FUNDING KIT 1.2
How to fund things in
places where venture
capital doesn’t work…
IT HAS FOUR
1. Lending, both funds
& lending clubs
2. A donor advised fund
3. Giving circles
4. A kids community
…For businesses that are not
high growth or fast enough
growth to call for venture
…works for loans that are
good for the community and
that can pay back investors at
below bank rates.
There are a growing number of Interest free platforms
that make loans to small businesses, like KivaZip, and
Community Sourced Capital, or community loan funds or
relationship-led lending circles.
We would also experiment with peer due diligences like
Which creates collective community wisdom.
And each investment would have to agree on a tax to the
commons to support the food hub.
Same with gifts
Unrestricted operating grants, not program grants
funding in an
most of the capital
needs to be gathered
from local sources.
Local people powered
We look at our community and decide when it makes
o give with no financial return;
o when a philanthropic investment makes sense; where
the tax deduction is enough to justify an investment that
is mostly for public benefit but can return capital to the
Donor Advised Fund (DAF) to replenish the money that is
o or simply lending, either through a local fund or less
formal local lending clubs.
WHAT’S REALLY NEW?
We are going through a transition that requires we look
at our resources differently and act in a new way;
investing and giving for good in our communities.
We offer a holistic look at community investing and
giving that erases the outmoded and destructive
bifurcation of investing versus giving. We can no longer
afford to invest for personal financial return and then put
some of the excess aside to do good with, often trying to
amend the ailments caused by investment.
Our three part approach will reduce friction & increase
the amount of capital available in a community.
DONOR ADVISED FUND
The DAF can do loans or equity (probably mostly loans)
but the individual donors get a donation tax credit by
placing their money in a DAF. The loan to the profit or
non profit business is paid back and the capital returned
to the DAF (not the individual donor). The DAF owning
group uses the money to either give away as a grant or
recycle into another investment.
Any return above $1 makes the donation side of the DAF
a more powerful force for giving. This is the place to do
long term investing, when getting close, as in
horseshoes, is a win.
Groups that meet regularly and trust each other, from book
clubs to Sunday School classes, meet and one member
presents a cause to donate to each month. The sponsor of
each cause keeps the group updated on the progress of the
non profit recipient. We have a software platform to enable
Or more established, larger scale groups like Women for
Women in Asheville, where each person puts up $1,100.
All grants are unrestricted operating grants; the most
valuable kind of money for non profits
Each gift includes a tax to the hub as a gift to the commons
baked into what is often microtargeted myopic philanthropy
. Can’ work with kids under 8 but not who are 18. theory of
change oppression is eliminated as much as possible.
FOOD HUB COOP
Miss chemical. Spit out dividends. Owen cooper.
No program grants. Tactical, not strategic philanthropy.
not accept any program grants; only unrestricted
operating grant.s the bst kidn of non profit grant dollars.
The right funders willb e attractd to us.
This whole thing creates a collective intelligence about
value in the community, long term, so kids are smart
about their bonds.
Every grant on the daf is taxed on two thigns; the food
hub and adolescent female agency. Top raptors and
MAP AND FARMERLIN
11 languages vital sicence. Also medicine. Cultural
preservation of language to help botanicals. Cultural.
Goal restoration west african mangroves through
indigenous land management as our best hedge against
climate change transition. Respigard.
Giving circles could follow the smart, effective Women for
Women group in Western North Carolina. In WfW, each
woman puts up $1,100 per year. They have become
For instance, they funded a social worker at ABTech,
which has led to battered women graduating at around
90% in trades compared to under 25%. The social worker
starts documenting instances that become an on campus
restraining around a woman trying to get her life back
together. Ideally, the giving circles would pay attention to
Women for Women and other smart larger scale giving
INFLUENCE ON BOTH
The kitwill also find ways to let the average person join
in investing in companies vetted by smart angel investing
lending & investing circles, (where people put up on
average $5,000 to $25,000 or more) like the lending
circle created by Accelerate Appalachia.
Enabling people who have $25 to invest in local
businesses following people putting in more money
who’ve gotten smart about where to put their money is a
key to both the giving & investing side of the funding kit.
KIDS SAVINGS BONDS
This is the only slightly original idea of this tool.
Kids save each week, for example $1, take it to school and put
it in a little manila envelope with a red button closed with a
Instead of saving $18 in a school year and getting a $25
savings bond at maturity, kids invest in a local project,
involving themselves and/or their local community and
environment. They would organize as Riparian Justice Scouts
For first graders, their fund matures in 12 years. During that
time they are involved in the project they invest in (river
restoration in a poor neighborhood, eg.).
Parents and grandparents can top up their kids deals and help
make them turn out well.
THE COMBINATION IS
Lending circles and local funds
exist, as do giving circles.
Some DAF’s have turned into
effective tools to invest for
goods, especially those on the
Impact Assets platform that is
a spin out of the Calvert
These tools have not been
combined and used with a
holistic lens that decides which
tool a community should use in
The threefold flexibility of giving, investing with a full tax
deduction and lending where you get your money back at
an appropriate return, make the Neighborhood Economics
Funding Kit a lower cost, more powerful tool for creating
a vibrant, thriveable community.
Then add in the kids, who will not only lend, but build
their own culture of local investment. Imagine that for a
Together the four elements offer a variety of ways for
churches, clubs and individuals to get involved, from
giving, to donating and then investing, to outright
And they provide a way for kids to get involved and learn,
and for the adults to learn from the kids; they would do
due diligence, assisted by an adult on projects each year,
as I see it, though ideally some projects would be 12 year
timeline projects with enough variety to make them
This model could be replicable in many towns, and I think
might scale down in Burnsville, and upward as we bring in
Nashville, scale up for use in Asheville, Nashville, and
Allentown, PA or Tupelo, MS.
It might need a local community
development financial institution
(CDFI) or other community
organization to help administer
It would require a full time
staffer, say an experienced CDFI
leader, who would thrive in a
Seven percent is what Kiva gets
for tips; seven percent would be
a good target operating fee for
this package of DIY local
merchant banking tools.