Woody Tasch is the founder of the Slow Money Institute, a nonprofit dedicated to catalyzing the flow of capital to local food systems, connecting investors to the places where they live. Today, Woody joins Ross and Christophe to discuss how he developed the idea of Slow Money and explore the reasons why we can’t seem to get our money out of the markets and do something radically different with it—especially foundations whose investments are out of alignment with their missions.
Full Transcript
Alexsandra Guerra: You’re listening to the Reversing Climate Change podcast by the team at Nori, the carbon removal marketplace. This is a show about the innovators and entrepreneurs developing solutions to climate change.
Ross Kenyon: Hello and welcome to the Reversing Climate Change podcast. I’m Ross Kenyon here with Christophe Jospe. We are still in Boulder. We’re on Pearl Street downtown. Fun place to be. It’s hot. I must imagine it’s been hot like everywhere else has been this summer. Denver, I know you’re high desert. I was expecting it to be a little breezier, but to no avail.
Christophe Jospe: There are very impressive thundershowers.
Ross Kenyon: Oh yeah, that’s true. The afternoons have had a lot of thundershowers. I like that.
Christophe Jospe: Those are nice. Yeah. You have heard about climate change, haven’t you?
Ross Kenyon: A little bit. Not too much. About 85 episodes worth.
Christophe Jospe: Yeah. So we’re deep into it. But that The voice you heard there was Woody Tasch. We’re sitting in his office in the slow money office where he is the chairman. He’s also an author. He’s been in the trenches for quite some time thinking about all sorts of things that probably do more harm than good. At least he tries, I think.
Unknown speaker: You’re saying he does more harm than good? What? More good than harm. Oh, man. One of those, right. Yeah, one of those things. Either way, it’s kind of backhanded, but...
Christophe Jospe: All right, this episode’s already starting out as sort of a train wreck, but Woody, welcome on the show. We like to start with people’s...
Woody Tasch: I love train wrecks.
Christophe Jospe: Great. Especially at a planetary level. We might be on one, but we’re optimists. We think there’s still time to get it right. We just need to have this global awakening, a restorative movement probably has something to do with connecting back to the land. I’m not priming you too much here. We like to start with people’s stories, which is you could probably go on for a while because you said that you’re old. So we’re allowed to say that.
Woody Tasch: Well, I’m older than you. Let’s say that.
Christophe Jospe: Right. Fair enough. So how’d you get to where you are today, which is two young guys walking into your office wanting to do a Reversing Climate Change podcast with you?
Woody Tasch: Bad karma. You’re being punished right now. You want to be a little more specific. Okay. So for maybe 35 years now, I have been working in, I would say, kind of weaving along the boundaries of investing in philanthropy and angel investing in And what used to be called socially responsible investing and then was called double bottom line investing then became triple bottom line investing. And now it seems to be settling on the term impact investing, which is a term I don’t actually like that much. And we might even get into some of that because it has to do with scale and return expectations and a whole lot of things that I don’t think impact investing usually gets to.
Maybe I jumped the gun there a little bit. But as far as how I got here, working at a foundation, being a treasurer of an environmental foundation, running an angel network dedicated to sustainability, investor circle for 10 years, and a few other things along the way, including a brief stint at the International Maize and Weed Improvement Center outside Mexico City, which is where the Green Revolution was born. I was there in 1979 for a year working with The Economist. That was kind of the beginning. But here I am now having written the book Slow Money 10 years ago and it sparked with a bunch of people.
And so I’ve been kind of trying to figure out what to do about that with thousands of people. And we have moved $75 million into around 750, mostly small organic farms and local food enterprises. It’s very decentralized. It is very much a movement. It’s very grassroots. It does have at the high end, if you will, from a money standpoint, some impact investors and foundations in it, but it’s by and large, Smaller individuals just working locally, a few handfuls of people giving $10,000 or $20,000 to some local farmers for hoop houses and drip irrigation and different things.
A lot of small stuff. I’m definitely a devotee of Wendell Berry and E. F. Schumacher, Small is Beautiful, Unsettling of America. From an intellectual standpoint, maybe that’s all I needed to say and forget all the other stuff because that’s how I got here. In the 70s, I came across them. I said, those guys are telling the truth. As far as I can tell, that’s what we got to be focused on. And it is just the last thing I’ll say is it is distressing to be sitting at a table in 2019.
I was talking to someone last night and this came up last week, the story about microplastics in rainwater at Rocky Mountain National Park. Now the CU guy who wasn’t even going out to study that, he was going out to do something else and he happened to get into it a little bit and then he looked at the water and he found micro particles of plastic in the water. This is up at over 10,000 feet and in a place where there aren’t easy access for anybody. And so he determined it was coming from rainwater, but that wasn’t even the whole story.
So I went online to research it a little bit, and there’s a French guy did a study like four years ago, a more comprehensive study, the same thing in the Alps. You know, very high altitude, very remote, no human direct traffic, no question it came down from rainwater. And he had all the measurements of how many particles at certain micron size and how many of them would go into your flesh and into your lungs and all this other stuff. So there’s one systemic problem that’s not, let’s say, directly related to climate per se, but is obviously part of the whole interrelated web of problems.
And then yesterday, a story that’s seemingly unrelated. By the way, you only have to ask me one question in the whole interview, and then we’ll be done. Oh, perfect. This will be my longest riff, I hope. Then yesterday, there was a story of all things. I saw it on real sports. I don’t know if you ever see that show on HBO, Brian Gumbel Show. They do kind of human interest, deeper stories on what’s going on behind. They did a story on video gaming because there’s a lot of debate about whether that’s actually an athletic thing, video sports, video games.
There are 20,000 video parlors in South Korea and they showed them on the air. They’re big. They look like a bowling alley or something in scale. They’re big and they have hundreds of booths in them. Kids are dying in them. They’re playing for like 15 hours straight and they get dehydrated and like 10 people died last year. And the kids next to them don’t even know they’re dead for like four hours. I’m not making any of this up. It sounds like you can’t believe it. And the story was on, are video games addictive?
