Travels in the world of ethical finance and good business

Human scale investments and financial institutions that care;
Collaboration among competitors;
Businesses that build goods and services for the benefit of people and communities.
All things we are coming to expect.

I’ve been on several grand adventures in the past month. Some close to home and one far away – all close to my heart and strong indicators of a world turning its focus on the well being of people and planet.

B Corps Champions Retreat
My first visit to the B Corps Champions Retreat was inspiring. It’s an annual gathering of leaders of B Corporations – a group of businesses large and small, who have embraced the concept that how a business treats people and the environment matters as much as the finances. The business-for-good movement is growing: Etsy became a B Corporation this past year and Kickstarter is a BCorp too. Even Unilever has announced that it’s interested in becoming a B Corp. BCorps voluntarily meet high standards of transparency, performance and accountability to all stakeholders (not just shareholders). As a B Corporation for two years now, Community Sourced Capital signed a Declaration of Interdependence, signifying we are both dependent on and responsible for each other and our mutual well being.

Money on a Mission, Portland
Beneficial State Bank, where we bank, is one of few B Corp banks in the country. For the second year in a row, we co-hosted an event called “Money on a Mission” in Portland, Oregon to bring together small businesses and mission-driven financial institutions that provide healthy capital. It was a sell-out event. The Governor of Oregon and the Mayor of Portland both showed up. There’s a lot of new ways for small businesses to access capital right now, and many online sources choose not to disclose their fees to potential borrowers (and they do that for a reason). That message was continually reinforced throughout the evening: all borrowers can and should fully understand how much a potential loan will cost. If you don’t want to take our word for it, just check out what these entrepreneurs had to say about it.

Ethical Finance and Innovation Challenge
Finally, my biggest travel opportunity of the last month took me all the way to Dubai, twice. We were selected as a finalist for the Ethical Finance and Innovation Challenge. Islam, the official religion in Dubai, has embedded rules in its principles and laws about what money is for. I first learned about Islamic Finance when a colleague sent me an article from the Guardian with a provocative headline: Can Islamic Finance Save Capitalism?. The article started with a question: Is there a place for ethics and morality in the global economy? I can only think — How could we have a global economy devoid of ethics and morality? Our economy is a reflection of our society. Islamic finance holds that money is merely a means of exchange, not something with intrinsic value itself. Money should be used for things that build real tangible value for society. It was an honor to share an American perspective on this. After all, I was the only American presenting (and the room was filled with 350 people, including Nobel Peace Prize recipient Muhammad Yunus).

At Community Sourced Capital, we find that people intuitively understand that their money is creating value when they participate in making a zero interest loan to a business in their community –- over 90% of the businesses that run CSC campaigns are successful in finding people to fund them. That’s compared to other kinds of crowdfunding which often only see around a 40% success rate. People WANT to make generous loans to their neighborhood businesses. It feels good!

And here’s an amazing thing about finance that feels good: real value is created. Measured in jobs alone –- the $1.5 million dollars deployed via CSC so far has already contributed to creating over 100 new jobs. Real value, on the ground. That’s the goal.

Wendell Berry Quote

“There are, it seems, two muses: the Muse of Inspiration, who gives us inarticulate visions and desires, and the Muse of Realization, who returns again and again to say “It is yet more difficult than you thought.” This is the muse of form. It may be then that form serves us best when it works as an obstruction, to baffle us and deflect our intended course. It may be that when we no longer know what to do, we have come to our real work and when we no longer know which way to go, we have begun our real journey. The mind that is not baffled is not employed. The impeded stream is the one that sings.” ― Wendell Berry

Need a small business loan? Attend CSC’s Money on a Mission event!

Money on a Mission Event - get a small business loan
Money on a Mission Event – attend to explore small business loans

More often than not a small business owner needs the opportunity to do lots of things all at once – from managing people, community relations, and inventory management to payroll, social media and financial planning for future growth. That’s an awful lot and we’ve heard from the small businesses we work with that managing their business finances can be the most difficult part of running the business because it’s not where their heart and passion lies.
Continue reading “Need a small business loan? Attend CSC’s Money on a Mission event!”

