Financial exclusion issues rarely occur overnight, but are the result of broken systems both large and small. When financial exclusion is finally recognized, all too often the solution to the problem is one that provides short-term opportunity only for the excluded group. The unfortunate truth, however, is that with every exclusive solution the issue is kicked further down the road. For example, a microloan program dedicated solely to the refugee and immigrant population works well in the near term but does little to solve the core issue. What barriers exist that prevent refugee and immigrant populations from accessing, or qualifying for, pre-existing solutions to begin with?

Short-term solutions often rely on pre-existing tools and methods. These same tools and methods are used by a system that resulted in financial exclusion to begin with. While temporary financial solutions are important, and often just, pressing on toward a solution (or set of solutions) that increases access for all is imperative. The more exclusive the financial solution, the more potential exists for delaying the larger goal of total financial inclusion.

The key to creating more inclusive solutions is for inclusion itself to be the primary constraint.

The key to creating more inclusive financial solutions is for inclusion itself to be the primary constraint. Setting proper constraints to create sustainable financial solutions may seem like an easy task, but warding off influence from existing systems and theories is actually quite challenging. The systemic roots of exclusion make envisioning a solution that’s truly different quite challenging due to pre-existing momentum and norms that can feel awkward to violate. Well constructed constraints for inclusive solutions should inspire new tools while weeding out those that are ineffective. Truly innovative and inclusive financial solutions emerge when the constraints of existing systems and institutions are temporarily ignored.

Three Constraints That May Result in Overly Exclusive Solutions

1. Short-term relief (when long-term goals are forgotten) — While short-term relief and emergency solutions are important, too many short-term efforts are assumed to be long-term solutions. Identifying a short-term solution as such signals to stakeholders that it is still worthwhile to seek out and invest in meaningful long-term solutions. A sudden influx of funding for a solution that includes little to no mechanism for offsetting costs is a hallmark of short-term, or emergency solution. Avoiding complacency among stakeholders and rightly classifying projects as short-term, versus clamoring for panacea themed headlines, creates space for long-term progress while meeting an immediate need.

2. Over-Reliance on Existing Infrastructure — It’s hard to build a new type of electric car when battery technology is outdated, and it’s hard to experiment with solutions like non-collateralized lending when existing lenders are reticent to change their underwriting standards. Inclusion may require new technologies, or for the owner to take on a role that has historically been provided by whatever system is being challenged. In the world of small business lending, for example, you may be forced to implement in-house loan servicing and underwriting activities. Creating long-term solutions will almost always require a few new tools and technologies to circumvent the existing system constraints that birthed the problem to begin with. Scoping out these new tools earlier in the planning process will increase the likelihood of receiving the funding that’s needed to fully implement an innovative solution.

3. Ignoring the Ecosystem — Where are your customers or clients coming from, and where are they going? For example, if a small business owner lacks access to capital, what does it look like to transition from lacking access to accessing any amount they require to grow the business. It typically involves multiple loans from a variety of lenders, typically over the course of several years. Relationship building is a key component in mutual success, and stand-alone short-term solutions require less relationship building. Customers are provided a disservice when a solution is so isolated that it provides no entry into the next solution based on individual or corporate growth.

Three Constraints For Building More Inclusive Financial Solutions

1. Life-Cycle Centric — While all of us may not look the same, we’re all growing. This applies to corporations as well as individuals. Thus, solutions that target various growth zones help to avoid exclusion by allowing potential end users to self-select the solution that makes sense based on their stage of growth. For example, we created the Growth Loan as an early life-cycle option for small business owners to access up to $35,000. The loan amount signals to business owners that the loan is an early growth option, but access is not limited by industry or ethnicity. It’s also non-collateralized to better meet the needs of earlier stage small business owners. As a business continues to grow, a loan of $35,000 becomes less meaningful. It’s also less meaningful for businesses and owners with abundant assets or high incomes who are able to access larger loan amounts from traditional lenders.

2. Human-Centered Design — The most sustainable solutions are mutually beneficial and empowering. Solutions that are not mutually beneficial should eventually die off, in theory at least, but if stakeholders confuse short-term for long-term solutions then innovation will wane and excluded end users will be forced to continue with any solution that meets an immediate need. Human-centered design includes an element of empathy that is easily forgotten when time and financial constraints start pressing in. Right-sizing the balance of power and influence to empower end-users should result in greater respect and performance by both parties involved. For example, as part of the underwriting process for the Growth Loan we invite applicants in to present their business model and answer questions from our loan committee in person. This unique interaction component gives each applicant greater ownership over the final outcome.

3. A Landscape of Financial Solutions — Where does your life-cycle based solution fit among other solutions. Does it come at the beginning, middle, or nearly the end of the life-cycle? If there are no feasible entry points for excluded individuals or organizations, should you be working on 2 solutions? Collaboration with another organization on a preceding or follow-on opportunity strengthens your own solution as well as the success of the end user. The ability to flow smoothly through various solutions that align with end users based on life-cycle stages contributes greatly toward longer-term sustainability.

By implementing these constraints, you will increase your odds of creating an inclusive solution that is truly sustainable. Once an effective strategy is formed, it’s ok to look for existing partners, technology, and tools that are effective within those guardrails. If they do not exist, your plan will help in identifying the tools that might need to be created to move forward.

As we pursue solutions we will continue to provide updates. If you are interested in joining us, engage with us on social media and send us your ideas! And for more updates and information about Access Ventures consider subscribing to our newsletter.

Originally published at accessventures.org.

Avoiding Financial Exclusion With Inclusive Solutions was originally published in Access Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

Many of us consider trust a fragile expression that must be earned over time. Trust is the assured reliance on the character, ability, strength, or truth of someone or something. Reading the definition of trust, we can understand why we place considerable weight on our decision to extend it to others.

Once trust is extended to someone we enjoy acting freely knowing it is present, which makes broken trust such a painful experience. Broken trust comes in many forms, but all lead back to the betrayal of vulnerability. It’s difficult to learn how to trust because we know all too well the risk that comes along with it. A family member takes advantage of you. A friend talks about you behind your back. A contractor walks off with your money leaving behind a shoddy or incomplete renovation. These examples drive home the personal cost of broken trust.

Over time we have adapted to the risks of trust by establishing institutions that endow trust. Companies and organizations that can guarantee or enforce good faith in transactions with individuals which are otherwise susceptible to a breach of trust. As these institutions have grown and society’s reliance on their service has increased, they have become centralized powers with the ability to shape the boundary lines for economic participation.

