You have heard of CSA (Community Supported Agriculture). A CSA is a way for the food buying public to create a relationship with a farm and to receive a weekly basket of produce. By making a financial commitment to a farm at the beginning of the season, people become "members" (or "shareholders," "investors" or "subscribers") of the CSA. The CSA movement has helped to make independent, healthy farming sustainable.
The principle of CSA is now being applied to many other sectors of business activity. With the economic melt-down, the activity is likely to grow even faster. Community Supported Business makes sense, and especially to the community banks.
Books : The system can work equally well with other local consumer markets. Examples include community supported publishing (eg, Southend Press) and bookselling. I 'invest' in a village bookstore, Putney Books in Vermont, where I have paid $ 1,000 for a 'certificate' and get books to the value of $ 25 for 48 months and a ten percent discount in the store. This gives me a 20% return over 4 years, as well as the discount and the reward of supporting a local enterprise.
Dining : In Portland, Maine, there is a Community Supported Kitchen that provides local and organic prepared food year-round to members, on a basis similar to the CSA system. In Morrisville, Vermont (which has 55 CSA farms), there is a CSA-type Restaurant where, in exchange for a $ 1,000 loan, investors get coupons that they can redeem for meals at the rate of $ 90 a quarter, over three years.
This is a petty meager return on investment, but in the first six weeks of launch, the Bees Knees restaurant had raised $ 20,000. They began began by selling $ 1000 "community supported restaurant certificates" to help finance the project. In return, customers receive $ 1080 in vouchers for food. Customers also lined up to give $ 5000 unsecured loans. In return, investors will receive a 4% return on their investment and a 10% discount on their tabs.The venture was followed by Claire's Restaurant, in Hardwick, Vermont. Launched by four partners in May 2008, it too, is based on a community centered investment and business model and raised more than $ 40,000 in community loans.
Fishery : Port Clyde Fresh Catch is a community supported fishery in Maine, where investors can sign up for a weekly share of wild-caught shrimp. Fourteen week shares $ 210) offer 10lbs of shrimp a week or half shares ($ 105) that yield 5lbs. Another is Skipper Otto's Wild BC Salmon. For $ 250 / year members receive approximately 35lbs of whole, fresh and / or frozen salmon that is available direct from the fisherman, amounting to roughly 7 fish at around 5lbs each (about $ 7 / lb).
Manufacturing : The concept of Community Supported Manufacturing, means taking back the means of production in a socially and environmentally responsible way. The concept here is to relocalize manufacturing. An example is Prumitei the fire arts center at Francardu in Corsica, where my friend Fanfan Griffi created the craft manufacturing center and restaurant with workshops all based on the use of fire: ceramics, glass, and bronze founding. He raised money from local governments, non-profits, large and small shareholders. The Post Carbon Institute has a briefing on CSM and a Power Point presentation you can download.
Energy : WindShare is pioneering Toronto-based 'for-profit' co-op with a mandate to provide renewable electricity to the people of Ontario through community ownership. The internal rate of return is projected at 7.23% per annum over a 20-year investment period, with no middle man, no fund management fees or other associated administrative costs. Sixty-six investors from Minnesota snapped up all the available shares in two wind generation companies (MinWind I & II) in 12 days. Eighty-five percent of the shares must be owned by farmers, with the rest available for local townspeople and non-farmers. Each share gives the owner one vote in the company and no single person can own more than 15 percent of the shares. Now there are MinWind III-IX, similar to the first two projects, which began producing power in 2002.
Chicago-based Indie Energy the geothermal-based clean energy building systems has a mission with a simple equation that became: Local Geo + Local People = Economic, Environmental, and Social Profit. "Organized labor, along with the private and public sectors, are the three pillars upon which the new renewable energy economy will be built," said Daniel Cheifetz, Indie Energy CEO. Indie Energy is backed by ShoreBank which is committed to building vibrant communities by providing financial services and information to create economic equity and a healthy environment.
The opportunities are near endless. The only considerations are that he product can be consumed within the community and that there is a way of mounting the venture on a for profit, not-for-profit or a hybrid. With the standard business loan availability having dwindled to a trickle and the risk-capital tap having been turned off, here lies nothing but a wide-open blue ocean with few fish swimming in it.
A companion market is social or P2P (Peer to Peer) investment and loans, using intermediaries like Lending Club, a social lending network where credit-worthy borrowers and individual investors come together to provide value beyond what traditional banks can offer. Or on a do-it-yourself basis you can use Virgin Money. They manage loans between relatives and friends and are a pioneer in the emerging social lending space.