SOIL: Notes Towards the Theory and Practice of Nurture Capital



We can’t all be Noam Chomsky or Ayn Rand or Wendell Berry or Bingo Pajama,¹ but that doesn’t mean each and every one of us can’t get the hint. We need a new story. Maybe even a new myth. We need to rediscover imagination.

Imagination that enables us to reckon our whereabouts in a world that is heating up and speeding up. Imagination that enables us to find our way past shallow punditry, tribal vitriol, global this and cyber that, past the hyper and the ultra and the mega. Imagination that leads us back to one another, to the places where we live, and to the land—not just the land of “this land is your land, this land is my land,” but also the soil itself, upon which all life depends.


My own journey in this direction has been catalyzed over the past decade by interactions with thousands of folks in Slow Money meetings, large and small, in dozens of communities.² It felt to me, at the outset, that we would do well to listen more to farmers and poets and less to CEOs and economists. Now, I’m ready to double down.

I’ll see your tweets, your big data, your Dow Jones Industrial Average, your political outrage of the day, and raise you thousands of csas,³ millions of organic beets, and a healthy dose of literary imagination, or, more specifically, some Thomas Mann, or, more specifically than that, some Hans Castorp, the protagonist in Mann’s 1924 novel The Magic Mountain, which evoked Europe on the eve of the First World War. Surrounded by questions of civilization and decay, disease and health, Castorp has the epiphany of all epiphanies. Lost and exhausted in an Alpine snowstorm, it comes:

For the sake of goodness and love, man shall
let death have no sovereignty over his thoughts.

Castorp found himself in a fictional blizzard; today, we are lost in a blizzard of the virtual and the fake.

Try this: Where Castorp says death, substitute terrorism or Twitter or, even… Twinkies.

For the sake of goodness and love, man shall
let terrorism have no sovereignty over his thoughts.

For the sake of goodness and love, man shall
let Twitter have no sovereignty over his thoughts.

For the sake of goodness and love, man shall
let Twinkies have no sovereignty over his thoughts.


Summon it and see that the rancor and uncertainty of the day, which seem so unprecedented, are subject to broad arcs of history:

Agricultural Revolution 10,000 years ago
Ancient Greece 2,500 years ago
Europe Colonizes New World 500 years ago
American Revolution and the Invisible Hand⁵ 250 years ago
Industrial Revolution 150 years ago
Tech Revolution and Population Explosion 50 years ago
400 ppm Carbon in the Atmosphere 1 year ago
22,000 Dow Jones Industrial Average 2017


Summon it and see that, all the technological wizardry and wealth creation not- withstanding, we are exempt from neither the laws of gravity nor the wisdom of mythology. The ancient Greeks gave us Icarus and Pandora’s Box and we are still acting these myths out. We invented cars to get horse poop off city streets and now we’ve got carbon in the atmosphere. We deployed nuclear weapons as a deterrent and now we face proliferation and terrorism. We developed antibiotics and now we’re dealing with antibiotic-resistant superbugs. We’re empowered by Twitter and Facebook but we’re losing the integrity of our elections. We’re chasing the dream of terraforming Mars, but we can’t figure out how to stem soil erosion in Iowa, rebuild Baltimore, or save Aleppo.


Ok. I can’t circle around this topic without citing Einstein:

“Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”

(Unfortunately, a skeptic might suggest that the frequency with which such quotes appear in e-mail signatures indicates a certain deficit of collective imagination.)


Summon it and see that governmental, institutional, and economic levers have become too big and too complicated and too clogged with globalized money to do what needs to be done down here on the ground.


It took one of the greatest acts of collective imagination in history to give birth to the United States of America. Thinking big was what that moment in history required and the result was a new nation and a new democracy. In today’s world of global, instantaneous everything and climate change, it will take a new kind of collective imagination to reaffirm the value of the small, the slow, and the local, nurturing a new generation of healthy communities, healthy bioregions, healthy watersheds, healthy foodsheds, and healthy… moneysheds.


Of course, poetic flourishes and references to arcs of history are unexpected in a discussion about food and finance. Perhaps even a little off-putting. But here are a few things that are even more off-putting:

  • Hundreds of grams of unaccounted for plutonium in Kazakhstan
  • 720 milligrams of salt in an 8-ounce soup can
  • Drone regulations that don’t have a prayer
  • Counting on the stock market for an outcome that’s fair

I also find brow beating, ideological zeal, righteous indignation, climate change denial, falling water levels in the Colorado River, and the rise of the lowest common denominator not just off-putting, but scary.

So, in response to all of the above, and as inevitably as Left Hand Creek wends its way to St. Vrain Creek on the way to the South Platte, and the letter “J” finds its way between a first name and a last, I now ask:

Can we summon the collective imagination
to bring some of our money back down to earth?


(1) Bingo Pajama is a character in Tom Robbins’ novel Jitterbug Perfume. Bees live in his hair.

(2) Slow Money is a movement sparked by Inquiries into the Nature of Slow Money: Investing as if Food, Farms and Fertility Mattered (Chelsea Green, 2008).

(3) CSA stands for community supported agriculture, a program through which farm customers pre-pay for a share of the season’s produce.

(4) The Magic Mountain, Thomas Mann (Alfred A. Knopf, 1985) p. 496

(5) In 1776, Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations put forth the concept of the invisible hand of the marketplace, whereby each individual pursuing his or her own gain contributes to the well being of all: “As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.” (Book Four, Chapter Two)

Marie Curie, a very prudent woman, theorizing with Henri Poincaré at the first Solvay Conference in 1911.

The Prudent Woman

This piece is a special collaboration with RSF Social Finance. The post was co-written with Kelley Buhles, Senior Director of Philanthropic Services & Organizational Culture, and was also published on the RSF Social Finance blog.