Announcing a partnership with B Corp

Maybe you’ve noticed the logo in the footer of our website or the thousands of emails our website sends to Squareholders every month. There’s a logo of a little “B” with a circle around it, and it stands for B Corp.

Shortly after we launched Community Sourced Capital, we started pursuing an endorsement that we believed would signal to the world our absolute commitment to using business as a catalyst for change. B Corp is a private certification assessing social and environmental performance of for-profit companies around the world. After a rigorous application and interview process, we received our certification a little over a year ago.

Using business as a catalyst for change is no small feat, and we aren’t trying to do it alone. That’s one of the reasons we’ve surrounded ourselves with the B Corp community — which includes legions of strong, committed small businesses as well as large entities like Patagonia, Beneficial State Bank, Etsy, King Arthur Flour, and very recently, Kickstarter!
Continue reading “Announcing a partnership with B Corp”

Amplifying the voice of community

The first loan we made at Community Sourced Capital was for $2,950. It involved 31 Squareholders lending on average $100 each. The loan itself was to an entrepreneur in our existing network who was willing to try out our new community finance system. We kept the amount low to keep things easy, and the loan was repaid pretty quickly.

We’ve made a lot of progress since then. We’re a bigger company with more capacity for handling larger loans. This month, we’re making our largest loan to date: $47,000.
Continue reading “Amplifying the voice of community”

Starvation Alley Farms: one year in

Starvation Alley Farms hasn’t stopped moving since we first worked with them a year ago to raise $12,000 for an industrial juicer. In fact, Starvation Alley Farms fueled the very first Square through our lending system.

As the first organic cranberry producers in Washington State, the farm needed a new market to sell their berries. Selling juice to cocktail bars instead of berries on the commodity market revolutionized their revenue model. Instead of traveling from Long Beach to Portland week after week to juice their berries, they were able to buy an industrial juicer to keep at home in Long Beach.

2013 was a year of expanding their juice sales to cocktail bars in Seattle, farmers markets, and even an experimental CSA program to deliver juice directly to people! Recently, their expansion to Portland has found them in a few new locations, and perhaps most exciting, in a great spread from Portland Monthly. You’ve got to see these pictures.

Perhaps the most exciting news from Starvation Alley has been the impact on their own industry. Seasoned farmers have asked SAF to help convert their berries to organic, too. Thanks to the scientific and business expertise the farm has been developing over the last few years, bringing on the second organic farm should be a little easier. To help them finance this next stage, our friends at Craft3, a local CDFI lender, have stepped up with some serious financial support.

People often ask about the story of their name: Starvation Alley. “Starvation Alley,” as deemed during the Great Depression, was the road on the Long Beach Peninsula that housed many hard working migrant farmers. Now, it’s home and work for these cranberry farmers. Though the road is now officially named Birch Street, the locals still call it Starvation Alley. They kept the name as an ode to those that came before and to honor everyone still working hard for food (and drinks).

A&R Solar: One year in

It’s been nearly a year since we first sat down with Seattle solar company A&R Solar to talk about a big project they had in mind for their company.

It’s been nearly a year since we first sat down with Seattle solar company A&R Solar to talk about a big project they had in mind for their company. They were running out of room in a small office in Seattle’s SoDo neighborhood and had their eyes on a new location down the street. It would be a game-changer for the business by adding five times as much office space, plus a warehouse.

A&R Solar was the third company to use Squares to raise money for the business. They hit go on a campaign on an afternoon in February to raise $20,000, and a month later, they had $25,000 in Squares accumulated from dozens of people in their community, including family, friends, customers, and even a few “competitors” in the solar industry. Nearly 200 people came together to lend a little money and move a growing company forward.

“Using CSC to raise money put us in a very vulnerable position of asking for money. The outpouring of positive support from people we knew was incredibly energizing. It gave us a confidence makeover.”

“It gave us a confidence makeover.”
    –Co-founder Reeves Clippard

Two weeks after their campaign wrapped up, they had a check in their hands. They got to work immediately building out the new office. In May, they made their first payment on their loan, and then in June, they encouraged their Squareholders to take part in a new loan through CSC to fund a solar hot water installation for the Adrift Hotel on the Long Beach Peninsula.

