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Markets

Terra Genesis Supply Chain Designer Ethan Roland Soloviev will be presenting at the 2015 Social Capital Markets (SOCAP) event on Thursday October 8th: SOCAP15

The talk is co-presented with Carol Sanford, a thought-leader for 40 years on Regenerative Business and Regenerative Enterprise development. The title of the talk is “Changing Pursuits and Measures to Alter the Course of History.” How do we assess an investment to see if it’s going to make a real difference to societal or planetary challenges? Beyond using responsible business management and strategy practices, game-changing impact comes from ventures that displace current offerings and change the industries they’re in, move social systems and cultural paradigms toward responsible changes, and utilize governing agreements to create change on a bigger scale. Go beyond responsible business, to disrupting entire industries for good.

Ethan Roland is an international expert on sustainable agriculture, permaculture, and eco-social entrepreneurship. He offers lectures and workshops around the world, and is the co-author of Regenerative Enterprise: Optimizing for Multi-Capital Abundance. Ethan is the President of the Apios Institute for Regenerative Perennial Agriculture, the founder of Regenerative Real Estate LLC, holds an B.S. in Biochemsitry from Haverford and an M.S. in Eco-Social Design from Gaia University. Ethan is our primary research scientist and Computer Aided Design specialist, producing accurate & information-rich site plans and 3D modeling for the team. Recent projects include 320 acre farm & development designs, orchard consulting for the state agriculture ministry of Guba in Azerbaijan, and teaching several Permaculture Design Courses in northern Thailand.

Carol SanfordScreen Shot 2015-09-22 at 8.16.31 AM has led a revolution in how business is to be conducted since1977. With long-term engagements, she functioned as a supra-executive decoding a company’s DNA and aligning systems to yield game-changing innovation, market leadership, and financial returns. Through her A-rated speeches and award-winning books, Carol relates examples that inspire and instruct businesses to re-imagine their way of working and change industries, social systems, cultural beliefs and governing practices. Her highly-praised books, The Responsible Business and her latest The Responsible Entrepreneur, are required reading at leading business schools including Harvard, Stanford, Haas Berkeley and MIT. Universities that use her book include her as a speaker and lecturer not only to students but also to the faculty. Carol Sanford offers a fundamentally different method of working that has been tested and proven successful on three continents in multiple industries. Her contrarian strategy, leadership and management approaches challenge myths she has proven undermine success, which many mistakenly call best practices. Carol is not a visionary who offers only great ideas. Carol offers proven success. Through deep direct experience she has repeatedly seen the fruits of her instruction succeed. In each engagement, Carol worked with all functions and levels of the business: from C-suite executives of Finance, Business Development and Sales, Marketing, IT, R&D, to operations leadership. In most instances this included acquisition, merger, brand development, product management and channel building resulting in decades long market leadership. Carol Sanford is the real deal—an experienced thought leader and expert that brings about innovative, meaningful and profitable change. As a result she is a captivating speaker with a wealth of real world stories, from her across-the-board experience that will uplift your audience and get them moving.

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Agriculture & Farming, Design, Markets, Regenerative Supply

Published in InPractice by Holistic Management International, Mary Johnson

Tools for Effective Financial Planning

I frequently talk with a room full of permaculturists or farmers and ask them questions like: “Are you happy with your current financial situation?” and “What goes into your financial planning?” I usually find myself looking out at a roomful of blank stares, or worse, getting loud sighs or judgmental groans in response to my questions. If you yourself are having a similar gut reaction, I challenge you to take a minute to suspend any feelings of distaste that you may be struggling with.  Also, if you think you already know enough about how to manage your life and finances, give yourself this quick quiz and allow yourself the opportunity to perhaps even make some profound and empowering changes in your life, I guarantee you will be happy you did.

Financial Literacy Quiz

  1. What information does a gross profit analysis give you, and how can it help you evaluate an enterprise? Why is that important?
  2. What is the purpose of doing a cash flow budget and how can the information be used in managing a project or business?
  3. Why calculate both a beginning and a projected ending net worth in the financial planning process?
  4. What elements could comprise an increase in the net worth of a farm or business?
  5. Describe the difference between being profit oriented versus production oriented?

