Former venture capitalist Woody Tasch believes it's time to create a market that values the environment, local communities and the natural world as much as it does financial growth.
First there was slow food, then slow cities and slow design. Now there is Woody Tasch, the catalyst behind a new movement touting "slow money" — the name the former venture capitalist-turned-revolutionary gives to his philosophy that combines a passion for social enterprise with the benefits of locally grown food.
Tasch is spearheading a national campaign to persuade at least 1 million Americans to donate between $25 and $1,000 each to help create a grassroots, nonprofit seed fund to support and grow local food businesses and family farms.
But it's much more than healthier food that Tasch is after. He is traveling the country this fall, warning that money moves way too quickly. Billions and trillions of dollars zip around the globe, he says, as if disembodied from the people who invest it. "Investors don't know anymore where their money goes and more and more, they want to see an impact for what they give in their own lives and own communities," Tasch recently told a capacity crowd at New York University.
Tasch said he wants to build and test the concept of something he calls "nurture capital" — a healthier and more sustainable alternative to venture capital for funding new businesses. It's time, he says, to shorten the distance between investors and their investments. It's also time, he says, to create new economic models that deliver a return but that also put community, soil fertility and the environment at the bottom line.
That's where the concept of "slow money" comes in. What if the money you invested stayed within 50 miles of where you currently live and was committed to local merchants and growers who put at least 50 percent of their profits back into the community? "What if, instead of making a double-digit return on a fast-money transaction that exploited Third World villagers and pumped up corporate profits artificially," Tasch says, "you could get a steady 2 percent to 3 percent return on money that dramatically improved the quality of life in your own neighborhood?
Which would you choose?
More people these days are looking for ways to add value, not just generate profit. That's the basic idea behind the slow money movement: value added, sustainable growth, responsibility to a local community.
"This is really paradigm-bending stuff," says Gabriel Brodbar, the director of NYU's Reynolds Program for Social Entrepreneurship. "Even the most traditional, free-market capitalists like [philanthropist] George Soros and [National Economic Council director] Larry Summers have recently admitted in one way or another that our traditional paradigms have failed us. This is an innovative response."
Tasch is no out-of-left-field gadfly. He is chairman emeritus of Investors' Circle, the nonprofit network of angel investors, venture capitalists, foundations and family offices that since 1992 has facilitated the flow of $130 million to 200 early-stage social enterprises dedicated to sustainability. Before that, he was the treasurer of the Jessie Smith Noyes Foundation. Tasch's slow money movement, which was officially kicked off in September during a conference in Santa Fe, N.M., is an extension of that work.
"Right now, it's hard to believe that the Whole Foods Market down the street is still able to exist, given the damage we're doing to our soils, and it's hard to believe something bad is going to happen," Tasch told NYU students. "But [our food production system] isn't sustainable. It's time to slow down and start looking up close at what we are doing not just with industrial agriculture but what we're doing to ourselves on the planet in the name of sustaining our standard of living."
'Ultimate hedge fund'
With slow money, Tasch is taking a page from the slow food movement, the 20-year-old movement that calls on consumers to treat the act of eating less as a hurried distraction and more like a family ritual that celebrates community and takes time out to reflect upon the labor involved in growing the food that we eat. "Money should move the same way," says Tasch. "This isn't just about finance but the relationship of finance to culture." If investment decisions start to take into account what's best for local communities, he says — when small businesses borrow or get investment directly from their customers — communities become stronger and societies become more humane. "There is accountability in places where now there is none," Tasch says.
But the real dividend of slow money? Diversity — social, economic, and biological. In an era of industrial agriculture, when millions of acres are planted with the same variety of corn and when millions of pigs are bred for their yield, small local farms are "the ultimate hedge fund," he says.
"Genetically-modified plants and organisms [GMOs] are like [financial] derivatives," Tasch says. "GMOs are like finance scientists trying to trick the yield on a piece of land. Sure, people will say I don't know what I'm talking about, that these new GMO varieties of plants are crossbred for less risk because every wheat stalk planted is exactly the same genetically. But I don't know. I'm not alone when I say that we headed for a biological correction similar to the financial correction we just had. Why? You can't trick risk. The only way to mitigate risk is with diversity. Biological, cultural and economic diversity is the only answer for risk — meaning lots of small-scale, diversified things of all kinds coexisting in a healthy relationship. We're talking percolation versus circulation; diversity versus monocultures, fertility versus profitability, and relationships versus transactions."
'Bring money back down to Earth'
So far, Tasch says, his slow money movement has 700 members, including about 50 people who have sent in $1,000 checks over the Internet and small local enterprises such as Vermont's Butterworks Farm, a $1 million annual yogurt business, as well as Let's Be Frank, a Berkeley, Calif.-based hot dog company, and Sky Vegetables and Local Harvest. At the Sante Fe slow money convention in September, there were 450 attendees from 34 states and six countries, he said. "Now we're trying to get 1 million people to sign the slow money principles and from that, build capacity."
He admits that early investors may not be "big money people" but instead, small money investors who are "frustrated with the foundations system and who are frustrated as philanthropists." Says Tasch: "We must bring money back down to the Earth. It's time to restore a bit of reality back into all of our lives."