Announcement of Third Schumacher Seminar “Tools For Community Economic Transformation’
Date: June 9th through 15th
Place: Bard College in Annadale, New York (along the Hudson River)
Cost: $450 per attendee (see note )
Limit: 25 participants
Like the two previous seminars sponsored by the Schumacher Center, this seminar is designed for representatives of both non-profit community organizations and for-profit small businesses or cooperatives which are struggling with the financing of their local community programs or businesses and wish to obtain a degree of community economic self-reliance.
After a historical overview of the root causes of the present breakdown of centralized banking and monetary institutions, the seminar will examine the tools for minimizing external economic exploitation and maximizing local control. Community acquisition and determination of land use will be the first topic and the Community Land Trust will be the tool examined. For the rural situation we will emphasize the productive use of farm land, and in the urban areas neighborhood self-determination.
The seminar will then move to a discussion of the structure and financing of small industrial cooperatives and consumer enterprises. We will look especially at what we have called the self-financing technique that involves the creation of local currencies for the purpose of financing local economic productive activity. The seminar will then go on to discuss the element of a full scale community banking program in which the surplus of productive activity remains in the community to help initiate new activities.
Actual case studies of programs and organizations are utilized to study in detail and depth how to implement such programs. Each participant presents his/her own organization’s program, problems, etc. for analysis and assistance in applying the “tools” presented (see articles on Oregon seminar for examples).
Staff includes: Shann Turnbull, Australian business man and consultant on financing to businesses, Third World governments and formerly the World Bank; George Benello, author, professor, consultant on workplace democracy and founder of Arrow Design, a worker-owned and managed industry producing a small car; Kirkpatrick Sale, socio-political historian, author and lecturer on the importance of scale in our governments, communities, and workplaces; Robert Swann, economist, builder, author of articles on decentralized land, banking and monetary systems, initiator of the Community Land Trust model and founder of many CLTs; and Susan Witt, organizer of SHARE, a community development banking project in the Southern Berkshires.
In general, morning and evening sessions will be intense workshops with presentations of economic tools and discussions of their application. Afternoons, as a rule will remain free for study, individual discussion and outdoor activities. Accommodations will be in the Bard dormitories and meals will emphasize whole foods.
Winter seminars are being planned for Chicago and San Francisco.
A Note On The Cost Of The Seminar:
In the first two seminars we attempted a “Robin Hood” approach, by setting a high fee which a few of the more affluent organizations could afford, and then offering scholarships to less affluent groups. This time we are setting the fee at our estimated actual cost based on 25 participants. This fee does not include any fees for staff of resource people. They contribute their time because of their concern and interest. In addition we are hoping to raise separate scholarship funds for participants from low income groups who cannot afford the basic fee.
Thelma Garza and Robin Braverman volunteered to cook at the Oregon seminar “Tools for Community Economic Transformation” in exchange for one or the other of them being able to attend the sessions. But it was more work than they anticipated and they spent the first day in the kitchen. Shann Turnbull, our dynamic and imaginative resource person on financing, decided to give them a mini-lesson on self-financing to catch them up on the day’s discussion. He used the example of a typist who earns $5.00/hour typing in an office, but could earn $8.00/hour in the home if he/she had a typewriter. How to finance the typewriter, the appropriate technology in this case? Simple. Issue typing vouchers. That is: pre-sell, at a discount, promises to type so many pages. With the cash, purchase the machine, make good the promises and at the same time take in new work.
“Sounds like Zoo-Zoo’s food vouchers, “commented Thelma unimpressed.
“What are Zoo-Zoo’s food vouchers?” asked the Australian, thinking that he had met some cultural language barrier that obscured the meaning of the discussion.
And the story of Zoo-Zoo’s emerged. Zoo-Zoo’s (prison term for “treats”) is a Eugene, Oregon worker-owned and managed natural foods restaurant. Two years ago they decided to move from their original quarters to a larger space. But how would they finance the move? They held bake sales and benefit concerts, and talked good friends into loaning money. But the key was the food vouchers. They pre-sold meals, redeemable over time at their new restaurant. The vouchers were dated so that they would not all be spent at the same time. The new space needed remodeling and the carpenters-accepted part payment in Zoo-Zoo’s food vouchers. Customers bought more than they would need to sell or trade or give as presents to friends. The result: Zoo-Zoo’s raised S 10,000 for their move by issuing their own currency backed by the meals that they would produce in the future.
