The Community Wealth Building Network of Metro Denver (CWB) is a burgeoning network comprising individuals and organizations with a shared vision to change the economic paradigm in Metro Denver by focusing on building wealth in economically marginalized communities.
The CWB Network got its start following a community wealth building conference held at the Anschutz Medical Campus in fall 2014. That convening successfully engaged residents from low-income communities as well as thought leaders and pioneers in the impact investment space. The Network received funding in January 2017 from The Denver Foundation and the Piton Foundation at Gary Community Investments to hire its first paid staff person. With Re:Vision as fiscal sponsor, in the coming year the Network will be building relationships and gaining a deeper understanding of the landscape related to community wealth building efforts, leading to the development of a comprehensive plan to support accelerating success for community wealth building efforts. We anticipate that a supported Network could play a role in building bridges between investors and individuals and communities needing investment capital.
Community Wealth-Building Strategies
A variety of strategies are employed to achieve community wealth building goals. Some local examples include:
- Launching worker co-operatives where businesses are owned by the workers who democratically run the business, share in the profits, and have an ownership stake in the business (e.g., Green Taxi, the Community Language Cooperative, and Namaste Solar);
- Running consumer co-ops (e.g., the Westwood Food Co-operative) where members receive dividends based on patronage of the co-op;
- Converting locally owned single proprietor businesses into worker-owned businesses when the owner decides to sell their business (e.g., Rocky Mountain Employee Ownership Center);
- Supporting social enterprises committed to hiring people with barriers to employment (e.g., Prodigy Coffeehouse and Mile High Workshop);
- Partnering with anchor institutions that commit to active engagement with surrounding neighborhoods to create stronger local economies through their hiring and procurement strategies (e.g., Community Campus Partnership at Anschutz Medical Campus);
- Providing loans and technical assistance to help low-income entrepreneurs start businesses (e.g., Community Enterprise Development Services, Rocky Mountain Microfinance Institute, Colorado Enterprise Fund).
There is a clear link between impact investing and this work — affordable capital being a linchpin for launching new co-ops, starting small businesses, and supporting conversions of sole-proprietor businesses to employee-owned. While the connection seems obvious, early indications are that the capital needed (typically in the $10,000-$200,000 realm) at a feasible price point (a 2-5% interest rate) isn’t a sweet spot for many in the impact investment world. That said, there are some exceptions and we are hopeful to keep learning and figuring out how to best engage with investors who are excited by the personal and societal benefits of democ-ratizing business ownership opportunities.
Two fresh examples of community wealth building projects that need capital:
- The Community Language Cooperative in Westwood is a worker cooperative that just celebrated its three-year anniversary. CLC provides translation and simultaneous interpretation services in any language. Founded by a small group of Latinas who used to volunteer their translation services, they are now a professional company that is expanding to include training interpreters in rural parts of the state, as well as designing and implementing community engagement strategies for nonprofit and government clients. CLC needs a $10,000 cushion to manage cash flow but they are not able to get a line-of-credit from a bank. A $10,000 loan with a 3% interest rate would make a considerable difference, as would technical assistance and coaching that would help CLC bill and collect on-time payments from customers.
- Rocky Mountain Farmers Union Urban Cooperative Development Center is creating a home care worker cooperative, with an anticipated launch in the first quarter of 2018. Preliminary estimates indicate that the business will require $200,000 in start-up capital. Modeling itself on the Cooperative Home Care Associates in the Bronx, which started with 12 home care aides in 1985 and now has a staff of 2,000, this local effort will improve wages and working conditions for its home care providers, as well as meet a growing demand for high-quality home care services. The intention is to secure grants and low-interest loans to launch this worker co-op.
With Rocky Mountain Employee Ownership Center’s success in introducing more business owners to the idea of selling their business to their employees, more nonprofits launching social enterprises, and Rocky Mountain Farmers Union Urban Cooperative Development Center’s organizing efforts in the home care and child care industries, we anticipate a growing need for low-cost capital over the next two to five years.
These are up-close and personal engagement opportunities that are not typically found in a social impact investment fund. In addition to low-cost capital, deeper engagement would also be invaluable. For example, some of these social enterprises need assistance figuring out how to structure a capital stack. They also need help tapping into professional networks to help find industry-specific expertise (e.g., home health executives) as well as introductions to potential customers and quality vendors.
The Denver Foundation’s Impact Investment Committee and The Beanstalk Foundation are examples of two impact investors that are wading into the deep end, figuring out ways to creatively engage at this level. Are there other impact investors with an appetite for this kind of close-to-home and close-to-the-ground work? We need a better understanding of the barriers for investors to engage at this level. We see an opportunity to work together to figure out ways to make capital more accessible and affordable to communities that are building their economic muscle.
The Community Wealth Building Network of Metro Denver educates and builds capacity for economic strategies that lift whole communities in Denver.
Michelle Sturm has over 25 years of experience working in the nonprofit and foundation arena. She launched her consulting practice after 10 years as a program officer with the Anschutz Family Foundation, which in turn followed a variety of positions in nonprofit organizations Since 2014, Michelle has felt very lucky to work with organizations and individuals in Denver to manifest a community wealth building movement.