Like any economic and community development approach, building a WealthWorks value chain is an undertaking. Identifying the coordinator, spotting the right market opportunities, assembling and connecting partners, finding leverage points and addressing gaps, bottlenecks and underutilized resources is real work. So, like any market-driven approach, it requires investment—not just financial, but investments of creative thinking, willingness to innovate, commitments to doing things differently to create different results—and time.
Think of a WealthWorks value chain as a venture undertaken by a group of investors. Each invests in the value chain to, over time, generate a good return. But WealthWorks investors don’t necessarily invest dollars, and not all value chain investors are looking for financial returns.
Three big investment questions guide the construction of a WealthWorks value chain:
In WealthWorks, investment includes any use or dedication of a capital for wealth-building results. Applying an underutilized resource to fill a gap in the value chain is a wealth-building investment.
Every partner who is drawn into a WealthWorks value chain is an investor—whether a demand, transactional or support partner. Each must receive something of value for their investment, or they would not be connected to the value chain. But there are two kinds of benefits: Direct benefits and broader benefits.
Direct benefit: Self-interest and shared interest. Typically, what draws a partner into participation and investment in the value chain is something that will fulfill their self-interest. Self-interest can have many facets, not all of them financial. Here is a simple partial list of self-interest motivators:
Many refer to finding this self-interest as addressing the partner’s “pain point.” So, a good initial organizing question for value chain construction is: “What issue or opportunity or pain is the potential partner experiencing that the value chain can address or alleviate?” From their point of view, the potential partner is asking a parallel question: “What’s in it for me?”
Quite often, two partners in a value chain have the same self-interest in participating and investing. So, in our tomato soup value chain, to operate at full capacity, both the food processing firm and the aggregating distributor might share self-interest in having a reliable supply of organic tomatoes. Once they realize that shared interest, they may be willing to invest more time and effort in working with the value chain coordinator and other partners to ensure that more local farmers have what they need to produce an adequate supply of organic tomatoes every season. Recognizing such shared interests can strengthen the bonds in a value chain in ways that encourage more investment.
Broader benefit: Common interest. It is also important to look beyond direct benefits to broader benefits produced by a WealthWorks value chain. This can include benefits produced by the value chain that accrue to people, places or businesses outside of the value chain.
For example, the more nutritious organic food options in the schools might help children make better food choices and reduce obesity. Both their parents and their doctors might notice and realize the benefit. Likewise, local officials might appreciate that local farmers are doing better financially now that they are growing and selling organic tomatoes, are also becoming more active leaders in the community and showing up and contributing ideas at town meetings and regional economic forums.
WealthWorks value chain partners and coordinators do well to keep asking two useful broader-benefit questions: “What broader benefits will this value chain produce for those outside the value chain?” and, “Who is it that will benefit?” These can help expand your thinking about all the ways the value chain might produce results that benefit the region. It can generate a list of potential support partners who might invest in the value chain. For example, the elected state legislator in the region might take a new interest in the potential of the organic food sector and begin to sponsor legislation or advocate for regulations that help the sector achieve more scale of production, participation or results.
Overall, what’s important is recognizing that a WealthWorks value chain will produce a range of direct and broader benefits that may provide investment opportunities in your value chain. Working with potential partners to identify their value proposition—that is, what they care about that is of sufficient interest to energize their participation—can lead them to invest in the value chain. The value chain may help them address a specific pain point in need of a solution or may help them achieve a goal related to their mission. An individual’s or organization’s interest in investing in a value chain may not be immediately apparent. It is through conversation and relationship-building that value propositions emerge and investment can take place.
WealthWorks value chain coordinators and partners learn to broaden their sense of what investment means to get beyond the common frame of “All we need is more funding or financing or profit to make things work better in this region.” The exact investment needs of any WealthWorks value chain will depend on that value chain’s market opportunity. In WealthWorks, investment includes any use or dedication of any of the eight capitals to the value chain for wealth-building results.
Think of investment as the nature of each partner’s participation in the value chain. Are they providing time and technical expertise to other partners? Offering use of space or materials? Committing to a purchase? Taking on some risk? Funding a critical function? Organizing a pivotal conversation to address a roadblock? Lending their voice to advocate for changing a regulation? Creating a new financing option? Volunteering time and paying fees to be trained in new skills? These are all investments.
The structure and timing of investments affect how—and how well—WealthWorks value chains fulfill wealth-building goals. Well-designed investments can help the value chain grow the capitals, expand ownership and improve livelihoods. This happens when you pair investments with strategies to fill gaps, untangle bottlenecks and bring underutilized resources into productive use.
While the value chain coordinator is often the leading wealth-building advocate, it takes value chain partners to make wealth building a reality. Initially, partners may simply invest in the value chain because it meets a narrowly-focused self-interest. Over time, however, they may come to see the broader benefits produced by the value chain and expand their investments to include wealth building from the start. These partners may even become wealth-building champions, encouraging others to invest and build wealth in the region.
A value chain coordinator helps motivate the self-interest of partners or potential partners into an investment in value chain “action” that is tailored to increase wealth-building results in the region.
Seek to reduce high turnover rates that increase the cost of hiring and training employees.
Gap: No ongoing skills training is available for local food processing workforce outside of on-the-job training provided in local processing firms.
Food processor group works with local community college to develop tailored training program, and commits to increase wages for program graduates who stay with their firms at least one year.
Wants to sell soup to local school district, but district has exclusive contract with large, national food distributor.
Bottleneck: Because they receive some state funding, schools must procure food through a complex bidding process only large national food distributors can manage.