Feeling confident, or does this all sound like Greek to you? Unless you are living the life you dream of and feel relatively confident that you will be able to sustain that lifestyle into the future, you may want to ask yourself these questions:

“What financial decisions did you make in the last year?”

“Do you think you had the best tools to make those decisions in a sound way?”

“Do you feel confident that you were using your precious time, money and energy in the most effective way?”

“Did your decisions lead you towards achieving your overall goals for your life in the best way possible?”

“Did the decisions support your deepest values?”

If you are still feeling good, you probably have a sound basis in financial management already. If your answers to any of these questions come up short, or leave you feeling a little uneasy, maybe it would be a good time for you to take a Financial Planning course or refresher.

I have been working closely with some of the Beginning Women Farmers from the Northeast that are part of HMI’s USDA-funded program, both as a mentor and as an instructor of some of their sessions. Just to give you a flavor of the diversity in the group, one woman has run a successful computer company in the D.C. area for the past decade, after having spent her early years working as a migrant laborer in the fruit industry.  Now she has invested a sizable nest egg into renovating a New England fruit orchard.  Recently I was at her farm working on developing her holistic goal with her husband, and testing some major decisions they were facing in the operation.  After 700K of investment in the start-up, they were trying to decide if they were really committed to the costly vegetable operation that was taking up a lot of their time, but not adding to their quality of life as they were both really more interested in the fruit side of their business.  Another woman, after raising nine children and coaching them through various 4H projects for years, decided to turn their goat experience into an organic micro-goat dairy.  She sells organic herbs and veggies to a Whole Foods just outside of Boston, MA.  All the women have similarly amazing stories about what led them to farming. I have watched their excitement and frustration and listened to their unique viewpoints as they have diligently tackled homework assignments and made the long drive across the state to visit each other’s farms and grapple with the new concepts, sometimes with tears, often with lots of laughter and vociferous conversations that make teaching a challenge at times.

Already, they are beginning to integrate the concepts into their busy lives as business women, farm owners, mothers and wives among the million other hats they wear on a day-to-day basis. All seem to agree, it’s not easy stuff, but the thought of being able to make better financial decisions ahead of time, and know they are on track to making a profit, is worth the extra effort. Finding the discipline to do it, now that’s the real challenge. Their mentee groups and the regular meetings help them stay committed.

Reinvestment Strategies

As a permaculturist I have noticed how the financial weak link test ties in with the Permaculture Principle of Obtaining Yield—a surplus is a natural part of a well-designed system. Holistic Financial Planning helps us understand what a healthy surplus is, and where it will come from in a well designed business and identifies how best to catch and store that surplus and even how to redistribute it based on the values you define as important to you in your holisticgoal.

Once you have the profit, you plan how you will use it – maybe to increase your net worth by shrinking debt, or add to savings for retirement, or just for spending on an overdue vacation that will improve your quality of life and increase the sustainability of your business by reinvigorating you and your family. Knowing what you will spend the profit on are the carrots and the sticks that keep you moving on the plan from week-to-week, and that force you to make the tough decision so you don’t let that profit slip away from you.

Mary Johnson is a Permaculture Design & Holistic Management consultant and trainer working with Terra Genesis International. She works with farmers and business owners in the U.S. & internationally using concepts from both Permaculture and Holistic Management to help families, businesses, and organizations. You can read more about Holistic Management and International Permaculture on Mary’s blog at http://wrcinashfield.wordpress.com.

Benefits of Holistic Financial Planning

  • Planning for & achieving a triple bottom line profit, one that is socially, financially and environmentally sound.
  • Planning for Profit. Once you know how much profit you need and want, then you brainstorm all the ways that you can think of to create that profit by the end of the year.
  • Prioritizing expenses to maximize investing in the areas that need it the most ex. focusing on wealth generating expenses first, and addressing the weakest link in the production chain, capping other unnecessary expenses and sticking with the plan so profits aren’t eaten up.
  • Analyzing your enterprises against each other (Gross Profit Analysis) and in relation to how they help cover overhead expenses and generate return on investment so you can maximize profit.
  • Monitoring your plan (usually monthly) and proactively making necessary changes along the way so you get where you said you want to be by the end of the year.
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Markets, Regenerative Supply

