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Banking & Finance  February 11, 2011

Workshop to explore community capital options

FORT COLLINS – The localized version of 18th-century economist Adam Smith’s invisible hand – the one that prefers “the support of domestic to that of foreign industry” – has been gaining strength steadily in recent years. As the local-economy movement has expanded in the United States, Northern Colorado has seen considerable growth in its regional branding and concentrated support for local, independent businesses.

Now, backers of a local economy movement are getting together with a well-known proponent of community-based economic development to talk about investment options to further support regional enterprise and business.

Bankers, investment professionals, business owners, farmers and others will gather for a workshop on Feb. 25 to discuss the idea of “community capital” to promote local investments. Michael Shuman, author of “The Small-Mart Revolution” and the director of research for the national Business Alliance for Local Living Economies, will lead the discussion, organized by Be Local Northern Colorado.

Be Local began in 2006, as a part of the Rocky Mountain Sustainable Living Association, producing a coupon book for “local-unique” independent businesses and holding a winter farmers market in Fort Collins in coordination with the Northern Colorado Food Incubator. Since then, Be Local has developed as an independent nonprofit, affiliated with the BALLE network, with its own office and two full-time co-directors.

The organization now counts 300 paying business members, and sells about 5,000 copies of the coupon book each year. Be Local also produces 70,000 copies of its food-producer directory and another 100,000 copies of its Eat Local food guide. A series of winter farmers markets now occurs in Fort Collins and Loveland, drawing between 1,200 and 1,800 shoppers who spend roughly $22,000 each weekend.

Community investment

After growing its consumer-oriented projects, the organization is now trying to widen its focus to community investment opportunities, said Gailmarie Kimmel, Be Local co-director.

“There are enough (local) people who are business and farm owners that really have a tough time getting access to equity or loan capital,” Kimmel said. “At the same time we have individuals with money who want to invest back locally, but don’t know how. The tools and vehicles to do that easily aren’t there.”

The most visible examples of localized capital support are community-supported agriculture, or CSAs, where individuals buy shares from farms and then receive crops and other farm products on a weekly basis. The model has expanded wildly in the region in the past few years, but it could be just the tip of the local-finance iceberg.

More innovative and cutting-edge tools include community loan funds, investment clubs, community-focused IRAs, and “crowd-funding,” where individuals and institutions collectively, yet independently, choose to finance projects. In an era of stock-market volatility, Kimmel said, community capital programs could offer more efficient and predictable results than traditional investing, while also backing local businesses that strive to meet the “triple bottom line” of financial, social and environmental success.

Colorado State University’s Global Social and Sustainable Enterprise program and several financial-services entities, including Home State Bank and Everence Financial Services, are co-sponsors to the discussion. They are also tuning into the prospects for community investment.

Home State Bank has helped Be Local conduct a “Localize Your Money” survey; so far, respondents have shown they are open to and interested in seeing banking deposits and investments somehow directed toward community investment for local food systems and renewable-energy projects.

“It’s an opportunity to pull together people working on a lot of creative ideas,´ said Jerry Kennell, managing director of Everence Financial Services (formerly Mennonite Mutual Aid and Mennonite Financial). “We think this is the perfect kind of program to be involved with.”

While it’s affiliated with the Mennonite Church, Everence, which has had an office in Fort Collins since 2008, is open to all customers regardless of any religious association. The company promotes values-oriented financial management, offering banking, insurance and financial services.

Kennell said he supports various community-capital programs, including a project that would divert a small percentage – 3 percent to 5 percent – of clients’ portfolios toward local projects that would support housing and business development in low-income areas.

“Our hope is to get to the point where we can offer opportunities to investors that go toward community development,” Kennell said.

Workshop attendance will be limited, and Be Local’s Kimmel said she hopes to have between 25 and 50 people at the meeting. Shuman, who is writing his next book on emerging, local investment programs, has been leading similar conversations across the country.

The discussion will also touch on regulatory tools – and hurdles – for community capital opportunities. For instance, the U.S. Securities and Exchange Commission legally restricts many major investors and large pension funds from investing in small, local businesses and crowd-funding programs.

The direction of the workshop and what investment avenues receive consideration will depend on the participants. “It’s really a mini, local think tank,” Kimmel said.

FORT COLLINS – The localized version of 18th-century economist Adam Smith’s invisible hand – the one that prefers “the support of domestic to that of foreign industry” – has been gaining strength steadily in recent years. As the local-economy movement has expanded in the United States, Northern Colorado has seen considerable growth in its regional branding and concentrated support for local, independent businesses.

Now, backers of a local economy movement are getting together with a well-known proponent of community-based economic development to talk about investment options to further support regional enterprise and business.

Bankers, investment professionals, business owners, farmers and…

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