Sacred Economics – Part One

I’m reading Charles Eisenstein’s book, Sacred Economics. I’m including his great video on this post, which presents his ideas.

In his book, Eisenstein suggests that we humans are born with deep gratitude because life itself is a gift.

He has a point, and I’d like to try applying it to how we support small business. What if we changed our financial story from one of every man for himself to one of the more we support one another the more we have?

At CSC, we are using new technologies to build on old traditions of sharing resources in order to support one another. One day, when I was introducing Community Sourced Capital to a small business owner, she said, “We do that!” It turns out the Vietnamese immigrant community has a practice of lending circles in order to help each other get a leg up. How wonderful 🙂

So I’m kicking off this series with a question: what more could we do to create an economy that is a reflection of our gratitude for each other, the resources of the Earth, and life itself?

Occidental Street by Community Sourced Capital Pioneer Square
A photo I recently took of Occidental park in Pioneer Square, just a few blocks from our Seattle office. Taking a walk through Occidental always feels like a gift to me.

Our first dive into Socially Responsible Investing

And when we say “our first dive”, we really mean “our first dive with you,” because we haven’t yet spoken about the role socially responsible investing plays in sustainable finance. Continue reading “Our first dive into Socially Responsible Investing”

Breaking the binary paradigm

Our team has been learning from mentor and friend Carol Sanford over the past six months. If there’s one thing we can count on, it’s that she’ll say something to flip our world upside down, and then follow it up with concepts, nuanced language and intention that reveals the full potential of where we can go from that moment of feeling flipped upside down. Continue reading “Breaking the binary paradigm”

Six months in, and we’re just getting started

Just six short months ago, our little company Community Sourced Capital was born with the purpose of changing the way society thinks about finance. It’s a unique challenge to change how we think about finance, especially if most of us aren’t thinking about it in the first place. That is, unless finance is bad to us. Then we think about it all the time.

We believe finance can be good. It can be good to people and it can be good to businesses. Like when finance enables 113 people to fund a $12,000 loan for an organic cranberry farm. Examples like this demonstrate the potential for finance to embody the qualities that form our generally accepted definitions of “good” like “community” or “sharing” or “love”.

And here’s the “good” news: because money is a human invention, the purpose it carries is ours to invent as well.

Here at CSC, we’re six months into giving money a purpose in our local economies. This is where we’re at:

2 funded campaigns raised $15,000 in loans for community business

Lots more campaigns in the pipeline

6 incredible team members

150+ card-carrying Squareholders

750+ friends (seriously) helping us achieve our vision

We love doing what we do. We spend each day meeting with incredible business owners bringing remarkable products and services to their communities. We identify their financial goals, tell their story, and then help them find purposeful money to finance the next iteration of their business.

So far, we’re a small drop in an enormous bucket. But here’s the “good” news: that bucket—that pesky financial one our society rarely talks about in a positive way—happens to hold remarkable possibility for creating the world we want to live in. Everyone reading this article holds a handful of water from that bucket and all the potential in the world to do something amazing with it.

Cheers to another six months of funding the world we want to live in.

Small business helping small business: part one

Conventional wisdom might say that if you have a web/technology-based business-to-business service company, then the pathway to rapid growth and revenues is to target large Fortune 500 companies as clients. Seattle enjoys the presence of many of those Fortune 500s: Microsoft, Boeing, Starbucks, Amazon, Zillow, and Expedia, just to name a few. Yet, Community Sourced Capital looks to businesses like A&R Solar, Starvation Alley Farms and Playback Sports as the future of our local living economy. These are the companies that make our neighborhoods more interesting to live and play in.

We get to work with these owners directly. There’s no corporate board vetting decisions and their possible impacts on quarterly earnings. Decisions are made by small business owners and CSC because they are the right thing to do and because they “pencil out.”

Both A&R and CSC experience success because of something we call social capital. Both of us are working against the grain, but we have lots of people supporting us. A&R installs solar (successfully) in the cloudy Pacific Northwest, and Community Sourced Capital runs a financial services company on the basis of sharing money. It’s a tough job, but somebody has got to do it. Somebody has to run these small businesses to bolster a new economy, and it probably won’t be big Fortune 500 businesses.

As I heard last month from a client, “it’s time for small businesses to start helping each other, no one else is.” It reflects the frustrations of small businesses owners drowning in marketing messaging from big banks and government about how important small businesses are to the health of the economy, but without action to back it up. I’d like to argue that, while we are nowhere close to being too big to fail, neither are we too small to succeed. We have to work together.

