What Is Slow Money?

An interview with Woody Tasch
by Jeff Severns Guntzel
Web Exclusive, March 2010
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The Slow Food movement revolutionized the way many people think about food with its mantra: “good, clean, and fair.” Entrepreneur Woody Tasch wants to introduce the Slow Food ethos into the world of finance. In his book, Slow Money (Chelsea Green, 2009), Tasch writes: “Be forewarned: slow money is no ‘ism.’” He is organizing for change. What does that change look like? It’s right there on the homepage of his non-governmental organization, the Slow Money Alliance: “A million Americans investing 1% of their assets in local food systems.” The Slow Money philosophy is gaining momentum, and was given some attention recently from the document of record for the fast money crowd: the Wall Street Journal. I spoke with Tasch about the effort and its genesis.

Jeff Severns Guntzel: Do you find the argument easier to make now?

Woody Tasch: Oh, absolutely. When you say the words “slow money.” It’s very intuitively obvious to the vast majority of people. I just say, “Before we start talking about slow money, just think about fast money for a second.” It’s obvious to a lot more people now than it was a year or two ago. There’s this idea of money that’s zooming around too fast to manage.

Severns Guntzel: When you were writing this book, whose hands did you imagine ending up in?

Tasch: It wasn’t like written for a specific audience. It was written for the investor part of all of us.

Severns Guntzel: Can you talk a little bit about your background? I have a little bit of a sense from the bio but how far back does your work with money go?

Tasch: I think it all goes back to Small is Beautiful, which left a kind of intellectual legacy. When Small is Beautiful was written in the ‘70’s by E. F. Schumacher, he was a Rhodes Scholar and senior economist for the British Coal Board. He was a very experienced industrial economist at a very high level. And then he had his late, late life epiphany about the collision course between economic growth and the environment—Western civilization and the kind of consumerism it was promoting. That book made a huge impact on me on the 1970s. I’d just gotten out of college and it was very clear to me that the book had all the wisdom we ever needed. We just had to figure out how to put it into practice.

Severns Guntzel: When you discovered that book, were you searching for that kind of thing or were you headed down a very different path?

Tasch: I did really feel like Schumacher’s book was the direction, but I noticed a lack of a road map and wondered about how we were going to take those values into the business community—recognizing that this is about reshaping the economy. We had to have a different vision for business. I determined that I wanted to get involved in some way in trying to fix the problem. This is about a cultural transformation—it’s about something much broader than finance.

I’m daring to say that finance is too important to leave to the financiers. We need a more humanistic view, a context within which finance must function if we’re all going to survive.

Severns Guntzel: You've been busy on the lecture circuit since the book came out. When you make this argument, do you encounter resistance in your audiences?

Tasch: Oh, you mean when somebody isn’t just going, “right on, where do I sign up?”

Severns Guntzel: Right, exactly.

Tasch: There is the elitism question, which kind of haunts the slow food and organic movements. People are kind of saying, “What kind of social change is this if it’s dominated by a bunch of rich white people who are eating in fancy restaurants?”

Severns Guntzel: How do you respond to that?

Tasch: We’re going through a major transformation of the food system. We have a system where all of the true costs—toxins, soil erosion, etc.—have been externalized to achieve cheap, stable food. We are now moving to a system in which those costs are going to be fully recognized. And guess what? It’s going to be a very uneven transition. It doesn’t bother me that the early adopters in the transition are the people who are able to absorb those costs and pay closer to the true cost of producing good food.

That does not mean that is the end of the movement or that they are the, the only beneficiaries we're interested in. The goal here is to get good, fair, and clean food to the entire population. Getting these issues off of white tablecloths and into the general population is very important thing. I'm very confident it is going to happen over time. I see it like a historical issue. The thing is going to take and it's going to ripple out into the culture as a whole. But you've got to start somewhere.

Severns Guntzel: What other threads of resistance are there?

Tasch: The other one is coming from the investor side of the equation where someone will say, “You really think you can change the attitude of the investor like that? Buy low, sell high is what we’re taught. Efficient markets is what we’re taught. How are you ever going to accomplish that?” If you feel comfortable with all your money going to smockstacks in China—which is kinda my shorthand for traditional markets—if you think that's the best path for the future you just keep all of your money where it is right now. I'm not gonna try to convince you. But if you think that's risky or that it's unsustainable, then you're gonna wanna take a few percent of your assets and start investing it close to where you live. I don't think that's radical. I think that's common sense—it's practical. We just don't have the structures set up to make it easy for people to do it yet. And with the Slow Money Alliance, we're trying to be catalytic in that process.