A whole system of economic understanding

©Copyright 2011 Ethan Roland & Gregory Landua

Click here to download the article from Permaculture Magazine #68

Context: Financial Permaculture, 2009

In 2008 and 2009, I was part of the organizing & facilitation team for the Financial Permaculture Course in Hohenwald, Tennessee. Convened by the Center for Holistic Ecology, Gaia University, and Solari, Inc, the course brought together permaculture designers, financial planners, entrepreneurs, community activists, complementary currency advocates, farmers and government officials from around the country. Financial Permaculture goes beyond the traditional permaculture approach to economics and asks the question, “What would it look like if we re-designed the global financial system using permaculture principles?” and “What if our financial system looked more like an ecosystem?” In 2009, Catherine Austin Fitts presented “Mapping Financial Ecosystems”. We mapped all the ‘capital pools’ in the local community. We explored the flows of money between entities, and discussed how vibrant local economies are more defined by the flows of money rather than by the pools. Something wasn’t sitting right with me. We kept talking about money as if it was the only form of capital, even though there was a growing awareness that acres of land, board feet of timber, and tons of carbon might also be part of an ecosystemic economy. At one of the open space sessions I began to realize a more complete map of “capital.”

Eight Forms of Capital

The Oxford American Dictionary states that capital is, “wealth in the form of money or other assets” and a “valuable resource of a particular kind.” What are these ‘other assets’? I’ve never seen a whole map of all the different types of ‘valuable resources’. In the Permaculture Designers’ Manual, Bill Mollison offers and expands on a categorization of assets based on their potential: Degenerative, Generative, Procreative, Informational, Conservative (1). These always seem like a good way to think about things, but I don’t use them in any tangible way. I wanted something that would be more helpful for understanding the complex transactions and exchanges swirling around me as a human being and us as a global community. As I considered the ‘mapping financial ecosystems’ exercise, a bigger picture began to emerge as I thought about the capital pools and flows of the Mayor of a hypothetical small town. The Mayor might have some money (financial capital). A good Mayor would probably also have many friends in the town and some influence (social capital). The Mayor, who has a degree in economics, knows the stock market extremely well. S/he uses that intellectual capital to generate more money (financial capital) to run a re-election campaign, in which s/he works to transform financial capital into more social capital in the town. I tried to enumerate all of the different ‘valuable resources’ which an individual or entity could gather or exchange. “Eight Forms of Capital” emerged:

Social Capital

Influence and connections are social capital. A person or entity who has ‘good social capital’ can ask favors, influence decisions, and communicate efficiently. Social capital is of primary importance in politics, business, and community organizing. Jason Eaton of Social Thread LLC explained to me that Capital can be in the form of equity or debt. In social capital, a person can ‘owe’ favors or decision-making influence to another person or entity.

Material Capital

Non-living physical objects form material capital. Raw and processed resources like stone, metal, timber, and fossil fuels are ‘complexed’ with each other to create more sophisticated materials or structures. Modern buildings, bridges, and other pieces of infrastructure along with tools, computers, and other technologies are complexed forms of material capital.

Financial Capital

We are most familiar with financial capital: Money, currencies, securities and other instruments of the global financial system. The current global society focuses enormous amounts of attention on financial capital. It is our primary tool for exchanging goods and services with other humans. It can be a powerful tool for oppression, or, (potentially) liberation.

Living Capital

A precious metal dealer who attended both Financial Permaculture courses advises, “Rather than U.S. Dollars, measure your wealth in ounces [of gold and silver]!” Recognizing that “precious” metals are just another form of financial capital, Catherine Austin Fitts recommends that we diversify and, “Measure your wealth in ounces, acres, and hooves.” Living capital is made up of the animals, plants, water and soil of our land— the true basis for life on our planet. Permaculture design teaches us the principles and practices for rapid creation of living capital. Permaculture encourages us to share the abundance of living capital rather than the intangible “wealth” of financial capital. (Note: “Natural Capital” could be a synonym for Living Capital, but the 1999 book “Natural Capitalism” by Hawkens et al. focuses more on a slightly updated system of capitalism than on the true wealth of living systems. The current Slow Money movement is also making strides in a similar direction, seeking to transfer financial capital into the living forms of soil, animals, and agriculture.)

