By Rodale News
After the stock market rose and fell by 400 points for four consecutive days in August, one Reuters financial journalist called Wall Street's roller coaster "one of the most volatile weeks in memory." The economy took a dive, and politicians and pundits started hand-wringing about a double-dip recession.
But long before Wall Street's volatile August in 2011, even before the 2008 recession, Woody Tasch gave up on Wall Street. "I remember in the 1980s, there was a lead story in the Wall Street Journal along the lines of 'AT&T Lays off 18,000 People,' and that day, the stocks shot up," he says. "And I thought to myself, that's really weird."
So he founded the Slow Money Alliance, a nonprofit that hopes to do with money what the slow food movement has done with food. "Our current financial system is way too interconnected, too fast, and extremely volatile and dangerous," he says. "So take your money out of it and put it into something that's more direct. And what's more high impact than helping a CSA [community-supported agriculture program] expand, or helping an organic creamery get started?"
The Slow Money Alliance has been around for about three years, encouraging financial investments in just that type of thing — local food producers who are focused on sustainable agriculture and just lack the financial means to get access to the wider market.
The details: Slow Money North Carolina, a chapter formed only a year ago, gave its first loan to a local baker who was baking bread for a community-supported agriculture (CSA) group. She needed to expand production, which required an expensive new mixer, so the group loaned her $2,000 with 3 percent interest. "Banks are not going to loan you 2,000, 4,000, 6,000 dollars," says Carol Peppe Hewitt, cofounder of Slow Money NC, "and yet that can be enough to make or break a start-up or an expansion of a sustainable business." The baker's loan has already been paid back, and over the course of the year, they've loaned $33,000 additional dollars to seven small food enterprises committed to producing or selling sustainable foods.
Slow Money is the financial road that's needed to rebuild the local food system. "It's like when we got rid of the railroads. We also pulled up the tracks," says Hewitt. "We've done the same thing with food. When we stopped producing local foods, we lost the distribution system."
Slow Money loans help the local baker or the organic cheese maker, who can't produce enough to supply a big-box store with the quantities those stores need.
If you don't happen to live near a Slow Money chapter, you can still invest in one of the group's more traditional funds; the impact may just not be as local. For instance, Slow Money offers a $1,000 certificate of deposit (CD) from Equal Exchange, a small company that sells fair trade certified and organic coffee, tea, bananas, chocolate, and a few other crops. The three-year CD guarantees that Equal Exchange will be able to buy coffee and other crops from farmers at the higher organic and fair trade prices, which means the farmers are assured of income and can send children to school, get health care for their employees, or even expand their operations.
What it means: Admittedly, the returns on these investments are not going to rival 8 or 9 (or higher) percent returns on investments made in the stock market, but investing in local businesses or sustainable enterprises needs to be the future of investing, Tasch says. The Equal Exchange CD has a 0.85 percent annual percentage yield (APY), and loan interests are defined by individual lenders and Slow Money groups. "None of us who are doing this are driven by financial concerns. We're driven primarily by social and environmental urgency and then secondarily by the belief that it will turn out to be a very good thing financially," Tasch says. He hopes, through slow money, that people will learn how their personal investments can make a difference.
It's also about revealing how truly dissociated from reality our current financial system is. "Very few people can name a single company that's included in the Dow Industrial Average, yet every day all we hear is how important that number is," he says. And much the same way industrial food systems have built a food empire that profits big agribusinesses while making people sick, "fast money" money managers are primarily concerned with satisfying shareholders. "There's no correlation between the well-being of the country and stock prices," he says.
That's why he hopes more people will pull some of their money out of the stock market and start investing in things with which they do have a real, tangible connection. "We need food, we need farms, we need more organic matter in the soil, we need less toxins in the environment," he says.
Want to learn more about Slow Money? Here are few ways to start:
Visit them online. Slow Money's national chapter lists a number of food-related investments you can make, ranging from $500 to $50,000, that help U.S. farmers get the funding they need, whether it's the Equal Exchange CD mentioned previously or providing capital for organic farmers in Nebraska grow their operations. You can also join (or start) a local chapter in your state to find specific local food projects that need money.
Attend their annual conference. From October 12 to 14, Slow Money Alliance is having its National Gathering, where investors and entrepreneurs can have a chance to meet each other. Attend if you're in the area or contact one of the local chapters to see if any events are scheduled closer to home.