That was the story. Well, obviously they’re addictive, but they interviewed people from Microsoft and all people denying it, whatever. So I’m just saying the systemic problems we’re dealing with go like ripple through every aspect of society. Capital markets being part of that problem. I mean, I view it all as being part of the speeding up. Intermediation, too much faith in technology, the seductiveness of technology, the speed of things. Video games, a lot of it is the titillation and the psychological impacts of just speed and virtual stuff. So I’m very worried, and you asked me how I got here, I’d say I’ve been worried about the same thing for 50 friggin’ years.
And it is kind of, if you let yourself be depressed, which I don’t very often, but it’s pretty depressing. It’s like, what the hell are we doing? What is it going to take? What is wrong? We really can’t get out of our own way as a species. It just seems kind of mind-boggling. So sorry about how long that took.
Christophe Jospe: You don’t need to apologize. I think you point to certain things that should wake us from this slumber, like kids dying in video games. And I think it’s systemic and emblematic of living in a society that makes money when someone consumes more of a thing. And so let’s figure out how can we maximize consumption? And that’s kind of what slow money is about. And, you know, we’ve brought on John Elkington in the past on this podcast and actually on the air, he’s like, I helped coin the term triple bottom line, but I don’t think we should use it anymore because it’s maybe pointing us on the wrong.
But it’s kind of nice to sit in the same room as someone who’s like, I wrote the book on that thing, which is slow money.
Woody Tasch: That doesn’t make it right.
Christophe Jospe: Well, maybe not, but at least you can tell us what exactly that means or what are some of the incarnations of slow money? How does that work?
Woody Tasch: It’s pretty simple. Well, the incarnations of it are simple. And how it works is, say, both simple and complicated. So where testimony came from is, as you might be easy to deduce from that previous background I just gave, I’ve been thinking all along my career, what is keeping us beneficiaries of the greatest accumulation of wealth in history? So John Doerr, who’s one of the founders of Silicon Valley, Kleiner Perkins, et cetera, a venture capitalist, He used the phrase, greatest legal accumulation of wealth in history. And he was describing venture capital, but it could just be for all of us.
We’re all living in an era where the greatest accumulation of wealth in history is happening. And now there are a couple of thousand billionaires and et cetera. So why with all of that wealth, we have foundations that have, I don’t know what the number is now, maybe $700 billion of assets, probably more now, maybe it’s $800 billion. With all of that, why can’t we as individuals still do what we really want to do? I believe most people when they say, I want to do good, I want to be green, I want to do less harm.
And yet we don’t take our money out of the system that is creating all that wealth. It’s like we’re afraid to actually take it out and do something radically different with it. So that comment comes from two basic professional experiences. One was being treasurer of the Jesse Smith Noyes Foundation in New York, which is a wonderful foundation, super progressive, early supporter of what was called then sustainable agriculture. And went through an entire remake of its culture around the idea of merging its investments and its grants and everything. But even there, with a completely dedicated, we were a $60 million foundation growing to as much as $80 million at one point.
It’s just so hard to actually do what we all said we wanted to do. And we did want to do it. We wanted the left hand and the right hand to know what they were doing. We didn’t want to just have the money invested in Monsanto, where it was when I got there, so that we’d have more money to give away to sustainable ad groups. We wanted it to make more sense. Super hard. So this is again that little depressing story of the 50 years. Now I’ll do 30 years. So 30 years ago, that’s when I got to the Noyes Foundation.
And we weren’t bigger than our britches. We just had the feeling that this idea that you have to align the mission with the investments with the charitable purpose was so compelling from a philosophical or moral or ethical standpoint that it would just ripple through philanthropy. 30 years later, a fraction of 1% of foundation assets are invested in Aligned with mission. It’s not because people are bad in philanthropy. And I hope if there are any foundation people listening, you heard those last words. Because I’m not criticizing the people in philanthropy. I’m just observing that the system itself can’t do certain things.
Despite the best intentions of the people in the system. It’s kind of like being in a car and saying, you know, I want to walk on a path through the woods. You know, if you’re in the car and you have to get the car somewhere, you can’t do that. The tool has to fit the job, right?
Ross Kenyon: Is this some sort of fiduciary hangup?
Woody Tasch: Oh my God. You said the magic word, the fiduciary. So I say a lot of things that are meant to be both playful and provocative, but I say as non-fiduciary a way as possible for slow money, right? Okay. Yeah. Here’s another one. If you’re laughing at that one, you’re going to like weep at this one. Place-based, return agnostic, civic engagement-related, conscientious investing. No, just no. No, no, meaning it’s slow money. So I’m kidding about all the jargon. That’s why I’m kind of against the jargon. So coming back to the slow money, let me kind of bring this loop together.
So thinking about why even the foundations and the wealthiest people couldn’t get it to happen. My basic conclusion was pretty straightforward. We need to think longer term. Now, it’s really easy to say that. Again, super hard to do if you’re in any kind of organized fund or structure or whatever. Thinking long-term means thinking generationally, at least seasonally, but meaning really generationally, obviously. So that’s the problem we’re having, again, through every one of these system things. We as a species are orienting towards the short-term and we’re creating long-term problems, but we can’t quite figure out how to address the long-term problems.
So that came out in two words, patient capital. So hopefully people don’t need me to explain the leap from patient capital to slow money, but I will just say that I did meet Carlo Petrini in Italy and the slow food people. And he’s a wildly inspiring global thinker, doer, a really interesting person. And I just immediately said, oh my God, patient capital, it’s slow money. Meaning saying you want to be more patient in general, good thing, but it’s a very broad idea. Slow money brings it right down to local food, slow food, indigenous culture, soil fertility really brings it down into the soil.
So that was my aha moment. I guess that set me on the thing of slow money. And then in terms of me saying slow money is both complicated and simple, The idea is, I mean, it should be simple, right? We want to make low interest or 0% that is going to require some conversation where the 0% come from. But we want to make, let’s say, concessionary. We don’t use those words in slow money meetings. But to an outsider, it would look like a concessionary loan to a local farmer. Why do we want to do that?
