Eight forms of capital
We introduced this concept above, but want to emphasize here that we consider this a hard core design tool. We use it in all of our designs. We have created a hands-on activity at the end of this section to demonstrate one way to use it.
Holistic Management planning method
This is another wonderful design tool that can not only help you integrate economics into your design, but can help integrate everything more deeply. This is a very in-depth decision making and planning approach, and training is available to learn this method. We’ve included some resources in the resource section.
Raising funds
Funding projects is often an ongoing challenge. What we do is often outside of how mainstream economics works. That shouldn’t be the case since what we do is so essential to basic survival as well as quality of life, but for now, it is what it is to whatever degree. So that means we may need to seek out creative ways to finance our projects. Fortunately, we’re not alone and there are a number of people and organizations who are working on creating those pathways. We share a few, below.
Ethical investing, Local investing, Slow money, Impact investing, Microlending
Many investors are starting to feel the need to invest more ethically and several organizations have arisen to support this. Slow Money focuses on investing in local farmers and food movements. Impact Investing also focuses on farms, but also other things related to climate change and social justice. Local investing is gaining in popularity, and can be done by finding projects or people you believe in, and investing in them.
Microlending
A concept that has turned out to be very popular, where people pool money to lend to worthy small projects. One of the most successful is Grameen bank, which loans money to groups of women in high poverty areas, who use the funds to purchase some form of capital, like cows, or sewing machines, and all help each other to success.
It was found over time, that this model was more successful than others, that women tended to be more stable in distressed communities, had a history of working together, and were more successful with a support network of friends all focused on the same thing, than without it. It has a 95% loan payback rate which is an unheard of rate of success in banking.
This can be used in our culture in a similar way or different ways. For instance, during the pandemic, a permaculturist had the idea of using her stimulus check, which she didn’t need, and possibly the checks of others, to start a microlending network to help people launch permaculture businesses or projects during lock down.
Community banks and credit unions
When you bank with local banks rather than big chains, the money goes back into the community and has a better chance of circulating back to you. It’s also possible to create personal relationships with local banks and they are often more willing to work with you to help you qualify for a loan. Cooperative banks can have even more advantages.
Our mortgage holder is a local cooperative lender and we actually get a check every year based on profit sharing. Often it is the equivalent to an entire month’s mortgage payment. Can you imagine that happening with Bank of America?
Crowdfunding
I’ve raised thousands of dollars for Pine Ridge reservation and Haiti projects through online crowdfunding organizations like Kickstarter or GoFundMe. Many people who didn’t know me donated because they liked the project.
Crowdfunding is a way to level the playing field, and also to tap into your social capital, and get help from friends. There are many people who have extra money and want to give it to something they believe in and would like to see happen.
There is a real community spirit to some of these projects. The most successful crowdfunding is clear about what the money will go for, keeps updating about the project, and offers “perks” for the donations.
Mutual aid societies
These were very popular during major periods of immigration and during the depression. Groups with common interests (often ethnic groups, like Italians or Cubans in Florida) would get together and offer home loans, build hospitals and more. Black mutual aid groups allowed some black communities to become prosperous even under severe oppression.
Today, Asian, Mexican and other immigrants have robust mutual aid groups that help new arrivals become established. One example is some Asian communities in Los Angeles. When someone arrives from China with literally nothing, all the cousins and aunts and friends get together and chip in enough money from savings to buy that person a restaurant or other business. The teenagers will then work in that business and the person will be mentored and guided until they’re successful.
They will have access to group bulk purchases and other support lines. The success rate is very high. The loan doesn’t have to be paid back until the restaurant is stable enough to afford it. Or maybe they don’t want to run a business but just work in one. When you go to a Chinese restaurant in LA, you will often see extended family working there.
They also pool resources to buy land, or hire an acupuncturist together. They collectively pay his salary between them (or add a family if they need more people to make it affordable) and then can go to him whenever they need to.
Informal mutual aid groups have sprung up around disasters in an effort to help out people who lost their homes or have some huge clean up to do. These groups create relationships and resources that make it easier to respond to the next disaster.
In North Carolina, permaculturists have started a mutual aid group that is funding alternative health care and other expenses by pooling resources. They have created a bulk purchasing network, community loan group, and are working on other cooperative ventures. Members pay an affordable monthly fee into the group in exchange for benefits of saving money and access to no interest loans.
This is inspired by societies that still have strong communities, where everybody helps everybody else. These societies tend to be much more resilient in economic downturns, disasters and other difficulties, and quality of life remains high. There is a lot of power in cooperation!
Time bank
Time banks are active throughout the US. They are an hour for hour exchange group, where people trade services with one another. Time banks have evolved into making volunteer work more remunerative and community building actions. They are a great way to utilize people’s skills that aren’t easily integrated into the money-based economy.
The founder of Time Bank, Edgar Cahn, wrote a book about it titled, “No More Throw Away People.” His humanitarian approach has resulted in an economic tool that embodies people care and valuing the marginal.
Gift economies
Gift economies revolve around giving. No one keeps track of who got what or what was exchanged for it. Many indigenous cultures have used nothing but gift economies. The Shoshone people believed that wealth was demonstrated by how much one could give away. Their society had peace for 1,000 years.
The Really, Really Free Market is a flea market where everything is free. There are a number of these across the world. There’s a huge “flea market” in the SF area with thousands of attendees. People ask, don’t some people come and take everything of value and resell?
The viewpoint is that yes, maybe that happens but maybe they need the money to not be homeless. We don’t know their situation. The thing to do is to communicate with them, hear their story, and approach it from a community viewpoint.
A strong online gift economy is the “Buy Nothing Clubs” on Facebook. The focus is on giving away items, like Freecycle, but the clubs are very localized and people are encouraged to get to know each other and establish neighborly relationships.
Other forms of gift economies:
Skill sharing parties
Seed and plant swaps (many don’t require any actual swap)
Creative commons
Sharing agreements (lending tools, equipment, etc, among friends)
Open source offerings
Information sharing via blogs, videos, etc
Another form of gift economy is a practice among wealthy people that is growing. One name for it is a "Kins Network." Wealthy people will gift money to someone doing worthy work in the community or to a worthy project. This is sometimes done as a group, and sometimes by individuals to people they know. This goes outside of the usual Foundation networks as it is an informal gift, usually with no strings attached.