The world of investing abides by various rules. Some are defined and articulated in formal legislation and regulations, while others are based on customs, common practices, and opinions expressed by jurists in court cases. The expectation of “prudence” in financial management is one such case. (1)

Originally expressed as the “Prudent Man Rule,” this standard—put simply—requires fiduciaries to consider various economic, risk, and liquidity factors as they relate to their clients or beneficiaries, and to invest accordingly. The Uniform Prudent Investor Act, adopted in the 1990s, allows investors to use the principles of Modern Portfolio Theory (MPT), including a total return approach to investing and an emphasis on diversification, as a means of achieving “prudent” fiduciary decisions. The act invited women into the equation, only linguistically, by referencing a “prudent person” rather than a “prudent man.” Although “man” was ditched for the gender-neutral term, the thinking and theory were not broadened to include the feminine.

For decades, there was an explicit expectation that men set the standard for prudence: “to observe how men of prudence, discretion, and intelligence manage their own affairs.”

While the concept of the “prudent woman” may be interpreted as the opposite extreme, we choose this term for our theory over a gender-less alternative because we’ve seen how semantics can hide the truth.

We’ve observed that the dominant economic paradigm still reflects what are traditionally considered masculine traits. We wonder what value feminine traits might bring to our increasingly challenging economic situation. In other words, is it time to ask, “What would a prudent woman do?”

One of the ironies of the Prudent Man Rule in economics is that the word “economy” derives from the Greek word that means “management of the household.” In our contemporary world, management of the household has become “home economics,” a term associated with “women’s work,” usually unpaid and undervalued. Meanwhile, men dominate the system that we now call economics, that is, the making and exchanging of goods and services in the pursuit of maximum profit.

The market economy, the milieu of the prudent man, has become the lens through which we view our entire world. It is the first and foremost arbiter of ideas and proposals ranging from personal career choices to public policy. Unless an idea makes economic sense, it is subject to ridicule and trivialization.

Those who dare to question the superiority of the economy are considered naïve. This is especially true when it comes to investing. The power of assumptions about the purpose of investing is so great that there is virtually no room for disagreement or debate among the professional cadre of advisors, managers, and other practitioners. These embedded assumptions are then transmitted to and imposed upon the clients who place their trust in these professionals. This circle is reinforced by self-interest and fueled by the allure of wealth and power.

We think this has gone too far. Witness the corruption of our democracy by money and greed, the depletion of our natural resources, the poisoning of people and planet, and the vulgar inequality driven by capitalism run amok and rudderless. These are the real risks to the future of investing and the economy.

The world of business and finance has generally been unappreciative of feminine traits, and many women and men have suppressed these aspects of themselves in an effort to conform to the dominant culture. Furthermore, women are often stereotyped in ways that are simplistic, judgmental, and demeaning. What if we could snap our fingers and instantly transform these stereotypes of women into positive character traits of value and power? What if women’s ways were the ways of business and investing? We wonder what would happen if the prudent woman stepped in.

Let us be clear: we are not talking about how women can conform to the current world of investing, nor are we promoting gender lens investing. We are talking about the unmitigated feminine—unharnessed, unjudged, and unconstrained. In a system that is so heavily skewed toward the masculine, we think a shift toward the feminine—by women and men alike—would be healthy and prudent.

We offer below our take on what it might mean to work with an investment framework that is founded on feminine traits. We have used research into cultural stereotypes and generalizations regarding what is “feminine” and what is “masculine” as a foundation. We recognize and appreciate that these are stereotypes. Feminine traits are, of course, not limited to women just as masculine traits are not limited to men.

To start, let’s look at some of the key character traits that are typically ascribed to men and women. The following information was compiled from studying 64,000 people and published in The Athena Doctrine. (2)

“Masculine” Traits

  • Decisive
  • Logical
  • Strong
  • Proud and confident
  • Independent, self-reliant
  • Stubborn
  • Rigid
  • Unapproachable
  • Focused, driven, and straightforward
  • Selfish and competitive
  • Aggressive
  • Assertive

“Feminine” Traits

  • Curious
  • Intuitive
  • Vulnerable
  • Humble
  • Community oriented, team player
  • Imaginative
  • Sensitive
  • Open to new ideas
  • Plans for the future
  • Helpful and nurturing
  • Patient
  • Listens

From these traits, we can envision an alternative, feminine way of thinking about economics:

  • Economics is a human construct that is as fluid as human behavior, not a science that operates by certain fixed and “natural” laws.
  • We can live in an economic matriarchy based on trust, collaboration, and connection, not an economic patriarchy that thrives on competition, fear, and marginalization of the other.
  • Small is beautiful, and growth is not necessarily good or proof of success and worth.
  • Modern Portfolio Theory is only as real as its underlying assumptions, which are merely assumptions, not facts, that have been constructed to make the theory work. We should directly challenge the belief that MPT is real and grounded in mathematics and certainty.

The ideas we describe above are not radical or unrealistic. They are simply more “feminine” than “masculine” and have not been part of the mainstream financial culture of our modern world. Once we open ourselves to these alternative ways of approaching economics, we also become open to a different way of thinking about investing and the standards that could apply to a prudent investor. The Prudent Woman Rule for investing might look like this:

  • A prudent woman takes investing personally while also considering the whole. This means living with contradiction and uncertainty; refusing to ignore or justify that which is difficult, unfamiliar, or frightening; and analyzing the implications of every investment in terms of who benefits and who gets hurt in the generation of financial returns.
  • A prudent woman cares about justice and fairness and considers these to be critical factors in decisions related to money and investing. She knows when enough is enough, and willingly enters into a process of divesting and giving as a way of addressing inequity.
  • A prudent woman educates herself on the origins of wealth; the history of colonization, slavery, and capitalism; gift economies; and other relevant aspects of our modern economy and its alternatives, in order to understand the context and implications of investing.
  • A prudent woman does what she can and is content with small solutions rather than grandiose ambitions and gestures.
  • A prudent woman speaks out and stands up for her approach.

During these trying times, we invite those who have access to wealth of any size to bring a Prudent Woman framework to your investing. We encourage you to have challenging conversations with your investment advisors and financial managers, to question preconceptions about the “rules” of investing, and to imagine what else is not just possible but also valuable and beneficial. Through thoughtful and daring investments, we can build a new field of finance and a new economy based on love, respect, and interdependence.


(1) “All that can be required of a trustee is that he shall conduct himself faithfully and exercise a sound discretion. He is to observe how men of prudence, discretion, and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of the capital to be invested… Do what you will, the capital is at hazard.”

