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Invest Locally: Shift from Wall Street to Main Street

March 27, 2018 12:06 PM | TLC Monadnock (Administrator)


Many of you contacted us about a topic we highlighted in our December article: community investment cooperatives.  You said you wanted to shift some of your investments from Wall Street to businesses based in your community.  While we discovered a community investment cooperative isn’t a viable model for us right now (state and federal laws need to change first), there are existing opportunities for us to shift some of our investments from Wall Street to Main Street. 

First, for those of you who haven’t yet explored the benefits of investing locally (or need a refresher) – this paragraph is for you.  Small businesses generate two out of three jobs in the United States, yet most stocks and bonds are with large corporations.  If we invested more capital in locally owned businesses, we’d see a return on investment that included more jobs and community prosperity.

“The reality is, the world is awash in capital. It just happens to bypass many small deserving businesses as it careens blindly around the globe in search of profit,” shared Amy Cortese, author of Locavesting.  “How do we change that dynamic? How do we channel more capital to productive use -- to the small businesses that create jobs, spur innovation and build strong local economies? To the companies that we know and trust? How do we fund the change we want to see in our communities and in the world?”

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Community Supported Solar

Eligible individuals with passive income (from rental properties, for example) can invest in one of Monadnock Sustainability Network’s Community Supported Solar (CSS) projects.  The solar panels on top of the Monadnock Food Co-op happened thanks to this model.  Now CSS hopes to bring renewable energy to nonprofits and low to moderate income households.  Local investors fund each project and receive a return on their investment as the energy is sold to a host organization of the project (like the Co-op).  After an agreed upon period of time, the host organization will purchase the solar panels and the investors can then choose to re-invest their funds in new CSS projects.  Many of the current investors of the Co-op’s project are interested in investing in future CSS projects. 

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Co-op Member Loans

The Monadnock Food Co-op may potentially offer another local investment opportunity to its member-owners.  If the Co-op decides to move forward on their proposed expansion project, they will launch a member loan campaign to help finance the project.  In 2011, the Co-op gathered $800,000 in member loans -- with 130 member-owners investing an average of $5,000 each.  These member-owners received up to a 4% return on their investment.

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New Hampshire Community Loan Fund

The New Hampshire Community Loan Fund offers an opportunity to invest with as little as $1,000 and earn interest rates up to 5%. Their Opportunity NH Investments Initiative pools those dollars with its own funds -- and lends them for projects that promote affordable housing, child care, and jobs for families with low to moderate incomes. This initiative has attracted close to 500 individual and family investors who want to put their money to work helping their New Hampshire neighbors.  They have many Monadnock area investors and have financed both businesses and housing projects in our region. 

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PitchFork

The Hannah Grimes Center plans to add several new twists to its PitchFork program this year.  In April, they will present an opportunity for eligible investors to finance a local fund, offered in partnership with Monadnock Economic Development Corporation. The first fund will raise $100,000 from a collective of investors (in increments of $5,000).  The goal of the fund is to offer a fair return to investors and give entrepreneurs access to much needed pre-seed and seed capital.  They will award a cash prize of at least $10,000 to the most promising business venture.

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Community Sourced Capital

Community Sourced Capital (CSC) transforms social capital into financial capital through crowdsourced loans.  Entrepreneurs can access zero-interest loans up to $50,000 through the CSC online platform.  They invite their family, friends and customers to become community investors by purchasing pieces of their loan called “Squares” in $50 increments, up to $1,000.  The CSC platform charges a one-time $250 fee to business owners to launch a campaign, plus $50 per month during the loan repayment period.  Loans are paid back in full within three years. 

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Local Dollars Local Sense

Economist and author Michael Shuman is partnering with economic developers to create a series of state-specific handbooks to jumpstart local investing.  Each book includes tools and resources for local investors, local businesses and finance professionals, plus a wealth of state-specific case studies highlighting the opportunities and challenges of each tool.  We are in the very early stages of assessing interest in a New Hampshire Dollars, New Hampshire Sense book.  Learn more about this emerging effort.

It’s time for us to invest in local investment options -- building on the local assets already available to us and identifying new tools ripe for us to implement.  Let’s keep this conversation rolling: jen@monadnocklocal.org.

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