The Art of Community Wealth: Building Prosperity Together

Community wealth building (CWB) is a transformative approach to economic development that focuses on creating locally rooted, broadly shared prosperity. Unlike traditional models that prioritize maximizing shareholder value, CWB emphasizes building wealth for all members of a community, fostering economic resilience, and addressing systemic inequalities. This post explores the principles, strategies, and real-world examples of CWB from across the globe, demonstrating how it can be a powerful tool for creating lasting, equitable, and sustainable communities.

What is Community Wealth Building?

At its core, CWB is about democratizing economic power. It challenges the concentration of wealth in the hands of a few and promotes economic inclusion for marginalized communities. It seeks to create an economy that works for everyone, not just a select few. Key characteristics of CWB include:

• Local Ownership: Businesses are owned and controlled by local residents, workers, or community organizations.
• Democratic Governance: Decisions are made democratically, giving stakeholders a voice in shaping the future of their community.
• Fair Labor Practices: Workers are paid fair wages and benefits, and have opportunities for advancement.
• Environmental Sustainability: Businesses operate in a way that protects the environment and promotes long-term sustainability.
• Community Benefit: Businesses prioritize the needs of the community, investing in local infrastructure, education, and other vital services.

The Principles of Community Wealth Building

Several core principles guide the practice of community wealth building. These principles provide a framework for creating economic systems that are more equitable, sustainable, and resilient.

1. Anchor Institutions

Anchor institutions are large, stable organizations that are rooted in a particular community and have a significant economic impact. Examples include hospitals, universities, government agencies, and large non-profit organizations. These institutions can play a pivotal role in CWB by leveraging their purchasing power, hiring practices, and investment strategies to support local businesses and create jobs.

Example: In Cleveland, Ohio, a consortium of anchor institutions called the Evergreen Cooperatives Initiative was formed to create worker-owned cooperatives that provide services to these institutions. These cooperatives include a laundry service, a solar panel installation company, and an urban farm. By sourcing goods and services from these cooperatives, the anchor institutions are helping to create jobs and build wealth in low-income communities.

2. Employee Ownership

Employee ownership gives workers a stake in the success of their company. This can take many forms, including employee stock ownership plans (ESOPs), worker cooperatives, and profit-sharing arrangements. Employee ownership can lead to increased productivity, improved job quality, and greater economic security for workers.

Example: Mondragon Corporation in Spain is a federation of worker cooperatives that employs over 80,000 people. Mondragon's cooperatives are owned and controlled by their workers, who share in the profits and participate in decision-making. This model has created a thriving economy in the Basque region of Spain and has been replicated in other parts of the world.

3. Social Enterprise

Social enterprises are businesses that are designed to address social or environmental problems. They generate revenue through the sale of goods and services, but their primary purpose is to create positive social impact. Social enterprises can be a powerful tool for CWB by providing jobs, addressing unmet needs, and promoting economic justice.

Example: Grameen Bank in Bangladesh is a microfinance institution that provides small loans to entrepreneurs in rural areas. Grameen Bank's loans have helped millions of people start businesses and lift themselves out of poverty. The bank's success has inspired the creation of microfinance institutions around the world.

4. Community Land Trusts

Community land trusts (CLTs) are non-profit organizations that own land on behalf of a community. CLTs provide permanently affordable housing by separating the ownership of the land from the ownership of the buildings on it. This allows residents to purchase homes at below-market prices while ensuring that the land remains permanently affordable for future generations.

Example: The Champlain Housing Trust in Burlington, Vermont, is one of the oldest and largest CLTs in the United States. The Champlain Housing Trust owns over 600 acres of land and provides affordable housing to over 2,300 households. The trust has been instrumental in preserving affordability in a rapidly gentrifying city.

5. Public Banking

Public banks are banks that are owned and controlled by a government entity, such as a state or municipality. Public banks can provide affordable credit to local businesses, invest in community development projects, and promote financial inclusion. Unlike private banks, public banks are not driven by profit maximization and can prioritize the needs of the community.

Example: The Bank of North Dakota is the only state-owned bank in the United States. The Bank of North Dakota partners with local banks to provide financing for businesses, farmers, and students. The bank has been credited with helping North Dakota weather economic downturns and maintain a strong economy.

Strategies for Building Community Wealth

Implementing community wealth building requires a multi-faceted approach. Here are some key strategies that communities can use to foster economic resilience and create lasting prosperity:

1. Supporting Local Businesses

Supporting local businesses is crucial for creating a vibrant and resilient local economy. When you buy from local businesses, you are supporting your neighbors, creating jobs, and keeping money circulating within the community. Communities can support local businesses through a variety of initiatives, such as:

• Buy Local Campaigns: Campaigns that encourage residents to shop at local businesses.
• Local Procurement Policies: Policies that require government agencies and anchor institutions to purchase goods and services from local businesses.
• Incubator and Accelerator Programs: Programs that provide support and resources to help local businesses grow and thrive.

2. Investing in Workforce Development

Investing in workforce development is essential for ensuring that residents have the skills and training they need to succeed in the local economy. Workforce development programs can provide training in high-demand industries, help residents find jobs, and support career advancement. These programs are especially critical for low-income and marginalized communities.

Example: Many countries around the globe are investing heavily in STEM (Science, Technology, Engineering, and Mathematics) education to prepare their workforce for the jobs of the future. These initiatives often target underserved communities and aim to bridge the skills gap.

