Community Supported Business

by William Keyser, The Business Startup Owl

You have heard of CSA (Community Supported
Agriculture). A CSA is a way for the food buying public
to create a relationship with a farm and to receive a
weekly basket of produce in season. By making a financial
commitment to a farm, people become “members” (or
“shareholders,” “investors” or “subscribers”) of the CSA.
The CSA movement has helped to make independent,
healthy farming sustainable.

Books: The system can work equally well with other local consumer markets. Examples include community supported publishing (e.g., Southend Press) and bookselling. I ‘invested’ in a village bookstore, Putney Books in Vermont, where I paid $1,000 to get books to the value of $25 for 48 months and a ten percent discount in the store. This would have given me a 20% return over 4 years, as well as the discount and the reward of supporting a local enterprise, but unfortunately the store failed in its second year.
Dining: In Portland, Maine, there is a Community Supported Kitchen that provides local and organic prepared food year-round to members, on a basis similar to the CSA system. In Morrisville, Vermont (which has 55 CSA farms), there is a CSA-type Restaurant where, in exchange for a $1,000 loan, investors get coupons that they can redeem for meals at the rate of $90 a quarter, over three years. This is a petty meagre return on investment, but in the first six weeks of launch, the Bees Knees restaurant had raised $20,000. The venture was followed by Claire’s Restaurant, in Hardwick, Vermont. Launched by four partners in May 2008, it too, is based on a community centered investment and business model and raised more than $40,000 in community loans.

Fishery : Port Clyde Fresh Catch is a community supported fishery in Maine, where investors can sign up for a weekly share of wild-caught shrimp. Fourteen week shares $210) offer 10lbs of shrimp a week or half shares ($105) that yield 5lbs. Another is Skipper Otto’s Community Supported Fishery. For $250/year members receive approximately 35lbs of whole, fresh and/or frozen salmon that is available direct from the fisherman, amounting to roughly 7 fish at around 5lbs each (about $7/lb).
Manufacturing : The concept of Community Supported Manufacturing, means taking back the means of production in a socially and environmentally responsible way. The concept here is to relocalize manufacturing. An example is Prumitei the fire arts center at Francardu in Corsica, where my friend Fanfan Griffi created the craft manufacturing center and restaurant with workshops all based on the use of fire: ceramics, glass, and bronze founding. He raised money from local governments, non-profits, large and small shareholders. Sadly, too this was a venture that founder and lost my small investment. The Post Carbon Institute has a briefing on CSM and a Power Point presentation you can download.
Energy : WindShare is pioneering Toronto-based ‘for-profit’ co-op with a mandate to provide renewable electricity to the people of Ontario through community ownership. The internal rate of return is projected at 7.23% per annum over a 20-year investment period, with no middle man, no fund management fees or other associated administrative costs. Sixty-six investors from Minnesota snapped up all the available shares in two wind generation companies (MinWind I & II) in 12 days. Eighty-five percent of the shares must be owned by farmers, with the rest available for local townspeople and non-farmers. Each share gives the owner one vote in the company and no single person can own more than 15 percent of the shares. Now there are MinWind III-IX, similar to the first two projects, which began producing power in 2002.

Chicago-based Indie Energy the geothermal-based clean energy building systems has a mission with a simple equation that became: Local Geo + Local People = Economic, Environmental, and Social Profit. “Organized labor, along with the private and public sectors, are the three pillars upon which the new renewable energy economy will be built,” said Daniel Cheifetz, Indie Energy CEO. Indie Energy is backed by ShoreBank committed to building vibrant communities by providing financial services and information to create economic equity and a healthy environment.

What next?
The opportunities are near endless. The only considerations are that he product can be consumed within the community and that there is a way of mounting the venture on a for-profit, not-for-profit or a hybrid. With the standard business loan availability having dwindled to a trickle and the risk-capital tap having been turned off, here lies nothing but a wide-open blue ocean with few fish swimming in it.

In my local town of Brattleboro, Vermont in the US, there is an interesting hybrid called The Commons, run by Vermont Independent Media (a non-profit) that promotes local, independent journalism, providing a forum for community participation through publication of The Commons, a weekly free newspaper, run on commercial lines with paid advertising; and promotes civic engagement by building media skills among local residents through a media mentoring project.

In a village nearby, there is The Saxton River Partners, Inc. which runs the Dish on Main a community restaurant and meeting place, whose mission includes offering employment and vocational training to adults with developmental disabilities.

More widely in Vermont, there is a new corporate form called the beneficial corporation that is effective from July 2011. This is a growing form in other US States as well. The initiatives spring largely from the efforts of B Corporation. WorkSavvy LLC is a B Corporation. In Vermont, a benefit corporation means a corporation defined as

  • providing low income or underserved individuals or communities with beneficial products or services;
  • promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;
  • preserving or improving the environment;
  • improving human health;
  • promoting the arts or sciences or the advancement of knowledge;
  • increasing the flow of capital to entities with a public benefit purpose;
  • the accomplishment of any other identifiable benefit for society or the environment.