Distributor joins others in a “local-foods producers alliance” that lobbies state legislature and procurement agencies to open up bidding process to be more competitive and inclusive of local producers at smaller scale.
Seeks to expand use of disappearing varieties of tomatoes.
Gap: No supplier willing to offer price-competitive seeds to small growers.
Heritage foods non-profit helps lower-income farmers gain traditional know-how to grow heritage varieties and harvest seeds for their own use and for profitable sale to other farmers.
Aspires to play a more useful role in building the region’s economy.
Underutilized resource: Small-farm producers lack capital for hoop houses that can both protect crops from extreme weather and extend the growing season.
Community foundation works with its donors to develop revolving loan fund for new small-farm producers who can’t get conventional bank financing.
Wants to keep its insured customers healthy and not using expensive medical services.
Bottleneck: Families have little disposable income to purchase higher-priced, more nutritious local organic food at the market.
Insurance companies offer monthly premium reductions to families that pre-purchase discounted weekly vegetable boxes (with recipe guides) from regional cooperatives.
Specialties: Local Food, Placemaking, Renewable Energy
States served: Minnesota
Additional details: Enhancing the vitality and quality of life in Cass, Crow Wing, Morrison, Todd and Wadena counties is the mission of Region Five Development Commission. Resiliency, inclusion and collaboration are guiding concepts in achieving mutually shared goals that continue to evolve with local municipalities, state, federal, philanthropic, non-profit and social advocacy agencies.
Contact: Cheryal Lee Hills, 218-894-3233
200 1st Street NE, Suite 2
Staples, MN 56479
Alternative contact: Dawn Espe, 218-894-3233
Specialties: Food, Forestry/wood products, Tourism
States served: Idaho, Oregon, Washington
Additional details: RDI was formed in 1991 in response to the timber industry crisis facing the Pacific Northwest. Our nationally recognized programs and services help communities help themselves with effective and results-oriented training and resources necessary for individuals living in rural communities to build and sustain a better future in their communities. Our work is based upon our genuine commitment to build rural capacity through Leadership Development programs and strengthen Rural Economic Vitality through moving capacity into action.
Contact: Amy Hause, (541) 255-9590
Rural Development Initiatives
91017 S Willamette St
Coburg, Oregon 97408
Alternative contact: Heidi Khokhar, (541) 684-9077 ext. 7011
Specialties: Food, Forestry/wood products, Housing, Tourism
States served: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming
Region details: RCAC serves 13 western states including: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. We also work in the U.S. territories of the Marianas Islands, Marshall Islands and the U.S. Virgin Islands.
Additional details: RCAC Value Chains, economic development and Wealth Works are embedded in RCAC’s Building Rural Economies program. With over 10 years of experience in these arenas we technically assist communities who wish to envision and create their future.
Carol Cohen, 435-671-7068
3120 Freeboard Drive
West Sacramento, CA 95691
Alternative contact: Ellen Drew, (575) 421-0261
Specialties: Energy efficiency
States served: Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, Wyoming
Additional details: Midwest Assistance Program (MAP) has been helping communities and tribal nations find solutions to their infrastructure and development needs through information, resource management, expertise, and technical assistance since 1979.
Contact: Chris Fierrros, 660-562-2575
303 N Market Street, Suite 2
Maryville, MO 64468
Specialties: Bio-energy, Food
States served: Arkansas, Louisiana, Mississippi, Oklahoma, Tennessee, Texas
Region details: Communities Unlimited serves seven southern states: Arkansas, Mississippi, Tennessee. Texas, Oklahoma, Louisiana and Alabama. This is an area that includes 60% of this country’s persistently poor counties, including large percentages of African Americans, Hispanics, and Native Americans.
Additional details: Communities Unlimited has 40 years of community economic development experience in the South. It seeks to move rural and under-resourced places toward prosperity by identifying a community’s assets and the market demand for the products or services created from those. We then build value chain collaboratives based on WealthWorks principles to create new economic opportunities. Since 2013, we are demonstrating the success of this approach through a farm-to-fuel value chain in the Arkansas Delta.
Martha Claire Bullen, 479-443-2700
3 East Colt Square Drive
Fayetteville, AR 72703
Alternative contact: Debbie Luther, 870-509-1331
Specialties: Arts, Food, Forestry/wood products, Tourism
States served: Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont
Additional details: Community Roots, LLC is a Vermont firm specializing in rural community and economic development consulting. Melissa Levy of Community Roots, LLC has been working with the WealthWorks framework over the past several years. She’s been a trainer, coach, workshop facilitator, and presenter in the WealthWorks community.
Contact: Melissa Levy, 802-318-1720
Location: Hinesburg, VT
Specialties: Arts, Energy efficiency, Food, Forestry/wood products, Manufacturing, Tourism
States served: Kentucky, North Carolina, Ohio, Tennessee, Virginia, West Virginia
Additional details: The Central Appalachian Network is a regional network of six anchor organizations that pursue collective sustainable economic development strategies across the Appalachian region of Ohio, West Virginia, Kentucky, Virginia, and Tennessee. CAN builds regional partnerships and also works deeply at the sub-regional level around sectors and opportunities including local food value chains, forestry, new energy, small business development, social enterprise, recycling/upcycling, implementation-focused research, advocacy, and organizational capacity-building. CAN’s members are Appalachian Center for Economic Networks (ACEnet), Appalachian Sustainable Development (ASD), Coalfield Development Corporation, Community Farm Alliance (CFA), Mountain Association for Community Economic Development (MACED), Natural Capital Investment Fund (NCIF), and Rural Action.
Contact: Leslie Schaller, 740-592-3854
1456 C Patton Avenue
Asheville, NC 28806