A hundred reasons that your listeners don’t need me to say. Everything from soil carbon to community resilience and water in the aquifers and less plastic in the rainwater and all these things, right? So that’s why we’re doing it. The doing of it is a little complicated because there’s no structure. And this is great to be talking to you guys about because you’re creating a structure to try to make it easier for money to flow through part of the system, right? That’s the thing we’re really bad at. I mean, we’re very inefficient in slow money.
It’s all we have to meet at the local level. We have to get to know each other. And I’m kind of smiling when I’m saying this to you guys because we actually like doing that. But from a finance standpoint, from just a transactional standpoint, it’s very inefficient, right?
Ross Kenyon: So wait, why doesn’t this happen in general though? Is it that if you are in charge of a portfolio, if you’re a treasurer at an environmental organization, you’re expected to grow at a certain percentage per year. So there’s more money to help and invest in products that you want. And if you just gave out concessionary loans at 0%, it makes you look like you’re doing a bad job.
Woody Tasch: Well, you didn’t actually totally finish your thought there because I think where the end of that thought would have been, you’ll be out of business eventually because you’re giving all the money out in some concessionary way and you’re not growing the endowment.
Ross Kenyon: Yeah, you’re losing on an inflationary loan.
Woody Tasch: Yeah. So the first part of your thing was, yeah, managing this portfolio and we have to generate money so we have money to give away. Yeah. So it’s actually interesting we’re talking about that. When I first started talking about slow money in 2009, when the book came out, That issue came up all the time in public meetings. And it was like a really easy way to just connect with the audience and go, okay, anybody here know what the total assets of U. S. foundations are? Anybody know how much they’re giving away here?
Anybody know how much is going to agriculture of any kind? Anybody know how much is going to local food systems? And if you go through the wallet, you get to a tiny fraction of a fraction of a fraction. And then you say, why? And the why really comes back to issues of the most fundamental thing it comes back to is the people who are managing the assets of the foundation are trying to grow the assets so that the grant makers have more money to give away. Now, that sounds totally logical, and it is actually logical.
And it is also part of the, what’s the word, cognitive dissonance that is destroying life on planet Earth, in my opinion. Not because of any one of those people or any one of those institutions, but because the left hand doesn’t know what the right hand is doing. And if you follow that thread all the way back, you get to, okay, we’re growing the economy so that we can raise standards of living, bring people out of poverty, and improve life. Okay, well, yeah, sort of, it does. You can show all of that has happened for most of the planet in very unequal ways, and maybe the last 20% are having trouble getting on the bandwagon, but you can sort of say that’s happening.
And because no one is looking from between the left hand and the right hand, we’re just growing the economy to kind of get all that to happen. All these, the systemic problems, the worst of which is climate change. I’m not sure if the worst, we can debate which one is worse. Is species loss, you know, which one is happening faster and worse, you know? But these systemic problems, and I consider on the social side, terrorism and the dysfunction of democracy and all these things are part of these systemic problems. It’s all about...
Flows of capital that have taken on a life of their own and the left hand doesn’t know what the right hand is doing. And so all of these problems kind of come out the bottom of the pinball machine. So it’s interesting that you went there. I’ve gotten off talking about this stuff in the last several years, maybe just because it’s human nature and I just don’t want to keep talking about the same thing. But to me, that’s why I was a foundation treasurer for 10 years. I couldn’t believe it. I just kind of came in out of left field.
I’d never worked at a foundation. I was like, really? All your assets are over here and you’re giving grants over there and it’s complicated to figure that out. And it really was. We could go into it more. I don’t know if we should, but I just think it’s good. It’s interesting to me that you brought it back to that because that is such a clear, unequivocal. Kind of light to shine on the problem. You have philanthropic entity set up to solve problems markets can’t solve. That’s what a foundation is, right?
And in the foundation, they are completely bought into market growth to grow the assets of the foundation, even inside of that.
Christophe Jospe: And it seems like there are sort of levers to push there where either it’s a divestment campaign or you hear in the philanthropic world, program-related investments where X percent of the portfolio needs to push. Do those things work?
Woody Tasch: Well, I don’t want to go too far into the weeds. I would say these were, and I was very actively involved in all of that for quite a while in some niches as a leadership role. So I do know something about that. I would say, and this could get me in a little trouble. This is a shorthand. So this is just a shorthand. Read the book, people, if you really want to know anything. No, no, no, no, no. It’s like putting biodiesel in a bulldozer. You have a system that is like a bulldozer, right?
In other words, I said in the first book, you wouldn’t use a backhoe to plant a garlic bulb. It’s a little bit like that. The foundations exist. They have all this capital. They have investment advisors. There’s legal, cultural, all kinds of stuff. They’re a regulated financial institution. And so it is just really hard for them to deconstruct themselves, despite the best intentions of a lot of people in them, to do something radically different with the capital. Program-related investing, mission-related investing, these things are tools that people try to come up inside of the institution to try to kind of create carve-outs.
And whether they work or not, yeah, I would say they work. They just work within a sort of a I’m hoping... I’m working to get as many people as possible to kind of get over that little hurdle. And the one thing I can report, I’ve been doing this for 10 years now, slow money. You know, tens of thousands of people have come to meetings, local, national. We have dozens of groups around the country, all volunteer-led. I can tell you that there are more smiles, the rooms that I’ve been in, there are more smiles per investment decision.
This isn’t painful. It’s tricky. It takes some time because you’re kind of getting people reoriented a little bit. But when you sent me an email saying things you might bring up, you said a favorite anecdote. So I’m going to do one right now because it’s very tied to this. There’s a couple of them, but I’ll just go to a bottom line. After a half-day workshop on slow money in Ashland, Oregon, The people who’d organized the workshop, we had about 40 people together for half a day. And then a few of us got together afterwards to debrief.
And one of the organizers said, the innate value of this investing is so obvious to me. I don’t care how much money I make. And that is such a simple statement. And obviously, every fiduciary on the planet would roll his eyes going, what the hell? This is ridiculous. What are these people? It’s like a joke. But it isn’t a joke. It’s really a beautiful thing. And that phrase, innate value, to me, that’s going to be in the book I’m working on now. What is the word’s innate value? Another similar type thing, meaning a relatively unsophisticated person from a financial standpoint saying a really important thing.