The Evolution Of The Trusted Third Party

Do you remember the first thing you bought online? What was that experience like? This may depend on the reader’s age, but for me the whole process felt risky. I was worried that my credit card data would be stolen, and that I’d spend eternity trying to prove that I didn’t, in fact, buy some random goods. I also feared that the seller would run off with my money and never actually send the sports memorabilia I coveted in that moment.

Over the eighteen years since I made my first online purchase, the ecommerce industry has evolved to address these trust issues. In order to grow adoption, the industry needed to introduce trusted third parties, intermediaries that make the process feel safe. For example, PayPal adds financial security and Amazon provides property exchange security.

The Risk of Trusted Third Parties

Intermediaries have made many aspects of life easier as they provide the service of endowed trust. Their service, however, has not come without its own risk.

The first, and most glaring, is the risk posed by fraudulent activity. Despite rules and regulations, trusted third parties are still run by people and are thus susceptible to fraud and abuse. The financial crisis of 2009 is a prime example of trusted third parties profiting from fraudulent activities, as mortgage companies made loans to borrowers seemingly destined for default and then sold those loans to unsuspecting investors. These organizations shirked their responsibility to be the agent of trust in a transaction, and the consequences of their negligence are still felt to this day.

“It’s difficult to learn how to trust because we know all too well the risk that comes along with it.”

Another risk posed by relying on trusted third parties is centralization which results in a single point of failure. An example of this risk and its impact on individuals would be the data breach of Target in 2013. All transaction data at Target stores was held within their central point-of-sale system, which was heavily secured by leading-edge technology. Despite the precautions taken by Target, hackers gained access to their system and stole personal information from 70 million shoppers along with 40 million credit card numbers.

Finally, there is risk associated with the terms of agreement we have with a given institution. For example, we entrust intimate details of our personal lives to Facebook and we are shocked to learn they sell this data to the highest bidder. This was the agreement we made with Facebook in order to access their free service. As users we give them information rights that will in turn be used to generate revenue. Of course ethical usage of data is another story, but also an inherent risk taken when trusting a third party with our information.

The Exclusionary Behavior of Trusted Third Parties

The more prominent a third party is within a given industry, the greater the risk they become a gatekeeper to that industry’s activity. One consequence of centralized trust is exclusion.

The role of financial intermediaries has been essential for innovation and overall economic growth, but there has been an unintended consequence as well: exclusion. Over time more and more economic activity relies upon banks, thus entrenching them as a central figures of commerce. Unfortunately this means a bank’s decision to work with someone is akin to access to the economy. Banks are drawing new boundary lines of trust which exclude unprofitable customers such as small merchants, small balance holders, and microtransactions.

Beyond the banks, other financial intermediaries such as credit bureaus have a similar impact on economic access. Credit bureaus, for example, exist to pull together information regarding your creditworthiness, which is then used by lenders to determine if they will lend you money and at what terms.

People do not typically have a balanced set of books for their household, therefore a credit bureau steps in to help banks understand your personal economic situation. The role of credit bureaus has unlocked institutional capital to lend to individuals, which has in turn afforded them the ability to buy a home, a car, an education, etc.

The unfortunate downside to credit bureaus as trusted third parties is the simple fact that they are historically inaccurate. The federal trade commission has found that 20% of all credit reports have a “potentially material error,” which impacts an individual’s ability to access capital.

What is worse, credit bureaus have a narrow view of creditworthiness, leaving many more data points out of the equation and many individuals without their endorsement. Your credit score is a combined look at payment history, current balances, length of credit history, and type and frequency of credit used. A common and significant objection to this formula is that you must have credit to get credit, which excludes many would-be borrowers from access to institutional capital. If the goal of credit reporting is to determine someone’s likelihood of repayment, there are numerous other behaviors that may provide a more accurate context. Behaviors such as work absenteeism, donation history, volunteerism, etc. Given technology today, all of these behaviors can be reported timely and accurately.

What Now?

If you feel like the problem posed by centralized trust is too big to solve, then you are not alone. Many of us have grown callous to the risks and costs of centralized institutions. We either ignore them or shrug our shoulders and look away as we feel powerless to change the status quo.

At Access Ventures, we strive to step into challenging situations and find solutions that lead to a more inclusive and creative economy. Although centralized trust is systemic, we believe it must be disrupted as the cost to society is devastating.

As we pursue solutions we will provide updates to this journal. If you are interested in joining us, engage with us on social media and send us your ideas! And for more updates and information about Access Ventures consider subscribing to our newsletter.

Originally published at accessventures.org.

The Role Of Trusted Third Parties was originally published in Access Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

The Problem With Accessing Capital

Every day, these hard working entrepreneurs struggle to identify adequate sources of capital. Small business owners are the unsung heroes of all of our communities and deserve a better solution that enables their business to flourish. While historical methods of evaluation should not be done away with, history has proven that evaluating small and large businesses in the same manner limits the flow of capital to these valuable components of our communities.

Small business lending has been stuck in a slow, grinding recovery behind most other types of business and consumer loans. It’s important to realize that while there are loan options that are marketed to small businesses, their underwriting standards often favor well established (often larger) businesses. This makes sense if you’re tasked with lending as much as possible while maximizing financial return, but leaves little room for less profitable small business loans. Strict regulations are limiting to an extent, but smaller loans will always be less profitable when reviewed in the same manner as larger loans. High costs associated with underwriting small business loans are a challenge for both mission-driven and for-profit banks alike.

Most commercial underwriting will consider several time tested and logical factors when seeking to eliminate as much risk as possible. For example, if a small business owner wishes to buy equipment they may be required to pay for at least 30% of the purchase before the remainder can be financed. When seeking a loan for something like working capital the same collateral requirement applies, however there’s no asset tied to the loan to offer as collateral. This is where equity in other equipment, such as vehicles or real estate, is often the solution. To borrow $30,000 in working capital you must have $30,000 in acceptable collateral. This need for 30–100% collateral is only one of many challenges that small businesses are less able to overcome than their larger counterparts.

Unfortunately, the challenges these entrepreneurs face when accessing capital are misunderstood by many. When most Americans think about lending, they think in terms of mortgages, credit cards, and auto loans. There are so many mortgage options in the United States that not being able to qualify usually indicates a true lack of readiness for a mortgage. The same is not the case, however, for small business financing.