Most of the vouchers have now been redeemed, but they have come in at staggered intervals because of the dating and so never were too much of a drain on one pay period. Zoo-Zoo’s food voucher customers are their best advertisers, bringing friends who pay in green backs and providing a steady clientele.
Shann staggered back to the seminar group. “Remember what we were talking about all day? The cooks have been doing it all along.”
Everyone at the seminar pitched in with the kitchen chores. Thelma and Robyn both made it to the rest of the sessions, their minds clicking with ways to help others self-finance their own projects.
An Urban/Rural Partnership Model
The presentation at the Oregon seminar by Tom Forester, graduate student in landscape architecture at Oregon State University, precipitated a unique proposal which involved: the Oregon Community Land Trust, represented at the seminar by Anne Maggs and Eugene Scott; a cooperative farm production group represented by Keith Walton; and several other urban members of the seminar who were concerned with the need to increase the supply of locally produced organic food. Though the various individuals knew of each other, they had not had the opportunity to work together before the seminar.
Tom presented a problem: a farm of approximately 125 acres owned by Keith’s father, is located very near Eugene and has been under considerable development pressure which the father is resisting but with increasing difficulty, partly because of his own financial pressures. His son Keith has organized the Thistlebrook Cooperative to begin farming the land organically and to sell the produce through the Eugene based farmer’s market. While the market is good and increasing and the land productive, so far the income has been low as the group gradually converts the land to organic production. In addition, members of the Thistlebrook Cooperative must travel some distance to work while at the same time some of the land could be used for limited housing development. How can this land be kept as a productive farm?
Adjacent to the Walton farm is a piece of land, currently for sale by the Eugene school board which has the potential for use as a demonstration farm for public exposure to research and development in appropriate organic farming techniques. How might the piece be purchased for this purpose.
The proposal which emerged out of discussion of this practical problem, and which is now being actively explored with the various parties, is:
The father might sell the farm (or part of it) to a local Community Land Trust organized with the help of the Oregon Community Land Trust. The sale price could be very reasonable in return for an agreement that the father continue to live on the farm for as long as he desired and also in return for the right of his son and co-workers to lease whatever part of the farm they need for productive purposes on a long term (99 year) lease.
The land trust could set aside a few acres for housing development (a rural village) with the first choice for sites going to Thistlebrook Coop members. House sites would be leased to individual families and the income from the leases would be used to make payments to Mr. Walton.
Thus the land would be protected against further development, the father would have a steady income for the rest of his life and the son and his co-workers would be assured of the use of the farm at low cost or no cost. With this assurance the Thistlebrook Coop would also add a livestock operation which would be designed to complement the existing produce and orchard operations. Sheep, weeden-geese and hogs would be used for weed control and consumption of waste produce.
George Benello is well-known in academic circles for his papers examining worker-manager industries. Not content with observation of other’s projects and concerned that though there are cases of conversions of privately owned factories to worker owned, there are few examples of start-ups of worker-owned and managed industries, George decided to jump in feet first and help initiate a new worker-owned and managed industry.
George has always expressed, rather eloquently, that not only must the structure of an organization build towards a new social future, but the product of that new organization should reflect well considered social and ecological criteria. He researched many products before deciding, with the help of skilled mechanics, on a two passenger, three-wheeled car capable of 70 miles to the gallon.
The ARROW III is the work of a group—a combination of proven technology and innovative design. To develop the prototype, members of the cooperative borrowed against personal assets, working until they had created a model in which they had confidence. But to go into full scale production of the car will require an additional $150,000. Problem: investment money has come to imply ownership rights. Investors expect to be shareholders. How does the Arrow Design cooperative borrow venture capital and still maintain its worker-ownership structure?
The second problem was one of scale. Putting aside the question of shareholders, Arrow Design found professional venture capitalists willing to raise one million dollars for the project, but not $150,000. “One hundred and fifty thousand is not worth my time. And besides, how can you manufacture a car with only $150,000. Look at Detroit.”