And I don’t have time to get into the whole story, but at the end of a full day workshop where we were training slow money local leaders and we were going through due diligence and securities laws and Just a host of things that you would want a person who is trying to get people to invest locally to know about. And this young woman who ran an NGO in Canada said, it was our first meeting, first low money meeting. She said, I’m confused. We just spent like the whole day talking about this from the investor standpoint, how to minimize risk, how to investigate this for the thing.
It’s all designed to minimize risk for the investor. Don’t we know that the only people who are going to do this are people who can afford to take the risk with whatever money they’re putting in? Why aren’t we talking about sharing risk with the farmer?
Unknown speaker: I actually got goosebumps now.
Woody Tasch: You don’t have to get them.
Unknown speaker: No, I got them. Wow.
Woody Tasch: Yeah. And I was like, oh my God, that is brilliant. So the next morning I was introducing Wendell Berry on the stage in the Louisville Kentucky Center for the Performing Arts. And I already had my little 10 minute introduction. I wasn’t going to speak much because Wendell was coming out, but I wanted to say whatever the best thing I could say. I had it all worked out. I went back to my room and stayed up all night rewriting the 10 minutes around the theme of shared risk because my mind was blown.
I just thought it was so important. So I got up there and I said my thing and Wendell sat down in the chair and the first thing out of his mouth was I’d like to pick up on the theme of shared risk. So that idea of shared risk to me is so... Radical in the non-political sense, radical in the root sense of what is wrong with that other system we were talking about where we’re just growing, growing, growing and kind of hoping we’ll solve more problems than we create. Sharing risk is such a beautiful thing.
That is what we all need. That’s what we haven’t done that has got us into the climate change. We’ve exported risk in a zillion different ways and the risk has piled up at a planetary level. And so by sharing risk, it’s a way for us at the local level Which is the only way I really know how to share risk that way, direct, local level. We might be able to begin moving in another direction. So I just got in a couple of my anecdotes, the aha moments, I call them.
Ross Kenyon: I just want to clarify. Yeah, it’s good. This sharing risk comment, is it? Because investors are always trying to de-risk and how they structure portfolios, etc. How to work with an investor trying to de-risk with a farmer? Is it trying to make sure that the farmer doesn’t default?
Woody Tasch: No, but it’s good because you’re still using the old don’t say de-risk, say share risk. So how do we share? Okay, so it’s like a CSA. Just think of a CSA model. I sometimes describe slow money as the CSA of investing. Same thing, just groups of people instead of you’re buying food directly from one farmer. I assume, hopefully everybody listening knows what a CSA is. So are people, you buy a share of the farm produce at the beginning of the year, and so you get one 100th or one 200th of whatever the farm produces that year.
Sometimes you go to the farm once a week, sometimes they drop off in town. So you are taking the risk of the production cycle of the farm with the farmer. It’s a really beautiful thing. Guess what? Once in a while, it doesn’t work out that well. There’s too much hail and too many things, and you don’t get that much for your share, but not too often. I think most people’s experiences with CSAs have been very Very favorable. So for slow money, we’re saying, okay, it’s not just one farm. We’re thinking about the local food system this way.
We want to put some of our money into the local food system in a way which we are, now I use that term, sharing risk. So we’re not de-risking. We’re absorbing the risk. We’re sharing the risk. We’re admitting the risk is there. We’re all in it together. It may hail. It may not rain. It may burn up. There may be a fire. There may be a plague. Climate change may just reduce the productivity beyond anything we understand, but we’re all taking that risk together. Because we live here, we just see an innate value in sharing the risk.
But it’s not de-risking. Sharing risk is not de-risking. It’s sharing. It’s admitting the risk is there and taking a piece of it.
Ross Kenyon: I’ve been scolded twice. Let’s see how many by the end of the show we have.
Woody Tasch: I hope it’s not coming off that way. Come on. No, it’s funny.
Ross Kenyon: It deserves reubing. It’s fine. I’m using the wrong way.
Woody Tasch: No, but it is interesting to me. I shouldn’t be surprised. You guys are financial entrepreneurs, so you’re going to bring the language of finance and try to use all those tools as best you can to do something new, which is cool.
Christophe Jospe: So let me throw another jargony term out there that maybe I’ll pretend like I don’t know it, but I at least use it to sound smart at cocktail parties, which is blended finance.
Woody Tasch: Well, you know where that term came from?
Christophe Jospe: Please tell.
Woody Tasch: Jed Emerson.
Christophe Jospe: Yeah, so what does that mean?
Woody Tasch: Well, that was his, and he likes to be recognized. And I’m not saying that as a friend. He should be recognized more often. Are you listening, Jed? Yeah, Jed, are you out there? And he’s kind of a Colorado person. He has a lot of roots. He spends a lot of time in Colorado. He grew up over in Granby, Colorado. So yeah, Jed has been developing over the last 20 or 30 years. He came out of kind of social enterprise, basically helping a portfolio of nonprofit social enterprises be more effective. And from that experience, he developed a methodology, kind of a conceptual framework around blended value.
If you just think of a continuum and it starts with negative 100%, meaning you give the money away, and then let’s say venture capital on the other end, and then everything in between. And trying to understand, let’s say, what’s the relationship between that financial continuum and the impact continuum. In other words, things that you think are home runs in terms of your social and environmental impact, things which are neutral, things which are negative but profitable. So in that sort of matrix would come blended value.
Christophe Jospe: Yeah, so I asked that question to cue you up. Jed, Jed, I’m sorry I butchered that so much. Well, I want to layer on top of that and I wanted to cue you up in terms of shared risk and also just continue to evoke Wendell Berry who says, you know, the work’s not done till the work is done. And that means that everyone, if you and I are neighbors and we both have our farm, I’ll come over and help you with something because actually as a human being, I’m sharing the risk and maybe I’ll walk away and you’ll give me some tomatoes that I helped or something.
But like there are these non-financial elements of sharing risk that have to do with community fabric. So... Keep blending it in together. What is that?
