Welcome to our May blog.  Over the next few months, we are inviting guest bloggers to talk about their passions and ways to impact invest.  This month, Hunter Hopcroft, Special Projects Manager for Ellwood Thompson’s, is writing about his work with the nationwide Slow Money movement.   Slow Money provides local farmers equitable and nimble access to capital to help them improve their businesses and strengthen our local communities.

Slow Money | Unrelentingly Practical, Small Solutions

Hunter Hopcroft, Co-founder Slow Money Central Virginia

Once when I visited a pasture raised beef farm, the Farmer explained that he really did very little oversight of the cows’ diet. The cows were designed to be on land he explained, and as a result sought out their own optimal nutrition among the variety of wild grasses that grew on the farm. Sensing a lack of protein or iron, the cows would find patches of grass rich in these nutrients. Given the proper resources, they thrived on their own. Pasture-raised beef grows more slowly than beef grown on a factory farm, but the end result is more robust not just in terms of taste, but also nutrition and environmental impact. This is broadly the same concept that supports impact investing, and our work at Slow Money Central Virginia. 

Regardless of whether it is sustainable agriculture, renewable energy or innovative education, entrepreneurs everywhere are working to solve many of our society’s most difficult problems. The common definition of a social enterprise is a business that eschews maximizing profit in lieu of doing good or causing less harm. Viewed differently however, a social enterprise is a business that focuses on growing collective wealth versus simply claiming a greater-and-greater share of what is already available. Sustainable agriculture does this by creating valuable, high-quality food products using dramatically less resources — that’s added value for everyone. It’s shockingly straight-forward and it appeals equally to those who are business minded as it does to those with high social consciousness.  

Why then, does the mighty hand of the market not reward these businesses with the same kind of performance and lavish praise as far less efficient, exploitative enterprises? It is because they are playing the game from a position of deep competitive disadvantage. Capital is the oxygen that feeds the fire of entrepreneurship, and these businesses simply don’t have the access to it that higher growth industries have attracted. Just as grass fed beef grows slower, so to do farm businesses compared to their high-tech competition. Similarly, the returns to society from a well-established farm business are longer lasting and more broadly shared than the small cabal of people that benefit from a tech IPO or establishment of a new oil well.  

Seeing this blind spot, we formed Slow Money Central Virginia to get small amounts of capital in to the hands of farm entrepreneurs. The USDA reports that until a farm earns over $300,000 per year in revenue, it is likely that the farm household income comes at least partially from off-farm employment. The job of growing food for our nation shouldn’t be part-time, but without access to capital, farmers are left bearing tremendous personal risk to grow their businesses. The phrase “betting the farm” is not unfounded, and as a result many small farms do not grow in to family enterprises that span generations.

To help solve this issue, Slow Money Central Virginia raises charitable (tax-deductible) funds that go into a 0% interest revolving loan fund.  Loans are typically under $10,000 and represent a variety of projects that help farm businesses grow. We’ve funded chicken coops that clean eggs as they’re laid to improve the productivity of a small farm crew, a dough sheeter for a farm bakery and a herd expansion for a creamery. These projects serve to advance the slow, incremental growth that can take a farm from a position of financial precarity to one of true sustainability. 

We hope that this “micro-finance” can one day become “impact investing”, and that hopefully that impact investing becomes attractive enough to just be “investing,” much like how “organic farming” was simply “farming” for hundreds, if not thousands, of years. There are volumes of statistics that highlight the degradation of the farm economy and the rural communities that surround it. Less than 2% of the US population are farmers, of that 2% the average age is above 60, agricultural lands are lost to development at a rate of 3/acres per minute, but as author/farmer Wendell Berry points out: “The problems are big, they are even big emergencies, but they can’t be solved by big solutions. What our understanding of nature tells us is that the big problems can be solved only by small solutions, unrelentingly practical, that will be made by individuals in relation to small parcels of land farmed or forested or mined, in their home watersheds”. We hope Slow Money is one such small solution. 

If you’d like to learn more about how you can get involved with Slow Money Central Virginia, visit www.slowmoneycva.org.