(2) Gerzema, John and Michael D’Antonio, The Athena Doctrine, Young & Rubicam Brands and Jossey-Bass, 2013.

Ayers Brook Goat Dairy

A Slow Money Journey

The idea was simple at the beginning, back in 2006: find a fund in which my clients could invest their money that would finance farms and businesses involved in sustainable agriculture. I quickly discovered that no such thing existed. Instead, the inquiry set me off on a rewarding decade-long journey of learning, collaboration, and co-creation.

I have served as a portfolio manager for high-net-worth individuals and families for almost 20 years. All of our clients at Clean Yield aim to align their money with their values, and for many that means finding ways to invest in their local communities and regional economies, especially in the food and agriculture sector. Ten years ago, just about the only vehicles for doing so were preferred shares in the Organic Valley and Equal Exchange cooperatives. They were a great start, but we were looking for more options, in particular something structured like the already popular community loan funds that support a range of economic-development activities around the globe. My search led me to Woody Tasch, who I already knew from Investors’ Circle.

Woody was busily brewing up the ideas that would eventually become Slow Money, but we came to the issue from different investment perspectives. My clients and I were familiar and comfortable with lending money through relatively safe and predictable community loan funds, but had little experience with angel or venture-capital investing, the part of the world in which Woody had been operating. Putting our clients’ assets in illiquid investments in individual farms and small food enterprises was more risk than was appropriate for most of my clients at the time.

There were also myriad administrative challenges around these potential investments: how to value them on client statements, whether to charge for our services, and how to custody the assets (our standard custodian, Charles Schwab, was reluctant to hold them). So my energy went into helping develop the organizations laying the groundwork for a more robust financing landscape for these types of businesses.

Woody invited me to participate in the gatherings that helped craft Slow Money, and Dorothy Suput asked me to join the board of the nascent Carrot Project, which aimed to address financing gaps for farmers in the northeast. The discussions that took place in both organizations deepened my understanding of the challenges to rebuilding healthy local and regional food systems, as well as the role that access to capital can play in catalyzing that process.

The Carrot Project developed relationships with existing community investment institutions in New England and launched specialized funds focused on small loans to farmers. This gave us an appealing investment option for some of our clients to begin directing capital into local and regional agriculture in a relatively low-risk way.

But it was the push we got from a handful of our clients who are deeply committed to sustainable agriculture that accelerated the flow of capital into this space. They had the risk tolerance and inclination to take the lead. So we started in late 2007 in our own backyard with an investment in High Mowing Organic Seeds, a Vermont-based company that needed capital to meet soaring demand.

High Mowing Organic Seeds

High Mowing Organic Seeds staff harvesting garlic

At the time, I was at Trillium Asset Management, but through my research on High Mowing, I got to know Clean Yield founder Rian Fried, who was the one conducting due diligence on the deal. I eventually joined Rian at Clean Yield in 2009, in large part so that I could spend more of my time working on Slow Money opportunities. The move allowed me to cofound Slow Money Boston and, later, Slow Money Vermont.

Meanwhile, as the Slow Money movement emerged and its networks launched in Boston, Maine, the Pioneer Valley, and eventually Vermont, the pipeline of investment opportunities in food and agriculture businesses significantly increased. The establishment of the Vermont Sustainable Jobs Fund’s Flexible Capital Fund in 2010 played a key role in allowing more of our clients to participate, by offering a professionally managed, diversified investment vehicle focused on agriculture and clean energy. This was a dream come true for Rian and me, and I can’t thank Janice St. Onge enough for her imagination, leadership, and persistence in creating and managing that fund.

By 2011, having had a positive experience with High Mowing Organic Seeds and having become more comfortable going beyond straight lending, we were ready to ramp up our direct investments in food and agriculture businesses—and we had clients who were more than ready to take the plunge. In particular, the Lydia B. Stokes Foundation set ambitious goals for the percentage of its endowment to be allocated to impact investments in sustainable agriculture. Happily, our home state of Vermont was fertile ground for these types of investment opportunities. Vermont Smoke & Cure, Vermont Natural Coatings, the Northeast Kingdom Tasting Center, and Ayers Brook Goat Dairy all raised capital between 2011 and 2013 with our clients’ participation.

Although investing in private companies is inherently different than investing in the stock or bond market, we applied the same rigorous analysis to these offerings. Given that we were sticking our necks out in considering these investments at all, we wanted to have a high degree of confidence that these businesses would succeed and be able to pay back their investors. As fiduciaries, it was also essential that we ensure that each investment we made was suitable for each client’s financial objectives and risk profile. This entailed increased communication with clients and increased administrative costs on top of the time being put into researching the prospective investments. However, we weren’t earning any additional revenues from these activities.

It was clear that this would not be a profitable line of business for Clean Yield, but there was never a question as to whether or not to do it. Our clients were enthused by the opportunity we had given them to go beyond having a “clean” portfolio of stocks and bonds to having holdings in their portfolios that reflected their deeply held vision of a truly sustainable local/ regional economy and food system. Once they had a taste of it, they clamored for more. The feeling was mutual. We took great satisfaction in the service we were providing, both to our clients and to the local economy. We accepted that this would lower our profit margins somewhat, but we also found that our leadership in this arena started to bring us new clients.

Rian’s untimely death in 2013 was a critical moment for us. He had been a pioneer not just in Slow Money investing, but in the broader realm of socially-responsible investing. In attempting to honor his legacy, we settled on hiring two people instead of one. The first would focus primarily on impact investing. Karin Chamberlain filled the role that fall and brought additional concentration and structure to our impact program, catalyzing even more activity. In the three years since she came on board, our impact investments have soared from about $5 million to nearly $15 million in 25 different vehicles for more than 50 clients. The Stokes Foundation has continued to push us to bring them new opportunities and has ratcheted their allocation to impact investments to nearly 50 percent of their portfolio. Not all of that is in food and agriculture, but we have continued to find new companies and funds to invest in, including Real Pickles, Iroquois Valley Farms, Root Capital, and Fresh Source Capital.