There’s also confusion when it comes to the need for microloan solutions in the US and what it takes to start a business. Most people who are familiar with microlending think of $500 loans to someone in a developing nation before they think of $30,000 loans to U.S. small business owners. The upper limit of what is considered to be a microloan in the United States is actually $50,000, and research by the Kauffman Foundation indicates that the cost to start a new business is estimated to be $30,000or less. Thus, access to microlending is critical for small business growth.

The Problem With Current Lending Systems

If the future of lending is to be better, we must discover new underwriting methods that are rooted in a borrower up approach. Models that rely heavily on credit scores and financial collateral are proven, but they exclude too many successful business owners. The 2016 Small Business Credit Survey found that nearly half of (46%) businesses with less than $1 million in annual revenues are denied credit because of insufficient collateral or low credit score. Establishing a strong credit history for your business is challenging when a lack of history is limiting access. Small business growth is extremely critical to creating jobs and desirable communities. Greater opportunity for small business growth will only come out of a desire to continually discover new ways to lend, in addition to proven and established methods that are still very relevant for larger loan amounts.

When mainstream financing is not an option, personal savings or friend networks are often the next place an entrepreneur looks for the capital they need to launch. The stark reality, however, is that the wealth of those networks varies drastically. Countless studies confirm an unnerving gap in wealth between white and non-white, as well as men and women. While studies abound on the reasons for such gaps, we believe sustainable access to capital solutions can be achieved by utilizing common alternative assets that can be owned by anyone — a unique competitive advantage, practical strategies backed by reasonable evidence, character, planning, related experience, hustle, etc.

Unfortunately, the first wave of innovative and scalable microlending solutions have come with shackles attached. Online lenders are filling the void, but at what cost? These sites offer speed, convenience and relatively loose qualifications for a business loan, but in return you will likely pay a high annual percentage rate on the debt. As small-business owners consider options for working capital, they must carefully weigh the potential costs before taking on debt with APR’s that sometimes exceed 60%.

Our Solution To These Problems Is The Growth Loan

In response to the complex access to capital issues faced by so many small businesses, we created the Growth Loan. A non-collateralized, non-credit score based loan of up to $35,000 that leverages common alternative assets to offset risk. It was designed using the aforementioned “borrower up” method, as opposed to a “lender down” design. The opposite, lender down approach, starts with the need to deploy large amounts of capital as efficiently as possible due to the shareholders’ desire to maximize revenue. A borrower up approach focuses on cost management, access, recycling capital, and achieving positive returns.

Relying on common alternative assets makes the Growth Loan necessarily relational. Not relational in a token sort of way, but in the locking of arms that comes from mutual success. It looks beyond credit score and financial collateral by providing space and time for a thoughtful review of character and strategy. We guard against prioritizing our own profit by putting effort into terms that increase a borrower’s ability to repay and humanize the review process by requiring decision makers to meet with applicants rather than basing decisions solely on the numbers.

When loan amounts of less than $35,000 are appealing, a borrower typically has very little collateral to offer. The borrower-up approach therefore excludes the use of traditional collateral, as does the Growth Loan. The creative use of common alternative assets has proven to be just as valuable as traditional collateral in many cases. What is more, over 60% of our loans have gone to either women or minority-owned businesses. An important stat considering some studies show lending to women and minorities totaling just over 25% of all conventional loans.

Greater opportunity will only come out of a desire to continually discover new ways to lend.

In addition to an alternative underwriting process, the Growth Loan leverages pre-existing community assets such as a volunteer loan committee with full authority to approve or deny borrowers, and technical assistance providers like the SBDC who are already working with hundreds of small businesses per year to improve their business model and support them in finding additional capital. Growth Loans are funded 100% by a revolving loan fund that began with $350,000. Since it’s inception, we’ve made more than $500,000 worth of loans through recycled funds.

The average APR on a Growth Loan is below market at 5%-7%. Non-collateralized online loan options are the closest comparison to the Growth loan, with rates well into the double digits. Local Community Development Finance Institutions (CDFIs) are able to offer larger amounts of capital at similar rates, but typically prefer more established businesses. While more flexible than mainstream lenders, there are only 2,000 CDFIs across the country and their funding varies from city to city.

Eighteen small businesses later, the potential economic activity created by the Growth Loan exceeds $1M. Without this unique borrower up approach, that same $1M would have been left on the table. There would be fewer jobs, less opportunity and less value creation for so many to enjoy.

We are excited to continue exploring, testing and deploying solutions that contribute to a more robust and inclusive capital system for entrepreneurs. If you have additional interest in the Growth Loan, we’d love to hear from you!

Originally published on accessventures.org

Helping Entrepreneurs Grow Small Businesses was originally published in Access Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

It seems every time you turn on the news, someone is talking about the economy. Even before the recession of 2008, the economy had been a major talking point and emphasis of politicians from both sides of the aisle. Political strategist James Carville coined “it’s the economy, stupid” as a reminder to stay on point for the first campaign of former President Clinton. President Reagan equally emphasized the economy in his inaugural run for the White House against President Carter in 1980. The economy is a significant factor in daily life.

Against this backdrop, millions of Americans have continued to struggle and are unable to fully participate in the various opportunities many of their fellow citizens have access to every day. Just recently, America “celebrated” 50 years since the launch of the War on Poverty under President Johnson; and yet here we are 50 years later, and for many, life has improved very little.

For an economy to function at its best, it needs to be growing, sustainable, and stable. It is also much more than this. It is not simply that the economy is merely growing, but that it’s growing for all people. It is not just creating stability for some people but creating stability so that every person is free from worry about financial roadblocks or unforeseen issues.

Therefore, for an economy to be a thriving economy, it must be an inclusive economy. However, what exactly does that mean? Over the past decade, this “inclusive” modifier has become a part of the government and philanthropic vernacular as it has become a significant area of focus. We were curious and so wanted to see what other people thought this meant.

Access Ventures exists to build a more inclusive economy, which means working to ensure the economy functions for all people and that all people have the financial freedom and mobility to pursue every opportunity they desire. We believe true inclusion is accomplished when all people are valued regardless of race, ethnicity, sexual orientation, gender, or religion and are afforded every opportunity to fully participate as they so choose.

“We believe true inclusion is accomplished when all people are valued regardless of race, ethnicity, sexual orientation, gender, or religion.”

This means the economy is not simply growing, but instead, its production of goods and services is optimized to increase the prospects and opportunities for everyone. This means that job opportunities and incomes are increasing and are doing so for every segment of the economy. We believe an inclusive economy is one in which our participation within businesses and communities is additive and not extractive. We must preserve and/or restore nature’s ability to produce the ecosystem of goods and services that contribute to human flourishing. The long-term costs and benefits of human use must be considered and our decisions calibrated for intergenerational economic vitality. An inclusive economy also is resilient — where every person has confidence in their future and confidence that their economic decisions will not cripple them with the slightest disruption.