Woody Tasch: But that’s what innate value and shared risk is. So here’s another big aha moment I had in slow money. Now, I’m not saying these like anything, any one of these things is a lesson that applies to all things. I’m just saying these are things we are learning as we go about in slow money as we try to understand kind of the hows and the whys. So one day I was talking with about 15 slow money people, happened to be here in Boulder. It was a group of people who had all put some money in.
It was a for-profit investment club. And I actually hope that, well not hope, I have to make sure at some point in this podcast we talk about donations and 0% loans because that’s what we’re doing now in Boulder and Carbondale and what I believe is going to replicate over the next couple of years in slow money. So this was the precursor to that. We’d each put $5,000 in and we were making 3% loans by vote of the members to local farmers and stuff. And how to do this without getting in the weeds.
I’ll just give the conclusion. So after an evening of discussion of what would success look like, And realizing that we might feel successful even if we had a negative rate of return. I know that sounds goofy to the fiduciary across the table here.
Ross Kenyon: Oh man, I’m such a poser. Yeah, exactly.
Woody Tasch: Meaning, if it be a little more specific, and this is the problem with finance. You never actually end up talking about the actual thing you’re investing in. You just talk about the numbers. I mean, you could see like, I won’t name any names, but the most prestigious financial institutions on planet Earth that put out big reports on impact investing. And they’ll be talking about trillions of dollars of flows of capital. It won’t be a single example of any one investment in there. Because it’s just so top down, they can’t ever get down to the ground.
So the negative return comment, let’s be specific. We make 10 loans. Let’s just say for sake of argument, they’re all the same size and they’re all 3% loans and two or three of them don’t return. But six or seven or eight of them do. Guess what? We have a negative return on the portfolio, but we help six or seven or eight of the local food enterprises. Everybody in the club said, well, we would be successful if six or seven or eight of the deals worked. That’s why we’re doing this. So I said, well, is that investing or philanthropy?
And everyone got all confused because those terms, like de-risking, those terms are the old terms, investing versus philanthropy. You make money here, you give money away over there. It’s very abstract and it’s very bifurcated. So that caused us to say the following, to your point about Wendell Berry and living next to the farm. So if you live next to a farm and the barn burns down, And you and one or two of your neighbors are in a position to lend them the money to rebuild the barn. What interest rate are you going to charge?
Now, in that room and every other room I’ve talked to, it’s a very biased, self-selected group. It’s slow money people. Everybody says, of course, we wouldn’t charge any interest. We’re doing that to help our neighbor. And then you get into it a little bit and you’d say, well... Maybe there’s milk being made, cows being milked in the barn. There’s aesthetic value to the barn. It could be any range of reasons you want to help them and you want the barn to be there. But you don’t need a third party to explain it to you and it doesn’t need to be compensated for with a positive rate of return.
But you are taking a risk for no financial return. Now, say it’s a bunch of you and you’re in a county and there are 20 farms and 20 barns scattered across 100 miles. You’re not all living right next to them. Who fixed which barns? How much risk did you take on which one? You can still kind of get there. You’re still close enough. We want there to be the barns and the farms. Now zoom out and your money is going to China. You’re investing in some food deal in China. How do you even begin to figure out what the hell it is, where it is, what’s the risk, how much money you should make for that risk?
So to me, coming back to the Wendell Berry, it’s all about being as close to it as you can so that the amount of financial jargon can be kept to a minimum. So that you can share risk and allow yourself to experience innate value. I know those are kind of jargony things the way I’m saying them today, too. But to me, that isn’t jargon. That is just a... Like, I don’t consider the phrase slow money jargon. Hopefully, it’s just a way of allowing ourselves to see something pretty simple that we weren’t looking at before.
Okay, so you can’t do any more cryptocurrency. No global finance. You know, I know, it’s sad. It’s sad, but... No, it’s all over.
Ross Kenyon: I was going to say, we really like Wendell Berry and I like him at least partially because he so bucks what you expect from both conservative and progressive voices that sometimes you’re like, Wendell is super conservative. He’s outflanked the left pretty hard on this other thing. I like that it’s so surprising.
Woody Tasch: Joel Salatin is like that in a very different way.
Ross Kenyon: Yeah, he’s like, yeah, sort of like mirror image of us.
Woody Tasch: But the interesting thing is they both, because they’re both looking at something through the perspective of, let’s say, soil, place, you know, Certain things, which if you really care about those things, you’re going to kind of break through a lot of the old boundaries in unexpected ways.
Ross Kenyon: Sure. And I feel like that part of me is missing. I moved around a lot as a kid. And then even as an adult, I’ve traveled and I don’t really have a deep set of roots. So reading Wendell Berry makes me mourn or like be nostalgic for something that never existed for me.
Woody Tasch: Well, it never really existed. That’s a great insight. Hey, for a kind of a fiduciary guy, you’re not so bad.
Ross Kenyon: Dude, I am really...
Woody Tasch: There’s hope for you.
Ross Kenyon: That’s not my background.
Woody Tasch: Wendell is a deep, I mean, what to say? I mean, you know, he’s inspired millions of us. It’s hard to say how much of his vision you could ever say really ever existed. We all know it should exist. Like Paul Williams is a little bit like a fairy tale. Well, not quite like that. What I mean is, so it’s a funny time to interview me because I’m working on a book right now. And so I’ve got all these, you know, every day I’m Kind of mucking through all this stuff. So yesterday, I wrote a sentence down where I listed a bunch of characteristics of Americans.
And actually, I’m not making this up. It came after a sentence. So I quoted Wendell, which I want to do. And he had a quote, something about the greatest earthly manifestation of imagination is local adaptation. I’m close, but I’m kind of butchering it. He said, if we all could Belong to the places where we live, then we maybe could finally be Native Americans. You know, it’s a pretty radical thing, makes you think about a lot of things. So I said the idea of belonging to a place, and this is really my response to you about things that never really existed.
Like Americans never really belonged to places very long as a culture, right? So if you list all the characteristics of Americans, and I just took a stab, I’m going to butcher it myself because I just did it yesterday. It was like immigration, Conquest, Extraction, Exploitation, Slavery, Trail of Tears.