3. Promoting Financial Inclusion

Financial inclusion ensures that all residents have access to affordable financial services, such as bank accounts, credit, and insurance. Many low-income and marginalized communities are underserved by traditional financial institutions, which can lead to predatory lending practices and financial instability. Communities can promote financial inclusion through a variety of initiatives, such as:

• Community Development Financial Institutions (CDFIs): CDFIs are financial institutions that are dedicated to serving low-income communities.
• Financial Literacy Programs: Programs that teach residents how to manage their finances and make informed financial decisions.
• Alternative Lending Models: Models that provide affordable credit to residents who are unable to access traditional loans.

4. Creating Affordable Housing

Affordable housing is essential for ensuring that all residents have a safe and stable place to live. The lack of affordable housing can lead to homelessness, overcrowding, and financial instability. Communities can create affordable housing through a variety of strategies, such as:

• Inclusionary Zoning: Policies that require developers to include affordable units in new housing developments.
• Public Housing: Government-owned and operated housing that is available to low-income residents.
• Housing Subsidies: Programs that provide financial assistance to help low-income residents afford housing.

5. Fostering Cooperative Development

Cooperatives are businesses that are owned and controlled by their members, who can be workers, consumers, or producers. Cooperatives can be a powerful tool for CWB by empowering members, creating jobs, and building wealth within the community. Communities can foster cooperative development through a variety of initiatives, such as:

• Cooperative Development Centers: Organizations that provide technical assistance and support to cooperative businesses.
• Cooperative Financing Programs: Programs that provide loans and grants to cooperative businesses.
• Education and Outreach: Programs that raise awareness about the benefits of cooperatives.

Real-World Examples of Community Wealth Building

Community wealth building is not just a theoretical concept; it is a practical approach that is being implemented in communities around the world. Here are a few examples of successful CWB initiatives:

Preston Model (United Kingdom)

The Preston Model is a CWB initiative in Preston, Lancashire, England. The model focuses on leveraging the purchasing power of local anchor institutions to support local businesses and create jobs. The Preston City Council has worked with local anchor institutions, such as the University of Central Lancashire and the Royal Preston Hospital, to redirect their procurement spending to local businesses. This has resulted in the creation of hundreds of new jobs and a significant boost to the local economy.

The Democracy Collaborative (United States)

The Democracy Collaborative is a research and advocacy organization that promotes community wealth building in the United States. The Democracy Collaborative works with communities across the country to develop and implement CWB strategies. They provide technical assistance, conduct research, and advocate for policies that support CWB.

Cooperative Coffees (Global)

Cooperative Coffees is a cooperative of coffee roasters in the United States and Canada that sources coffee directly from farmer cooperatives in Latin America. By bypassing traditional intermediaries, Cooperative Coffees is able to pay farmers a fair price for their coffee and support sustainable farming practices. This model empowers farmers, creates economic opportunities, and promotes environmental stewardship.

The Emilia-Romagna Region (Italy)

The Emilia-Romagna region of Italy has a long history of cooperative development. The region is home to a thriving network of worker cooperatives, social cooperatives, and agricultural cooperatives. These cooperatives play a significant role in the regional economy, providing jobs, delivering social services, and promoting sustainable development. The regional government has a strong commitment to supporting cooperative development through policies and programs.

Challenges and Opportunities

While community wealth building offers a promising path towards a more equitable and sustainable economy, it also faces several challenges. These include:

• Lack of Awareness: Many people are not familiar with the concept of CWB or its potential benefits.
• Resistance from Established Interests: Traditional economic models often benefit established interests, who may resist efforts to promote CWB.
• Limited Resources: Implementing CWB strategies can require significant financial and technical resources.
• Complexity: CWB involves a wide range of stakeholders and requires a coordinated approach.

Despite these challenges, there are also significant opportunities for CWB. These include:

• Growing Demand for Economic Justice: There is a growing demand for economic justice and a desire for more equitable and sustainable economic systems.
• Increased Awareness of the Benefits of Local Economies: People are increasingly recognizing the benefits of supporting local businesses and building strong local economies.
• Emerging Technologies: New technologies, such as blockchain and crowdfunding, can facilitate CWB by connecting communities, mobilizing resources, and promoting transparency.
• Government Support: Governments around the world are increasingly recognizing the potential of CWB and are implementing policies and programs to support it.

Conclusion

Community wealth building is a powerful approach to economic development that can create lasting, equitable, and sustainable communities. By focusing on local ownership, democratic governance, fair labor practices, environmental sustainability, and community benefit, CWB can transform economies and improve the lives of all residents. While challenges remain, the growing demand for economic justice and the emergence of new technologies create significant opportunities for CWB to thrive. By embracing the art of community wealth, we can build a future where prosperity is shared by all.

Actionable Insights:

• Research local initiatives: Identify community wealth building initiatives in your region and explore ways to get involved.
• Support local businesses: Make a conscious effort to shop at locally owned businesses and support their growth.
• Advocate for policy changes: Encourage your local government to adopt policies that support community wealth building.
• Educate yourself and others: Learn more about community wealth building and share your knowledge with others.
• Invest in community-based organizations: Support organizations that are working to build community wealth through financial contributions and volunteer work.

By taking these actions, you can play a role in creating a more equitable and sustainable economy for your community and the world.