Intellectual Capital

Intellectual capital is best described as a ‘knowledge’ asset. The majority of the current global education system is focused on imparting intellectual capital — whether or not it is the most useful form of capital for creating resilient and thriving communities. Having intellectual capital is touted as the surest way to ‘be successful’.Science and research can focus on obtaining intellectual capital or ‘truth’, though it is often motivated by the desire for financial or social capital. For example, “going to university” is primarily an exchange of financial capital for intellectual capital. It is supposed to prepare people for the rest of their lives in the world.

Experiential (or Human) Capital

We accumulate experiential capital through actually organizing a project in our community, or building a strawbale house, or completing a permaculture design. The most effective way to learn anything comes through a blended gathering of intellectual and experiential capital. My personal experience getting a Master’s degree at Gaia University showed me that experiential learning is essential for my effective functioning in the world: I was able to do projects instead of take classes, and I’m now collaboratively organizing the local permaculture guild and co-running a successful permaculture design firm (2). I can see that ‘Human Capital’ is a combination of social, intellectual and experiential capital,all facets of a person that can be gathered and carried in essentially limitless amounts. But there’s one more form of capital that a person can gather and carry inside themselves.

Spiritual Capital

As one practices their religion, spirituality, or other means of connection to self and universe, one may accumulate spiritual capital. It contains aspects of intellectual and experiential capital, but is deeper, more personal and less quantifiable. Manyost of the world’s religions include a concept of ‘the great chain of being’, a holarchic understanding of existence where spiritual attainment (in this context, the accumulation of spiritual capital) leads to different levels of being (3). Buddhism even contains an explicit spiritual currency: Karma! This form of spiritual capital is tallied and accounted for not only in one’s current life, but (taking re-incarnation into consideration) also in all of the past and future lives of one’s soul. In spiritual capital again enters the concept that capital can be in the form of equity (gathering positive spiritual experience/understanding/attainment) OR in the form of debt. In some Mayan cultures (like the Tzutujil of Lago Atitlan), a basic understanding of existence is that humans owe a ‘spiritual debt’ to the magnificent beauty and complexity of existence. According to this worldview, the goal of one’s life in the world is to create works of unspeakable beauty and gratitude, thereby repaying the spiritual debt to existence (4). The Tzutujil also recognize that single human beings can never really be effective at gathering and flowing capital if they are separated from their community.

Cultural Capital

All the other forms of capital may be held and owed by individuals, but cultural capital can only be gathered by a community of people. Cultural capital describes the shared internal and external processes of a community – the works of art and theater, the songs that every child learns, the ability to come together in celebration of the harvest or for a religious holiday. Cultural capital cannot be gathered by individuals alone. It could be viewed as an emergent property of the complex system of inter-capital exchanges that takes place in a village, a city, a bioregion, or nation.

Properties of the System

These eight forms of capital help us map our understanding of the world. The map clarifies that money is not the only form of capital flowing around and through us. This map expands the concepts of wealth (and poverty) to include the ‘valuable resources’ of personal connections, natural resources, land, knowledge, experience, and more. It provides a language for permaculture designers to communicate the value of healthy soil and healthy communities to people immersed in the current mindset of global capitalism, where financial capital is the only reality.

There are two types of flow between pools capital:

  1. Intra-capital flows, between the same type of capital. For example, using US dollars to purchase a stock or bond, or exchanging heirloom tomato seeds for a carton of eggs.
  2. Inter-capital flows, between different types of capital. For example, paying for a 2-year apprenticeship with a master builder would be an exchange of financial capital for experiential, intellectual, and even social capital.

These properties of capital flow point to another interesting question and feature of this map: What are the mediums of exchange used for each form of capital?