We are facing a moral crisis in our economy. The single-minded pursuit of money — fostered by a culture of self-interest and self-preservation — ultimately isolates people, destroys community, and accelerates inequality. Poverty persists (and in many cases grows) despite realized gains in productivity. Mobility, as well, remains limited for many citizens. There is increased sentiment that more and more people do not have a fair chance to succeed — that vulnerable groups are excluded from the jobs, schools, and opportunities they need to move up; this leaves them stuck in poverty for years or even for generations.

When Adam Smith wrote The Wealth of Nations in 1776, he set the course of modern capitalism in motion. He identified, in the human condition, natural drivers that govern our economy.

“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.”

“The Wealth Of Nations,” Book I, Chapter II, pp. 26–7, para 12.

Even in his own time, Adam Smith understood that not everything capitalism produces is necessarily good. As P. J. O’Rourke points out on this short podcast, Adam Smith “believed the purpose of all production is to make something that’s useful”. Greed on the part of businesses and consumers has led to unprecedented debt and a cycle of consumption that is not the “self-interest” Adam Smith described but selfishness. Indeed, even before these transformations, Adam Smith maintained that there was a crucial difference between selfishness and self-interest, and he warned of the dangers of conflating the two.

Today, we experience full well the side-effect of narrow-minded self-interest. Too many people have virtually no access to the economy. Of those who do have access, many face limitations on their ability to participate fully (they lack the economic autonomy to make decisions for themselves and freely move within the system). “This is more than economic inequality — it’s economic exclusion.” It is time we focus on expanding opportunities and limiting exploitation so that everyone wins, together.

“It is time we focus on expanding opportunities and limiting exploitation so that everyone wins, together.”

Dignity remains inherent to our value and worth as human beings. Everyone is born with it, and as such, we all have a deep, human desire to be treated as something of value. Equity, fairness, and justice — these are all components of dignity. When people talk about these components of dignity, they are stating loudly that the human condition is not how it should be. Vulnerable people everywhere face systemic opposition. Therefore, it’s not okay to simply build a functioning economy. We need to press into the much more essential and challenging task of building a more inclusive economy — an economy that demonstrates this inalienable truth.

Matthew Desmond, a MacArthur Genius and sociologist, wrote in his most recent work, Evicted, about the constant struggle many Americans face day-in-and-day-out. In it, Desmond provides a small window into the lives of the staggering number of Americans facing or living in, poverty and homelessness. He also details the lives of many other Americans who, under the banner of self-interest and profit maximization, can amass small fortunes by engaging in activity which — when viewed from a broader perspective — can only be described as exploitive. Desmond further examines how our national institutions are set up to operate, and finds that many are similarly designed to exploit the most vulnerable among us. In summary, It is expensive to be poor in America.

However, this is not how most of us want our communities to function. We do not imagine communities deficient in opportunity. We desire to live in a society in which we care for one another, one which fosters our sense of trust, belonging, and safety. It is where we have an individual and a collective sense that we can, as part of that community, influence our environments.

Moreover, we do not simply imagine a community with base essentials present but a community that allows us to thrive. In this community, there is an investment in human knowledge and learning; where social trust, empathy, and solidarity are present; where beauty and creativity define a place and inspires us; where there is both natural and physical health; and where the economy is thriving through growth and innovation. This is the picture of a thriving community. There is an organized complexity to these communities, and therefore, we need approaches to community building that deliver equally complex and dynamic social systems both to enable and to empower.

At Access Ventures, we propose an economic environment dictated not by narrow-minded self-interest (selfishness) but by valuing the importance of pursuing equitably distributed growth — growth that is optimized to extend opportunities for upward mobility to every citizen. We prioritize relationships over isolation. We believe that when we open access for the underserved, we build the community we all desire to live in.

Originally published on accessventures.org

What is an Inclusive Economy? was originally published in Access Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

Imagine this scenario: you have a strong conviction to protect our planet for future generations and you devote a lot of time and resources to this effort. You spend your evenings and weekends organizing awareness campaigns, clean up efforts, and fundraisers. You sacrifice some bucket list items to send donations directly from your paycheck to organizations that share your conviction.

Now imagine finding out that the organizations you support actually invest into corporations responsible for depleting and destroying natural resources. Moreover, you find out that they have upwards of 20 times their operating costs invested into companies that at-best have nothing to do with their mission and at-worst are actively working against their mission.

This scenario elicits feelings of betrayal, cynicism, nihilism, and disgust. Unfortunately, this scenario is common amongst the majority of endowed foundations. As the Forum for Sustainable and Responsible Investing noted in its 2016 survey of foundations, a “small but growing number of US foundations are investigating or pursuing sustainable and impact investing. They are embracing the notion that in addition to making grants, they can employ investment and shareowner strategies across their assets to help achieve positive societal outcomes and targeted financial returns.”

“It’s common for large foundations to have a disconnect between their mission and the means in which it produces income.”

It’s common for large foundations to have a disconnect between their mission and the means in which it produces income. Access Ventures is keenly aware of these issues and we believe the disconnect stems from how a foundation thinks about its resources.

What Is An Endowment And Why Create One?

An endowment is a financial asset, in the form of a donation made to a non-profit group. Most endowments are designed to keep the principal amount intact while using the investment income from dividends for charitable efforts. Given the context of this journal post, endowments are created by benefactors to sustain the mission and operation of a non-profit organization which reflects the benefactor’s values and passions.

How Are Endowments Traditionally Managed?

This is where issues begin to arise between a foundation’s mission and the totality of its operations. It starts with the IRS requirement that a foundation distribute a minimum of 5% of the fair market value of its assets towards its charitable activities. The IRS requirement can, and does, frame how a foundation thinks about its resources.

The prevailing viewpoint is that endowment assets are best utilized when providing the highest-possible return, because it generates the highest-possible dollars for charitable purposes under the IRS minimum rule. We call this the two-pocket mindset: assets in one pocket are viewed strictly as income-generating, while the other pocket gets the feel-good money for philanthropic purposes only. Mathematically this is fine; practically, it leads to missional conflict. In the pursuit of maximizing returns, the endowment assets are often invested in companies that are antithetical to the organization’s purpose for existence.

How Does Access Ventures Manage Its Endowment?

