth in North Carolina from those raw materials.
And that, obviously led me to think about the Panic of 1837, a financial catastrophe deemed more harmful than the great depression. Think 2008 with no federal reserve to help keep things afloat. And it all happened because collateralized debt derivatives based on slave futures, based in Natchez, the banking capital of the slave bubble were finally deemed by British banks to be no longer be plausible. The background of this is the compendium articles and essays, Slavery’s Capitalism. The Bankers based in London could not agree with the view of the future those derivatives projected anymore. The millionaires of Natchez were instantly pennyless, and so was the system based on unrealistic growth projections that essentially had hologram like models, being sold as if they were actually real assets. And the first derivative’s perhaps emblematic of this new tool’s ability to dehumanize and commodify all things of real value, those first derivatives, were bets on the work product of people in chains.
And a decade of a nearly shattered national economy was the result.
But the bubble of 1837 that led to the panic when it popped was also the first time that derivatives that complex were created. That is the moment when financial markets created the instrument that would let them victimize the world in search of higher profits; the Frankenstein monster arrises from the workshop. The derivatives that create a future that people believe in that let sophisticated investors take strategies for short term profit at long term ecosystem or social system damage were born in Natchez by gentleman bankers in waist coats.
Eliminating externalities, the bad things a business does, the consequences of its pollution, or other bad practices, were born like the Alien coming out of someone’s chest at that moment, it is possible to suggest.
The derivative was able to bewitch people into not looking at the consequences of what they were doing to the resources we all share.
And then we would look at cotton exchanges in Memphis and the mills in North Carolina which captured the wealth of Mississippi’s raw materials.
The Watershed Fund, working with Reseed, will come up with a design and plan for the #WatershedDividend, to be distributed in the Swannanoa River Ecosystem. We are working with smart students and former students of Amy Knisley at Warren Wilson College on education and community engagement.
How to distribute the #WatershedDividend is being discussed at meetings every other week at First Presbyterian Church in Black Mountain every first and third Friday from 3-5 in the Community Room by the group meeting under the name Swannanoa Watershed Action Network, which is online as a Facebook group. The Watershed Fund has contracted with Lalita Booth to figure out the #WatershedDividend.
An online marketplace that lets local people invest in healing the racial wealth gap is launching in Western North Carolina in November.
The Economic Justice Marketplace is a set of three interlocking philanthropic investing marketplaces; you given as little as $25, get a standard tax deduction and your donation is invested on your behalf in enterprises creating economic justice, enabling under represented people to build assets and intergenerational wealth; to create rich aunts and uncles who can help startups get friends and family funding that they can’t get under the current system.
The Watershed Marketplace will launch with the Community Equity Fund. The CEF has already raised $3,000,000.00, and has already been funded for two years in a row by our local county government and the largest foundation based in our community and has proven to be a low-cost job creator. This fund solves the problem of the lack of friends and family funding for the 90% of Black and brown-owned businesses that are sole-proprietors. It gives them equity from donated investments/venture philanthropy (people give and then the fund invests).
The sole proprietors get two years of runway to grow, to become job creators, and then to pay back the fund through seven percent of their revenue over three years. When the investment is repaid, the equity fund owns no equity in the business. For those businesses that succeed, the result will be that in five years from the initial equity investment, the business is finally ready to get additional growth capital from a loan from a CDFI, like Mountain Bizworks as well as traditional bank financing. The Community Equity Fund has been funded for two years in a row by both Buncombe County and Dogwood Health Trust and other funders. With the online marketplace, it becomes accessible to average people who want to be part of creating an economy where everybody has a chance to thrive, across race, class and neighborhoods
All three funds create an economy of interdependence, part of a movement to replace the extractive and unjust dominant economic paradigm,but the Repair Fund subverts the existing rules of the extractive economy in a particularly deep way. It is a BIPOC-led version of the United Way where you give and then trust the community to distribute and decide who to fund, reversing the traditional power dynamics around philanthropy..
Like with the United Way, you don’t get to designate your donation to go to a particular initiative. The decision on what and how to fund is administered by a BIPOC led group, hosted by Eagle. Like the United Way, the Repair Fund is redistributive fund; the money you give is given to deserving non profits and community groups. The Repair Fund, like the United Way, will show you who they gave to and how much they gave, but the decisions on where the money goes are left up entirely to the people of color in the community being funded. The first community group, in a displaced neighborhood in Buncombe County, NC, has already bought into the idea.