Here was a practical problem for seminar members to consider. Arrow Design is a fine example of a business working towards a sustainable future—an organizational structure supportive of the worker and the worker’s rights, a product that is much needed and which employs small scale decentralized technology—but the project is unable to locate “appropriate scale financing.” It is a problem that similar initiatives will face. How might it be resolved?
From the seminar a plan emerged to pre-sell the car as a way of financing start-up costs. At least 40 cars will be pre-sold at $3,500, representing a discount of $195 over the regular price of the car. Potential buyers will make a deposit of $100 in a special deposit account. This $100 will be returned if 40 cars are not pre-sold by September 1983. When 40 persons commit themselves to buying a car then all pledges will be called in. Arrow Design will have its start-up funds and production can begin. Production projections are for twenty cars per month, so that all per-orders can be filled within three months from beginning of production.
Further, Arrow Design has agreed to encourage owners of the Arrow III to form an association that provides performance feedback on the car to the cooperative. The association will have the right to elect one of its members to the Arrow Design Board so that there will be direct responsibility of the company to the consumers. The company will pay a small royalty to the owner’s association for its cost of operation and a sales commission will be paid on any car sold through the owner’s association.
Tilth is an agricultural association of the Pacific Northwest with chapters in local communities. Tilth’s publication is well known throughout the country for its excellent reporting of experiments with biological gardening and farming. Through its chapters, Tilth has a sense of the needs and concerns of the organic farmer. Financing is one of those problems.
At the Oregon seminar, Schumacher Center staff members presented details of the SHARE program which they helped to initiate in the Great Barrington area. The presentation sparked keen interest from Barbara Snyder the co-ordinator of Tilth, Tom Forester of the Willamette Valley Chapter of Tilth, Kris Nelson a reporter for RAIN magazine, and Ianto Evans of Aprovecho.
SHARE (Self-Help Association for a Regional Economy) is a program open to anyone in the Berkshire region. Individuals make deposits in a local participating bank (a 90 day notice account earning 6% interest). These deposits are used to collateralize small loans to farmers or businesses which apply through one of the SHARE associations. Associations are peer groups of farmers, business people, cottage industry producers, etc. If the loan meets the criteria of providing more local self-reliance in the area of basic needs (food, clothing, shelter, energy) and meets the other social and ecological criteria, it is then reviewed for its financial feasibility by the appropriate association who may recommend it to the SHARE board. If funds are available on deposit, then the SHARE board approves the project and the loan is made by the bank. Because the passbooks of SHARE members are used as collateral for the loan, the bank assumes no risk and so can lend at an interest rate well below the normal market rate.
The effort of the SHARE program is to ensure that local money is reinvested locally for socially significant projects. It is a step towards encouraging community responsibility and participation in the banking process. By depositors accepting the risk, the bank is transformed from a for-profit privately motivated organization into a service organization.
Just recently we received a letter from Oregon telling us of the formation of ARABLE (Association for a Regional Agricultural Building a Local Economy), sponsored by the Willamette Valley chapter of Tilth. Tom Forester will co-ordinate the program and many of those at the seminar are involved. ARABLE will be patterned on the SHARE program, but focusing on agricultural loans”. A local bank has already agreed to sponsor the program and Tilth members will be asked to become depositors. Best wishes to this new undertaking.
A topic of much concern at the Oregon seminar, was the problem that non-profit organizations (i.e. groups formed as charitable organizations that depend on contributions) faced of finding funding in this time of economic scarcity. A significant amount of staff time is devoted to fund raising rather than on the programs, research and education for which the organization was formed.
At the same time, new cooperative businesses (see Arrow Design article as a case in point) producing ecologically sound goods or services are having difficulty in raising business capital or in marketing their new product. Their goods often require an “educated” market, the very people who the non-profit organizations are reaching with their newsletters and workshops.
One approach to this problem which was advocated is that non-profit groups, with the skills gained through their research, create related for-profit businesses as subsidiaries in which the profit is returned to the non-profit as business income. Amity Foundation, represented at the seminar by Craig Patterson and Raymond Albano, has been researching and providing information on low cost solar energy design. In the process the staff have constructed, installed and tested solar units. These skills provide the basis for a cottage industry that could help support further research by Amity.
