As previously reported, crowdfunding has gained momentum among small businesses. A direct appeal from a business to its community, prospective customers, and/or concerned individuals for financial support, online crowdfunding platforms like Smallknot and 40billion have made initiating a small business crowdfunding appeal easier than ever.

One local church community is flipping crowdfunding onto its head: It got the crowd together first. The result is the Leaven Project.
 

Recognize the Spending Power of Your Community

Pastor Melissa Reed (center) with members Nick Fenger (left) and Darrel King (right). Photo: Wendy Hall
Pastor Melissa Reed (center) with members Nick Fenger (left) and Darrel King (right). Photo: Wendy Hall

As the recession began affecting families in Portland, the congregation at Redeemer Lutheran Church started thinking about how it could help beyond the usual path of charitable giving.

“We started hosting community potlucks in 2009 to learn how people were being affected by the recession,” says Melissa Reed, Pastor of Redeemer Lutheran and a leader of the Leaven Project. “We had potlucks for a year.”

The potlucks began to have themed discussions around how to support the local economy. Eventually, more formal workshops were held to examine the role of money and work in the community. In one of those workshops, community members mapped their spending to see where it was going. This revealed a startling fact.

“We had a dozen people in the room, mostly low and middle income,” Reed describes. “We realized that a half million dollars was being collectively spent every year by this group of a dozen households. This blew people away. No one had thought about the collective spending power of the community before this.”

The community then began considering how to utilize its money in a way that better served its values.
 

Move Your Money to a Local Bank 

Move money that belongs to local families into a local bank that's better poised to serve the community, and gain a shared stake in that bank.
Move money that belongs to local families into a local bank that's better poised to serve the community, and gain a shared stake in that bank.

“One of the first things we learned during the potluck discussions was that people were upset with the big banks,” Reed says. “We started shopping around credit unions to see how we could move our money.”

The community decided on Advantis Credit Union. Unlike other move your money initiatives that were gaining momentum around the country, this move was going to be collective.

On Sept. 18, 2010, the community deposited over $300,000 into new Advantis accounts.

The collective money move served a few purposes. The first was moving money that belonged to local families into a local bank that was better poised to serve the community. The second was to gain a shared stake in that bank.

“By moving our money as a collective, we could consolidate a caucus within a single credit union and could leverage that power,” Reed explains.

The third reason was to lay the foundation for the next move, which is now being referred to as the Leaven Project.
 

Create a Crowdfunded Lending Program

Advantis gained the chance to benefit from the Leaven Project’s collective money move because it was open to helping the community start a crowdfunded micro-lending pool.
Advantis gained the chance to benefit from the Leaven Project’s collective money move because it was open to helping the community start a crowdfunded micro-lending pool.

During the potlucks and other meetings, the community brainstormed ideas for how it could use its collective power to create opportunity. Early on, it began to imagine the creation of a micro-lending project where people in the Leaven Project who had money could lend it to individuals in the community to start local businesses.

Advantis gained the chance to benefit from the Leaven Project’s collective money move because it was open to helping the community start a crowdfunded micro-lending pool.

The Leaven Project is working with Advantis to finalize details on the crowdfunded lending program. Initial crowdfunded loans will begin this fall. The application process will be simple and personal. Loan interest rates may be as low as 0 percent. As loans are repaid, those same funds will be made available for new local loans.

At the end of the day, the purpose of the Leaven Project’s money move is to help community members to recognize the power of their money, no matter how much they may have.

Reed sums it up simply: “If you could put your money anywhere, where would you put it?”

Have you made any changes in your spending or banking to put your money to better use in your community?