Finance Innovation Relevant to the Regenerative Space

Finance Innovation Relevant to the Regenerative Space

cover image – grow by iconix user from the Noun Project

After ten years of volunteer research and development across the world in local grassroots community networks, Bloom Network is looking for start up capital for the first time, to set up a distributed cooperative. This will look basically like a media company that is rooted in localized actions and leadership.

Through the process of talking with finance professionals and adjacent network leaders, I’ve come across tools to share more widely. Many of the people I’m talking with do not know each other yet, yet are all asking similar questions and have symbiotic solutions. I’m thinking on how best to connect you with each other! In the meantime, here are some findings:

What problems have we found that require finance innovation?


Regenerative enterprises – whether they are for-profit, nonprofit, or grassroots non-monetized community projects – have some common challenges and unique ways of working that require novel financial structures. For example, these projects work best in collaboration, at a level that is more comprehensive than a normal transactional B2B relationship.

Staff sharing is one thing that will help this (administrative tools that support that are listed below). There is also clearly a “network weaver” role that is entirely being done by unpaid labor right now around the world, with thousands of people acting as bridges between different communities and networks to help people access the tools and resources they need, and to strengthen solidarity across movements who are working toward aligned goals. We’re also finding a need for novel IP agreements, international cooperative structures, and startup or capacity mentorship that is specific to regenerative development and regenerative entrepreneurs. They often are not the kind of people who would go get a traditional MBA, and even social impact entrepreneurship communities and accelerators are not quite the right fit for these projects. Finally, connecting regenerative projects that are operating primarily in a grassroots environment, with the major financial players who want to contribute to climate change solutions, is a cultural, communications, and structural barrier we’re working to address, in collaboration with leaders from the UN and large corporations.

Here are some of the movements, tools and processes we’ve encountered that can support regenerative enterprises. Some are working now, and some are at an early stage of development and ready for experimental use:

 Slow Money is an investment community of practice, building local food systems as a lever to address climate change, health, and community. Here are a couple of tools investors from Slow Money have built, to support local community investing:

  • Credibles – open a pre-paid tab with a local business to give them up front capital
  • Investibule – community based investing

Slow Money also practices a type of revenue sharing where the investor receives a 2-3x return and no equity. Ownership remains in the community, not in the hands of those with outsized financial power. Repayment is based on a percentage of revenue, so repayments grow along with the business’s growth.

DisCO – distributed cooperative organizations. Their manifesto is long but an engaging read! DisCO tracks labor contributions not just on paid contracts, but also on “care work” for the collective members’ well-being, and on pro-bono work they agree they should do. Collective members are then paid for all those kinds of labor from the paid contracts.

I’m convinced that distributed cooperatives are going to be a key underlying financial and legal infrastructure for the regenerative movement. They will allow us to pool services, federate member dues, and tap into large-scale funding sources such as government grants without each tiny project having to do a boatload of administrative overhead.

Analysis, Research & Reporting

On the topic of philanthropy, Global Green Grants Fund has a good approach to distributing funds in a decentralized way where decision making is in the hands of the communities. To get there, they have processes for building trust between the funders, program managers, and communities.

The need for living systems-oriented business models:

One thing we’ve found at Bloom Network is that regenerative projects are often necessarily more complex than a single service or product, and they often require more complex financial models. These projects are designed to address systemic dysfunction and care for the commons in ways that colonization and the evolution of the entire legal and finance structure of the U.S. and dominant world economy are designed to erode away. Leaders of these projects often have not gone through the industrialized education system, and they often do not have network connections to people or institutions who have capital. Communicators who can bridge that gap are needed in this space. Regenerosity by Buckminster Fuller Institute and Lush Cosmetics is at the forefront of this bridge.

Here is an example of a simple product business done in a way that supports local decentralized production and regenerative systems education:

Todd Anderson is a software developer and maker who has invented a new surf fin shape that gives surfers higher lift in the water (I don’t know enough about surfing to explain what effect that has or what kinds of surf it’s good for, but it’s exciting to people). He has also made his design into a file that can be 3D printed. He would like to share this file and teach “third world” surfing communities to use 3D printers, so that they can receive an income stream from people purchasing the fins they print, and so they can use the 3D printer to generate income streams from printing other products (localized manufacturing).