Another approach is for a non-profit to provide a service (such as help in marketing, advertisement in newsletter, booth at conference) to a for-profit business in return for a fee. In such a case the non-profit may be given shares of stock in the for-profit business in return for its service and so share in the risk of starting a new venture. Again, this would be business income.
Some non-profit groups, however, feel some hesitation about linking up with and promoting for-profit businesses —particularly if the for-profit business is primarily owned by one person or even a few people. However, an important social and economic distinction can be made between a typical for-profit structure and a worker cooperative, where the ownership of the business resides with the workers, especially if the cooperative has a policy of returning a share of its profits to the-community.
An example of this is the Mondragon worker cooperatives of Spain which were discussed at the seminar. These worker cooperatives have a policy of returning 10-30% of their profit back as gifts to the community, whether to schools, hospitals, churches, performing art groups, or other non-profit groups that serve the community. The Mondgragon cooperatives recognize that part of their wealth is the result of the consumers who buy their products and so they turn part of the profits back to help organizations that nurture the community.
In this country new worker cooperatives such as Zoo-Zoo’s Restaurant and Arrow Design are being organized with such policies. Such businesses are a natural compliment to the work of the non-profits and deserve full support in the ways described above when producing needed products and services that meet ecological criteria.
Third Annual E. F. Schumacher Lecture: Oct. 22
This year the Schumacher Center is sponsoring a lecture program on the subject of bio-regionalism. The location for the lecture is Mount Holyoke College in South Hadley, Massachusetts and two speakers are invited
Kirkpatrick Sale, author of Human Scale and member of the Schumacher Board of Trustees will be the first speaker. Kirkpatrick has been researching a new book on bio-regionalism and will share with us the history, parameters, insights, anecdotes and hopes of that movement. The second speaker will be announced in our September Newsletter.
The format of the all day session will be similar to our first lectures with Wendell Berry and Wes Jackson. The program will begin in the morning at 10:00 with Kirkpatrick’s talk. Following lunch and the second talk will be a panel discussion with audience participation. Included on the panel will be Garry Davis, founder of the World Citizen Movement and president of the World Service Authority.
Bio-regionalism has become an increasingly important part of the political/ecology dialogue in the U.S. over the past few years. As more and more people have begun to feel that the present large scale nation state system is not only obsolete in the age of nuclear power, but, in fact, an ever present threat to all life on earth, a growing worldwide interest has developed in alternatives to the present systems.
The alternatives have seemed to divide into those who look to some kind of world government and those who want to start at the local level with small scale relatively independent political entities. Are these two alternatives entirely opposed to each other and what does the concept of bio-regionalism contribute to the question? This will be the subject for the lecture and discussion.
Please note the date. We hope to see you there. Members of the Center may reserve a place at the day’s program for $10. Cost to non-members will be $15.
More On Bio-Regionalism
Dave Haenke, who attended the first Schumacher Center seminar held at Simon’s Rock College in Great Barrington, is the organizer of the Ozark Area Community Congress. OACC has gone a long way to conceptualizing a bio-regional platform in its statement of resolutions.
The Congress has some 200 delegates representing different organizations and groups from the Ozarks. They meet yearly in a democratically conducted gathering to outline and begin to implement just and ecologically concerned policies for life in the Ozarks.
An impression from the third Congress held in the fall of 1982: When the 5 members of the forestry committee stood before the plenary session to present their resolutions for discussion and adoption, the onlooker knew quite well that it was only those 5 who would have the time, skill, or the initiative to carry out those resolutions. And yet as the whole -Congress spoke a “yea” to each resolution, the on-looker realized that those five would go out to carry on their work with the affirmation of 200 people standing beside them, hoping for their success, believing in their task. Two hundred people who understood that the work of those five with the forests was a part of a series of integrated activities, each vital to creating a sustainable future for the Ozarks.
It was a simple and moving event.
David, with OACC’s support, is calling for a North American Bio-regional conference in 1984.