The Alliance to Develop Power has invited our closest allies to help us get the word out about our participation in the JobRaising Challenge. We've asked them to share stories of their work with us, explaining how our joint efforts tackle some of the most intractable problems in our communities. We want to demonstrate how collaboration is key to creating jobs and expanding our vision of a new community economy.
by Christopher Sikes, CEO
Common Capital
It was only weeks ago that 300 million people were heading for the "fiscal cliff", their fate in the hands of the President of the United States and the Speaker of the House, who sit four hundred miles and five states away from where we are in Massachusetts.
And if that bus went over that cliff, or, if it goes over the cliff in the coming months, there will be huge local consequences. Not only will our taxes go up, as much as $4,000 for middle class families. There will be cuts to Medicare which will make it harder for people to get the health care they deserve. Those in greatest need will see draconian cuts in human services such as childcare, food, mediation services, heating assistance, etc. There will be less money for physical infrastructure, our roads, bridges and schools.
The moral of the story is that we are far too vulnerable to forces beyond our control. We need to have more ownership of our local economy. Our work force, our schools, our industries require it in order to have more control over our local destiny.
It may seem like a tall order but let's consider what we already have. Using 2010 figures, there was $24.3 trillion dollars invested stock and bond markets.
This is only an estimation based on the assumption of a uniform distribution but let's look at what it would mean for a local economy. In the Connecticut River Valley in Massachusetts, where we are, there is an adult population of 544,000. Under this methodology we have invested over $70 billion dollars outside of the region. If we could focus 1/100th of that investment directly in our region, we would be investing $700 million in our local economies.
So, why isn't our local capital being invested locally? The challenge is to attract local capital in a manner which will provide a real financial return, in addition to a "social" return, that allows people to invest a portion of their capital into their own community.
How can we do that? There is more than one answer. At Common Capital we have taken a first step and formed a local investment fund called the Community First Fund for local individual to lend as little as $2,500 to a portfolio of local small businesses. We are working to create other venues for investment as well.
Larger projects such as health centers, libraries, theaters and community centers all need capital. We need to find incentives currently targeted towards institutional investors by the federal and states governments to be redefined to give incentive for local investors.
Ultimately we need to create the consciousness that "buying locally" is not enough. We also need to "invest locally". The solution is in our hands. Let us vow never again to be as beholden as we are today to two people in Washington whose primary interest is not where we live.
ADP is a primary community partner for Common Capital and we have financed several high impact projects would not have been possible without ADP's leadership and connection to low-income communities. With the local investing model described above, we can increase the impact we have and "close the loop" between projects that are starved for capital and our local communities that can provide it.