In order to make this economically viable for him, he would need to invent or find an IP solution where his digital design’s usage can be trackable, so that every time it’s printed and sold, he can receive a small portion of the sale price. I believe a solution to this exists already on Ethereum but I’ve just started asking around to find what teams are working on it. Todd wants to do his project through Bloom Network because he sees it as an opportunity to a) have more distribution reach than he would on his own, and b) facilitate communities to not only learn about 3D printing, but also about food sovereignty practices they can do, or any of the stuff you’d find on Bloom’s wiki.

On-site crowdfunding: One of the things we’ve been eyeing as we bring in financial capacity for Bloom Network to hire our current volunteer team, is tools that support crowdfunding and crowdequity raising directly on our website. So that members logged into Bloom Network can easily surf projects, find ones in their passion area or local community, and financially support. I’d love to see the internet shift toward having these tools as plug-ins rather than having to go to a site like Kickstarter, so that people can stay in a values-aligned webspace. With the decentralized web, I believe it’s possible to have peer-to-peer tools for this, where projects do not pay a 3-9% platform fee plus payment processing fees. Imagine: you visit Bloom Network’s website and see the “regenerative actions ticker” display a company in France who has converted an underground parking garage into a mushroom farm, and you have the option to support them with crowdequity investing so they can make more mushroom farms as car ownership declines with the uptick in remote work and the advent of self-driving shuttles. You make money, the world has more mushrooms, there are less steps and friction for you to do this.

(I only became a business person because mushrooms made me do it.)

Other finance innovation tools:

  • https://twitter.com/patio11/status/1230142988845629440?s=19 – A way for accredited investors to do small angel investments and reduce the amount of paperwork and legal expense involved for the entrepreneur and investor
  • Landscape regeneration teams are developing ways to work with bonds for funding large-scale regenerative projects.
  • A team at CrowdDoing is working on forest fire prevention derivatives to build financial incentives for risk reduction, in collaboration with insurance companies. Here are details on what they’re putting together.
  • Regenerative events ticketing model: Transparent costs and a pay-what-you-can structure. Our friends at Terran Collective in the Bay Area, California produced an event last year at the Mushroom Farm, a regenerative farm and events center, where they modeled a successful pay what you can event. They listed a recommended contribution amount, a minimum, and gave people links to their accounting spreadsheets. They came up short as the event started, but at the end told everyone that and requested more contributions from people who could. They met costs and beyond, and further allowed all attendees to allocate profits to a set of causes participants proposed that were in alignment with building regenerativity in the Bay Area. Terran Collective has a core group that practices pooled income so members have their needs met – they go deep with that, you can read more about it here.

Blockchain:

Aragon is a company that sponsored Bloom’s Governance Hackathon at Pollination 2019 (our regenerative futures conference). They have some incredible and futuristic tools. Aragon is the world’s first digital jurisdiction. Groups can start digital organizations in literally two minutes, and when disputes arise (like a contract dispute such as work not delivered), they can be settled through an online peer juror system. There is lots of software building going on in the space of digital organizations, to achieve more egalitarian financial participation, fast and cheap exchange across international borders, and highly sophisticated governance. RadicalxChange and DGov Foundation are two more good project hubs.

  • Aragon has a decentralized project management suite, for organizations to collaborate on projects across their different entities/teams. This will make the backend administrative process of regenerative business networks and cooperatives easier, among those that are ok with their finances moving through digital currencies. (Bloom Network will be hosting a year-long educational series on decentralized web and finance tools starting in June 2019.)
  • Aragon’s fundraising app (members of a community can propose a project, and people can contribute funds to a pool that issues a monthly payout to the working team on that project. People can withdraw their funds if the team is not delivering or has gone astray values-wise, etc.
  • That fundraising app uses something called a bonding curve which lots of blockchain people are excited about. Here’s an article that explains bonding curves. (Readability note: I am two years into lazily starting to learn about blockchain technologies and I only now read this as language that doesn’t just sound like it’s from another planet.) Thibauld Favre’s Continuous Organizations model also use bonding curves.
  • Aragon’s also developing liquid democracy and futarchy tools – much needed advances to the 17th century technology we’re using to run today’s global governments (facepalm). If you want to nerd on this, read up on what Taiwan is doing with digital democracy tools.
  • Bounties are another tool that helps distributed communities get work done together