At Access Ventures, we subscribe to a one-pocket mindset. We believe that all assets pledged to our organization should be used to reflect the values of the organization. Therefore, we actively manage our investment strategies and inspect every dollar for mission fit.

In order to achieve a mission-aligned portfolio, we operate with a network of experts across asset classes to surface high-performing opportunities that meet the investment targets necessary to fund our operations.

“We believe that all assets pledged to our organization should be used to reflect the values of the organization.”

Does The ‘One-Pocket’ Approach Achieve Similar Investment Returns?

In short, yes. For a longer review of this topic, see the Sustainable Reality Report from Morgan Stanley. This is a topic of discussion which requires a paradigm-shift amongst investment advisers before it is settled, which is my way of saying “we won’t conquer it in this article.”

How Does The Access Ventures Approach Impact Culture?

Earlier in the article, I alluded to issues between a foundation’s mission and the totality of its operations. In a two-pocket foundation, the investment work is typically outsourced to managers far removed from the organization. Within the one-pocket approach, the investment work is considered part of the mission of the foundation and very much embedded in its culture.

A tremendous benefit of the one-pocket approach is that our entire team is aware of our investments and the operating thesis which directs them. Each team member brings their perspective on building inclusive economies to the table which better informs how we invest our endowment.

Are There Downsides To The Access Ventures Approach?

One outcome of the one-pocket approach is a blurred line between our program work and investment work. Externally there can be a challenge in explaining the difference between an investment in a disruptive technology for the social sector and building an inclusive economy, which leads many to the false conclusion that we are simply an investment company. The flipside impression is that our investments are all designated as “program-related,” which place an emphasis on achieving goals in line with our charitable purpose and ignore financial return.

The downsides of our approach lay with the impression of Access Ventures and do not impede our ability to achieve our goals as an organization. Although the one-pocket approach presents a challenge on how we message our work, we do not let it hinder our desire to share the totality of our operations.

Who Else Operates Like Access Ventures?

Although the one-pocket approach is nascent, there have been some trailblazers. We take inspiration from Omidyar Network and Skoll Foundation. Since we have adopted this philosophy, we have been encouraged to see others, like the Chan Zuckerberg Initiative, follow suit.

Access Ventures invests across a spectrum of asset classes, ranging from program-related investments to market-rate investments. This leads to a blended portfolio approach that is maximized for impact and weighted for return. If you are involved with an organization, foundation, or idea that you believe is an investment that matters and aligns with our mission then we would like to hear from you.

Originally published on accessventures.org

One Pocket Endowment Management was originally published in Access Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

Historically, employee turnover is tracked as the total number of people that worked for you for the year divided by the average number of workers. Employee turnover is also defined purely from the perspective of the business’ bottom line and ignores the myriad of reasons people leave to begin with — it fails to capture the why.

Every company expects to retain and lose workers regularly as part of doing business. According to the Bureau of Labor Statistics, the average salaried worker keeps his job for a little more than four years, and the average service worker for a little more than three years. Some will leave to retire, some to pursue a new opportunity elsewhere, and some may be laid off or fired.

The employee turnover within the workforce is defined as attrition and is considered natural in any business and industry. It’s also historically tracked as a negative business indicator because of the high cost of recruiting and retraining new employees. In some industries, the turnover rate can top out at over 100% (i.e. hospitality, retail, healthcare and food service).

Some organizations also look to employee turnover as a tool to reset their workforce. According to Al Bondigas, “sometimes changes within an industry demand that fresh workers be brought in, and if a company’s culture heads downhill, it’s wise to clear out workers who push it in the wrong direction.” This type of turnover is sometimes defined as “positive attrition” — attrition that is ultimately good for the bottom line of the business (as opposed to the negative attrition that is the loss of a productive employee).

My colleague TJ Abood, an Investment Partner at Access Ventures, feels this definition is inadequate and he is attempting to reframe the meaning of positive attrition. For one, the other definition frames the reset from the perspective of the company and it’s bottom-line. It is an attempt to defend any employee turnover as a gain or loss for the business.

“Positive attrition demonstrates intentional professional development and is in the best interest of the employee”

Within TJ’s framework, negative attrition is employee turnover that is the result of under-performance or a bad fit between employee and employer, and neutral attrition is turnover as a result of retirement and other normal life events (relocation, etc). Positive attrition can consequently describe (and celebrate) attrition that is the result of an employee graduating to a new job which they would not have been able to get without the training/development of their current employer.

There is an old business joke where the CFO asks, “What happens if we invest in developing our people and they leave us?” and the CEO responds, “What happens if we don’t, and they stay?”

Positive attrition demonstrates intentional professional development and is in the best interest of the employee — which is how we normally describe their growth anyways. It should be an active goal of every employer today to discuss every aspect of our associate’s lifecycle with the company from that vantage point. Attrition defined from the perspective of the employer is defensive (at best) and counter to how we talk about our employees as team members.

Positive attrition, therefore, should be celebrated and reported. Yet in order to break down employee turnover, we have to be intentional about tracking turnover. We need to better understand why someone leaves a company and celebrate the story of opportunity and growth when we see it in our employees. It’s a net positive for the individual, the community, and the company if someone is able to leave for a better job that sets them on the path towards a career. Therefore not all employee turnover is bad, and it’s time we started thinking about it from the perspective of the American worker.

Originally published on accessventures.org

Not All Employee Turnover Is Bad was originally published in Access Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

In April 2017, The Ewing Marion Kauffman Foundation convened a diverse group of 50 professionals over two days in Kansas City in order to discuss one fundamental question: What would we do with a trillion-dollar collective investment in entrepreneurs across the United States? The convening in Kansas City brought together bankers, venture capitalists, community development finance executives, entrepreneurs, representatives from government entities, faith community leaders, and aligned foundations. They provided space for those in the room to discuss existing, effective solutions while collaborating to design new, promising opportunities. The group generated hundreds of ideas that could help to bring about a substantial sea-change in our system for investing in entrepreneurs. But ideas are one thing, practicality is another.

As is the case with any major moonshot, there are already many people and organizations working on the problems we face in American entrepreneurship, with demonstrable success — and yet, these same organizations struggle to maintain the attention of funders. It is important we continue to provide catalytic resources and solutions to support new and innovative ideas — but, just like in the 1960s with the original moonshot, there have always been things working that warrant scale.

As an investor, and as a community funder striving to build more robust ecosystems, the question of how to balance supporting what’s new versus scaling existing solutions is one that I find myself wrestling with at times. In order to realize the moonshot for entrepreneurs across America, we need to support ideas and companies that have yet to be discovered; but we also need to do the work of scaling existing solutions and organizations.