Eight Forms of Currency

Although most definitions of currency focus on financial capital, the Oxford American Dictionary and the Princeton Wordnet (5) both include the definition of “the fact or quality of being generally accepted or in use”. For this map, I define a currency as the generally accepted (or in use) medium of exchange between pools of capital. In many cases, the currency is the capital itself — for example, items of ‘Material Capital’ like copper or steel, can be the medium of exchange. Currencies can also be “complexed” into more interconnected and functional forms, and still used as a medium of exchange. Here are the eight forms of currency associated with each form of capital:

Practical Applications

Earlier this year, as my partner and I designed a four-weekend series of Forest Garden courses, we were having a lot of trouble with the budget. The costs of renting space and paying teachers combined with our desire to keep fees affordable for the local community made the numbers look unfeasible. No matter how we changed things around, we couldn’t figure out how to make a reasonable financial return. Then we realized that our thinking was too narrow — we were only looking at financial capital! When we considered the experiential capital we’d gain by running a course, the social capital gathered by planting forest gardens at a new education center, and the living capital of hundreds of useful plants going into the ground… it became clear that financial remuneration was only one facet of the system. Nonetheless, we still needed to balance our inflow and outflow of this one form of capital. The eight forms of capital provide a clear path towards a small point of great leverage: Eco-social Investing. We can encourage individuals, businesses, organizations, and governments to mimic nature’s practices of investing: Locally, intimately, diversely, and primarily in living capital. The Financial Permaculture community, Gaia University, and a host of connected businesses and organizations are investing diverse baskets of capital, offering events like the Carbon Farming Course in Tennessee and the thriving eco-social chocolate business BooyaCacao. I’ve outlined a set of principles for Eco-Social and Ecosystem Investing, which you can find on my blog at www.appleseedpermaculture.com/blog One of the most useful applications of this map is for growing and shifting our own understanding of the world and the transactions we engage in. When I volunteer time working on my friend’s organic permaculture farm, more than just ‘free labor’ is taking place:

  • I’m gaining experiential and intellectual capital about the farm’s soil, crops, and management,
  • We’re supporting the growth of healthy living capital in the soil,
  • My friend gets help producing products to exchange for financial capital (her right livelihood)
  • We both build social capital through positive interaction and connection with each other.

This amount of clarity can lead to a whole new level of transparency in our work as eco-social-cultural-economic designers. It can guide us towards an ever-deepening practice of the third ethic of permaculture.

The Third Ethic

Although Bill Mollison originally stated the third ethic of permaculture as “Setting limits to population and consumption,”(6) many of us (especially in the more recent waves of permaculture) have been taught different forms of the third ethic. Some learn “Fair Share,” a toned-down and friendlier version of “Limits”. Others learn “Resource Share,” which directs attention away from scarcity and towards re-investment of abundance. And more recently I’ve seen Starhawk refer to the third ethic as “Future Care,” which synthesizes the call for “Fair Share” and “Resource Share” into a focus on creating thriving inheritances for future generations. The eight forms of capital can and should be considered in terms of each version of the third ethic.

Fair Share

When people and the businesses, organizations, and governments understand the eight forms of capital, they may find that financial capital is not the whole system. This can lead to decreased consumption of non-essential goods and services that fuel our infinite-growth-based financial system. A truly just society requires fair and equitable distribution of all forms of capital. While financial capital is important, non-financial capitals offer pathways to empowerment for the oppressed communities of our planet. In communities I’ve visited (Kazakhstan, Chile, and Latin America), the abundance of cultural capital often outweighs the financial capital, regenerating into a wealth of experiential and living capital that I’ve never seen in my northeastern-USA home. Any of us in the over-developed world can follow this modeling, working to end oppression caused by our current financial-capital-centric systems.

Resource Share

We can use the eight forms of capital to include resource sharing in our projects. AppleSeed Permaculture has set a new Carbon Policy, whereby 5% of our revenues will be dedicated to offsetting our carbon footprint through carbon-farming projects (living capital). The Permaculture Activist’s tree tax functions in much the same way, transforming financial capital into living capital for the good of the planet. AppleSeed Permaculture is also inspired by our friends Shabazz and Josephine of Greenway Environmental Services, who explicitly donate 10% of every work week back to the community through education and consulting. They share their intellectual and experiential with urban youth groups and rural permaculturists alike, generating social capital for themselves at the same time. As an upper-middle class white male from the northeastern United States, I am seeking ways to transparently and joyfully use my multi-layered privilege to effectively share resources with those who have less power and freedom than I do. This article is one manifestation of my sharing of intellectual capital. I will also approach this goal through my work with eco-social investing. After seeking out leadership from people and communities who have been targeted by the oppressive effects of sexism, racism, and classism, their projects can be empowered through flows of multi-capital investment.

