Should regenerative forestry meets indigenous wealth creation projects just write off impact investors and follow Ejido Verde’s crowdfunding model?

Because of Shaun Paul’s extraordinary success with Ejido Verde at deploying Kiva to unlock the most important capital for these projects; capital that can wait until harvest, we are launching what we hope will become a guild on a quest to create a lab.

The simple question: is what Shaun Paul did replicable by smaller biomedicinal projects that accomplish the same kind of deeply culturally connected impact that also in the aggregate could be a big climate change response? Or do you need the scale of a commodity like pine resin to have this success, resin that’s in everything from the ink in your ballpoint pen to the adhesive that keeps your leather uppers connected to your rubber souls? Does it work for another non timber forest products, like biomedicinals with a complicated, to say the least, supply chain?

The deeper question the lab would address is this, perhaps: Should people working on projects wait on impact investors, or should they pivot and go for crowdfunding for the essential missing capital they need; money that can wait till harvest to get paid?

We will be talking to and asking that question of projects that look to create indigenous community wealth; not just jobs but assets owned collectively, either pledges of future revenue from pine resin, eventual transfer of ownership assets, etc. Does what works for a mass production project like planting 15k hectares of pine resin work for these more boutique, small scale biomedicinals? What part of the Ejido Verde story that resonates so well, carries over to culturally rich but locally unique biomedicinal production? Could these smaller projects that are often hyperlocal collectively do through crowdfunding that Ejido Verde does as one project, going to scale? Coordination comes at a high cost when you are working across time strapped, often underfunded social enterprises with deep community engagement creating both high social and environmental value at the grassroots level with real community leadership.

To start the quest to get some of those questions answers, I used the Field Guide to Transformation we soft launched at Transform to interview Marc Thibault this week, who is working with the Kechua people in Ecuador biomedicine’s project called Nativien about both these questions and as a way to get to know his project, which is aimed at creating a local, resilient next economy to fend off encroachment by oil, mining and logging interests back by the government.

The bigger question Shaun Paul, at least, is beginning to ask is, and that Marc was willing to perhaps entertain is, should those people leading climate change mitigating projects that create assets owned by the indigenous community, rather than standard colonial/industrial extraction modes bother waiting on risk averse impact investors? It takes them often a nearly infinite time, it feels like, to agree the stars have aligned to let them put their money where they say its intended to go, to real change at the root of the economic system? The Kiva money bridges that valley of death, as it’s known.

Risk averse impact investors are so hard to get to get to move into the valley of death, beyond accelerators and before institutional funds. And Ejido Verde can bring in $10,000 per day on Kiva, which adds up to more than $3.6 million if it were an everyday thing. Shaun Paul has contracted with a Kiva veteran, who was his own representative at Kiva to explore just how scalable and replicable, in what sort of formats, this extraordinary crowdfunding success is. The only thing Shaun Paul would commit to is that Ejido Verde is going to be expanding its crowdfunding, because it is working so surprisingly well, and study where to take it. Do more on Kiva, or could a new platform, or new white label of an existing platform make sense?

That’s where the team that created SOCAP, a market we believed would be real that we helped catalyze with a convening that ended up making it possible to think like a philanthropist; with the goals to solve a problem you have in giving, with the actions of a investor, and sometimes getting more positive impact by helping build a business where the mission is economically viable and not dependent on donations and can pay an appropriate return to patient capital investors who want a new way, beyond merely philanthropy alone, to make a difference you can measure.

Rosa Lee Harden are good at creating businesses around the conversations that need to happen at new intersections where unlikely allies emerge to help create markets that enable you to act your way into a new way of thinking. That’s what we did with impact investing and SOCAP. So in this case we are asking the question, could crowdfunding, rather than impact investing from professional funds, be the key to unlocking the most important capital to make non timber forest product biomedicinals reach its potential?

The question can also be phrased as where does crowdfunding fit, and how does it mesh or not with impact investing for this niche category? I will be using the field guide to ask varieties of this line of questioning various projects with the hope that we figure out there is a way these projects can emulate Ejido Verde’s success with more unique, story-rich deeply local biomedicinals. Perhaps it will be linked to the diaspora of those communities in the United States. Of the 44,000 Ecuadoreans in Minneapolis, a majority only speak Kechua. Buying medicine from home that has memories and cultural value that also makes their homeland more resilient and independent and has a great impact on our collective response to climate change, seems like a promising way to go Nativien. I’m talking to Simon Turner, of Regeneration Capital, of Brisbane, Australia, a regenerative ag and forestry fund about his thoughts on that next week (site is log in only).

Should Shaun Paul, getting back to him, forget about persuading risk averse impact investors to deploy their money earlier and with an eye to build the field while making a return in an early space they want to build and just tell his story to the people? The problem he has is one that a lot of, if not most of these projects that could have a massively positive climate change impact face. Investors want a return before harvest; they have internal rate of return; how fast they get their money back, calculations going on; they are used to seven year returns or less. They are bound by their allegiance to their view of the time value of money so it is often hard for them to see that the best way to collectively respond to climate change is to invest in these non timber forest projects in a way that the indigenous people create wealth and assets. The assets are created by the way you invest in the resources their trees produce, from pine resin to biomedicinals in the understory that need the trees to enable the high margin medicine to grow until harvest.

And that same question again, is it better to make smart appeals to the people who put up $25 apiece, rather than focusing on the professional investors, to fund these projects? Almost all these biodiversity meets indigenous wealth creation projects share one systemic blockage, one place the economic and funding system is broken. They can find early, mostly philanthropic support, as Marc has done, for the Kechua anchor of Nativien. But funding for infrastructure is harder, like the manufacturing plant that Nativien needs to be in the U.S.

Should projects like Nativien also look for crowdfunding dollars too? And how? And how should or could forest grown biomedicinals projects that create indigenous community wealth make a collective appeal? A lot of the most promising projects are small. Maybe they should figure this out collectively? All I’ve got at this point are questions and one interview.

Phillippe Greer who leads a transformative journey project with indigenous people in Brazil is also part of figuring out the story that will enable biomedicinals to tell a story that enables them to take advantage of crowdfunding at aggregate scale. Going to the place and seeing and being a respectful part of indigenous culture, through journeys like his, enable people to understand their connections with indigenous places, which helps them grow enough trees and make money around the trees to maintain them and keep the businesses going while creating a collectively great climate change response across a network of projects could be the way to go. I need to ask some network builders their thoughts on approaches to use.

So, the walkabout among biomedicinal and other non timber forest products via interviews and recorded zoom calls has begun. I will post the Zoom video of my talk with Marc, where Phillipe joined us, when I download it. And we will put up a google form for people to fill out the details around their project in this space, within the field guides discovery parameters of where the system is broken and a the shape of the capital that’s missing that if it were present would catalyze transformative change.

And the Field Guide works as an investigative tool. A lot of people are already using it and suggesting modifications, or additions to the roles.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s