Two ways we neglect to provide appropriate scale to proven, existing solutions:

People Prefer A Shiny New Penny

It’s human nature. We all like the next, best thing. We all assume foundational programs and organizations will persist, so we prefer to be credited with discovering that shiny new penny. I imagine, in my mind’s eye, that as we discuss new and exciting ways to support entrepreneurs, there are numerous organizations standing in the corner, waving their arms back-and-forth in a desperate effort to remind us that they are in the arena every day and are able to provide even more and better solutions, if only we got behind them financially to provide adequate funding. It’s important and at times necessary to consider new approaches and organizations, but not at the expense of existing solutions that have proven themselves worthy of support.

People Apply A Program Mindset Over An Investment Mindset

I have found that as it pertains to economic development, we apply a program mindset instead of an investment mindset. A program mindset is one that requires a detailed plan and budget, and then an expectation from funders to follow that plan exactly as defined. An investment mindset recognizes that variables change and the path may be different than anticipated, but the outcome itself is what matters. An investor views budgets and plans as instruments deployed to achieve an objective, often working in close partnership with organizational leadership to navigate the inevitable twists and turns involved in growing an organization. Program officers, conversely, often view the plan as the objective, requiring, above all, detailed reports on how the plan was executed. If we are to support entrepreneurs in an ever-changing environment, the solutions themselves must be flexible. We need to identify people and organizations that are working faithfully toward a supported goal and support them without strings and without requiring strict adherence to rigid plans which often become outdated and outmatched. There is a mantra among investors that venture capitalists invest in people, and then trust those people to do the job. Non-profits should be given similar flexibility and trust when it comes to spending money!

The Unintended Consequence of Neglecting to Support Organizations at Scale

We like organizations that have a proven track record and that are surpassing our expectations in every way. However, by neglecting to scale what works, we rob these very organizations of the resources they need to attract and retain the talent required to deliver those results quarter over quarter. Appealing to a person’s altruism for employment only works for so long. Organizations eventually have to support their employees competitively or risk losing the very talent that makes the organization distinctive and worth scaling.

In the final report to Kauffman on the $1Trillion Moonshot, we highlighted some of the organizations worth scaling. For the purposes of this short article, I am featuring two that I have worked with over the years, seeing firsthand both the amazing successes they have achieved and the unbelievable difficulty they face in overcoming the hurdles listed above:

Village Capital finds, trains, and invests in entrepreneurs solving real-world problems (e.g. health, education, energy, agriculture, financial services) in overlooked markets. Village Capital has trained more than 500 entrepreneurs through 50+ programs, and its 80 investments boast an impressive 91% survival rate and have created more than 10,000 jobs . Village Capital’s method of peer-selection and venture development reliably identifies promising ventures that are solving significant global challenges, providing an efficient and inclusive alternative to conventional due diligence; 38% of Village Capital portfolio companies are led by women, 19% by minorities, and, in the US, 86% are from outside of New York, Massachusetts or California, the three states that receive more than three-quarters of all venture capital investment.

However, despite these amazing statistics, they struggle to raise balance sheet capital to support their work. They are routine, as their tagline suggests, democratizing entrepreneurship and producing materials for the broader entrepreneur support community (see VIRAL and the VilCap Communities effort). Yet when entrepreneurs seek funding, they find it difficult to find the capital it takes to run their core investment readiness programs that have produced these inspiring results. Village Capital is forced to take on side projects that provide the critical capital needed to pay their personnel, but that distract them from the core function of their organization. Recruiting and retaining top talent is often a challenge, as a lack of balance sheet capital means Village Capital is often unable to offer competitive salaries. Instead of investing with the mindset that they will produce, we fund them programmatically and require cumbersome reporting, creating inflexibility in an organization that is seeking to keep up with the pace of entrepreneurs.

Kiva US helps any founder building a business secure a loan. Kiva has lent over $1 billion worldwide, and its U.S. program has funded over $20 million in loans, unlocking capital within the U.S. and bringing in new capital through loans sourced abroad. Kiva’s borrowers include a high proportion of women (58% female) and minority business owners (27% African American and 30% Hispanic), helping to fill the gap in access to funding for emerging entrepreneurs within these demographics.

At Access Ventures, we have had the pleasure of working closely with the entire Kiva team in multiple markets, and have been impressed with their ability to move the needle on a seemingly tight budget. Jonny Price, Founder and Director of Kiva U.S., has built an impressive program across the United States with (at times) a team of 3–4 full-time individuals. Kiva is delivering vital and transformative capital to disconnected entrepreneurs everywhere. Nevertheless, they struggle to maintain a team of dedicated developers to keep up with the ever-changing online platform.

In both of these cases (and in so many others across the country), there are amazing organizations and leaders doing the hard work of sustaining and improving our entrepreneurial economy. We owe it to these amazing individuals and organizations, and to the people they serve, to put aside our bias for the next big thing and to put on the mindset of an investor as we partner with them to scale what already works.

Originally published on accessventures.org

Consequences Of Ignoring to Scale Solutions was originally published in Access Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

It may seem obvious but people depend on you. The social sector, which sits at the intersection of the public and private sectors, serves the neediest populations in the United States. Unfortunately there are no reliable statistics on just how many people benefit from nonprofit services, but it’s safe to assume it’s over one hundred million given that nearly 65 million volunteer annually.

Beside the practical need for your service, why does volunteerism matter? Let’s start with the personal advantages.

It Adds Perspective

No matter which cause you choose to support, getting into the trenches of service provides a different perspective on the issue you are facing. Stepping outside of ourselves to give time to another creates a deeper level of empathy.

It Adds Time

Not physical time, but studies show that volunteering will make one feel as if they have more time. It’s a pretty simple psychological trick, but if you are able to give time to others you begin to realize you have extra time in your life. An added benefit to feeling like you have more time is that your productivity increases as a result.

It Boosts Your Resume

A recent study by Deloitte states that one is far more likely to be chosen for a position if they have volunteer experience on their resume. However a simple resume boost is not the ultimate benefit. Volunteering your professional skills (ex: web design) can significantly boost your market appeal as most employers view skills-based volunteerism as an effective leadership training experience.

If you are unemployed, or underemployed, skills-based volunteerism may be your ticket to fulfilling work, professional growth, and ultimately a job that fits your passion. Companies like Catchafire help match nonprofit needs with individuals that may help, and their effectiveness is objectively high.