Ross Kenyon: There’s some good stuff too.
Woody Tasch: No, no, no. This is good that you said that. I was just looking, I was kind of looking at the dark side to just say, why is it so hard for us sometimes? What are the things that really prevent us from getting to where we really want to get? There’s plenty of good stuff. You know, the Statue of Liberty and Founding Fathers on down. There’s lots of good stuff. Henry Ford. You know, I mean, it’s a lot of great stuff. But I was talking about the things that were impediments to us to breaking through.
Okay. And they really do have to do with like not belonging to a place, staying on the move, throwing shit out, frontier mentality, manifest destiny. Some of those things, a gold rush, I mean, those have, they have good and bad. They’re not, you know, slavery, can’t say anything good about that one. But a lot of them, some of them, like this urge to conquer new territory, entrepreneurship, competition, innovation, those have lots of good things and lots of bad things. So thank you for mentioning that. So I think it’s okay. I’ve never really said this or thought it this way about Wendell.
He evokes like a deep yearning for authenticity on these issues to like say we are destroying the land, you know, like face it. The economy is destroying the land. Now he says it way better than that, but that’s what he’s saying. People are not staying rooted in places and so the places are getting destroyed. Now, and then the question would be, how rooted were we ever to the places? The places we came from, all of us who came from European descent, I mean, look at Europe. You think places are better taken care of in Europe?
Did you watch the Tour de France and just see where the guys are riding their bikes through? Is there anything in the United States that looks like that? No. I don’t think there is. Why? Because way too long to get into, obviously, I just offer a few things. Those towns were developed before cars were invented. Right. The built environment was built before cars. Very basic. Look at our country. Probably 95% of it has been built after cars. Actually, I don’t know that number, but in terms of the built environment, buildings.
So everything’s in a grid connected by superhighways and stuff. So I don’t know. What the hell are we talking about? Wendell Berry? No, we’re talking about Wendell Berry. We’re talking about Wendell Berry. And to me, it is amazingly hopeful that... How will I say this without being too provocative? No, I’m just pulling your legs. That you guys are seeking to use the power of cryptocurrency and electronic finance and intermediation and all the tools of modern finance to do something which is aligned, that in your heart you’re aligned with Wendell Berry.
Have you ever interviewed Wendell, actually? It’d be interesting.
Ross Kenyon: Do you think you could help us out there?
Woody Tasch: Probably not. I mean, I can introduce you to his daughter and tell her what we’re doing and everything and you can take it from there.
Ross Kenyon: We would flip. We would love that.
Woody Tasch: He might do it. I mean, if you went to him and just sat with him for an hour and maybe it’d be awfully interesting. I’d love to listen to that conversation because he’s such a deep thinker. I just think it’d be fascinating. I don’t know if this is a topic he’s... I don’t know if the new world of finance is something he’s thought that much about. I don’t know.
Ross Kenyon: I don’t think so. No. And we’re also trying to make carbon removal commoditized and fungible with itself, none of which is unique or local to a particular place.
Woody Tasch: No. Well, it’s great. I mean, so those are the things that I’m intrigued about when I learned about what you guys were doing too, because... Look, everything I said should not be construed as saying my way or the highway or I only think... I’m just trying to do this with a bunch of people.
Ross Kenyon: Oh, sure.
Woody Tasch: And we have to use all the tools. We have to use every tool we can to get carbon out of the atmosphere and get it back into the soil.
Ross Kenyon: I think we’re both quite sympathetic with what you’re saying, too. I like being challenged by him, too, because I am sort of a rootless modern or maybe a rootless postmodern. Plus, you’re like a fiduciary, I think.
Christophe Jospe: All right, I’m cutting all this. This episode’s done, Woody. No, I want to go back to the flow of money because obviously that’s something you think a lot about. And one flow of money that has been going on for quite some time and causing effects that might be detrimental to the sequestration of carbon in the soils are agricultural subsidies. So you’re supposed to say, don’t get me started. I just got you started. But don’t those help farmers, Woody? Yeah. What do those actually mean? I can channel my inner Wendell here.
Woody Tasch: The interesting thing, I’m not going to bring it all the way back to Wendell, just to say, for a non-economist, he says a lot of really interesting stuff about economics. Now, a skeptic would say it’s because he’s not an economist that he’s able to say all those interesting things about economics, because he’s looking at it from an outside perspective, right? And somewhere, I’m flashing to some passage in one of his many wonderful books about that we never get to talk about who the beneficiaries are. He knows what I’m talking about.
I don’t even remember where it is. So you say farmers. It’s like, which farmers? Farmers aren’t one thing. So here’s a fun little kind of way to get at this. So I’m going to ask you two guys as a quiz. I’m going to embarrass you in front of all your listeners.
Unknown speaker: Or not. I don’t think you know that we actually like that.
Woody Tasch: A typical, oh, I’m going for it. The average industrial commodity grain farmer in the United States spends how much time a year on each acre of his land? Now, to answer that, you have to kind of come up with an average number of acres, obviously. So I’ll just help you out and say, what if it’s 5,000 acres? I’m just making a number up. So a 5,000 acre commodity farmer, how much time a year does that farmer spend on each acre?
Ross Kenyon: Thinking that if you only have to drive a planter and a combine over it, it’s like 30 minutes.
Woody Tasch: Damn.
Ross Kenyon: Yeah.
Woody Tasch: You know, for a... You are fairly intelligent. So that’s a really great guess. That’s one of the best guesses I’ve ever heard that. So 45 minutes.
Ross Kenyon: Oh, wow.
Woody Tasch: Okay. And very few people. In fact, you might be the first one that has ever answered that way who immediately went to and how is he on the land? He’s not walking it. He’s driving over it in an expensive piece of equipment. All right. Flash to Elliot Coleman on his several acres of farm in Maine. Elliot Coleman of Four Seasons Harvest fame, Feed the Soil, Not the Plant, in Deep Organics, etc. And when I quizzed him on that, he went, Woodman, how many hours are there in a year? So I spent 50% of them on each acre.
