In his book Inquiries Into the Nature of Slow Money — Investing as if Food, Farms, and Fertility Mattered, author Woody Tasch outlines the principles of the Slow Money movement, the macro goals of which are broadly applicable to any community-centric organization.
“It falls to us to undertake a new project of system design,” writes the Slow Money founder. “The creation of new forms of intermediation that catalyze the transition from a commerce of extraction and consumption to a commerce of preservation and restoration.”
Tasch stresses the importance of long-term benefits and sustainable business plans over rapid ROI. His movement benefits local businesses, economies, and communities and is evident in the investment activities of New Mexico Educators Credit Union ($1.4B, Albuquerque, NM). In August 2013, the credit union donated $3 million to the University of New Mexico (UNM) in support of Innovate ABQ, an initiative that marries the city and state’s capacity for research with its business community to create and develop companies, grow a culture of innovation, and attract workers and capital to the state.
CU QUICK FACTS
New Mexico Educators Credit Union
data as of 12.31.13
HQ: Albuquerque, NM
12-MO SHARE GROWTH: 11.42%
12-MO LOAN GROWTH: 24.23%
“We’ve been struggling for years to recruit companies to come here and provide opportunities for more employment and higher wages,” says New Mexico Employees CEO Terry Laudick, who is on Innovate ABQ’s board of governors and also works with STC.UNM, an innovation and economic development nonprofit corporation.
According to an article in the Albuquerque Business First, negative job growth over the past several months is just one sign of the city’s “nose-diving” economy. U.S. Census Bureau data ranks Albuquerque sixth nationally in metropolitan areas with the highest poverty rate — 20.4%. Additionally, New Mexico has the tenth-lowest median household income, $44,605, and the second-highest percentage of people below the poverty line, 21.5%.
Laudick has been involved with Innovate ABQ since the project’s conception in May 2012. Inspired by Victor Hwang’s book, The Rainforest: The Secret to Building the Next Silicon Valley, Innovate ABQ promises to take a Slow Money approach in creating new opportunities for Albuquerque, specifically in the information and technology sectors.
“The initiative is really a collaboration among education, government at all levels, and the private sector, Laudick says. “ [It’s] a collaborative effort around creating new economic viability for Albuquerque and New Mexico as a whole.”
Near the end of 2013, UNM was soliciting donations to purchase the land on which to build Innovate ABQ. Despite receiving a $1.5 million economic development grant from the state as well as $2 million from the city of Albuquerque, UNM was still $3 million short. (Bernalillo County has since committed $1 million more.) In August, the president of UNM approached New Mexico Educators for a donation, and the credit union agreed to supply the funds for two major reasons.
“It was the opportunity to create a stronger, more viable economic community,” Laudick said. “But more so [it was] the opportunity to demonstrate the cooperative principles on a grander scale.”
One of the seven cooperative principles is “concern for community,” and the credit union made this investment with a mind toward building a stronger, more attractive local economy. For example, instead of the donation, the credit union could have put that money toward a bonus dividend delivered directly to its more than 140,000 members. However, Laudick estimates that little of that money, roughly $20 per member, would have made it back into the local economy and benefitted the community over the long term. The $3 million investment in Innovation ABQ, on the other hand, is a long-term investment in the creation of new jobs and the overall economic revitalization of Albuquerque.
“That $3 million is going to return to our members ten-fold or greater,” Laudick says.
The Slow Money approach is one of patience coupled with an eye toward the greater community good. Innovation ABQ promises to make a significant community impact, although perhaps not on a short-term basis. It is not, as Laudick acknowledges, something where investors can expect a quick return on investment.
“This is a long-term project,” Laudick says. “It’s not a one-year or three-year project. It’s the basics of the cooperative principles. As we pool more resources and come together and perform well, we’re able to do more good.”
As the credit union continues to invest and help position the initiative in different ways, Laudick expects to see the city attract more industries outside the technology sector. For example, the credit union’s vice president of community relations grabbed the attention of Living Cities, a philanthropic collaborative of 22 foundations and financial institutions. Because of the combination of initiatives such as Innovate ABQ and research facilities such as Sandia National Laboratory, Los Alamos National Laboratory, Kirtland Air Force Base, and the University of New Mexico, Albuquerque was one of five cities selected for the Living Cities’ Integration Initiative. According to Laudick, Albuquerque’s inclusion offers the potential for further development to the downtown area. Projects include such things as rapid transit, low-income housing development, and new community centers — all of which can have a significant long-term affect on Albuquerque’s development.
“We’ve been able to leverage this $3 million contribution along with the nearly $4 million from other parties into what could potentially be $20-$30 million more in grants and low interest loans or no-interest loans for projects the city is going to be putting forth alongside of Innovate ABQ,” Laudick says.