Woody Tasch is all about the money.
But not in an evil, greedy-bastid way. For two decades, he’s been pioneering the integration of financial investing with social responsibility. It’s an enormously important undertaking. When investment dollars go to conventional businesses—and the great bulk of funding still does—orthodox business practices are endorsed and sustained. The result: more social injustice and environment decline. When dollars stay local, on the other hand, environmental costs are reduced because there are lower shipping costs, jobs are created that aren’t subjected to the vagaries of global corporate decision-making, and the money circulates in the community, making for a much more robust local economy.
In the 1990s Tasch served as treasurer of the Jessie Smith Noyes Foundation and was the founding chairman of the Community Development Venture Capital Alliance. Subsequently he was chairman of Investors’ Circle, a network of angel investors, family offices, and social-purpose funds and foundations that since 1992 has invested $133 million in sustainability-promoting ventures and venture funds.
Tasch’s latest venture is the Slow Money Alliance, which aims to bring investment dollars to the emerging alternative culture centered around “slow food,” a growing global movement that celebrates community life through locally grown food and eco-gastronomy. The Slow Money Alliance’s mission, offered here in an abbreviated form, is to “support small food enterprises, catalyze increases in foundation grantmaking and mission-related investing in support of sustainable and local economies, and incubate next-generation socially responsible investment strategies.”
In addition to being a leading expert on socially responsible investing, Tasch is an integral thinker with a poetic sensibility. These qualities are on vivid display in his recent book, Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered, which combines an indictment of our mainstream money culture with a passionate call for a slower, more humanistic approach to investing.
For Tasch, slow food and slow money go together like, well, grass-fed beef and a fine microbrew. I caught up with him before a talk he gave at Time and Space Limited in Hudson on April 24 on Slow Money/Slow Food.
What’s the essence of your vision?
We live in a culture that’s all about speed, quantity, and growth. It’s a culture that’s profoundly out of balance. We need to slow down, focus more on quality, and reject growth for growth’s sake as the sole benchmark of business success.
Over the years, the socially responsible investing movement has taken a step in this direction. “Patient capital” is the term that’s emerged to describe investors who don’t require companies to maximize returns as quickly as possible. But there’s a tension here. Socially responsible investing is under constant pressure to get more adherents—in other words,to become more mainstream—and this comes with a price. Its core values get diluted.
We need to build a culture that stands as a radiant counterpoint to our dominant hurry-up culture. We need to bring our culture down to earth—and I mean this literally. We need to replenish the soil; we need to remember our connection to the soil; we need to support our local food system; we need to participate in and celebrate the authentic local culture that emerges from these many connections and awarenesses; and we also need to build the financial infrastructure that will enable all this to thrive.
At a founding retreat of the Slow Money Alliance, Peter Kinder, one of the pioneers of the socially responsible investing movement, used the term “deracinated.” It’s a great word that means cut off from our roots. Slow food and slow money are concepts that, together, help us find our roots again.
“Slow money” is an intriguing term.
In my book, I define it as “patient capital on the opposite of steroids.”
And then there’s “slow business”—
That’s an important piece of the puzzle too. The entrepreneurs are the real heroes. While the focus of the Slow Money Alliance is on businesses that are part of the local food system, there’s a growing parallel movement that focuses on supporting businesses that are rooted in place, value quality, and are mission-driven.
This is about changes in organizational structure as well as values. New organizational forms such as social enterprises and so-called B Corporations, which combine for-profit and nonprofit purposes, are emerging.
We’re experimenting with new enterprise structures on the financing side, too. In Santa Fe, for example, there are efforts underway to develop what’s being called a Sustainable Business Investment Cooperative. They want to use the co-op model as a new way to aggregate capital, which would then be deployed locally.
The core wound we’re trying to heal is the bifurcation of finance and social purpose. For a century or more, the two have been totally separated. At the end of the day, this is a design challenge. We need to design new types of corporations and shareholder arrangements that integrate finance and social purpose. We need to design new forms of financial intermediation that allow investors to direct dollars to slow businesses.