So I just wanted that to highlight a farm is not a thing. There’s like a whole different bunch of different kinds of farms. That’s the whole point. So when you’re dealing with industrial scale farming, which is where the subsidies are going, obviously, I don’t even have an opinion about that really. It’s a whole different system. You’re talking about large scale commodity agriculture. And what’s interesting about what you guys are doing is you are saying, okay, great, it exists. And we need to get carbon back in those fields, just like we need to encourage the next generation of Elliot Coleman’s.
It doesn’t take a rocket scientist to say, where would the impact be greater if you could get it? Meaning the gigatons of carbon and acres of land and everything, that’s where, you know, there’s whatever it is, I don’t know, 800 million acres of farmland in the United States or some number like that. So that troubles me. When I turn it back on myself, it is frustrating. I go, God, even if we’re wildly successful, we’re not even going to be a rounding error in terms of carbon sequestration. So for me, I think this is where our boundaries are as enterprises.
I’m not really trying to measure gigatons of carbon the way you guys are. Because it wouldn’t really mean anything. I’m trying to encourage reformulation of community relationships and the flow of capital for a whole bunch of reasons that include carbon sequestration. But to really get the macro change we need, we need people like you kind of working at the other scale. So I didn’t really... If you have a more specific question about subsidies, you can tell me.
Christophe Jospe: Well, let me ask it this way. What’s the difference between, if there is a difference, between agriculture and agribusiness? Oh, well, come on.
Woody Tasch: That’s a softball. I already answered that. That’s the difference between that mythical farmer and Elliot Coleman. Fair enough. Or the difference between Wendell Berry and... One of the Tysons or something. I would say it’s mostly scale. So if you look carefully at some of the data about what’s happened to agricultural enterprises over the last 100 years, and you flash to, let’s say, a barn that has 100,000 hens in it, either in cages or not. It’s still a barn that has 100,000 animals in it. Obviously, I’m alluding to a sub-sub topic on his cage-free reel and what that means.
But if you’re just looking at the scale of what it takes to manage a barn with 100,000 animals in it, and to keep those animals from getting sick, I’m obviously alluding to antibiotics. Even though, you know, in Netherlands, there seem to be proving... And there’s a lot of movement to try to get the antibiotics out of CAFOs, so I don’t want to take potshots at anyone. But I’m just saying the scale issue... Puts you behind the eight ball already. So if you’re producing a million eggs a week or something, that’s a very different thing than if you’ve got, you know, a couple of Joel Salton style mobile things out on 10 acres of land.
So that- Handmobile, is that what that’s called? I don’t know. I don’t know. Whatever I said, he, no, he is. Don’t quote me on anything. So yeah, I’d say most of it’s about scale, which of course ties into my concerns about capital too, because once it becomes big, it becomes abstract and it’s really hard to stay focused on innate value. Obviously it is the tiniest scale.
Ross Kenyon: One of the questions we get a lot, we haven’t done a proper episode on it. We know a guest that we’d like to do for it, but it’s never come up. It hasn’t happened yet. What can regular people do about climate change or slow money? It sounds like maybe one of the answers is be involved in your community, know your neighbors, help them first. I think also that’s just a general strategy for being happier and living in a better place.
Woody Tasch: Well, I know that’s the crazy thing. I work closely with a guy who runs Boulder County Farmers Markets. He’s very involved in our local efforts here. And actually, this would be my cue to just describe the 0% loan thing we’re doing just so we don’t lose that. But we get together pretty much every Friday, meaning later today. You know, we have a drink, talk about what we did this week, this and that. Like half the time we get to like after an hour we go, isn’t it amazing how much talking and working and things we have to do just to get people to do something which is actually fun?
It’s actually fun. When you actually get out of... I’m not going to say the word, that mindset, that other mindset, and make the time to get together with people that live near you and get to know the farms that are near you and say, you know what, we’re going to help them. I’m sorry, it sounds so goofy. It sounds so simple. So again, that’s not instead of other things we do with our money, like Nori and other things that we can come up with that are steering us in the right direction.
But it’s in addition to, and it is accessible. It’s something that everybody can do. Everybody can. I mean, you’re going to say everybody can participate in Nori too, and that is true. And that’s a different hurdle. In other words, they have to go through a kind of a purchase decision of something online. So that’s a thing. And you guys, I’m sure, are spending every waking minute figuring out how to make that easier and more accessible for people. And I’m doing it like the other end, which is how do I get someone to just walk out the door, come to a meeting?
You know, Oscar Wilde, I’ve used this quote a million times, but it keeps having purchase. So he said the whole problem with socialism is it requires too many evening meetings. And I always add that slow money is not socialism. It’s just highly sociable capitalism. And that has to be added, especially in today’s climate, political climate. So I don’t know if I answered your question. I mean, so let me just say the 0% thing just because it’s important for me to have that be shared. So a couple of years ago, we started doing something in Colorado, which was, again, very simple innovation in slow money, but we’re just trying to see what we can make work.
As Wendell said, the work isn’t done until the work is done. So we’re just trying this stuff. In order to get out of, so I’ll use the word fiduciary again, not to be a jerk. That just happens naturally. But that’s the right word. So in order to allow us as local residents to just put that stuff aside, we couldn’t get there when we were making 3% loans. We were still trying to do transaction costs and manage the portfolio and we just couldn’t get there. And because of the discussion I alluded to earlier about if you were just lending money to the people whose barn burned down, how much interest you would charge.
If you just put all that together, you come up with this idea. And now we are doing it in Boulder and in Carbondale. People are making donations starting at $250. Unless you’re an organic farmer, you can come in for $25. And the donations have ranged, leaving the farmers out, from $250 to $50,000. These are individual annual donations. Now, the $50,000, only one of them is coming in on a recurring basis. That’s pretty rare. But we’ve raised over $300,000 and we’ve started making 0% loans. We have 85 members, almost all in Boulder.
