Kevin Jones
We’ve raised a year of operating capital to launch The Watershed Fund, https://emsdcmarketplace.org/donations/watershed-fund/ which offers zero interest loans to local farmers serving our farm-to-table sector in Asheville.
The connections and reciprocity within our food systems are already proving to be one of the surprising benefits.
With the Watershed Fund, https://neighborhoodeconomics.org/wiki/index.php/Initial_design_of_the_Watershed_Fund what we are finding as we connect the social and economic networks in our food system, is that mutuality is what will make this work, if it does work.
Market demand has been very good; a key local farm-support non-profit leader says he knows of twenty farms that need our capital now, farms whose owners can’t get the money they need from existing funders.
Some of the more environmentally focused members of our founding team have made it clear that they are really interested in something that could evolve into a collective, local climate change response risk reduction solution.
The Appalachian Sustainable Agriculture Project, known as ASAP, https://asapconnections.org/find-local-food/farmers-markets/asheville-city-market/ the non-profit that serves the local farms, says that one of the biggest needs for the loans will be mid-season loans for emergencies. For example, two weeks ago, ASAP was talking to a farmer whose gravel road washed out, so she couldn’t get her goods to market. A quick emergency loan for repairing that could have enabled the farmer to get those goods to market before the produce ruined. This would have helped her get back on the road to economic viability with the farm she’s created and with her friends and allies and customers.
With this process, we look at ways to pool and share that risk and have people buy a form of mutual insurance by being a member of the active food system, or whatever it is called, that raises the money for those emergency loans. That’s still a rough idea, but partners are liking it as an approach.
This initiative relies on venture philanthropy, https://ssir.org/podcasts/entry/how_venture_philanthropy_works_and_its_role_in_effective_charity long an accepted tool to enable people to give to invest, but the non-profit gets the return, for example. Long neglected in the United States, though common in Asia and Europe, venture philanthropy is the missing catalytic capital that makes important things get over the hump and on to success. Giving to invest means the gift keeps coming back and is recycled into the next loan in your community.
The loans are zero interest, and farmers have a year’s grace period before they have to start paying them back. Then they have three years to pay. Eagle Market Streets, a local community development corporation (CDC) is doing the due diligence and underwriting. The concept is to do a lot of $10,000 loans rather than larger loans to start out in order to socialize the concept of this new source of capital and see the idea spread broadly. By contrast, $20,000 loans at Mountain BizWorks, our excellent local CDFI that loans to mission-related businesses, are 8.75 % annual interest. We are working with smaller loans and no interest. We are following the model of Beetcoin, which grew out of Slow Money with the zero interest loans
The Ager family, owners of Hickory Nut Gap, a highly successful farm-raised beef collectivehttps://www.hickorynutgap.com/home/, have, through their family foundation, given us enough money to do two $10,00 loans. In initial talks with farmers, most have a pressing and immediately pressing $10k capital need, along with much bigger needs. Rayburn Farms and Bellyful Plants Nursery are the first borrowers in our Fund.
The plan is to launch the program through benefit dinners at restaurants that feature farms on their menu. And we will also do benefit dinners at a local farm for farmers who don’t serve restaurants. The $10,000 loans work for farmers with sufficient social capital to draw a grateful crowd. The people who come to the benefit dinners want to help the people growing our food in our community succeed and be more economically viable.
With the farm loans, for example, when the $10,000 raised at a dinner is paid back, that gift goes out again as another loan. Giving to invest can be a more powerful form of giving, but it does not replace giving; the market, even with patient capital with no interest loans, does not solve every problem.
The gift that comes back to be given again gives donors another opportunity to see their money work, doubling down on their positive impact each go round, making sure that their local food systems are sustainable and preparing for a time when shipping food no longer makes sense. The money continuing to come back after every loan may make it easier to work on long-term, infrastructural problems with some of the money.
Donors to the farm loans will be taking strong local action on climate change and keeping good food at the table, and their gifts will keep recycling again and again. Giving to invest can be more powerful than simply giving. The money comes back and then goes out to do the work again.
In addition to these loans, at our farm to table dinners, we will add the opportunity for the diners to link to a qr code on a table tent to add a 5% donation to give healthy, locally grown organic meals to people who can’t afford to go to expensive restaurants. The plan is for the donation to go to Equalplates. Equal Plates buys farm-to-table produce at market rate and cooks it up at Southside Kitchen for delivery to the underserved. We want to do more community engagement around the loans and also do educational presentations in schools as we have capacity.
The Watershed fund is a project of Eagle Market Streets, Community Development Corporation https://www.eaglemarketsts.org/ in cooperation with Neighborhood Economics. It is one of the three marketplaces the two partner organizations have launched, including the Community Equity Fund, which has raised more than $3 million to solve the friends and family funding gap for entrepreneurs and business owners of color (more than 90% of Black and hispanic owned businesses never progress past the stage of being sole proprietors to being job creators) https://emsdcmarketplace.org/donations/community-equity-fund/ and the Repair Fund https://emsdcmarketplace.org/donations/repair-fund/.