What are some of the more interesting slow money structures that you see emerging?
One possibility we’re looking at is “slow munis.” Why not invent a new kind of municipal bond that would let people invest in local and regional food systems? We’re in exploratory discussions with a municipality about this.
And how about a fund that was dedicated to expanding community-supported agriculture [CSA] in the US? Currently, about 100,000 Americans get their food from CSAs. In Copenhagen alone, about 55,000 people do so. Talk about a huge opportunity!
We’d also like to see the creation of regional slow money funds that would support everything from small organic farms to local food processors to slow food restaurants. We’re currently conducting workshops in various regions around the country to identify what a truly healthy food system would look like and what is needed, including capital requirements, to make it a reality.
Here’s a quote from your book: “Entrepreneurs and farmers are the poets of the economy. They are holders of ambiguity and risk. They cultivate interstitial spaces, where demand and need and aspiration coexist in a mildly turbulent state of chaotic possibility. They continuously test the boundaries of quality and quantity, as a poet tests the boundaries of denotation and connotation. Ideas in a business plan; seeds in potting soil; rhymes in search of new reasons.” I ask you: Is this any way to write a book about finance?
It is the only way to write a book about finance. This wasn’t the case 50 or even 25 years ago, but it is today. With soil depletion and climate change hard upon us, we’re heading toward an irreversible and possibly apocalyptic problem. We need to respond by being daring. This means going beyond our left brains and engaging our whole brain and our heart.
The paragraph you quoted links poets, farmers, and entrepreneurs. The entrepreneur takes an idea that isn’t real and turns it into something real. Sounds pretty poetic, doesn’t it? And what’s a farmer? He’s an entrepreneur whose material is land. Like poets, farmers need to balance all kinds of imponderables. They beautify the landscape and enrich the life of the community. There’s an essentially poetic aspect to that, don’t you think? If we think of poetry as a crucible that brings together meaning and music, it’s fair to say that entrepreneurs and farmers do the same thing.
As currently understood, economics is all about speed and going hell-bent for growth. This isn’t the right tool for addressing our current problems. Genuine economic prosperity requires more than a set of rote calculations and activities. Meaning and music have to be included if we’re going to have a shot at surviving long-term.
As a poet, you understand the importance of language and how it shapes people’s perceptions. Take the word “economics,” for instance. It’s come to mean quantitative analysis with all qualitative assessments stripped out. This is one example of how we’ve culturally been imprisoned by our language. How can we possibly address a challenge as deep and pervasive as this?
How do we deal with the problem of language? With poetry. Poetry is a way of slowing down language to a place that gives meaning a chance to come out in different ways.
Would it be fair to characterize Slow Money as a poetic polemic in favor of nonviolence?
Nonviolence is certainly a core organizing principle. If you start from the perspective of an investor who is trying to find socially responsible businesses to invest in, and if you follow those enterprises back to first principles, you will find that there’s almost nothing nonviolent for that person to invest in. Consumerism is intrinsically violent. A world in which families are organized around job and career opportunities does violence. A food system that is arranged around creating the cheapest, longest-shelf-life food possible does violence.
In a world as violent as ours—indeed, in a world that celebrates violence as much as ours—how do you steer people toward nonviolence?
My answer to this daunting and profound question is: organic carrots. Eliot Coleman is an organic farmer who lives in Maine. He has a great way of recognizing the power of food to change behavior. Kids who live within 15 miles of his farm ask for his carrots for their lunchbox; they’re that special. His philosophy is, “Make good easy.”
We’ll never get everyone to become saints overnight, but we can entice and inspire people to move in the right direction by linking the healthy and the pleasurable to the nonviolent. This is one reason organic food can be so powerful. It’s fun to put your hands in the dirt. We’re inviting people to relax their obsession with dollar-defined well-being and to engage in activities that are immediately rewarding.