Real Pickles

Addie Rose Holland, worker-owner and cofounder of Real Pickles

With more than five years of very active Slow Money investment behind us now, we’re beginning to see meaningful financial returns. Our first investments have matured or been renewed or extended. Our clients continue to receive regular interest payments from those investments where it was expected. We’ve even had one unexpected “home run” where a private-equity firm took a majority stake in a company, resulting in a quadrupling of our clients’ investment value.

While we fully expect that the reverse will be true as well—that despite our due diligence some of our investments will lose money—the early results are encouraging, especially given the ultra-low interest rates available from conventional investments.

The social and environmental returns remain hard to measure, but are undeniable. Our clients’ commitment to financing the food system makes capital more accessible—and often cheaper—for the companies that are building a more just and sustainable food system.

We recognize that in the context of the global food system, it’s barely a drop in the bucket and that the playing field remains tilted in favor of industrial, petroleum-drenched agriculture, but we also know that our efforts are making a difference in our region and hope that our example will inspire others.

Eric Becker is chief investment officer at Clean Yield Asset Management. He has been engaged in social and environmental investing since 1993. Eric co-founded Slow Money Boston and Slow Money Vermont, as well as the Vermont Food Investors Network. He is a founding board member of Soil4Climate. Eric serves as a Trustee of Sterling College in Craftsbury Common, Vermont. He was also a founding board member of The Carrot Project.

Don Shaffer

A Conversation with RSF Social Finance CEO Don Shaffer

Don has served as President & CEO of RSF Social Finance since 2007. He has been a social entrepreneur for many years, growing an education business, a software company, and a sporting goods manufacturer, in addition to the nonprofit Business Alliance for Local Living Economies. Don and the team at RSF are constantly asking the question, “How can we model financial transactions that are direct, transparent, personal, and based on long-term relationships?” Under Don’s leadership, RSF’s total assets have grown to over $160 million.

Woody Tasch: If I told you that I think of you as the least fiduciary fiduciary I know, would you consider this a compliment or an insult?

Shaffer: I like that designation. For one thing, at RSF we don’t have any institutional investors. All investors and donors are individuals or families. We know each of them quite well. That makes an extraordinary difference in terms of how we show up. We know their intentions, and so we can represent them well. We’re in actual relationship with them. We give agency to their desire to question assumptions, to put money to work as directly as possible. We try to be a thin layer of intermediation that helps people deeply align their money with their core values. We are not conventional investment advisors who have all sorts of institutional constraints and who are typically not interested in questioning the core assumptions of modern portfolio theory.

The core assumptions of modern portfolio theory?

Actually, I sometimes avoid the phrase “modern portfolio theory.” Financial jargon is part of the problem. People get buried in a blizzard of financial terms that obfuscates—makes opaque—what is going on, furthers the paradigm of, “We’ll just take care of you. Here are the reports—full of jargon and charts and analytics that are virtually meaningless to you.”

You’re making me think of a recent impact investing report from a major investment bank. It covers billions of dollars of impact investing, has all manner of survey data from institutional investors about their social and environmental concerns, about the allocation of capital and return objectives and metrics, but does not mention a single individual transaction. It is all about large, aggregated pools of capital, sliced and diced analytically in various ways. But you can’t tell where the money is going in terms of specific investments.

That’s why at RSF we do not think of trying to be a leader in the impact-investment industry. The impact-investing industry is mimicking the structure and presentation of institutional finance—the culture of Wall Street. So, what we do, to counter this, is to bring investors and social enterprises as close together as possible. When this is accomplished, investors and entrepreneurs can experience a visceral sense of how we are all connected. When you experience where your money is going and, as an entrepreneur, where your money is coming from, we find that, pretty much every time, it nurtures a spirit of generosity.

That reminds me of the words of a woman from Ashland, Oregon who said, a few years ago, after a half-day public Slow Money discussion, “The innate value of this kind of investing is so obvious to me that I don’t care how much money I make.” Innate value—a truly beautiful way of expressing it, since the word innate has connotations of the natural and the intuitive. This is a way of getting at the visceral sense of connection that you are talking about. It happens when people are in direct relationship to one another and to the places and the soil where they live. And, being the devotee of Wendell Berry that I know you to be, this is where we should throw in the word affection.

Yes, affection. There isn’t much of it when the workout team of a bank gets down to business, getting whatever financial value they can out of a troubled loan. RSF doesn’t have a workout team. We have a work-through team. We can be more patient, more flexible, and can work toward an effective resolution in situations where commercial banks just cannot. Is this generosity? Or affection? Is it simply a matter of working at a smaller, more-human scale? These are all great ways to think about what we are doing.

Common Market

A mission-driven distributor of local foods to the Mid-Atlantic region, Common Market has grown rapidly through integrated capital financing from RSF. Featured are cofounders Haile Johnston and Tatiana Garcia-Granados.

We’re finding the same to be true in the Slow Money investment club in Boulder. There is strong consensus among our few dozen members that, although we don’t use the words “affection” or “generosity,” we are using that spirit to evaluate our success. Success for this group is not a particular rate of financial return. It is the enhanced impact on the local food system of the small food enterprises to whom we have made loans. This is our primary concern. I’ve started using the term “return agnostic” to describe this mentality. As we become more grounded in terms of our shared mission, and as relationships strengthen, we become more agnostic about the arithmetic.

If you want to talk about arithmetic, let’s talk about LIBOR—the London Interbank Offered Rate. Trillions of dollars a day globally are pegged to LIBOR, a rate which has been shown many times to be rigged for the benefit of the big banks. At RSF, we don’t use LIBOR. LIBOR is part of the black box of the banking system. No one knows where the money in a big bank goes. It could go to hedge funds. It could go toward community investments. You don’t really know.

So, we use Community Pricing Meetings as part of an entirely different approach. We bring together the investors in our $100-million loan fund, the entrepreneurs who are our borrowers, and RSF staff, and we talk about each others’ needs. Some investors focus on reducing risk. Some want only a little bit of financial return. Some care only about the depth and potency of social and environmental impact and want to support the modeling being done by social enterprises. You’d think the entrepreneurs would care about nothing more than paying as little as possible. Yet at every meeting, some of the investors are inspired to say to some of the entrepreneurs, “I’d be willing to take less, if it will help you be more successful.” Then some of the entrepreneurs say, “We’d be willing to pay a little more if it will enable you to help other entrepreneurs.” This experience of interdependence changes the arithmetic.