The Repair Fund will work to solve a hidden but pervasive imbalance in the philanthropic industry. Fewer than 10% of unrestricted operating grants are given to non-profits led by people of color. They are relegated to program grants which are often said to “fund the soup, but not the soupbowls.” The unrestricted operating funds often come through relationships and trust, and these often aren’t available to people of color. Unrestricted operating grants give you the financial runway and security to fund capacity and operations between program grants. The Repair Fund will only give out unrestricted operating grants.
Non-profits led by people of color also create a lot of earned income strategies to tide them over between program grants and overcome the systemic inequity of not getting unrestricted operating funds that go to white led non profits. A second fund, called the Watershed Fund, will offer growth capital to those non-profits with earned income. It can deliver those funds to non-profits through recoverable grants with a two year runway, and then the grant is paid back by three-years of revenue share. It is patient, growth capital that is almost unheard of for entrepreneurs of color. This fund will also be able to philanthropically invest in mission focused for-profits, including local small farms, who need growth capital paid back by revenue share.
The sole proprietors get two years of runway to grow, to become job creators, and then to pay back the fund through seven percent of their revenue over three years. When the investment is repaid, the equity fund owns no equity in the business. For those businesses that succeed, the result will be that in five years from the initial equity investment, the business is finally ready to get additional growth capital from a loan from a CDFI, like Mountain Bizworks as well as traditional bank financing.
This fund solves the problem of black families having an average of $14,000 in assets as opposed to the white families having an average of $140,000. So Black entrepreneurs can’t reach out to friends and family for the money to grow their sole proprietorship into a business that is a job creator.
All three of these funds can be replicated in any community with the repair fund being the easiest to launch. The other two funds, the Watershed and the CEF, need financial professionals to do due-diligence and provide technical assistance. All three funds can be invested in by faith-based congregations, a high school or college class or civic groups as well as individuals With the Repair Fund CEF and the Watershed Fund, the investment is returned to the Repair Fund, to be recycled into new investments.
Some places have figured out how to respond to climate change intelligently, collectively, and practically, in a way that energizes communities, and lifts people from the crippling fear and imaginations of impending doom that often besets progressives.
I’ve been interviewing people from some of those places and I have some initial patterns to report back.
All of the shining examples are new initiatives founded on decades social capital built through non profit and community projects, of people who showed an active interest in their communities well being and future.
Pattern one: an effective climate change response requires people to care about the place they live. As Walter Brueggeman, the Old Testament scholar whose teachings guide our work at Neighborhood Economics, they adopt the protocols of neighborliness, rather than the protocols of purity. Novelist, environmentalist and farmer Wendell Berry says it all turns on affection.
In some cases, that caring is for a city, like Birmingham or Guildford in the UK, sometimes the focus is on a bioregion; like the North Devon UNESCO Biosphere Reserve, also in the UK, or the Lake Vaneren UNESCO Biosphere Reserve in Sweden. Peter Block, one of the creators of Asset Based Community Development, starts engaging with a place by asking one question: what do you love about this place you live? In the cities creating resilient responses to climate change, they have answered that question and taken action because of it.
In several of these places, people have found that using the framing created by Kate Raworth in Doughnut Economics is an effective way to move beyond the activists, who attend three or four meetings a week to the broader community and get school children, businesses and average people engaged. The idea behind the Doughnut is that a healthy economy should be built to thrive, but not to grow; climate change is happening because our economy has grown beyond those planetary boundaries. They describe the Doughnut as the safe and just place for humanity, a place to create a regenerative and distributive economy.
In the places where the Doughnut Economics leaders pointed me when I asked for examples of where the Doughnut has landed solidly, it rests on top of a previous initiative that got part of the way toward thinking and acting together for the common good. Second pattern: the Doughnut model reaches beyond the activist core to the broader community and helps them get involved. They use a design and action lab model to engage with new communities. We are considering using the Doughnut as a way to help congregations start to engage with our Field Guide to Transformation as they begin to engage with their local economies. We are hopeful that it can be a way to bridge those working on climate with those working on economic justice, since it links social equity and justice with climate change and biodiversity. Those groups are often siloed in the U.S.
In Birmingham, the Doughnut is the user interface to reach the people, but it is built on the work of one of the best of the Impact Hub communities. Impact Hubs are a network of co working sites for social entrepreneurs; in Birmingham, under the leadership of Immy Kauer it grew into a real hub for the community to think about designing a new future for the city. Kauer has moved to beyond social enterprise to working at city scale through Civic Square in Birmingham, described as a public square and a neighborhood economics lab. Their move to use the Doughnut as an organizing model is in this video.