Now, how does that work? The word fiduciary is important because we live in the age of fiduciary capitalism. And you guys are operating, you guys are trying to be the world’s coolest fiduciaries. So it just means somebody who’s managing other people’s money in a regulated flow of capital. When you’re a fiduciary, you can’t bridge the gap between investing and philanthropy. But when you’re a local resident... You say, how do I put my money to work in a way that’s beneficial? So in this case, if you use a fiduciary mindset, you say this is negative return investing, right?
I mean, you’re already there. But for the people listening, just be clear, you’re putting the 0%, you’re donating the money in and you’re making 0% loans, you’re not going to get every single loan back. How poorly the portfolio performs, we’re going to learn over time. We’re obviously going to try not to lose too many. But if you lose any, and we know we’re going to lose some, you’re going to have a negative rate of return. But if you do it for a generation or two, this is very Wendell Berry-esque. If you do it for a long enough period of time, you will gradually grow a pool of capital that is dedicated to, and we call it soil because it stands for Slow Opportunities for Investing Locally.
And it’s to do all the things that we have. We’ve alluded to them during this conversation and we’re assuming I think people listening to this know all the multiple benefits that come from building soil fertility and ranging from climate change to human health and other ecological things. So to create a community controlled funding stream. That could grow very slowly over a long period of time. Despite the negative return, if you have new member donations coming in every year, it will very gradually grow. So we’re doing that. We’ve got a couple of them.
They seem pretty cool. Everyone likes it. And literally, in the office we’re sitting in, we have our first ever full-time paid local slow money staff person in the United States happens to be working in this room. Because we’re doing it as a nonprofit, we’re not thinking about transaction costs. We’re thinking, okay, we have enough money. Let’s hire a staff person. We’re thinking very long term, not about any one transaction. So we’re able to make an investment decision like that. So stay tuned. I hope if we do another talk like five years from now, there’ll be a whole bunch of these soil things around the US.
And by the way, nothing would make me happier than if there was a very high conversion rate for people in soil to participating with what you guys are doing.
Ross Kenyon: Well, thanks, Woody. Is there someplace people can go to learn more about your way of thinking and your work, maybe your books?
Woody Tasch: I was going to say, really? You’d want to after all this stuff? So yeah, so I’ve got two books. The first one was Inquiries into the Nature of Slow Money, the subtitles Investing as a Food, Farms, and Fertility Mattered.
Ross Kenyon: Would you like an Adam Smith reference?
Woody Tasch: Man, you’re on it. I’m glad I don’t have to deal with you every day. It’d be very annoying. So yeah, the Inquiries into... I mean, that was a reference to The Origins and Wealth of Nation, which is Adam Smith. And then the subtitle is a reference to E. F. Schumacher. So I was... Trying to weave those things together, even in the title, and you’re the only person who’s ever said that. I’m not kidding. You’re the only person who’s ever noted that. Well, I don’t know if you knew the E. F.
Schumacher part. You knew the Adam Smith part.
Ross Kenyon: I don’t know his work as well.
Woody Tasch: Oh, okay. So the subtitle of E. F. Schumacher’s seminal works, Small is Beautiful, is Economics as if People Mattered. Okay. And so anybody who’s kind of my age and was influenced at the formative age, kind of, a lot of people have written books and said something as if something mattered, and it’s all because of E. F. Schumacher. Okay. So that was my first book. The second one came out a couple years ago, and it’s called Soil, Notes Towards the Theory and Practice of Nurture Capital. They’re both available through Slow Money Institute, which is our little nonprofit.
All the money goes into the NGO to support this work. I’m working on a third one that I hope will keep the conversation going forward. So yeah, slowmoney.org is our website. There’s a tab on there. It has all the local groups around the country, what they’re doing. And if you go through there, you’ll see Colorado listed. You can click on the Colorado groups, and you’ll see a bunch of stuff on the soil model. There’s a couple little videos. There’s more than enough to give people an idea. And as I said, I’m cautiously optimistic that little simple tweak of things of donations and 0% loans will help us replicate maybe more in the second decade even though we did in the first.
Ross Kenyon: Do you have anything left you want to say? You’re going to hold your tongue?
Unknown speaker: I’ll hold my tongue. This is fun.
Christophe Jospe: Don’t hold your tongue. Well, no, we’re going to just keep hanging out with you. I’m definitely not going to hold your tongue. That’s out of the question. Just enough so you like us and don’t get super annoyed by us. But let’s say someone’s listening in a part of a country, the country where there is no slow money chapter. Can they start their own?
Woody Tasch: In one of those few neighborhoods in the United States where there is no slow money. Yeah. Well, again, no magic. This is a little bit why we came up with the soil model. We’re trying to just create just a tiny bit of structure so that we can replicate better and build capacity and whatnot. But right now, we’re just a network. It’s a movement. It’s a small movement. So for there to be slow money in a community just requires one or two people in that community to kind of get excited and be willing to host some meetings.
It is a... It’s a thing. It doesn’t just happen. We’ve been blessed. We have a few dozen really good local leaders that have just self-organized in a bunch of communities. People could send an email to info at slowmoney.org and say, I’d like to find out. Then we do respond. Once in a while, it leads to enduring change at the local level.
Ross Kenyon: Woody, thank you so much for being here with us. It was a lot of fun.
Woody Tasch: Yeah, I really enjoyed it. And we didn’t really talk about you guys at all, which for me, I mean, I did my best to answer your questions and tell the story of Salamone, but I’m extremely intrigued by what you guys are doing. And being a little bit of a Luddite and being of a certain generation, it’s a little hard for me to totally get it. And that’s my learning curve thing. But I definitely want to stay in the loop and kind of be a fellow traveler any way I can.
Ross Kenyon: Well, thanks. That’s very nice of you to say. And I’m sure we’ll stick around here and tell you more. If you like the show, please rate and review it in iTunes or Apple Podcasts. Thanks so much for listening. Tell your friends, share it on social media, blah, blah, blah. You know the drill.
Christophe Jospe: Yeah. If it’s your first time, please subscribe. We try to have fun on this and ask the tough questions and make fun of ourselves or all sorts of malapropisms.
Woody Tasch: And everybody they talk to isn’t as old as I am.
Unknown speaker: This is true. All right. See you next time.