Perla Ni, who used to be editor of the Stanford Social Innovation Review, named that tune in three words: “Numbers suppress empathy.”

There’s a lot of truth to that. If you are so busy doing the numbers, you don’t have time for empathy. I’m constantly surprised by how often I get asked, “Am I allowed to have a portion of my assets invested in deep social and environmental assets and either just get my money back or have a small financial return?” It’s fascinating that so many people ask if this is “allowed.” And the frequency of this question, whether from folks of significant means or not, is increasing dramatically—it’s ten times what it was five years ago.

We’re all trying to get permission from the “Big Fiduciary in the Sky.”

This is why I like your mantra about “bringing our money back down to earth.” It’s about giving ourselves permission. Investing in food and farming brings a lot of this to the forefront.

Can you share an example of one of your recent investments in food?

A recent example is a multipronged loan/investment/grant to Veritable Vegetable, the oldest local organic distributor in northern California. They ran out of warehouse space and needed a new building, but San Francisco real estate is extremely challenging. We split the mortgage loan on the new building with New Resource Bank—a $3.2 million loan, split 50/50. Then we financed leaseholder improvements for them with $800,000 of subordinated debt, half of which came from a philanthropic fund at RSF and half from five RSF investors who participated alongside the fund.

On top of that, they got a grant from the USDA, but needed a lead gift to catalyze this. RSF put in $30,000; then USDA came in with an $100,000 grant. So, that’s an example of what we are doing in the food sector. We’re taking an integrated capital approach, working to break down the compartmentalization of transactions.

The Veritable Vegetable team

The Veritable Vegetable team

Say more about what you mean by “integrated capital.”

Integrated capital is the coordinated use of different kinds of financial capital and nonfinancial resources to support an enterprise that’s working to solve complex social and environmental problems. We’re talking about direct investments, loans, grants, etc. What we find constantly is that this is very nuanced work—to figure out how to provide the right combination of funding at the right time. Often the entrepreneurs need quite a bit of counsel. It’s a deep listening process.
So we’re launching an Integrated Capital Academy in the fall of 2017 to train the next generation of integrated capital specialists. Basically, there is a big need right now for hundreds of finance professionals who have what I call “the whole enchilada”: technical knowledge of direct investing/lending/giving, a fundamental disposition for listening, a spirit of service, and the impulse to go beyond “impact” transactions to relationships.

Kate Danaher, who is our lead manager for integrated-capital deployment in food and agriculture, has it. Esther Park, who led our lending team for years, has it. Esther is CEO of Cienega Capital now, one of the most innovative family offices in our field. We want to create a peer-learning experience for about 20 people initially. I can’t wait to see how it goes!

It’s interesting that you are introducing a new curriculum and calling it integrated capital, because Slow Money is introducing something new as well. We’re calling ours a Decelerator. You know: venture capital has accelerators and pitch fests; nurture capital needs decelerators and harvest fests. We’ve done all kinds of meetings around the country and the Decelerator is a next iteration. We’re hosting our first one in October in Colorado. The challenge in all of this is balancing the need to develop a new kind of financial intermediation—I did say you were the least fiduciary fiduciary I know, didn’t I?—that gets more money flowing from the wealthy and also empowers and engages small investors. I love the prospect of many more Esther’s working with many more Cienega Capitals. And I love the idea of hundreds of thousands of small investors and crowd- funders connecting to do lots of small investments through a network of CSA-like local investment initiatives.

Sounds like a plan.

Stock Exchange

$617 billion, $.20/lb. and A New Kind of Coin

Your response to my “Bombing, Blaming, Droning. . .” letter a few weeks ago was beyond heartening. Scores of you took the time to share thoughtful replies to me. That’s the good news. The bad news is that it has emboldened me to reach out in a similar manner again.

Don’t panic! I won’t inundate you. I am as prone to hit the Unsubscribe button as you.

So, please bear with me, be charitable with a few more minutes of your time, and let’s see where this takes us.

The impulse to write today comes, as it did a few weeks ago, from two news stories. The first is from Bloomberg, which reported yesterday on mistaken stock trading orders to the tune of $617 billion—yes, that’s billion with a “b”, just like it’s trillion with a “t” when we are talking about the cost of wars and hundreds of “t’s” when we are talking about the cloud of derivatives that blankets the financial heavens. The magnitude of the faulty trading orders would be enough of a topic in itself, as we are talking about calculable percentages, even major chunks, of the total valuation of major public companies and total daily trading volume of major exchanges. But what caused me to sit down to write this was the following:

“I don’t think we can find out who did this,” Jefferies’ Yamamoto said. “OTC transactions happen directly between two parties, which makes it difficult to find out who was involved. But considering the scale of the error, I guess it was a big broker.”

I don’t think we can find out who did this. Just what kind of cuckoo’s nest is this? Just what kind of social and environmental and cultural collateral damage are we exposing ourselves to daily as a result of ignorance about massive capital flows? Just when did we cede control of the wealth created by hundreds of years of industrialization to a handful of anonymous fiduciaries who cannot even keep track of the dollar flows in real time, much less think about long-term social and environmental concerns?

Ok. That was News Story One.

News Story Two was on NPR’s Morning Edition on Tuesday and was about poultry processing in the U.S. and Europe. And the dollar amount at issue is not hundreds of billions of dollars, but, rather $.20/lb. In order to save $.20/lb., U.S. processors dip chicken carcasses in a chlorine bath to kill salmonella; in Europe, the use of chlorine bath is prohibited and processors instead use vigilant husbandry to keep salmonella out of their flocks. Hmmm: vigilant husbandry vs. cheaper chlorine bath? Which is the path to healthier culture? Just which parts of vigilance and health are we willing to sacrifice for $.20/lb.?

Industrial finance and industrial agriculture are two sides of the same coin. It is time for us to learn to save, spend and invest a new kind of coin.

