We are pleased to offer this inspiring, informative article from Fran Koster, an “optimistic futurist.” Fran, based in Kannapolis, N.C., is a very wise researcher, solution provider and writer on topics relating to local impact and moving communities and people forward. We appreciate Fran sharing this article.

We can help struggling local businesses survive and foster the growth of new ones by using some proven tools many people do not know about.

One option is that a group of local investors come together and form a locally focused mutual fund that has as its mission making prudent investments only in the local economy. Each investor in the fund earns a rate of return based on the success of the portfolio, which could include an air conditioning company, three restaurants, a car wash, a computer repair shop, a local landlord with a fleet of rental properties and a manufacturing plant.

Local investment has two major advantages over the same amount of money invested via Wall Street. The first is that the investors personally know who they are backing – the owner of the restaurant may go to the same church, or be well known for their civic activities. Second, have shown that when dollars are spent at local businesses, they have a 3 to 5 times greater local economic impact than if the same amount of money is spent at major chain stores.

You can read many examples of this kind of investment in Michael Schuman’s book called The Local Economy Solution.

In Winston-Salem, N.C., there is a locally focused, very hands-on investment group called New Ventures that is an integral part of a business incubator located there. It has screened over 600 startups in five years, coached over 65 startups, and invested in 24 companies. Those local companies have created 89 jobs with a combined valuation that has grown to more than $40 million in less than five years.

There is a nonprofit consulting group that travels around the country helping communities conduct an inventory of local assets and leads discussions about how to stimulate the local economy, including setting up local mutual investment funds. You can learn more about them at www.centerforcommunityownership.org.

If you want to invest locally, but don’t have the time or desire to set up a new local mutual fund, the internet age has created an alternative. Many people are familiar with Crowdfunding, where you can post a project or social need on-line, and donors can make charitable contributions.

Similar, but not a charity, a website called Crowdfund Mainstreet allows small local companies (after they pass rigorous review to eliminate fraud) to solicit investors on-line. You just enter in your zip code, and if there is a qualified local business looking for investments in your area, you can make investments or purchase shares on line immediately. They have a great video on their website.

We know that COVID-19 will have serious impact on health and our economy for at least another year. This crisis is both urgent and important. If your personal situation allows you to invest in a way that can support local entrepreneurs, call the Chamber of Commerce or Economic Development Council and let them know of your willingness.

See more of Fran Koster’s solutions at www.theoptimisticfuturist.org