Severns Guntzel: Tell me about the genesis of the Slow Money Alliance.

Tasch: We started in January 2008 and it took all of that year for me to have even a glimmer of what to do. I talked to a lot of people and I sat around thinking about what would a fund look like. There was an assumption at the beginning that it would be a $50 to $100 million dollar fund and that we would raise money from major investors and foundations and whatnot. Then we would demonstrate slow money through a low return portfolio of investments in small food enterprises around the country. It was really a good thing we didn't do that.

Severns Guntzel: Why?

Tasch: Because now we have this thing sprouting up all over that place. I'm in Austin today and I just met with five people who are hosting fifty people tomorrow night to talk about what slow money would look like in this city. I've got a similar thing in San Diego next week. We've got founding members in Philadelphia, Cambridge, Vermont and Madison, Wisconsin—all talking about creating slow money funds in their regions.

Instead of going towards one fund we created a tent under which hundreds of people could raise money. We have over 125 founding members—people who put in a thousand dollars or more—many of whom are very experienced feeder philanthropists or investors or entrepreneurs who are all eager to see how this works.

They recognize it as a movement. We're trying to get lots of people all over the country moving towards this. If you think about all the social and environmental issues here, the only way change is going to happen at a scale that could make a difference would be for tens of thousands or hundreds of thousands or millions of investors to start moving towards this—not just a few funds. We have to act right now.

Severns Guntzel: Was there a moment when it became clear that this should be a grassroots thing rather than a sort of fund manager model?

Tasch: There were a few “a-ha!” moments. So what does a fund manager do? First you have to go get the money. You coax the money out from pockets of extreme affluence. I'm talking about the venture capital model here. So if you were going to raise $100 million you might get it from 10 or 12 investors. Then you say no to ninety-nine out of a hundred people who come to you for money. You're maybe working with 15 or 20 companies over a period of five years. It’s the opposite of building a movement. But it wasn't until we started talking to people in these workshops that this became clear.

So at the workshop in California and a venture capitalist stood up and said, “Woody, I totally disagree with you. You’ve been talking about how you’re not going to make too much money doing this. You’re going to make tons of money! This is a huge sea change in the food system of the United States. It’s the kind of change that venture capitalists lay awake at night waiting for because there’s going to be a huge wave of innovation. You can make mistakes and the wave will carry them forward. There are going to be all kinds of great companies and good venture capitalists are going to make tons of money.”

Severns Guntzel: What was your response?

Tasch: I said to him, “Even if you were right and somehow despite ourselves we made a lot of money, we can’t take it off the table. It’s got to be reinvested for the benefit of future generations. That’s the old extractive model and we’re about putting back what we take out.”

Then there was a wave of applause through the audience and I realized, wow, we really are stepping away from venture capital towards this idea of nurture capital. And even though we don’t have a fully articulated alternative model yet, we know what the principles are. And one of those principles is we don’t want to extract money for the benefit of current beneficiaries in a way that reduces the opportunity for future generations. In the food system this is like talking about soil fertility. There’s a literal thing that you’re putting back when you take out. Industrial agriculture is modeled on the opposite premise—extract, extract and extract and pour chemicals on it.

Severns Guntzel: So what are the first experiments of the Slow Money Alliance?

Tasch: The experiment is the organization. We had our first national gathering in the middle of September 2009 in Santé Fe. We had 450 people from 34 states and 6 countries there. And that meeting was organized on very short notice for a gathering of its kind—just 100 days. That’s the first part of the experiment—building social and intellectual capital. It’s stating what our beliefs are. Beginning to organize around those beliefs in the communities where we live. We’re spending a lot of time organizing and collaborating on a regional and national level before the money starts to flow.

Severns Guntzel: When the money does begin to flow where does it go first?

Tasch: It’s everything from small and mid-sized organic farms to local food processing to slow food restaurants—restaurants that serve local and organic food. And it's organic brands. That covers a lot of territory but there is also the question of farms running on a community supported agriculture model and farmer’s markets. Traditionally these wouldn’t be thought of as investment opportunities but when you’re thinking about building local food systems you’re going to want to see them expand dramatically.

We hope we’re going to be able to get money from two sources. One is top down, meaning some of those very same types of donors and investors that we might have gone to for traditional venture fund, but the big play now is to get a very large number of small donors.

We just launched our Slow Money Principles. Our goal is to get one million signatures by the end of 2011 as a first step towards a million investors investing 1% of their assets in local food systems within a decade.

Want to know more? Woody Tasch may be coming to a town near you. 


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