In Guildford, about 15 miles southwest of London, used the Doughnut as a way to create a vibrant network around Zero Carbon Guildford. Zero Guildford evolved out of the Transition Towns network that arose in the nearby town of Totnes and became a global network of places trying to transition to a lower carbon future.
Third pattern: in each place where the Doughnut thrives, there is a system entrepreneurlike McAllan. A system entrepreneur is a person or organization that facilitates change to an entire ecosystem, connecting the dots, and working from the bottom up, at the community level as well as changing policy and rules at the top. They are code switchers, able to talk to politicians, bankers, activists and people from the community and from faith communities.
In Guildford, Ben McCallan has been playing that system entrepreneur role for the past year, leading in setting up a thriving Community Climate Hub called Zero. It’s a place where all the climate non profit groups share space, and which provides simple daily and weekly actions for people to take action to reduce their carbon emissions, personally and together in short term projects or work days, from selling outgrown baby and child clothes and equipment to neighbors to tips on lowering your heating bill to a seed bank for local gardens. The Doughnut approach starts with a community’s assessment of its assets and its needs, and people find it easy to place themselves and their relationships within its circular frame. You are inside the Doughnut, trying to create a safe operating space for humanity in your town or region.
Because the system entrepreneur is one step removed from direct impact; enabling and augmenting the impact of other non profits or community groups, it is notoriously hard to fund. Impact investors and strategic philanthropists find it hard to fund something where the results are often catalytic and essential, but not easily measurable. That is an unfortunate fourth pattern. McAllan was full time this past year because he took the money he and his wife had saved to renovate their house to create Zero Carbon Guildford. Now that his savings has run out and he has to get a job, he hopes there is enough momentum created that the initiative can continue to thrive through volunteer effort alone.
McCallan says the Doughnut expanded action beyond the core 20 to 30 regulars to the broader community and also helped the slightly dogmatic environmental groups, set on their approach, to find more common ground through that shared outreach. I’m hoping the Doughnut can do the same, linked with the analysis created by using our field guide.
We ask three questions: what is likely to happen if we stick with the status quo, what are shining examples we should know about and what can we learn from them. Examining the shining examples of people building thriving, interdependent, inclusive economies is at the heart of our own design lab approach at Neighborhood Economics, which is primarily focused on bridging the racial wealth gap and helping communities of faith engage in their local economies alongside people already engaged. Seeing the patterns across those examples can apply to our own work, or to others in our network.
This is a story of how systems change. In this case the power shifted through a Black entrepreneur asserting his power against the thoughtlessly oppressive credit card and banking fee system. A fund set up to help Black and brown sole proprietors become job creators created the room for the system to shift, and the entrepreneur to redefine who he is in the world.
Having an infusion of equity investment, and two years of runway before they have to start paying the investment back gave the entrepreneur the breathing room to realize they could claim a position of dignity in the financial system by using their growing economic power to claim their rights as a business owner. Asserting the right to negotiate fees requires a big shift in self perception for many sole proprietors.
Here is the story of how the system changed through CEFs fund manager acting in the role of a controller for the entrepreneur’s business . Steven Lawrence, the portfolio manager for the that friends and family fund, called the Community Equity Fund, helped one their portfolio companies, which gets most of its revenue from credit card transactions understand how to read his bill, and find the fees. He had no idea his fees were one of the biggest costs for his business; he’d just been struggling to pay the bills. As a business, he can negotiate those fees; his business has value to the big card company. But he was never told that. His banker didn’t want his fees cut. Steven helped the guy see himself as working on his business and not just having a job; portfolio management at that level means helping people see themselves in new ways.
All of that self definition, as a real business person with valuable assets in a transaction, requires overcoming intergenerational trauma, internalized oppression, etc. Helping entrepreneurs overcome the legacy of trauma has to be part of the skill set working with people who’ve not had a chance to move up. That’s why Stephanie Swepson Twitty, founder and CEO of CEF relies on the book My Grandmother’s Hands, which helps people of color deal with that trauma that includes self definitions that keep a person from seeing their power in a transaction. And the big corporates who are on the other side of that transaction have no interest in letting sole proprietors understand they have that power. The revelation comes when you examine your monthly spend and see the power imbalances that can be addressed.