If you’ve seen the Beetcoin launch, you know that’s just what we’re trying to do. If you haven’t seen it yet, check it out. We’re barely out of the gate, and 53 intrepid early adopters have contributed $18,500. We’ve also gotten lots of early affirmation from friends and observers, so thanks for that. Beetcoin may well have legs for the long-term, but for right now, all eyes are on Louisville.

Please don’t misconstrue this letter as little more than a thinly veiled promotion of Beetcoin. It is sharing from the heart and the asking of a kind of public question: Can we help one another focus less on the crazy institutional dysfunction of the day and more on the seeds of a nonviolent economy that we can plant together?

Blaming, bombing, droning … investing.

I was watching the news this morning over my coffee and listening to a brief mention of Quaker lobbying on Capitol Hill for peace initiatives in the Middle East, to which the commentator immediately offered the following knee-jerk, supposedly un-trumpable retort:

“But what about ISIS? Isn’t military response to ISIS completely justifiable and needed?”

There was also—and stick with me, here, as we move from terrorism in the desert of Iraq (Or is it Syria? Or is it some other geopolitical non-neighborhood that existed before the region was carved up by Western powers after World War I?) to the cornfields of Northern Ohio—a piece on last evening’s PBS News Hour about the toxic algae bloom in Lake Erie.

The PBS story featured a conventional corn farmer talking about the need to increase production to feed the world’s growing population, hence the need for fertilizer. . .but, not to worry. . .he’s using drones to help him apply his fertilizer more efficiently, so there’s hope that this will reduce run-off into Lake Erie.

Not that it would come as any surprise that farmers in northern Ohio are resistant to the possibility of federal regulation of fertilizer application. But, sure, even after all these years, it is still a bit shocking to me that a news organization working more in the public interest than commercial networks would fail even to mention longer term, structural fixes to agriculture. . .words like sustainable, organic, local, diversified, or even, heaven forefend, the world “soil”. . . .were as far away from that news story as Iraq is from something that was once called the Fertile Crescent.

In response to the violence and institutional dysfunction and ecological degradation and uncertainty and fear of the day, we have only two choices, if we boil it all down:

1. We can blame, bomb, drone, attack, argue, vilify, deny, lobby, scare, tax, legislate, regulate, investigate, prosecute and protest; or,

2. We can invest.

Blaming, bombing, droning, attacking, arguing, vilifying, denying, lobbying, scaring, taxing, legislating, regulating, investigating, prosecuting and protesting may be satisfying in the short term. But only investing can deliver the long-term results that have a shot at giving staying power to the “happiness” in “life, liberty and the pursuit of happiness.”

Happiness that comes from blaming, bombing, droning, attacking, arguing, vilifying, denying, lobbying, scaring, taxing, legislating, regulating, investigating, prosecuting and protesting is short-lived and fragile, a bit too much like the non-satiety that comes from empty calories. You want real nutrition? Health? Lasting happiness? You have to invest.

(And, for the record, please note: I’m not suggesting this is an Either/Or choice. We are, to be sure, and for better or worse, in All Of The Above mode, but the one that is most precious, and in shortest supply, is investing.)

Excuse me for echoing, as many have and many will, those prescient, funny, poignant words from the movie Network: “I’m mad as hell and I’m not going to take it any more!” (By the way, if you’ve never seen it, please do check out these two and a half minutes from that movie—arguably the best, most entertaining two and half minutes ever filmed about global finance, the economy and nature.)

Let’s get a little riled up, sure, but then, quickly, appropriately, sustainably, slowly, let’s sit down together, break bread, plant seeds and otherwise conspire about how to spend less of our time blaming, bombing, droning, attacking, arguing, vilifying, denying, lobbying, scaring, taxing, legislating, regulating, investigating, prosecuting and protesting … and more time …


Starting with food. Starting with the soil. Starting with investing ourselves in a collective, conscientious, entrepreneurial, neighborly, heartening, peace-loving and vital public conversation.

Photo by Allan Ajifo / CC BY

Of Algorithms, People and Knowledge

I arrived at this month’s inaugural Slow Money Canada meeting ready to share an excerpt of Michael Lewis’s new book, Flash Boys. Is there a more stark counterpoint for slow money, a better argument for bringing money back down to earth, than the excesses of high-frequency traders racing to achieve a few-millisecond trading edge?

Turns out there is.

And it is this: A venture capital fund called Deep Knowledge Ventures has just announced the appointment of a computer algorithm to its board of directors.

No, I’m not making this up. No, this is not an article in The Onion. This is real news. This is financial reality as of June 2014, on this little old ball of whirling, zooming, and life-of-its-own cyber-money called Planet Earth.

Makes me think back to Niall Ferguson’s prescient observation in The Ascent of Money: “Planet Finance is starting to dwarf Planet Earth.”

Here’s the Business Insider piece on the algorithm’s appointment:

A Hong Kong VC fund has just appointed an algorithm to its board.

Deep Knowledge Ventures, a firm that focuses on age-related disease drugs and regenerative medicine projects, says the program, called VITAL, can make investment recommendations about life sciences firms by poring over large amounts of data.

Just like other members of the board, the algorithm gets to vote on whether the firm makes an investment in a specific company or not. The program will be the sixth member of DKV’s board.

VITAL’s software was developed by UK-based Aging Analytics.

“[The goal] is actually to draw attention developing it as an independent decision maker,” Deep Knowledge Venture’s Charles Groome told BI.

How does the algorithm work?

VITAL makes its decisions by scanning prospective companies’ financing, clinical trials, intellectual property and previous funding rounds.

Groome says it has already helped approved two investment decisions (though has not yet cast its first vote), both of which resemble its own function: In Silico Medicine, which develops computer-assisted methods for drug discovery in aging research; and In Silico’s partner firm Pathway Pharmaceuticals, which employs a platform called OncoFinder to select and rate personalized cancer therapies.

“It’s not what you’d call AI at this stage, but that is the long-term goal,” Groome said.

Let’s leave out the irony of the venture firm’s name: Deep Knowledge. No, let’s not leave it out. I suppose this is the fundamental issue: What is the difference between data and knowledge? Between knowledge and wisdom? What kind of information do we need in order to make what kind of decisions? What kind of knowledge might we call deep?

