Innovators in Rural Community Economic Development
Every so often I find myself thinking about the WealthWorks framework in new or expanded ways. I would like to share these thoughts with the WealthWorks community on the chance that they can add value to your work and to our shared understanding and ability to articulate the framework. I would welcome your feedback. I also invite you to share your own thinking.
Today’s topic is the relationship between structures of ownership and control of wealth and financing for WealthWorks value chains. We have always said that wealth is not wealth if the groups that are intended to benefit from it do not own or control it. They need to be able to make decisions about how the wealth is managed, including:
Experience also suggests that ownership or control of wealth can give previously excluded voices a place at the table.
What we did not recognize at the beginning was the relationship between ownership and financing. Most financing can only flow to entities which have a legally recognized structure be it for profit or not for profit. That legal structure defines ownership and control. Some legal structures, like cooperatives, employee-ownership, or partnerships, support shared ownership, others do not.
If, for example, a WealthWorks value chain needs an aggregation function to succeed, and a truck is required to perform that function, no one will finance the truck unless it is clear who will own it and take responsibility for its upkeep and repayment of the loan. Will it be a single owner or a shared ownership structure? What difference does it make? As with so much else in this work, there is no single “right” answer; the right answer depends on the context. However, what we do know now is that getting the ownership/control structures “right” is crucial not only for keeping wealth local and in the hands of the intended beneficiaries, but for making sure financial investment can flow where it is most needed. We need to pay close attention to the interplay between how enterprises within a value chain are owned and controlled and how they are financed to be sure the benefits of ownership and control can actually be realized over time.
WealthWorks is a 21st-century approach to local and regional economic development that belongs in every community and economic development toolkit. For information about Yellow Wood's engagement with WealthWorks, see our WealthWorks and Wealth Creation pages and related resources.
