I recently attended the North Carolina Main Street Conference in Salisbury, N.C., where speaker Todd Barman introduced us to the term “Locavesting”. He recommended a book by this title written by award-winning journalist Amy Cortese.
Locavesting is a new and different term, but it’s such an interesting concept, I’d like to explain it by using ideas from Cortese’s website.
What is locavesting? According to Cortese, it’s a term she coined to describe the local investing movement taking root across the country. The idea is to earn profits while supporting your local community.
She writes, “Locavesting is about investing in Main Street, rather than the casino known as Wall Street, and creating a more inclusive and just form of capitalism.”
Have you heard the term “locavore”? A locavore is a person interested in eating food that is locally produced, not moved long distances to market. In a similar way, just as locavores eat a diet sourced close to home, Cortese applies this idea to “locavestors” who try to invest that way.
Small businesses are the backbone of the American economy, generating 80 percent of all jobs and half of gross domestic product. They also create the foundation for healthy, diverse neighborhoods and strong local economies.
So why does it seem we’re starving these vital enterprises?
Locavesting is a call to rethink the way we invest, so that we support the small businesses that create jobs and healthy, resilient communities. Just as “Buy Local” campaigns have found that a small shift in purchasing from chains to locally owned enterprises can reap outsized benefits for a community, so, too, can a small shift in our investment dollars.
The book “Locavesting” explores an extraordinary experiment in citizen finance taking place across the country, from Brooklyn, N.Y., to Honolulu, Hawaii, and dozens of towns in between.
In these communities where locavesting is taking place, communities take back control of their financial destinies while revitalizing the communities they call home. Cortese thinks these citizens are at the vanguard of a grassroots locavesting revolution.
Many pioneers are creating new models to put their money to work locally, from community ownership to “crowdfunding” to the rebirth of local stock exchanges. (By the way, crowdfunding describes the collective effort of individuals who network and pool their money, to support efforts initiated by other people or organizations.)
People are doing business with community banks and credit unions and launching community-owned stores. In the process, they’re rebuilding their nest eggs, their communities, and, just perhaps, the country.
Did you know ...
A dollar spent at a local independent business, on average, generates three times more local economic benefit than a dollar spent at a corporate-owned chain.
Forty percent of agricultural startups are denied financing, according to the Carrot Project, and more than half of farmers surveyed by the National Young Farmers Coalition cited lack of capital as their biggest obstacle.
If Americans shifted just 1 percent of their investments to locally owned companies, more than $260 billion would be injected into the Main Street economy — without costing the government a dime!
So who’s interested in locavesting in Elizabeth City? I’m sure we could see some of these same benefits right here on our own Main Street.
We can certainly shop local, and perhaps we can go even further to create an environment of “locavestors” in Elizabeth City!
Rebecca Cross is executive director of Elizabeth City Downtown, Inc.