Several thousand dollars in repayments from A&R Solar went back to work for a loan to the hotel, and A&R carried out the project. In September, A&R threw a party for their Squareholders to check out the new Seattle office. In October, another party to show off the solar hot water project with the Adrift Hotel, and by the time November came around, A&R’s loan was paid off in full.

Besides the Adrift, several Squareholders have kept their money in the CSC system by using repayments to make loans to other companies running campaigns with CSC. Here’s one example from a Squareholder:

One year later, A&R has been named one of the 100 fastest growing private companies in the Puget Sound by the Puget Sound Business Journal. And it’s no wonder, they’re in one of the hottest industries in town — and it’s an industry that happens to be doing a lot of good for the world. You decide if that’s a coincidence.

CSC and PCC Farmland Trust host Funding Farmers Creative Session

Of the many cool things we get to do when working on finance, collaborating with other local finance groups is at the top of our list of favorite things.

This fall saw us hosting a creative session to discuss finance for farmers, so it was a good thing we had groups in the room like PCC Farmland Trust, Slow Money Northwest, One PacificCoast Bank, UbrLocal and Rooted In. All together, over a dozen farmers and food network stakeholders came together to identify creative ways to raise capital for sustainable farms and to discuss shared goals and values for our regional food systems.

Shared values and concerns

During the course of the evening our discussion revealed some shared values and concerns:

  • Sustainable Stewardship of the land and soil
  • The importance of farmer’s livelihoods and access to land ownership
  • The need to reflect the true value of the services of farms to society and the environment
  • The desire for good food for all
  • Figuring this out inside the existing market (not waiting for some other economy to emerge)
  • Making farms financially viable

The evening came to several conclusions, but above all else, it’s clear that there is both plenty of work to do and the energy, commitment and expertise to do it is right here in our community.

So let’s get back to work.

A visit to CSC Roanoke

Traveling to Roanoke VA last week was a study in beauty and hospitality. I visited Brent Cochran, CSC co-founder and our SouthEast lead where he and his wife Meghan welcomed me into their home and showed me around the city. The folks in Roanoke are as inspiring as the autumn in the Blue Ridge mountains. There’s a lot to get excited about in this town. And I think the people there are ready to add Community Sourced Capital’s special version of finance to the mix.

Traveling to Roanoke VA last week was a study in beauty and hospitality. I visited Brent Cochran, CSC co-founder and our SouthEast lead where he and his wife Meghan welcomed me into their home and showed me around the city. The folks in Roanoke are as inspiring as the autumn in the Blue Ridge mountains. There’s a lot to get excited about in this town. And I think the people there are ready to add Community Sourced Capital’s special version of finance to the mix.

Brent grew up in Roanoke and has been bringing his vision of great community to all he does. After graduating from college, hiking the full length of the Appalachian Trail and leading kayaking tours in Hawaii, Brent and Meghan settled back into their hometown. Upon returning to Roanoke Brent noticed two things: a few empty parking lots and too little farm fresh food. In response, Brent founded a non-profit, LEAP for Local Food, which hosts several farmer’s markets and brought those empty lots back to life while launching a sustainable local food system in the greater Roanoke region.

After successfully establishing LEAP, Brent now puts his energy into other sustainable development projects in Roanoke. He has been vital in the success of CityWorks (X)po, a gathering of urban leaders sharing big ideas for better cities. But Brent is just one of many people making Roanoke an exciting place to be.

While I was down there Brent introduced me to some of the folks making things happen in Roanoke. I met the owners of a great Grandin Village coffee shop, the manager of a local radio station, an artist and a wonderful banker who works in community development at a local credit union. Brent and I had a great time pitching the CSC concept to a large group of folks who I’m sure will be some of our first Virginia Squareholders!

Measuring Impact with Love

The businesses we work with impact their communities with love. So sometimes their measurements might be a little outside the norm.

Maybe impact is just another way to measure love. The businesses CSC works with impact their communities with love. So sometimes their measurements might be a little outside the norm. Continue reading “Measuring Impact with Love”