Slow food isn’t only about food; it’s a social change movement that uses food as a tool for connecting people to each other and the earth. Many Americans slot slow food into the pigeonhole of white-tablecloth restaurants and the like. They’re missing—or at least reducing—the point. There’s something in the coming together of people around food that can drive social change.
What else is the Slow Money Alliance doing to support the emergence of this vision?
We’re creating a national alliance of stakeholders that will create social capital at a national level. These are nationally known people like Greg Steltenpohl, who founded [juice drink giant] Odwalla. We’ve signed up 58 members so far, every one of whom has contributed $1,000 or more. We’ve also gotten foundation support. The Charlottesville, Virginia–based Blue Moon Fund has made a significant seed funding commitment.
In parallel we’re building a grassroots network. We will soon announce a set of principles—the Slow Money Principles—and invite people to publicly endorse the principles and contribute $50.
One of the things we’re stressing is the need for social capital—the bonds of real connection among people. In mainstream financial circles, that’s viewed as largely irrelevant. There are no enduring social relationships in the venture-capital world. We’re turning things on their head. We’re starting with the social relationships and using them to identify and build financial intermediation structures.
Meanwhile we’ll be continuing to refine our design ideas. We’ll also raise capital so we can test them.
What sort of progress do you hope for over the next decade or so?
A positive scenario for 2020 would include tens of thousands more small and midsized organic farms, one or two million American families getting their food from CSAs, and a robust capital market supporting many thousands of entrepreneurs who share the concerns and values I’ve been describing here.
There are tremendous opportunities embedded in this vision. Take Hawthorne Valley Farm, for instance, which is a great local yogurt producer. What if we could help bring into being a whole generation of similarly-sized regional yogurt companies to complement the Stonyfield Farms of the world? It would be great if we could successfully nurture the emergence of a large number of regional food producers.
Another enormous opportunity is associated with carbon sequestration. The science suggests that because organic soil is so rich in organic matter, it can play a significant role in capturing carbon and alleviating climate change. Some people even believe that if organic farming became sufficiently widespread, it could reverse global warming! Whether or not you believe that, the notion that organic farming can play a significant role in addressing climate change is very exciting. It also opens up all kinds of entrepreneurial opportunities involving soil amendments, ways to measure carbon sequestration, and so on.
I’d like to see a form of financial intermediation that links organic farming to carbon-sequestration payments. It’s a tremendously pleasing idea, both practically and emotionally. And such a poetic concept!
What impact do you expect the Obama Administration to have on the shifts you’re espousing?
Although some people complain that he’s not doing enough, Obama keeps coming back to the need for fundamental structural fixes. He’s not satisfied with superficial solutions and wants to get to the bottom of things. This is our mindset, too. It’s wonderful to see that a serious high-level articulation of a fundamentally new direction is emerging from this crisis.
And the economic meltdown?
It’s created an environment in which the deleterious effects of fast money have become painfully obvious to everyone. It’s allowing us to jump to the next level of the conversation much more quickly.
Earlier, you talked about “having a shot at surviving long-term.” Are you really that pessimistic?
Realistically, I think the odds of our working our way through all our monumental problems are one percent or less.
That said, I wake up every day in that hopeful one percent, knowing there’s no shortage of things to do. It won’t be easy to get out of the corner we’ve painted ourselves into, but it’s not impossible, either. We can’t let ourselves be paralyzed because if we put one foot in front of another and head in the right direction, you never know what we’ll find.
I think about this in terms of money. We need to get it flowing in a qualitatively different way. We need to slow it down. If we can accomplish this, even with small amounts of capital, who knows what changes will follow?
I live on one acre of land in northern New Mexico at 8,300 feet. It’s famous for its communally-managed irrigation systems, called acequias. When you watch the first water coming onto your land, it’s an amazing and inspiring experience. It’s also a metaphor for slow money. We need money to percolate instead of circulate. We need money, like water, to seep into the culture in a way that makes life possible.
Watching the water come onto the land is a profound source of hope for me.
To find out more about Slow Money: www.slowmoneyalliance.org.
This article appears in May 2009.
