Merging Social Investing and Philanthropy – A Conversation with Author Woody Tasch
Apr 02, 2010 04:12PM
In Inquiries into the Nature of Slow Money, author Woody Tasch points the way to strategies for fixing the economy, from the ground up. His principles of responsible investing connect investors to the places where they live and to the land, offering life-affirming, culturally rich alternatives to global markets run amok.
What do you mean by the term slow money?
There are two aspects to slow money. The first is intertwined with the slow food movement, initially begun as a response to the opening of a McDonald’s restaurant in Rome, Italy. Now, this grassroots social movement, with some 85,000 members, promotes a way of living and eating that strengthens the connections between the food we eat and the health of our communities, our bioregion and our planet.
The second aspect is about creating a grassroots financial movement. The initial goal is to attract the attention of one million or more Americans who are willing to invest a small fraction of their investment dollars in small-scale agriculture. This supports the health of the individual and ultimately, leads to a more robust community.
Slow Money is a new nonprofit that organizes local and national networks and develops new financial products and services to bring money back down to earth. We are currently steering significant new sources of capital to small food enterprises, appropriate-scale organic farming and local food systems.
In addition, we seek to catalyze the emergence of the new nurture capital industry—entrepreneurial financing aimed to support soil fertility, carrying capacity, sense of place, cultural and ecological diversity and nonviolence—all of which connects investors to their local economies. Present examples include credit unions, co-ops, community supported agriculture and community development venture capital funds like Community Development Financial, which is already in place.
At the heart of our organization are two questions. What if we put soil fertility into return-on-investment calculations that serve people and place as much as they serve industry sectors and markets? What if we could design capital markets built around preservation and restoration, rather than extraction and consumption?
So, by contrast, how would you define fast money?
Fast money refers to investment dollars that have become so detached from the people, places and activities being financed that it is impossible to say whether the world economy is going through a correction in the markets triggered by the sub-prime mortgage crisis, or whether we are teetering on the edge of something much deeper and more challenging.
Fast money creates a baffling environment that cannot be understood or managed, even by financial experts. This kind of befuddlement arises when the relationships among capital, community and bioregion are broken. If we continue to invest in ways that uproot companies, putting them in the hands of a broad, shallow pool of absentee shareholders whose primary goal is the endless growth of their financial capital, the depletion of our social and natural capital will continue.
Why do you believe today’s industrial finance strategies are not working?
Organized from “markets down,” rather than from “the ground up,” industrial finance is inherently limited in its ability to nurture the long-term health of a community and bioregion. These limits are nowhere more apparent than in the food sector, where financial strategies bent on optimizing the efficient use of capital have resulted in cheap, chemical-laden food; millions of acres of genetically modified corn; trillions of food transport miles; widespread degradation of soil fertility; depleted and eutrophied aquifers [where nutrient and algae overload snuff out oxygen and helpful organisms]; a dead zone in the Gulf of Mexico; and an obesity epidemic that exists side-by-side with persistent hunger in this country.
What do you believe is the crux of the problem with the present financial system?
The bifurcation of social purpose and fiscal prudence is at the root of the problem. If the goal is to make more money through our investments as fast as possible, so that we have more money to give away for cleaning up existing problems, then we are on the wrong track. Cleaning up problems with philanthropic money may have seemed to make sense in the 20th century, but it is no longer conscionable or appropriate for the 21st century. We need more realistic expectations for smart investments that can sustain and preserve the planet’s wealth for generations to come. We have to ask ourselves this: Do we want communities whose main streets include local merchants whom we know, or do we want them made up of multinational companies, owned by people we think we know, that produce products under conditions of which we are not aware?
For more information about Woody Tasch and Slow Money, visit SlowMoneyAlliance.org.