This entrepreneur’s margin was substantially improved, a benefit he will feel every month, by helping him think of himself as a business owner; not the hustling sole proprietor who sort of “is” his job. Each of the promising sole proprietors who were in the fund’s pipeline (they had to have three years in operation and be trending toward $100,000 in revenue) said several times during due diligence that they wanted the space to be working on their business, not in their business.
The philanthropic patient capital from the equity fund gives them the breathing room to look at their situation differently. That gives them the ability to work on their business, not be swimming in their business. For CEF, that means helping their entrepreneurs, through analyzing their spending history, to redefine who they are and claim a new place at the table.
Power is reversed just that way. Through people claiming more rights, one unjust fee renegotiated at a time, on the path building intergenerational assets. So that there will not be a need for a friends and family fund, but there will rich aunts and uncles who can give the next generation of entrepreneurs the same runway and a path to economic rights other people have.
Sister Joan Chidester said the reign of God is reclaimed one inch at a time. Someimes it’s reclaimed one credit card fee at a time. The justice embedded in CEF’s basic operating method is one reason it believes its story resonates so well with people of faith, who want to invest in the well being and empowerment their neighbors who have been systematically excluded from the path to small business success. Old Testament scholar Walter Brueggeman’s talk on justice from below illustrates this well. “Justice is the maintenance of human relationships that keep life viable and human, Brueggeman says. “Injustice is the maintenance of human relationships that make life not viable and not human.
The research says the net worth of a Black family that’s a job creator is 12x one that isn’t. With the credit card bills as the trim tab, an entrepreneur gained a new way to look at himself and be in the world, as a person with rights and economic power. The system is changed when you look at your credit card bill, and realize that you are more than they told you you were and then take action.
Twitty is leading the track on bridging the racial wealth gap at the invite only Neighborhood Economics conference, with Faith+Finance that we are hosting next May in Indianapolis. I will be doing stories on other track leaders and some of the other people who are coming in the next few weeks.
Those linked rubrics, True cost accounting and Doughnut Economics are the lenses of we will use in the class on the True Cost of a Tesla I am doing for my grandson and nephew. I wrote about the class itself, here.
This post will cover just the true cost accounting lens. Donut Economics as a frame for looking at the economy we want to build will be the subject of the next blog.
True cost accounting would not let a corporation get away with not paying a living wage by offloading the need for that employee’s support to the government social service programs. The company would have to support its employees; not relying on society to pay those costs, food stamps, etc. in order to enable it to maximize its profits and its financial return to its shareholders.
The system is set up for for profit businesses to offload their environmental costs to society as well, and not cover those real costs on its books. True cost accounting just says business has to pay what its products and services cost all of us; they can’t do damage and expect the rest of us to pay to fix it up. True cost accounting reigns in corporate and Wall Street power.
So we will look at the true cost of a Tesla. That’s why the company, and all electric vehicle companies accept slavery as a cost of mining to get the cobalt for their batteries. It’s all the batteries, not just the ones Tesla uses. Other slavery mined minerals are in your iphone or Android. We have slave blood in the things in our pockets.
But true cost accounting, as I am using the term here, would also look at the great good Elon Musk and Tesla have done; reinventing the electric car industry; all the other EV companies are riding on a wave Musk created. That was huge and important and put Tesla out in front in a smart way; their electric battery stations are going to be worth $25 billion in a few years. He has the vision to be out in front on the right things. Even though his stock is really high priced, betting on Musk to come through has proven to be a good thing to do. He does good and big things. And his stock keeps rising.
Musk’s ability to make people see his vision and join in is amazing. Investing to be more part of his great quest is a good thing. And will likely also make money. As will many of the other mostly good companies we invest in each month. Investing in mostly good is not bad.
Musk will keep getting in trouble and that will cost the business. There are as yet unsubstantiated allegations of sexual misconduct and disrupting union organizing. All of those things count as risks to your investment.
So those are the plusses and minuses, the embedded environmental mining costs, the blood on the batteries, that our system lets businesses avoid paying and Musk’s grand vision that is actually working, along with realizing you are investing in a genius who’s strongly on the spectrum and gets in trouble for speaking his dreams before they are real.
This is the first class. The plan is to invest $50, each month, in a new company whose product positively impacts climate change, plant based foods, energy companies, food system innovations, mostly good companies that are public companies. Moms top up moms or dads who can’t do $50 a month.
