This document proposes a neighborhood economics funding kit for communities where venture capital does not typically work. It has four parts: 1) Lending through funds and lending clubs, 2) A donor advised fund for philanthropic investing, 3) Giving circles, and 4) Community savings bonds for kids. The funding kit uses various tools like lending, investing, and giving to pool local capital and empower community members and kids to fund projects that create value, like a proposed food hub cooperative. The combination of tools is presented as a new holistic approach to community investment and giving that could be replicated in other towns.

1. NEIGHBORHOOD
ECONOMICS
FUNDING KIT 1.2
How to fund things in
places where venture
capital doesn’t work…

2. IT HAS FOUR
PARTS…
1. Lending, both funds
& lending clubs
2. A donor advised fund
that invests
philanthropically
3. Giving circles
4. A kids community
savings bond

3. LENDING THAT…
…works for businesses that
are not high growth or fast
enough growth to call for
venture capital.
…works for loans that are
good for the community and
that can pay back investors at
below bank rates.

4. LENDING
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 and
relationship-led lending circles.
We would experiment with peer due diligence models like
Village Capital, where the entrepreneurs join the funds’
investment committee, and eventually lead due diligence.
This reduces investment costs by 50%.
The lending would be in context of its sister modes;
philanthropic investing and giving. This reduces the
power of investment capital alone and synchs it with the
needs that the community has agreed on. The bank is not
calling the shots; the people are. In Yancey County, this
starts with the food hub and adolescent female agency.

5. COLLECTIVE
INTELLIGENCE TO
REDUCE THE COST OF
CHANGEThese tools are designed to create self sustaining
collective intelligence in the community about what is
good to fund locally. This sets up the long term bond the
kids invest in. It is a long-term perspective.
This should reduce the cost of change and enhance buy-
in. This suggests that the Food Hub might be owned
cooperatively by the community. More about that later…

6. THE COMMONS TAX
Each loan would include a
tax to the food hub,
representing the
commons, paid by the
lenders. An equal part of
that tax would support
efforts at enhancing
adolescent female agency,
which has been
quantitatively proven to be
the key leverage point in
creating community wealth
and health.
We could also design the
commons tax as a part of
every gift that goes over
the DAF platform,
including giving circles.

7. ECOSYSTEM ANALOGY
This tax on the platform creates abundance. The food
hub, coupled with support for female agency, follows the
ecosystem management pattern that resilience scientists
at Stockholm Resilience Center say creates thriving
watersheds. The signals are to:
• make sure the top raptors are growing, the
representatives of abundance, and “systemic profit”, and
• that the most fragile ecotone; the connecting space
between two sub ecosystems, like bugs one inch below
and one inch above flowing water, ishealthy.
In a social system, that fragile ecotone is the adolescent
female; if they stop asking questions in math and science,
a community’s productivity declines. This is a case where
the market and justice overlap, with exponential results.

8. BENEFIT
The democratization
of funding makes
both the rich and
average people part
of the solution
Local people powered
capital.

9. OUR INNOVATION
We look at our community and decide when it makes
sense to:
o give with no financial return;
o when a philanthropic investment makes sense such as
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 given;
o or simply lending, either through a local fund or less
formal local lending clubs or online crowdfunding
platforms like KivaZip and Community Sourced Capital,
which can ignite the Yancey diaspora.

10. WHAT’S REALLY NEW?
We are going through a transition that
requires us to look at our resources
differently and act in a new way. We
must invest and give 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
our own investments.
Our multi-part approach will reduce
friction & increase the amount of
capital available in a community.

11. DONOR ADVISED FUND
(DAF)
The DAF can do loans or equity (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
local 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 an unrestricted operating 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.

12. GIVING CIRCLES
Two forms:
Groups that meet regularly and trust each other, from book
clubs to Sunday School classes. They 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
this.
Or more established, larger scale groups like Women for
Women in Asheville, where each person puts up $1,100.
All grants made through the DAFR would be unrestricted
operating grants; the most valuable kind of money for non
profits. We can become a magnet for the best non profits.
The Yancey Neighborhood Economics platform itself could
take a stand and decide to accept no program grants, and
only take unrestricted operating grants.

13. FOLLOWING SMART
GIVERS
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
exceptionally strategic.
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 circles.

14. TACTICAL NOT
STRATEGIC
PHILANTHROPY
If we take foundation money, perhaps we only want to
work with a certain kind of foundation.
Most foundations think of themselves as strategic
philanthropists. That makes the foundation the
entrepreneur, and reduces the non profit they fund to
being merely their agents to carry out their plans. The
giver is the landscape architect; the non profit service
provider or social enterprise merely the gardener,
working at the direction of the giver.
We want tactical givers, foundations
like Mulago and others, who trust the
entrepreneurs and let them make
decisions on how to solve the problem.
We want to avoid the mission creep
that program grants create.
We know what to do in Yancey County.