Slow Money board member Eliot Coleman speaks eloquently about the difference between deep organics and shallow organics. No need to belabor the distinctions here, other than to recite Eliot’s wonderfully insightful maxim: “Feed the soil, not the plant.”

It makes me imagine two cartoons. The first depicts a board table around which five people and one laptop are seated, with everyone saying “Aye.” The second, the same board table, around which five laptops and one person are seated, with the five laptops saying “Aye” and the one person saying “No.”

The “Ayes” have it.

From Bitcoin to Beets

The recent collapse of Mt. Gox and the “inconvenience,” in its CEO’s words, caused by the disappearance of hundreds of millions of dollars of Bitcoin investors’ money, should make us all think about the history of finance and … organic beets.

We invented joint stock companies in 1600, came to what appeared to be an inexhaustible continent, took everything, cut it up into pieces and started selling it to strangers, only to find ourselves finally selling Ones and Zeros and Sliced and Diced Who-Knows-What Derivatives to invisible strangers. In milliseconds and in incomprehensibly large quantities.

Then came Bitcoin.

Then came Bitcoin “mining.”

Now, I could rant about the absurdity of roomfulls of servers, funded by venture capitalists, applying the extractive, industrial mentality of mining to the techno-seductiveness of virtual currency, but I’d rather talk about organic beets.

As in, thousands of us starting to invest in local, organic food enterprises—something startlingly common sensical yet seemingly radical in today’s byzantine world of hypersecuritized capital markets.

Under the improbable banner of something called Slow Money—let’s call it the polar opposite of Bitcoin—we are acting on the visceral sense that there is such a thing as money that is too fast, securities that are too abstract and complex, and companies that are too big.  We are fermenting a peaceable little non-technological revolution in investing.

It’s as if we were taking all the macro numbers of economic growth—the Dow Jones Industrial Average, the Case Shiller Index, GDP, Consumer Confidence, the value of all the barrels of oil still in the ground—and throwing them into a jar along with some friendly bacteria of the Care of the Commons, Sense of Place, Diversity and Nonviolence Kind.

Over the last few years, the Slow Money network has put over $35 million into over 300 small food enterprises around the country (and a few in Canada, France and Switzerland), supporting small and mid-size organic farms and the many small food businesses that create jobs, revitalize Main Street, build carbon in the soil (where we want carbon, as opposed to in the atmosphere), improve health, and create fertility at the base of a restorative economy.

This is a small part of a larger movement that is asking:  After all the globalization and financial razzmatazz, don’t we need to bring some of our money back down to earth?

A number of NGOs are emerging to rebuild local economies, including the Business Alliance for Local Living Economies, the Post-Carbon Institute and the Institute for Local Self-Reliance.   Small new investment intermediaries are emerging too, including RSF Social Finance, Mission Markets and Farmland LP.

To fix our economy from the ground up, we need to do more than Buy Green and Buy Local.  We need to do more than regulate the excesses of Too Big Too Fail.  We need to Invest Local.   We need to take a little of our money out of there—the abstract, complex, ultra-fast world of global investing—and put it to work here—near where we live, in things that we understand.

Food is a great place to start.  Slow Money investments are supporting dairy coops, organic grain mills, regional food hubs, seed companies, restaurants that source locally, compost companies, niche organic brands, grassfed beef producers and more.   Investments have ranged in size from a few million dollars to a few thousand dollars.   Investors include experienced angel investors and family foundations, but are mostly just plain regular folks who want to know where their food comes from and where there money goes.

You may ask: Is this investing or is this philanthropy?

The answer is embedded in the experience that more than half a million Americans are having as members of CSAs—farms that sell shares of their production in advance of each season. I’ve asked thousands of CSA members around the country: How many of you ever calculated quantitative metrics supporting your decision to join a CSA—food miles, price, nutrient density, pesticide levels, organic matter in the soil or any other such factors? In many years of asking this question, only a few people have raised a hand and said they had done any such calculating.

This suggests that hundreds of thousands of Americans are using a sense of innate value to pre-pay for food from a local farmer. They are entering into an arrangement that is part investment decision, part consumption decision, part transaction, part relationship, part capitalism, part socialism, both deeply conservative and deeply liberal.

This is where we must head if want a healthy economy. Away from Bitcoin and towards beets. Away from anonymous transactions and towards healthy relationships.  Away from computer screens and towards farms and fertility. Beyond financial diversification and towards diversity—ecological diversity, cultural diversity, economic diversity.

Because, after all, what is more diverse than a gram of fertile soil, with its billions of micro-organisms and thousands of species, most of them not yet named?

Castanea Foundation and Creamery Form Ag Investment Model

A shortage of goat milk was the beginning of an innovative investment currently mid-stride in Vermont.

Allison Hooper and Bob Reese, co-owners of Vermont Creamery, wanted to invigorate dairy goat farming in their state. Their creamery is a successful company 28 years in operation, manufacturing high-quality butter and artisanal cheeses from goat and cow milk. Vermont Creamery does $16 million in annual sales and sources milk from 20 dairies in Vermont, but has to go outside the state to purchase additional milk. Would it be possible, Hooper wondered, to provide technical assistance and bring in business capital so Vermont goat dairy farmers could increase their yields? “We have several decades of experience developing goat dairy farming and we know what it takes to get this supply chain up and running,” she says.

Along the way Hooper connected with Tim Storrow, Executive Director of the Castanea Foundation based in Montpelier, Vermont, and one of Slow Money’s early founding members. The Castanea Foundation, which sees the use of its investment capital as key to its mission, invests around $1 million annually, with a focus on supporting diversity within the Vermont agricultural economy. “We try to be the tipping point by anchoring each project,” says Storrow. “What we’ve found is if we step up with our patient capital, it attracts other private investment.”

After examining the Vermont goat dairy industry, Storrow saw an opportunity to create a demonstration farm to model best practices for goat dairy farmers and serve as a catalyst for the industry. Even better, he realized, was the fact that the demonstration farm, which they’ve named Ayers Brook Goat Dairy, already had a proven market: Vermont Creamery would buy all of its goat milk.