And we also, after the stock talk, will have a presentation from a mission focused company or platform changing the system. And you can give $10 to it through the Impact Assets built donor advised fund as a public utility.
Each kid’s $10 can be either a gift to the marketplace, to build the market we all can use, or it can go into the Community Equity Fund or another mission focused fund or project. When you philanthropically invest it, it’s called venture philanthropy; you give, we invest. Then their donation enters one of the funds or companies as equity paid by sharing in the revenue after a couple of years. Or their donation can be a pure gift if you just want to build the commons for all of us.
It looks like Doughnut Economics will be in the next blog.
I am working on the ideas about the true cost of a Tesla to teach my grandson and nephew about the economy and power and economic justice, while also helping them save for college, I wrote about the true cost of a Tesla here and true cost accounting (how you compute the social and environmental cost of a for profit business) here.
I’m fleshing out the elements of the idea in a wiki, with a different page for each important concept or area of research. My goal is to help my grandsons, nieces and nephews understand the economy, and entrenched power and economic justice. And to see ways they can take action to create a new and better economy using both their investment and donation dollars and also save for college or a future of their design.
Part of what will make it interesting enough to have them think about the economic justice impact is that they will also be learning about cool tech electric vehicle and power and plant based food companies along the way. We are doing a long term, low risk strategy of investing $50 a month in one company; to spread the risk and make the chance of a big win more likely. That’s called dollar cost averaging.
Some of the companies may fail in our initial basket of about a dozen. Some will lose money. In the aggregate they should do all right; they came well recommended by people who know. The real point is learning how the world and the economy works.
Among the things we will need to cover are redlining and the taking of land from indigenous people.
We will try to install the protocols of neighborliness in the group of parents and kids; so that if some mother doesn’t have $50 a month, another mon can top her up so that she’s helping another mother give the same advantage to her kids that she enjoys.
If this works out well, it could become an interactive zoomer curriculum from Faith+Finance. but it obviously could also work in a secular version youth groups or that the Y or Boys Clubs could do. If we figure it out and people like it.
Our older grandson is doing a report on the cobalt used in Tesla batteries; the miners in the Democratic Republic of Congo are slaves. The report is for the monthly virtual education about investment I am doing with great nieces, grandons, etc. All electric vehicle companies have to rely on cobalt. But they are also doing real good in the world; replacing fossil fuels and creating climate change resilience. They can make money while learning about the complexity of the world. And saving for college or to fuel an adventure after high school.
I think it’s going to be fun. I made up a Yahoo portfolio to follow of ten or so companies experts in public equities with a base in impact investing said are doing good as part of delivering their product; renewable energy, plant based foods, any aspect of Donut Economics is a major plus. But no public company is pure.
I will be teaching them about true cost accounting while they invest $25 to $50 a month in one company that’s doing good. But, in the true cost accounting part, they will also be researching the externalities; the social and environmental harm those companies doing good are creating as a byproduct of their business. So teaching about complexity and nuance is built in.
I’m keeping this just to kids or kids of kids I’ve known all their lives. I will be about presenting for 15 minutes once a month for a zoomer audience, who are existentially concerned about climate change, distrustful of capitalism and all authority and knowing how the older generations have screwed up the world, not exactly by intention, but maybe inattenion…..
The donors get a deduction, the money goes out as equity (many of these companies are not ready for debt and need capital to give them a runway to get there) and is paid back by revenue share. Nobody is going to repossess their assets and they don’t have to post collateral. But they are viable, have been around for three years and are trending in a good way.
I will also include some innovative projects doing systems change work around the racial wealth gap that can offer a modest investment return, but that also rely on venture philanthropy to cross over to become investable. Eagle Market Streets CEO Stephanie Swepson Twitty, who’s also founder of the Community Equity Fund is building a donor advised fund as public utility with a local community foundation and Impact Assets where that kind of capital thrives. It’s patient, understands that there is a cost to doing good, flexible, willing to go in early to help something that could be big take off. The next generation of nun money.
We at Faith+Finance are working with churches to get them engaged through their local mission offerings through the DAF marketplace in these companies and the funds like the one that’s helping move from sole proprietors to job creators or preserving Black Wall Streets from predatory hedge funds who want to displace them. It’s part of our overall approach to help congregations take seriously God’s call to engage with economic justice. Once I get the formula of the sessions down with my younger generation, we at Faith+Finance could turn the whole thing into a Sunday School curriculum, perhaps.
Building an interdependent economy 