Alternative Ways of Accounting for Labor and Value Contributed

  • 8 Forms of Capital, – I have a hunch that when we set up Bloom’s cooperative, it will be native to the blockchain on Aragon, and use some kind of digital token to track and reward contributions, payable in a more exchangeable cryptocurrency as money comes in to the network. We’ve been asking ourselves how we might allow people to buy into the cooperative with other forms of capital than financial. In addition to the 8 forms of capital we would add creative, and one other which we don’t yet have a name for! This seems bonkers complicated to me right now but I think there’s a there there. For now we’ll just gift memberships to people and orgs that really couldn’t even afford $5/mo so that we can keep the decision making and leadership power dynamics balanced.
  • Commons Stack is making a token engineering components library to align healthy incentives around using and developing public goods:

Financial Interventions Suggested by the Global Regeneration CoLab

  • Policy to require insurance companies to put X% of insurance premiums into regenerative risk reduction actions
  • Proper cost accounting of human and environmental costs that are externalized in extractive economy
  • Economies built on interconnection with watersheds
  • Quantitative easing
  • Regional regeneration bond market creation
  • Low to no interest loans
  • Measure success in regional gross regenerative product
  • ROI incorporating regeneration
  • Policy to shift government spend toward regenerative projects

Contributions to this article are welcome! Also, if you have a question about finance structure, or services or features you would find helpful to support your work, please reach out. Contact me here.

With love,

Magenta
ECO, Bloom Network


Peer-to-Peer Currency 101

An entry level overview of Bitcoin, the blockchain, and the various applications and potentials of peer-to-peer technologies.
Featuring John Light on the Bloom Podcast (Bloom was previously Evolver Network).



Rocket Stoves

Rocket Stoves

What Are They?

A rocket stove is an efficient, hot burning stove that uses an insulated vertical chimney and can run on small branches.

Why Make One?

They use less fuel and create less emissions. It’s possible to make one yourself, and they can be used for a variety of situations, from heating a home, as a hot water heater, or for cooking.

How to Make a Rocket Stove:

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Regenerative Movements

List in progress! Is there a movement you’d like to see listed here? Contact us here.

Our intention with Bloom Network is not to circumscribe people into one movement or into our “brand”, but to help people find regenerative spectrum activities and groups they can participate in and contribute to, and to boost the visibility of initiatives that are doing wonderful work for all of our well-being on this planet <3.

Economy

New Economy Coalition

Ujima Project

Climate

Generation NOW

Global Climate Strike

Extinction Rebellion

Food

Slow Food

Clothing

Fibershed

Justice

Restorative justice

Indigenous Sovereignty

Amazon-specific:
Rainforest Trust
Amazon Watch
The Guardians of the Forest

Regenerative Culture Examples

TLDR; It’s about nurturing and creativity, + circular systems that build life, as opposed to extractive ones that create sickness and inequality.

Holistic

Creative Arts

P2P Economy

Global Justice

Community Health

Earth Stewardship

Sustainable Technology:

Collective Wisdom

Regenerative Building and Natural Building

It’s not yet widely known that the construction industry is a huge source of pollution and waste. Additionally, chemical sensitivities are increasingly common. Many of the fibers and materials people use in business buildings and homes offgas chemicals. The transport and packaging of these materials also creates a lot of waste.

“According to new research by construction blog Bimhow, the construction sector currently contributes 23% of air pollution, 50% of the climate change causing waste products, 40% of drinking water pollution, and 50% of landfill wastes. In separate research by the U.S. Green Building Council, the construction industry accounts for 40% of worldwide energy usage, not including ongoing energy use.” (via The Abundant Edge)

Natural building methods and regenerative building reference traditional building techniques used in place-specific cultures. Cobb building, hempcrete, and bamboo construction are three examples of this. Mycelium-based insulation from mushrooms is another example. Whatever building materials are used, it is also possible to design buildings that are net zero and net positive in terms of energy useage.

This wiki article is an index of techniques and resources for further information, as well as organizations that focus on this space.

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