Storrow knew that in order to achieve success, the investment model had to include a component in which the farmer could make a realistic income. “Our interest is, ultimately, the conservation of the working landscape in Vermont, but we don’t think that we can make an impact towards that mission unless people, families and individuals can make a living farming,” says Storrow. “It’s a lifestyle in which you’re not going to get rich quick, but it has to be economically rewarding. You’ve got to be able to pay the bills, pay for retirement, send your kids to college, and if you can do all of those things and farm at the same time, then we are truly going to sustain our local economies.”

Hooper found a farm with prime agricultural land for sale in Randolph, Vermont, near Vermont Technical College, providing access to students from the agricultural program and other schools and colleges. Storrow secured the land purchase by forming a partnership called Evergreen Conservation Partners, L3C, a Vermont low-profit limited liability company. The partnership led by Castanea also includes the High Meadow Fund, a supporting organization of the Vermont Community Foundation, and the Boston-based John Merck Fund. The three non-profit partners pooled their capital and purchased the farm for $800,000 and currently lease the farm to the goat dairy. Funding for a conservation easement has been secured for property, which will not only conserve the prime farm soils, but raise capital for the farm’s start up. Vermont Creamery recruited one of the nation’s top goat dairy farm managers to help design and manage the goat dairy operation.

Right now the foundation and creamery hope to raise $2 million for infrastructure improvements and working capital for the start-up phase of the farm. “We are running a viable business,” says Hooper. “We are not going to get that second generation of farmers or investors if we can’t make the investment model work.”

A key component of Ayers Brook Goat Dairy’s business plan is to improve the genetic quality of goats for more efficient, higher dairy yields. In addition to modeling how a commercial goat dairy operates, Ayers Brook will provide high-quality replacement animals for farmers wishing to start their own goat dairies or improve their herds. Hooper says it takes at least 5 to 6 years to get a herd up to scale and profitability. At Ayers Brook the plan is for a herd of approximately 800 milking goats, which produces the same volume of milk as a 250 head cow dairy. This scale is typical of many Vermont family farms.

“This model can go beyond goat dairy,“ says Storrow. “It’s a model that other philanthropic partners can use for any social-benefit enterprise.”

Castanea Foundation’s return expectations clearly reflect the values of the Slow Money Principles. “Our first goal is a return of capital,” says Storrow. “If we get our money back, plus a return that allows us to continue with our mission, that’s great. But if we get our money back, and that’s all that happens, but 15 years from now there are half a dozen additional commercial goat dairies in Vermont, that’s a home run for us. We’ve strengthened the local food economy, created economic opportunity and conserved land with responsible management. That’s the bottom line for us.”

UPDATE: Slow Money will be presenting a special webinar session on Tuesday, January 29th, 2013. It is at 10am Pacific, 11am Mountain, 12 Noon Central, 1pm Eastern. Tim Storrow from the Castanea Foundation and Allison Hooper from Ayer Brook Goat Dairy will join us live online to discuss this innovative financing story in more depth with you.  Click here to learn more and get involved. 


Compost Company Strikes a Royalty Deal

Is it possible to use cow manure to turn a profit? That’s the question entrepreneur Teddy Stray had mulled over for years on his wife’s multi-generational family ranch, renowned for its award-winning Pt. Reyes Farmstead Blue Cheese.

Repurposed waste is the raw material for many businesses today, from clothing made out of recycled containers, to mushrooms harvested using discarded coffee grounds. Mining manure from the dairy farm could be promising, Stray thought. But it wasn’t until he attended a 2008 Slow Money Gathering in Point Reyes that he was inspired to take action and in 2009 started Point Reyes Compost Company. As Stray often says, “Everyone has to take crap from his father-in-law, but not everyone buys it from him.”

The potential for his compost company looked sweet in the fall of 2011, not just to Stray, but to seven interested Slow Money investors who committed a total of $175,000. About $30,000 of that was an equity investment, buying an ownership stake in the company, while the rest came via an innovative royalty financing structure. The royalty strategy allowed Stray to retain capital and pay back the investment using a percentage of revenue.

Point Reyes Compost Company has revenues under a million annually, with strong growth. Stray sources only from farms that operate with environmentally responsible practices and he produces a premium product that is “nutrient rich” compared to other composts. Point Reyes Compost Company has four products; “Bob’s Best” from cow manure, “Double Duty” from cow and horse manure, “Mary Jane’s Blend” from a combination of cow and horse manure for potting soil, and “Poulet Poo,” a blend of chicken poop and vineyard grape pumice great for prepping soils. Coming soon is an indoor mix that works for greenhouses and other inside gardening. There are five compost competitors in the region, but all produce different types of compost—for example, discarded green materials and worm composting.

Stray reconnected with Slow Money’s Northern California Chapter at a spring 2010 event in West Marin. And then again in June of 2011, when he gave an overview of his company as part of an entrepreneur showcase, following which a group of Slow Money investors made a few visits to his operation.

“Each meeting helped me see that our values were deeply aligned, and also offered me business critiquing and support. I couldn’t find that anywhere else,” says Stray. “They really helped me get a clearer picture of my niche.”

In October 2011, while discussions with investors continued, Stray was invited to be one of 30 presenters at the Slow Money National Gathering held in San Francisco. “The process was, well . . . slow,” Stray says with his customary smile. “But I’m not sure it could have happened any other way.”

Stray now feels he’s secured not only capital for his company, but also relationships that will help him over time. “I’ve developed some of the best relationships over the past two years with my Slow Money investors,” says Stray. “The conversation is honest and straight up. There’s no posturing. We can talk about anything.”

The need for compost is increasing, notes Stray, due to the boom in organics. “People understand that you have to feed your soil to get good yields, and you can taste the difference if it grows from a soil that is well fertilized,” he says. “Finding a market for manure also benefits livestock farmers by offering a new revenue stream. This creates diversification for farmers because they can now sell their excess material.”

Stray has a wealth of lessons learned both from making compost and growing his company. As it says on one of his bags, “Don’t let anyone else sell you their crap.”

Listen to a radio interview with Teddy Stray and Slow Money investor Marco Vangelisti on Slow Living radio.

For details about the Royalty Financing model, and other Slow Money financing models, go to Marco Vangelisti’s blog on Slow Money Northern California.