15. INFLUENCE ON BOTH
POLES
The kit will 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.
This enables 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.
This is a key to both the giving & investing side of the
funding kit, the crowd can listen to the experts, but
make their own decisions. This is counterbalanced by
everyone having to listen to and help the kids create
their long term bond.

16. 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
string.
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.

17. THE COMBINATION IS
NEW
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
Foundation.
These tools have not been
combined and used with a
holistic lens that decides which
tool a community should use in
which instance.

18. APPLYING THE TOOL TO
THE FOOD HUB
We have as our goal using
the Neighborhood
Economics Funding Kit to
fund and create a long
term sustainable business
and giving model around
the Yancey County Food
Hub.
That means designing the
Food Hub into the
economic fabric of the
economy we want to build
together in Yancey
County.

19. MAYBE THE FOOD HUB
IS A COOP
As a long term, intergenerational investment in creating
a platform to enable smart Yancey County young
people to move back home, the Food Hub would
eventually be able to pay dividends, as it reached its
potential. This is a standard feature of many agriculture
related coops, and enables them to last across
generations. That would enable local community buy in
in a literal way.
The people of Yancey County would literally get the
long term payoff from creating an entity that existed
mostly in the commons but that supported businesses
and community health and wealth.
We would be using a frame that unites the commons
with each participating company’s and individual or
family’s balance sheets and budgets. We would look at
our resources and use them to create the community
we want. We would not be ruled by old myths of capital
that divide investing and giving into two separate
realms.

20. FOOD HUB DIVIDENDS
A business’s Food Hub dividend could be measured several
ways; by a percentage of its proportional contribution, with
early funding counting for more.
Each business could also receive dividends through a
community wide application of the three part B Corporation
metric; reporting on what you did for the environment this
year, what you did for the community, what you did for your
employees.
Adapting the B Corps rating to a rural Southern Appalachian
county is a project we could get colleges involved in. The
higher your businesses Community B Corps score, the higher
your Food Hub Dividend.
B Corps metrics for each family could also be designed; your
families collective quantifiable commons gifts results in
higher Food Hub dividends, or could count towards their
kids’ investment in the long term bond. This causes the
parents to think longer term, in partnership with their kids.

21. FOOD HUB DIVIDENDS
The food hub coop creates reliable abundance, a safe,
“annuity feeling” in the present, like suddenly discovering
an extra check in the mail just when you need it. Parents
and kids then decide how much of the dividend goes in
mom & dad’s checking account & how much should go
into the kid’s bond.
The family would be delivering its resources to the
children on a regular basis with a goal set by the kids for
what they want to have happened by the time they leave
home for the first time. The kids are responsible to their
parents as their investors.

22. WISER TOGETHER:
HOME AND THE YANCEY
DIASPORA
The Yancey Diaspora, the kids who’ve left, would want to
invest in things that make it possible for them to come
back. They can do this on the platforms built by Joy
Boothe’s techie kids and their peers.
The Yancey Diaspora donates and gives, informed and led
by their little brothers and sisters at home. This keeps the
dialogue happening; the ones going off to see the world
learn from the ones still at home.
The parents, having to convince their kids to fund a
project with the kids’ bonds, would, in conversation with
the Yancey Diaspora, carry the hope of the community
and would make everyone wiser together.

23. FOOD HUB EDUCATION
Education needs to be a key component of the Food Hub.
People need to know why it matters, and what it will do
for them, their families, for their businesses. It has to be
clear how it will enable their kids to move back home.
This project will attract students from Warren Wilson’s
sustainability degree program, as well as that of Berea
College and Western Carolina, to start with.
Part of the education baked into the Food Hub is to help
the kids decide on what their own long term, 12 year bet
will be, incorporating that learning into the bonds they
invest in every month, for as low as $1 a month.

24. THE PAYOFF
The threefold flexibility of giving, investing and
receiving a full tax deduction before getting the
money back to give with or invest with again coupled
with traditional lending where you get your money
back at an appropriate return, makes 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, and their
parents who have to decide how much of their annual
Food Hub dividend they put in their checking account
and how much in their kids long term bonds, which
could make it feel like an intergenerational savings
account. Imagine that for a minute.

25. THE PACKAGE
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 investing.
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.
Ideally some projects would be
12 year timeline projects with
enough variety to make them
interesting.

26. NETWORK
POSSIBILITIES
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.

27. THE BACKEND
It might need a local
community development
financial institution (CDFI)
or other community
organization to help
administer the package.
It would require a full time
staffer, say an experienced
CDFI leader, who would
thrive in a flexible
atmosphere
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.