The "Slow Money" Movement May Revolutionize the Way You Think About Food
The slow food movement that started in Italy two decades ago has gained much attention and popularity, with a blossoming of community supported agriculture (CSA), local organic farms and general awareness of where our food comes from. But money doesn’t grow on trees, and in an economy structured around industrial-scale global agriculture, starting and sustaining small farms and local, sustainable food processing and delivery systems can be a challenge.
About five years ago, veteran financial manager Woody Tasch and his colleagues at the Investors' Circle began discussing how an intentional and organized influx of investment into localized sustainable food systems could be paired with a general increasing philosophical commitment to slow food principles.
The result is the Slow Money movement, shepherded by the Slow Money Alliance, of which Tasch is executive director. Now 750 members, including individual investors and sustainable farms and food-related businesses, are members of the alliance, and 450 people attended a Slow Money conference in Santa Fe in September.
The goals and structure of the alliance and the movement are fairly amorphous -- cynics might say squishy -- more on the philosophical than pragmatic level for the time being. Tasch’s recent book "Inquiries Into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered" (Chelsea Green) aims to spark and incubate investment at all levels in local or regional food systems. This means not only organic farms, dairies and ranches, but food processing facilities, food artisans (makers of jelly, cheese, etc.) and retail or distribution networks, restaurants and stores.
"It is two things: a new way of thinking about money at a macro level, in terms of philanthropy and social investing, and on the ground it is getting money into local food systems," said Tasch. "Our objective is a very robust network at regional and local levels across the U.S. -- many, many players who are all interested in the same goal: rebuilding local food systems."
Butterworks Farm in Westfield, Vermont has been practicing slow food, and by extension slow money principles for 35 years. The family-run business makes organic yogurt, cream and other dairy products, with a small sideline in rolled oats and other grains. Jack and Anne Lazor started the farm as "back to the landers" with "one cow in the garage." They have stayed small and hands-on, with about 10 employees and 50 cows, and they have thrived economically, with products sold throughout Vermont and in Whole Foods stores down the east coast.
"We’re paying attention to things that modern industry has sort of forgotten," Jack Lazor said. "If we don’t take care of our soil and our earth, we’ll be pulling the foundation out from underneath us and we’ll topple. We’ve been channeling all our income and profits back into the earth we steward. Our farm has just become this verdant paradise of incredibly lush pastures, grasses high in minerals, and you can turn around and taste that in our products because our milk is naturally sweet. If you are generous to the earth, the earth is going to give back to you. It’s an investment of giving back more than you take. That’s certainly not the American zeitgeist, which is about greener pastures over the next hill."
Other alliance members include Let’s Be Frank, a Berkeley-based hot dog company that relies on free-range, antibiotic-free livestock and fair labor standards; and Hawthorne Valley Farms, a 400-acre biodynamic, organic farm 100 miles north of Manhattan founded in 1972 that also has programs for city schoolchildren.
"An industrial structure for a living system is what we need to correct," said Martin Ping, executive director of the Hawthorne Valley Association. "We will correct it because we have to, there is no alternative. It’s obviously an uphill climb because it’s a fairly entrenched system. But the message is certainly resonating. People know things are out of balance."
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.
"There are long-term modest rates of return but nowhere near venture capital rates of return," said Tasch. "We’re not trying to put a one-size-fits-all approach, we have members who are foundations to individuals looking for venture capital investments. There are also those who might take low or even negative rates of return. We have plenty of angel investors too, who are just looking for interesting food projects to be involved with."
Fair-trade coffee, chocolate, crafts and other commodities from developing countries have become an increasingly profitable and popular market, especially around the holidays. Slow food and hence slow money have much in common with fair trade. Tasch said for the time being the Slow Money Alliance is focused on local and regional systems within the United States. But he wouldn’t be surprised by more cooperation and connections with global fair-trade groups in the future. He noted producers from six countries were at the Santa Fe conference.
Midwestern farmer and coffee roaster David Meyers is not formally involved with the slow money movement, but he has been practicing slow money and slow food philosophies on a grassroots, DIY level for the past six years. After burning out on grant-writing for non-profit organizations, he sought a way to combine food justice, community activism and a sustainable lifestyle of his own. He single-handedly runs the CSA On the Fly Farms from a several-acre farm in southwest Michigan and roasts and sells fair-trade Resistance Coffee. He donates proceeds of both operations to local activist or community groups and spreads awareness of social justice struggles through coffee bag labels and fliers in CSA deliveries. He is also helping to start a small coffee-roasting business in Chicago to employ immigrants affiliated with a local workers center.
This fall Meyers sent out a plea for "investors" to help support his enterprises, though he didn’t offer any financial returns. He said supporters responded with about $1,000 in donations, the use of a car and apartment and paid speaking gigs. He advocates restructuring community-based micro-economies based on direct connections, subverting the larger finance system. Among other things he notes that people with unused land in regions like southwest Michigan could "invest" in local food systems by allowing low-income people or community groups to farm their land.
"We should reconfigure the system so it’s for the good of everyone, rather than people fighting for spots on life rafts," he said.
Slow money proponents see the economic crisis, paired with increasingly alarming news about the effects of climate change and environmental degradation, as an opportunity for a new economic and agricultural paradigm.
"Our historical experience with global industrial finance is now in question -- people are not completely sanguine about the prospects of venture capital and investing in China as it has been practiced," said Tasch. "There’s a lot of economic uncertainty, so just the idea of diversification, putting one percent of our money to work in local food systems, is more attractive. And the number of people just interested in food is at an all-time high, people are starting to understand problems with industrial agriculture, industrial food."
Tasch is hoping to get thousands of signatories to the Slow Money Principles, which include, "We must bring money back down to earth" and "We must build a nurture capital industry." Whether or not people invest or donate, he hopes people use the holiday spirit to forward the principles far and wide.
And slow money proponents naturally advocate that people buy gifts and meal ingredients locally, and experience the transaction as a gift within itself.
"It’s a joyful act to buy a gift for someone that is well-considered, well-made, that will support someone who can then give back to the local economy," said Martin Ping. "Enjoy how positive that feels when you are actually handing your money over to your neighbor or friend. It is such a totally different feeling than just materialism for the sake of materialism."