Beyond the personal advantages, the social sector relies on volunteers to meet an ever-increasing need for service. More specifically:

It Magnifies Giving

The value of service provided by individuals was $193B in 2016. By comparison the total amount donated by an Individual was $281B for the same period. The value of giving your time allows an organization to do measurably more with their existing fundraising base. Just think, if volunteerism went away, the social sector would need to increase its fundraising goals by 69%!

It Spreads Awareness

As individuals volunteer, they become more vested in the mission, and ultimately share this with people closest to them. Whether it’s a social media post, dinner party conversation, or inviting someone to join them in volunteering through MobileServe, a mini-campaign has begun.

A perfect example of the power of awareness is the Ice Bucket Challenge from 2014, which was a competition to raise awareness for ALS. This challenge led to more than 2.4 million people spreading the word about a relatively unknown disease and leading to over 739,000 new donors to the cause.

It’s Impactful

Here at Access Ventures we think about impact in numerous way, one of which is generational impact. How do our efforts today lead to a better tomorrow for the next generation? For many nonprofits, this is a very visible outcome of their efforts. Take for example the Boys and Girls Club, where volunteers give their time to mentor, coach, or tutor children in need. The success of this program has increased high-school graduation by 40%, college enrollment by 19%, reducing drug use by 39%. These outcomes place the child on a different trajectory than ones that do not enroll in the program.

The benefits listed here are only a handful of the many reasons why volunteerism matters. Please consider giving your time to a worthy cause in your local community.

Originally published at accessventures.org.

Why Volunteerism Matters was originally published in Access Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

There is no single way to make a decision on investments. Some people perform a detailed analysis of projected cash flow to determine the right price and if it’s favorable compared to other options, they may invest. Others have a thesis on how an industry landscape may change and they look for opportunities that support their hypothesis. Even still, some people make investments because they believe in the leader of an organization and trust she will produce value.

Given no single investment approach, layering on the complexity of investing for impact increases the decision variables exponentially. For investors seeking a financial return only, they rely on a well-worn process of transaction classification and reporting to evaluate the opportunity and evaluate progress. The impact investor uses these tools, but also must assess any number of impact variables. So how do they do it? As Ross Baird, President of Village Capital, says in the video below, “if you’ve met one impact investor…you’ve met one impact investor.” There is very little uniformity in decision making across the industry and it’s idealistic to assume that will change. Of course, there are a growing number of industry resources to assist with this problem, there is no silver bullet approach.

Instead of a checklist for investment, this situation calls for an impact mindset during investment evaluation. Below are the four major areas to consider while investing for impact, inspired in part by the framework out of Harvard Business School research.

Clarity On Problem You Want To Solve

It seems obvious but it cannot be overstated, one must have a clear problem statement in order to begin the process of problem-solving. If you care about inclusion, what does that mean? Why is exclusion a problem? What is causing exclusion and what offers the best chance for change? How would you know you successfully solved the problem?

Estimating Impact

Now that you have a clear problem statement (and an idea of what success looks like), let’s move on to investment review. During the process of due diligence, an investor learns as much about the organization and opportunity as it can. Financial opportunities are generally framed up in a financial model, built on assumptions of performance, that concludes with a range of investment returns.

For the impact investor, another model should be produced based upon success measures associated with their impact goal. At this point, the investor may compare impact opportunities more uniformly across an industry to determine which offers the social return on investment. Time and financial resources are finite, therefore choosing an opportunity with the highest impact return option is prudent.

Impact Measurement Plan

Within financial reporting, there is little need to specify certain reporting requirements at the time of investment. Rather, most operating agreements state a timeframe acceptable to receive “financial statements.”

As you work with early-stage ventures, you may see more descriptive requests around key performance indicators that are crafted specifically for their industry or even their operating initiatives. The same goes for impact investors, whereas they must set proper expectations on what should be measured, how it’s measured, and when it’s measured. If you are making a program-related investment, this step is necessary for you to justify the classification with the IRS. These are the metrics that should ultimately be defined and reported with diligence.

Establishing a measurement plan can be critically important in determining if management earnestly cares about the impact initiatives. As Ross mentions in the video “if [management] thinks it’s burdensome to communicate that number to me…then maybe we aren’t a good fit.”

Managing Impact

Now that the investment decision has been made, and the measurement plan has been enacted, it’s time to manage the impact. First of all, both the underlying organization and the investing organization need to create space to adequately monitor impact results.

Much like with financial performance, if impact results aren’t as anticipated one must investigate the cause. Is it execution? Poor assumptions? Something else? Unlike the measurement plan, this step involves work from both the organization and the investor.

If poor financial performance is a leading cause of partnership disputes, one can imagine the passion involved with impact goals to magnify the distress since the best investments have impact baked directly into their business model.

Each investor will find their own path forward, with metrics that matter to them. Keeping in sight the problem you are trying to solve and creating a pathway for success with your underlying organization is advisable to create the change you want to see in the world.

A Case For GIIRS

Allow me to make a case for adoption of the GIIRS system, which utilizes the IRIS taxonomy to score impact. GIIRS is the closest thing to a generally accepted impact rating system that the industry has, and it allows for ease of comparison across an impact portfolio. We use GIIRS at Access Ventures and Ross uses the same for Village Capital, as well as numerous other funds. Wide-scale adoption of a single rating system has the potential to lower the underwriting burden for people new to impact investment, thus growing the overall investment class.

Access Ventures strives for excellence and forward-thinking that challenges the status quo with new and creative ways to make impactful investments. Our investment approach begins with a process of reviewing a companies mission-alignment with our organization. After determining a fit, we then move to a financial review of the opportunity. We believe that opportunities to create an inclusive economy come in all shapes and sizes, therefore a single investment vehicle is not sufficient. We invest across a spectrum of asset classes, ranging from program-related investments to market-rate investments. This leads to a blended portfolio approach that is maximized for impact and weighted for return.

If you are involved with an organization, initiative, or idea that you believe is an investment that matters then we would like to hear from you.

Originally published at accessventures.org.

Measure The Impact Of Investments was originally published in Access Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

Luke Groce is a true entrepreneur. A fews years ago he and his wife Katherine dropped everything and decided to start farming. They haven’t looked back ever since. Driven by a love for land, food and people the Groce’s provide chemical-free vegetables and pork products to Louisville residents and restaurants alike. Groce Family Farm was Access Ventures’ first endorsement through Kiva, a micro-lending platform, a little over a year ago. Because of the successful loan the Groce’s were able to purchase a tractor and some pigs that have significantly increased the efficiency of their farm.