As CSC moves forward, we’re staying as true as possible to our small businesses customers, because we’re a small business too. We need each other to succeed.

This is the first in our series Small business helping small business.

Harvesting Social Capital: a renewable resource

This week, we’re launching our third and most ambitious campaign to-date with A&R Solar, a Seattle-based renewable energy company. Having A&R approach us to help them raise money for their new office space is an honor. One of the highest compliments I’ve received in my young business career was from Dave Kozin (A&R Solar’s CFO), stating “we could probably find other ways of financing this project, but we want to do it with you guys. We think it will be more fun getting CSC and our community involved.”< It's this kind of intuitive and values-based decision making in business that I identify with, and it's where I see CSC having continued success in the future. Actually, there are a lot of parallels between the two companies. Both are small, owner-operated, bootstrapped service businesses. A&R is a registered B-Corp. CSC is a Social Purpose Corporation. Both are built with sustainability at the core of the business model. We’re creating new jobs in a radically different economy than we might have planned for a decade ago.

In prepping for A&R’s $20,000 Squareholder Campaign, we spent the afternoon shooting a campaign video in their new headquarters (it’s a bit empty in the picture above) with a few members of the team. It was way too much fun to be considered work.

And having fun matters. Every day, the way we carry ourselves in the world impacts relationships and connections to those around us–either growing them stronger, letting them fall apart, or missing opportunities to build new ones by blowing by at life’s busy pace and forgetting to look up and meet your neighbor. Social capital fosters reciprocity and the willingness to share resources–knowledge, connections, equipment or even money!

So, how do we put social capital to work? After all, social capital is a renewable resource if we are conscious in how we use it. Consider the companies CSC has had the honor of working with so far. Each harvests a renewable resource, generating new value without being extractive. Recycling sporting goods at Playback Sports, organic farming of a perennial berry with Starvation Alley Farms and now solar energy with A&R Solar.

CSC’s business model is intentionally designed in a similar way. We harvest social capital in the form of shared money. In returning the money to Squareholders, we don’t deplete their ability to share it again. We believe this is part of a larger movement as we transform how we collectively think about money. We’re grateful for the small business owners, the squareholders and all the people in our world who are making their decisions based on their deepest values. This is what will bring in a new economy!

Swimming and diving: an update from the team

What does it take to pull off Community Sourced Capital? A wide range of talents and an insatiable passion for using finance to enhance communities. No big deal.

We share this story with you because we want you to see the kind of topics we’re thinking about in addition to everything we produce. It’s one thing to start a business, and it’s another to share that experience with our network of supporters.

Following the official launch of our first “live” community lending campaigns, we brought our entire team together last week for a full weekend “hang out” and a one day “retreat” at our Hub Seattle headquarters. Brent flew in from Roanoke, Meryl came up from Denver, and Alex, Casey and Rachel enjoyed short bus rides from their homes in Seattle. We also had the incredible opportunity to have the entire team meet with our amazing mentors: Jon Kroman, Todd MacDonald, and Carol Sanford.

Todd led us through a morning exercise of exploring how our team’s interactions ripple out and affect our customer relationships; the core of our team operations will show up in our everyday interactions with non-team members, and those interactions could even show up in our customers relationships with their customers. Whoa. It was an exciting reminder of how important a healthy team is for running a healthy company. And ultimately, it re-enforces our core purpose of building community through trust-based relationships.

In the afternoon, Carol took us down an incredible path of exploring how we engage with our customers and Squareholders in order to create systems of constructive dialogue instead of just asking for “feedback” and seeing what shows up in the inbox. We want to invite our customers and Squareholders to conversations that reward everyone involved through real conversations. “Feedback” often misses this target by a longshot. We hope you hold us to this challenge.

At the end of the day, we’re still swimming along, creating and growing our community finance platform. Our team retreat was a reminder that we should never hesitate to take deep dives into re-exploring our company’s essence, what we do, how we do it, and who we are when we do what we do.

Here’s to swimming, diving, designing, playing, and inviting people to learn alongside with us, all at the same time.

Realities of modern lending remind us what we’re working on

A recent article from Inc. Magazine is reminding us what we’re working for: a better financial ecosystem for small business. The article describes the negative relationships between banks and some small business owners following the financial crisis.

When it comes to the future of small business in America, it’s easy to say that “small business is important to our economy” and leave it at that, but we should really take it a step further. We’ve learned from our economy over the last few years that strong, local economies will require networks of many strong, small businesses.

