People often ask, “So what do Transition Town groups do?” One answer to that question would be, “We take good ideas, bring them home, and make them real.”
That’s what Pat Thompson and Sherm Eagles did when they attended Jay Tompt’s REconomy workshop at the Transition US National Gathering in St. Paul, Minnesota in 2017.
“Hearing that such a thing exists as the REconomy Centre, that was an eye opener. Wow! Someone is doing this thing and maybe we can do something like it,” said Pat. “I was also inspired by the people who attended the workshop. There was a woman from Brooklyn who owns a building that serves as a community center and helps percolate programs to start things the community needs. There were people doing online crowdsourcing to fund Transition-related things. There was local currency. All these different angles from different parts of the country.
“My first thought was that our Transition group – Transition Town–All St. Anthony Park (Transition ASAP) – could set up something like the Community of Dragons, community-supported entrepreneurship, that they have in Totnes. But we’re in a really big market here in the Twin Cities, and some things like that already exist. So instead, our group set up Transition Your Money (TYM).”
Sherm and Pat now convene a monthly group that talks about ways people can get their money out of Wall Street and bring it back into the local economy.
“Our neighborhood is a pocket of fairly well off people – not all, but some – and also people with a strong social conscience,” Pat said. “They’re concerned about climate change and they want to do something about it.
“Most people’s money, if they have some, is in their retirement account. They don’t have a lot of money otherwise lying around. That means it’s trapped on Wall Street because of how our government has structured things. We knew there were people who weren’t happy about that. If we could come up with ways to free that money so it could be invested locally, they would do it. We wanted that for ourselves, and we thought there were others who would want it too.”
They were right! Over the course of several months, people attended meetings, met with local organizations like these, who held a piece of the local investment puzzle:
- The Main Street Project, a regenerative farm near Northfield, Minn.,
- Co-op Principal, a co-op investment club,
- Silicon Prairie, a web-based local investment portal,
- Shared Capital, a co-op-funding Community Development Financial Institution, and
- The Rondo Land Trust, preserving affordable housing in a historically Black neighborhood.
They assembled a list of ideas that could be pursued through self-directed IRAs.
“Unfortunately, self-directed IRAs cost a lot of money to do,” Pat explained. “With a self-directed IRA, you decide what to invest in, but the government says you have to run the money through somewhere official and those places have very high fees. If you’re investing in local small businesses, the return may be something like 5%. By the time you’ve paid the fees, you could come out earning not much.”
TYM members, discouraged by the financial limitations of self-directed IRAs, turned their attention to the work of Michael Shuman and the Next Egg (a co-creation of Shuman, the Sustainable Economies Law Center, and the LIFT Economy). Through Next Egg, TYM members can collaborate with others across the nation who have the same mission to transition their money from Wall Street to Main Street.
Another problem that TYM members are trying to address is lack of liquidity for local investments, which is a big challenge for older people who want to invest their retirement money for awhile but who may need their funds for nearer-term living expenses.
Pat said: “Traditional savings and retirement investments are pretty liquid but if you invest in real estate, or small local companies, you may not be able to sell it if no one is able to buy it. So we’re looking for ways to develop a secondary market – like a stock market.
“If we’re serious about the idea of real local investing replacing national extractive investing, we need a secondary market to be part of the solution. We don’t know how to create one. We hope that’s part of what Next Egg or the National Coalition for Community Capital is thinking about.
“There are no answers yet, but we’re trying to come up with solutions.”
In the meantime, members of the group are helping to start a second Twin Cities real estate investment cooperative to build a base of community ownership for commercial buildings in the adjacent Hamline-Midway neighborhood, following the lead of folks in Northeast Minneapolis who started the Northeast Investment Cooperative.
Transition Your Money also spun off an investment group called Local Dough. It is an incorporated LLC that now has 24 members who invest $100/month. Members decide together how to use that money to support the local economy and regenerative businesses. So far, the group has invested in two energy projects with Cooperative Energy Futures and the Red Lake Solar Project. They are looking for local regenerative agriculture projects for their next investment.
Several TYM members also partnered to create a neighborhood coworking/meeting space called CoCreatz. It provided event and office space to key neighborhood organizations at a highly visible location convenient to mass transit.
“This was an area where there were literally no single-family homes. Everybody lives in an apartment, so the coworking space was both a ‘third place’ where people could be and meet people who weren’t just from their own building, and it was a community event space. It was the only place you could meet that wasn’t a restaurant or coffee shop.”
It was on track to become the beating heart of that part of the community – partnering with a local art gallery, hosting events, home base for community projects and the potential home of the neighborhood association. Unfortunately, in 2020 it was forced to close due to the pandemic.
But Transition Your Money and Local Dough continue to look for practical ways to create a bigger impact in their community.
You Can Replicate a Group Like Transition Your Money
Here’s Pat’s advice:
- Find a core of three to five people
- Meet regularly. Just continuing to talk, read, and connect creates momentum
- Establish guiding principles that everyone in the group is learning and there are no stupid questions
- Connect with anyone and any organization in your area who is doing parallel work
- Focus attention on what you DO want rather than what you DON’T want
This story is part of a series developed in our Stories to Action phase of our year-long national campaign, From What Is to What If: Reimagining and Rebuilding Our World. In this phase of the campaign, Transition US is inviting (through May of 2021) community resilience-building initiatives all over the country to share inspiring stories. We have curated a collection of stories of innovative, successful, and replicable projects that have furthered the causes of sustainability, justice, cooperation, and regeneration in neighborhoods, towns and cities, states, and regions throughout the U.S.
5 thoughts on “Transitioning Our Money to Invest Local”
Did they look into REITs (real estate investment trusts) as a way to transition their retirement savings into the local economy?
We have discussed REITs a bit at various points, as well as real estate co-ops with different level of share amounts. Something to look into more, though as the article says, not the most liquid of investments, so if investors are older, that can be a concern, especially.
Thanks for sharing your work. I’m especially interested in the Local Dough concept!
Local Dough is pretty replicable because it’s under the federal guidelines for investment clubs, and incorporated as an LLC. We’re happy to share our incorporation papers and operating agreement with anyone who wants to see them. You can email info@TransitionASAP.org to ask to be forwarded to the person who can send to me and I can get the documents. —Pat
Thanks for offering support, Pat – a great resource for other local groups!