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Changing Capital: Emerging ChangeMakers Network

By Sarah Trent

This is the second in a three-part series featuring Local Economy Fellow Jessica Norwood. Below is a mini case study of her Emerging Changemakers Network, the leadership, capital, and policy organization she founded after Hurricane Katrina. In part one, learn about Jessica’s journey to Localism and her passion for changing how capital works to support communities. The third installment features four strategies ECN is implementing to change how capital works for under resourced communities in the Black Belt. April 16 at noon (PT), meet Jessica along with Senior Fellow Angie Hawk Maiden and BALLE Board Chair Sandy Wiggins in our webinar, Building an Ecosystem for Place-Based Investing.

When Jessica Norwood founded Emerging ChangeMakers Network nine years ago, it was in response to a need for a holistic leadership approach in the aftermath of Hurricane Katrina.

The storm, she says, displaced people who cared deeply about their place – citizens, activists, people in academia – and left a void that was filled by corporations and private companies deploying their own ideas for rebuilding, often on “emergency contracts” that required no oversight. “It was a perfect storm of private companies coming in and being able to exploit a community because of a disaster,” she says.

As part of her own early work in the recovery, she was asked to prepare a report for the Ford Foundation, which included research into the leadership capacity of organizations on the ground and whether they were able or prepared to engage in policy work: “We know that policy interventions are a way to scale and make systemic change,” she explains.

In that report, she proposed the question of how to identify “Miss Mary”: a valued community member who falls outside the purview of a traditional organization but is nonetheless an integral part of the fabric of a community. And further, she asked, “How do you identify them before they become Miss Mary?”

The “farm team” approach she developed – identifying emerging leaders and fostering in them an understanding of social justice and structural inequity before they got to the major leagues – became the basis for her Emerging ChangeMakers Network, which began in 2005 and was founded in earnest with a formal organizational structure in 2007.

But it wasn’t having the systemic impact she hoped for. “We could develop leaders all day long,” she says, but she knew something was missing – that there was something beyond policy intervention that could influence systemic inequity.

“My network membership at that point was getting older, more established,” she says, “and they didn’t have the same kind of time to volunteer like they used to. But they had a little more disposable income to work with. Not a lot, but some. And I started thinking, how can I make their money make a difference in the community? It just started to make sense, and as I talked more about it, really quite innocently, people started saying yeah, I agree, let’s flesh that out more.”

And so Jessica and Emerging ChangeMakers Network starting learning about, developing processes, and building the infrastructure to create a community capital strategy.

Today, in addition to continuing their work in leadership development, Emerging ChangeMakers runs a local investment club that aggregates small amounts of capital from members of a community and invests in triple-bottom-line local businesses. Food businesses have been their focus for the last few years – it was an industry with enough depth and diversity to explore what worked and didn’t as they learned about community capital, lending, and entrepreneurial support – but they plan to expand to other sectors soon.

From their 2014 annual report: “The model harvests ideas and ventures based on local assets, connects entrepreneurs, investors, philanthropists, and other stakeholders in order to build the flow of capital to local businesses… that economically contribute to the community, that offer livable wages to employees or ownership opportunities to the borrower, and are environmentally friendly.”

Influences & Models

With a background in campaigns and elections, Jessica had a lot to learn about community capital. She talked a lot about her ideas, and learned from mentors including Marjorie Kelly of the Democracy Collaborative and Robert Dickerson of the National Community Reinvestment Coalition. “I got all these amazing things out of this process of just sitting and listening to people who cared, who were brilliant, and wanted to just share stuff with me,” Jessica says. “Maybe it was great I could come in green, because I could ask a lot of crazy questions about things that a lot of people accept as true and I was maybe too foolish to know to accept.”

Jessica also extensively studied other capital models around the country and world to glean ideas. Her thinking and design is influenced by a long list of other models, including:

Slow Money: “Slow Money takes individuals and aggregates their dollars into investment clubs. They are intentional in how they place their money, and have unique systems and ways of networking together to do that… I think it’s really important to work through a group, it teaches everybody a lot about communal resources, and I’m a fan of that kind of model.”

Calvert Foundation: “Their Community Notes program is an online vehicle that provides really positive returns for folks and they’re rolling out an initiative right now, Ours to Own, where folks in Denver can put $20 forward, help support local businesses in the Denver area, and get a return back… I like the simplicity of what Calvert has done and their track record is impeccable.”

CDFIs: “Banks have built a very solid relationship CDFIs. Because of banks’ charters and other underwriting criteria, they can’t make the kind of loans that we’re necessarily talking about, and so they loan to the CDFI and the CDFI re-loans that out. And they have some pretty good underwriting criteria that I’ve looked at for what our criteria would be like for our initiatives.”

Savings and Burial & Loan Clubs: “I’ve also gone back and looked at things you wouldn’t imagine, like the way immigrant communities save money together and how that is very much culturally related to how they’ve been able to pull a lot of people forward. And burial and loan clubs, that we’ve had in African American communities for forever: everyone would put money in for rainy day fund or burial fund and then they would be able to take care of each other.”

Grameen Bank: “I looked at the Grameen model in Bangladesh, and what they were able to do with small amounts of money, this microfinance. And also the ownership that each entrepreneur had and how relationships helped the bank have a 98 percent return rate.”

In all of this research, Jessica was looking for “what happened when we used to save money together, what the stock of relationships needed to be, what the infrastructure needed to be, and what was the importance of a reputable agency that people could trust, holding each other accountable.”

Starting an Accelerator

After learning everything she could and developing an early model, Jessica and Emerging ChangeMakers Network launched an accelerator program to support entrepreneurs such that they would be capital-ready and in the best place to repay the community loans. Their work in the 40-hour intensive program includes everything from helping small businesses develop business plans and think about marketing to helping larger grocery stores understand their markets.

The first year she ran 11 people through the accelerator; the next cohort was 20. Now, she said, she’s preparing for a group of 100. Her model has been tested and changed and continues to develop as she sees and learns more about how capital works for businesses, investors, and the community in concert.

“Aside from Grameen,” she says, “In the grand scheme of things, everybody is new at this, at bringing unaccredited individuals into a framework where they can invest. We’re working with the 99 percent, the mainstream, and learning how you do that. Securities laws are changing to allow that to happen even more. A lot is changing as we build it.”

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