Over the last couple years, the farm has grown and so has their family. We spent a few days with the Groce’s on their farm to learn more about their lives. Luke answered a few questions about farming, life and family below.

What does a normal day for you look like?

There are not very many days that are normal. Most start with a cup of Sunergos coffee and some eggs over whatever vegetables are in season, and sometimes some porcine breakfast meats. Usually I’m waking up, emailing customers and others, planning the day and getting together whatever supplies I need for the day. When I get to the farm, I’m checking on the hogs: making sure they are all healthy and present, checking and filling feed and water if needed and investigating their temporary pasture to see if they and the pasture are ready for a move.

Picking days are usually Tuesdays and Saturdays. Those days I’m picking quickly with whoever is helping me and then getting it all packed up for our two farmers markets and our wholesale customers. On other days, when I’m in the garden, I’m mostly working on planting, picking, doing tractor work and killing weeds with a tractor or hand tools.

Why farming? What impact do you hope to have?

I farm for so many reasons: I love food. I love feeding people. I love working outdoors. I love learning and being challenged by new and different problems every day. I love seeing the way abundance and life comes forth out of sunlight, water and inanimate minerals. I love participating very tangibly in God’s cultural mandate to govern creation.

“I want to do work that I can involve my whole family in.”

Farming is nothing, if not a management of complex ecosystems. I believe that farming can treat those ecosystems in a very reductionistic way, or it can honor God’s design and enhance the complexity and beauty of them, while also enhancing their productivity. I hope to continually learn and to shift my farming toward the latter. I hope to impact land with my farming in a way that brings about this type of healing and harmony, and I hope that impact on the land brings abundance to people for generations to come.

Describe your family. Who else helps you on the farm?

My wife Katherine and I have three children: Our oldest son Hugo is three, and his brother and sister, Oscar and Lyda, are a year and a half old…yes, twins. My dad and brother help me on the farm more days than not. My dad has a couple agriculture degrees and worked for a missions organization with rural people, oftentimes helping them with their agricultural systems. A friend of mine sometimes comes and works with me one or two days a week on the farm. Since we live closer to our farm now, we are starting to try to send Katherine out to the farm for a portion of a day to work in the garden while I get a little extra time with our kids. We are hoping to one day live where we farm so that as our kids grow we can more easily share in what we hope to be increasingly overlapping spheres of the home and farming lives.

Why pigs?

I love pigs. They are smart, fun, powerful, good looking, affectionate, delicious and they grow fast. There aren’t any terrestrial landscapes on earth that don’t include some animal and it’s impact. All animals create manure. Pigs dig and plow and disturb ground as well. This is one of those liabilities that can be turned into an asset when the size of their pasture paddock and the amount of time they can have access to that piece of ground is managed: think of the difference between being punched really hard and getting a massage; placement and duration are the key variables determining force of impact.

What were you doing before you started farming?

I worked for a few different non-profits that focused on helping various people living with poverty and/or mental illness. Before that, I was studying Political Science at the University of Florida. Katherine studied art and worked in the service industry. At that point I was having a hard time imagining what I wanted to do next. I knew I wanted to move on from my current field, but was a little bit afraid of trying something so different.

When I was a kid, I loved growing plants, and was amazed that you could grow something productive, tasty, and even worth some money, from a seed and rain and sun. In sixth grade, my Social Studies teacher told our class that there is no such thing as a small farmer in America anymore and that it was just a thing from the past. That stuck with me. By the time I was 25, I hadn’t met any farmers and didn’t have any evidence to make me question him. Just before we got married, a farmer who Katherine bought vegetables from told us he was looking for a part-time worker who had a pickup truck. I jumped at the opportunity, and spent a season being his field hand. Katherine and I quickly decided this was something we wanted to do, and we were starting our own farm the next year.

“My Social Studies teacher told our class that there is no such thing as a small farmer in America anymore.”

What are some things you couldn’t live without on the farm?

Our tractor makes so much of what we do possible. Electric fencing is the single thing that makes raising livestock in a nature-mimicking way possible without unbearable cost, especially with pigs. We can adjust the location and duration of a potentially destructive force on the land in a way that causes it to be a regenerative force, simply from careful management with the tool of electric fencing. I have a lot of hoes that I like too.

What are some of the hardest challenges you face as farmers?

There are so many challenges with running a business, especially a small, vertically integrated one where you are the head of strategy, accounting, marketing, HR, plumbing, ecosystem engineering, botany, agronomy, veterinary medicine, building, delivery, microbiology, etc. Most things that go wrong on the farm though are management induced problems at their core. Because I didn’t have generations worth of knowledge to draw from (farming skipped two generations in my family, and I never knew my great grandparents), I couldn’t just start out with centuries of collected wisdom built into my practices. So I learned from books and podcasts and YouTube and other farmers. I also learned a lot from crop failures and hard times.

One other hard thing right now is that we want to be a farming family and a family farm. Though we are working toward that integration, it is hard on those many long days when we can’t be doing our work all together because of the particulars of our kids ages and the location of our home and farm. It is a heavy thing to know that I’m not seeing my children as much as I’d like now, in hopes of the chance that I’ll see them more next year, or in a few years. But if that doesn’t work out for whatever reason, it was a very steep price to pay.

What is the local food and farming community like in Louisville?

In most ways it is really amazing. The farmers we know around Louisville are really great friends and colleagues. Slow farmers markets, terrible hot and dry spells, crop failures and dead livestock are much easier to weather when you’ve got farming friends who are right there with you. And with the relationships and market demand we have, we generally all operate way more collaboratively than competitively. There are an incredible number of very dedicated eaters who want to buy food from local farmers for flavor, health and ethical reasons. We are really fortunate to have something to offer to folks who key in on any and all of those three reasons to buy.

Who inspires you?

So many people. My wife has worked every day to raise so many tiny people all at the same time. It’s really hard and she’s really good at it. My dad is 73, and he continues to uncomplainingly work hard just because he wants to see me succeed. He also showed me with his life an example of doing something you believe in that wasn’t an already prescribed path. I can’t imagine coming into adulthood without being able to imagine that’s possible. There are a lot of farmers who inspire me and teach me. Most aren’t from this country. But many of them have written or recorded podcasts that shape the way I think about farming and land management. There are a number of local farmers who I interact with and learn from that have been a huge inspiration: Adam Barr, Nick Posante, Todd Childers, Megan Olliges, Darren Bender and many many others.

Originally published at accessventures.org.

The Life of a Farmer was originally published in Access Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.