This is not to say that big business is bad or has no place in our future. It’s just to say that we’ve done a great job supporting big business for a while now, and it’s probably time to focus some more energy on our friends at the “small” end of the business spectrum.

Back to the article– author Burt Helm draws examples of successful small businesses being dumped by big banks because of their industry, major trends in big bank density across the banking landscape, and it asks what might change to fix the whole system.

My own understanding of systems suggest that this current dominant system probably won’t change anytime soon. It’s too big to move, too big to adapt, too big to… well, you get it.

Instead, we can focus on introducing new financial systems that make the entire ecosystem more sustainable. At Community Sourced Capital, we believe these systems will (and should) more heavily involve large groups of people (read: communities) in decision making, and ultimately, in an ongoing education about how our financial system works in the first place.

All this said, I think it’s important to specify when you might see exactly what we’re talking about at CSC . We’re designing and testing sustainable financial solutions, and that process requires lots of care and patience. The last thing we want to do is scale half-baked solutions that end up harming small businesses, or worse, the local economies we’re trying to strengthen.

If sustainable finance, design and collaboration piques your interest like it does ours, then I strongly encourage you to read through this article. Then, consider taking our short survey on small business lending in your own community.

The state of small business on the eve of the election

Small businesses are the heart of our communities and the life-blood of our economy. Few politicians would disagree with that.

Every day, small business owners roll up their sleeves and bring you and me some of our most basic services, often with a smile from a friendly face. They make our lives better by creating spaces where we can enjoy coffee with friends and by making delicious food when we’re too busy to make it ourselves. They create jobs. Small business owners are some of the hardest working and most creative Americans. Every politician agrees with this.

So how do we “vote” for small business? Both the Republican and Democratic Party platforms say we need to make the tax code friendlier to small business. USA Today recently published an article, Q&A: Looming Small Business Tax Hike Explained. It’s an ominous headline, but, in fact, all the looming tax hike has to do with is raising personal income taxes for people earning over $200,000 a year. This possible tax hike might affect as much as 3.5% of all small business owners, maybe—probably fewer. Most small business owners just don’t have that kind of income. That means, when they need to grow, they can’t afford to just cut a check.

I’m worried about what’s happened to access to capital for small business. Bank lending in the smallest sized loans, loans under $100,000, has plummeted. Overall lending is starting to improve for larger loans, but these “micro-loans”, the size most often needed by our neighborhood businesses, continue to decline precipitously. A recent Federal Reserve study says small businesses identify “access to capital” as the greatest impediment to creating new jobs. I want my neighborhood businesses to create jobs for my neighbors, and they need access to capital in order to do it!

So while the presidential candidates focus on tax codes, how can we, we the people, help our neighborhood businesses get what they need?

I don’t believe we need to wait around for banks or government to solve these problems for us. We can start by making appointments at the locally owned hair salon and frequenting the locally owned coffee shop (an easy task for Seattle). We can recommend neighborhood businesses to our friends and start to build local economies that are less likely to tank when Wall Street tanks. But that’s not the whole story.

We also need to ensure that small businesses have access to financial resources; they need the capital to start, run, grow, and improve their businesses. Banks simply aren’t lending to small businesses like they used to. Let’s put our money to work where it can do our neighborhoods some good!

Crowdfunding puts financial power in the hands of many people, but its application to small-business financing is still new. Kickstarter, the most well known crowdfunding website, recently helped a business on Bainbridge Island raise nearly $20,000 to help start their business, but Kickstarter was designed to help artists fund creative projects with donations. That’s why my company, Community Sourced Capital, was designed from the ground up to meet the needs of small business through crowdfunding. We’re so passionate about it that we decided to become one of the first Social Purpose Corporations in Washington State. That means our corporate charter includes a mandate to help small businesses and local economies thrive. You can count on us to live up to that mission!

This election year, we aren’t focused on the power of the politician. We’re focused on the power of the people. We should never forget that we the people are what elections are really about. We hold the power to collectively make decisions, and when we aren’t voting for politicians and policies, we can vote with our dollars by supporting small businesses with our purchases and our investments. We don’t need politicians to help us with this step. We can roll up our sleeves and put our money to work to fund the world we want to live in, today.

Re-imagining our relationship with money

Imagine this: 20 people sitting around in a circle talking about money. It wasn’t bankruptcy counseling. It wasn’t a fundraising meeting. It wasn’t even a investment club. It was just 20 people, sitting in a circle, talking about their personal relationship with money. Continue reading “Re-imagining our relationship with money”