Future Care

To care for future generations, we need to move beyond finance into living and cultural capital. Of all eight forms, these two have the greatest potential for positive systemic change. Mollison writes, “We should develop or create wealth just as we develop landscapes, by conserving energy and natural resources [and] by developing procreative assets (proliferating forests, prairies, and life systems)”(7). Only through the songs, stories, and shared ethics of cultural capital can a focus on living capital can be sustained for the seventh generation to come. Some pieces are missing from the map: where does “labor” fit into the picture? What form of capital is “time”? There may be some dangerous implications: this map could commodify ecosystem services, spirituality, and culture. To care for the future, we must think more holistically about our current capital system. Let this map be a first draft. We don’t know what will happen in the future, but if a complex set of changes and capital flows appear along the way, I offer the eight forms of capital as a new map for the journey.

Gratitude & Resources

I offer my deepest gratitude to Catherine Austin Fitts, Andrew Langford, Bill Mollison, Jason Eaton, Gregory Landua, Dyami-Nason Regan, Connor Stedman, Mai Frank, and Rafter Sass for their specific contributions to and reflections on this evolving map.

References

  1. Mollison, B. 1988. Permaculture: A Designers’ Manual p. 534. Tagari Publications, Tasmania, Australia.
  2. Roland, E. 2008. Gaia University Master’s Degree Portfolio, http://gel.gaiauniversity.org
  3. Wilber, K. 2001. A Theory of Everything: An Integral Vision for Business, Politics, Science, and Spirituality p. 66-69. Shambhala Publications, Massachusetts, United Staes
  4. Prechtel, M. 2009. Saving the Indigenous Soul: Derrick Jensen Interviews Martín Prechtel. Sun Magazine, December 2009
  5. Wordnet: A Lexical Database for English. http://wordnet.princeton.edu/, accessed 5/31/09.
  6. Mollison, B. 1988. Permaculture: A Designers’ Manual p. 2. Tagari Publications, Tasmania, Australia.
  7. Ibid. Permaculture: A Designers’ Manual p. 534. Tagari Publications, Tasmania, Australia.
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Agriculture & Farming, Markets, Regenerative Business, Regenerative Supply

Roberto Muj is an agricultural trainer and community organizer for CIEDEG in Guatemala (http://nuevociedeg.org/).

He travels widely for work and designed a home food production system based on perennial crops that could survive his frequent absences. We taught a permaculture training together in January 2010 and I was amazed by his deep and wide knowledge of permaculture plants and systems. His home is one of the finest examples of perennial market gardens that I have ever seen.

The farm is in what is considered a chilly area as they sometimes get light frosts. Avocados grow but only some kinds of citrus will survive. Elevation is about 2200 meters. Most of the year is dry, with a 4-5 month rainy season in our summer.

Here is Roberto with his 10-year old perennial beans growing on firewood trees.

Much of the farm is laid out as a perennial alley crop system. Rows of productive trees alternate with perennial herbaceous crops.

Trees include citrus, avocado, sweet gum, alder, mulberry, fig, macadamia, and giant yucca.

Herbaceous crops include aloe, alfalfa for chicken fodder, perennial beans, perennial kale, and many cut flowers including lot of Alstromeria. The cut flowers and fruits are sold in local markets, with most of the production currently being in flowers and soon to shift to fruits as trees mature. We brought asparagus seed at his request as it is hard to produce in Guatemala but there is a huge market. Roberto wants to extend this production model to more of his acres which are currently producing corn – perhaps a macadamia-avocado-alder-asparagus type of system.

Roberto’s alley cropping system:

This polyculture is in the very back corner. Rather than weeds as one might expect, every plant is useful. The large elephant ear is a Xanthosoma, not an edible clone but instead used for pesticides to kill whiteflies, a significant pest for Roberto.

The living fence is izote (Yucca guatemalensis), which has excellent and valuable edible flowers. The trees (genus uncertain) are used for firewood. Climbing them is chayote or guiskil (Sechium edule), a perennial vegetable cucurbit, and perennial beans (Phaseolus coccineus).

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