The "Slow Money" Movement May Revolutionize the Way You Think About Food
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Woody Tasch has impressive credentials in the finance world, with a background in venture capital. He is chairman emeritus of Investors' Circle, a nonprofit network of angel investors, venture capitalists, foundations and family offices that has steered $130 million to hundreds of budding sustainable social enterprises. But with slow money he expands the definition of investment to include not just formal stock purchase or loans but also more broadly supporting local enterprises, for example subscribing to a CSA.
"If you take a CSA, you could call them self-organizing micro-finance: hundreds of people get together and provide a form of financing directly to a farmer," he said.
"People joining CSAs and shopping at farmers markets is the beginning of this sea change. People think of those as consumer rather than investment dollars, but they are a kind of investment."
Tasch doesn’t want or expect the Slow Money Alliance to maintain leadership of the movement; rather, he hopes it can start people talking, and investing. "A bunch of people around the country are starting to do slow money in their own way in different regions," he said. "They are way out ahead of our capacity as a small, new NGO -- we’re very excited to have been the catalyst for that."
How much Slow Money can raise remains to be seen. Rather than using athey are seeking to mobilize hundreds of thousands of members contributing millions of dollars per year which will then be used to seed the nurture capital industry. Founding members -- 150 of them -- contributed at least $1,000 each. And the overarching goal, Tasch said, is connecting investors with food systems in their own regions.
Lazor said organic farms will likely never be as profitable for investors as more traditional stocks, but he thinks people are increasingly seeing such investments as an attractive option in the holistic sense.
"People's perceptions of good [financial] risks are the traditional exploitative and extractive industries that are ruining the earth," he said. "Folks that have the dough are going to need to be satisfied with a lower return on their dollar, and get their satisfaction from knowing they’ve made the earth a better place."
The movement has some things in common with two financial or consumer trends that get much attention, especially around the holidays: socially responsible investing and fair trade.
Socially responsible investing (SRI) has become a highly respected and lucrative sector in the past decade, with investment firms essentially screening investments on a range of criteria and packaging stock portfolios that are both in line with investors’ values and profitable. Such funds usually eliminate oil companies and other highly exploitative industries and alcohol and tobacco, and also look at companies’ records on issues like domestic partner benefits, transparency and environmental responsibility. SRI would in many ways overlap or dovetail with slow money investing.
But Tasch notes that SRI portfolios are generally expected to be competitive with the stock market as a whole, usually on the same timetable. Slow money involves the belief that investment in sustainable local food systems is likely to pay off financially in the long run, since it simply makes more sense and curbs the costly environmental and health damage wrought by industrial agriculture. But it may not pay off quickly -- hence the "slow" -- and the payoff may not come in direct dollars back to the investor but rather tangible or intangible benefits to food producers, the environment and the general public. Slow money also encompasses philanthropy – investments made without any expectation of financial return.