News from the Idaho Rural Partnership: September 2019

Visit our website Welcome to IRP's e-bulletin, The Idaho Ruralist. Thanks to Battelle Energy Alliance, Operator of Idaho National Laboratory for their generous support of this publication. We hope you find The Idaho Ruralist of value, wherever you live and work. Although you may opt out of this newsletter via the "unsubscribe" option at the end of this issue, we hope you stay tuned! Have questions or ideas to share? Let us know! Let Us Know! In This Issue: 21st Century Barn Raising: investing locally to make a return—and a difference Partners for Rural America hold annual conference in August

21 st Century Barn Raising: investing locally to make a return—and a difference Crowdfunding 1.0 What comes to mind when you think crowdfunding ? Many of us have seen or helped fund a Kickstarter or GoFundMe campaign, where we support a startup and select a reward or contribute to someone with medical debt—exchanging cash for a product or making a donation. Donations like these make a big difference when multiplied hundreds or thousands of times, but we as donors do not expect to see that money again. Kickstarter works for making backpacks, bikes or cell phone gadgets, but what about financing a rural business startup, small housing complex or civic project? Traditional options are limited to government grants and loans, conventional bank financing, and large accredited investors. Each brings challenges involving regulation, credit and collateral, legal fees or a long track record. If regular Idaho residents and neighbors wanted to support local startups or projects, it's been easier to invest our money in Wall Street than Main Street. Investment unchained All that changed with the 2012 Jumpstart Our Business Startups (JOBS) Act and the advent of Regulation Crowdfunding (Reg CF). Those seeking investment financing can now appeal directly to the public—similar to a Kickstarter campaign but with one difference; the expectation that the investment will be returned, along with an additional amount, like interest on a loan. Americans at any income level now have the opportunity to make money—and a difference—in our communities or in causes or projects that reflect our values. Like any investment this involves risk, results will vary based on a number of factors. The new rules have led to multiple investment portals including smallchange.com , patronicity.com and iroquoisvalley.com , which match investors with real estate, civic, and farming initiatives respectively. More specific projects can be seen in Seattle with Bellwether Housing or in Portland with Guerrilla Development .

Rural opportunity IRP partners see potential for crowdfunding in rural Idaho, whether it’s a ‘neighborhood-friendly’ housing complex designed and priced for seniors or local workers, an established business looking to expand into a vacant storefront, or a local startup. As IRP Board Member Erik Kingston notes, the advantage of local investors goes beyond money. “When local residents have a financial stake in your business or housing project, they support you, whether at a P&Z meeting or as a customer. People often put their money where their values and interests are, which creates additional incentive to see the investment succeed.”

Crowd funding Idaho Kingston and his employer IHFA sought national expertise to bring this topic to an Idaho audience, since it’s outside their scope of financing tools. With in-kind support from IRP and the Association of Idaho Cities (AIC), IHFA hosted Amy Cortese, author of Locavesting and co-founder of Investibule , along with local crowdfunding expert Kathleen Minogue of Crowdfund Better , to provide an overview of how crowdfunding could work in Idaho. The two offered a session at the AIC Conference, followed by a half-day public workshop on June 21.

Attendees at the June 21 public workshop, which was part of the Association of Idaho Cities Conference.

Cortese covered the evolution of the JOBS Act as a journalist and was even present at its signing. Her site provides a detailed and informative section, ‘How Does Community Investing Work?’ which breaks down key aspects of the law and its applications. Minogue helps communities and businesses design successful campaigns that reflect crowdfunding essentials, their likely audience and the details of the project being funded. Both presenters provide excellent descriptions of crowdfunding regulations and applications on their respective sites. Ms. Cortese defines ‘community investing’ as, “…a new form of funding that opens up opportunities for small investors and small businesses alike…It’s a very small-d democratic idea. There are no gatekeepers or Wall Street overlords; just citizen-investors voting with their dollars and businesses sharing the wealth created with their supporters.” At Crowdfund Better , Minogue opts for the term crowdfunding, which she calls “a transformational capital-raising process empowered by technology that turns the trust and goodwill of your network into funds to start or grow your business by allowing a large number of people to share small amounts of their social, creative and financial capital.” In her 2016 TEDxMaui talk, Cortese asks us to imagine the impact on our local economy if we diverted “just 5% of our investment dollars to projects or businesses within 50 miles of home…rather than chasing profit around the globe.” She points out the economic advantage of investing in local businesses, which “…create two out of every three jobs and employ over half of the private workforce.” Kingston adds that grant makers and other funders often look for local support before investing resources. “Crowd investing is a simple, concrete way to show residents believe in their community and will step forward.” Following the Idaho workshop, a small group of participants are currently working to create an Idaho-specific structure and template for communities and entrepreneurs, to provide along with the other resources mentioned above.

Examples of three Idaho companies using crowdfunding:

This new barn-raising opportunity can leverage the sense of community we see throughout rural Idaho. Stay tuned; we’ll post projects and accomplishments as they arise.

Partners for Rural America hold annual conference in August IRP Executive Director Jon Barrett joins PRA executive committee as Secretary

IRP Executive Director Jon Barrett recently represented Idaho at the Partners for Rural America (PRA) conference held in Springfield, Illinois. Ten rural development councils from states across the country took advantage of this annual opportunity to share information about challenges and successes in their respective states.  Topics raised by many participating states are of interest in here in Idaho. These include, for example, housing, broadband, health care, workforce and economic development, entrepreneurship, youth outmigration, opioid abuse, opportunity zones, and the 2020 U.S. Census.

Attendees of PRA from participating state rural development councils, at a Café in Petersburg, IL.

The conference agenda included a tour of rural communities in central Illinois. Sharing her experience fundraising for her community, one local leader told us, “Tell me no and give me a day or two to get over it, then I will keep working on what I’m working on.”  An economic development leader in Pittsfield, IL, shared their success drawing attention to their local businesses by organizing “cash mobs” that encourage everyone in town to show up at a local business over a two to three-hour period to spend at least $20. In several Illinois communities, a C.E.O. (Creating Entrepreneurial Opportunities) program provides high school students with entrepreneurial training they can apply to create their own business. PRA members shared information about their funding sources. State rural development councils are typically funded by some combination of the following sources: ·          annual appropriation of state funding ·          membership dues ·          income derived from annual conferences and other events ·          grants ·          fees for services provided

The PRA conference agenda also included a visit to the Springfield home of Abraham and Mary Lincoln, as well as a tour of the Illinois State Capital Building. IRP Executive Director Jon Barrett was elected Secretary of the PRA board at the annual board meeting held the final morning of the conference.  PRA’s annual conference and monthly board conference calls affords IRP the opportunity to adapt the experience and success of other state rural development councils to our efforts to increase stability and prosperity here in rural Idaho.

PRA attendees visiting the home of Abraham and Mary Lincoln.

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Thanks also to Idaho Department of Labor for donating office space and to the Idaho Housing and Finance Association for ongoing support of The Idaho Ruralist e-bulletin and other outreach materials.

Idaho Rural Partnership 1090 E. Watertower St., Suite 100 Meridian, Idaho 83642-8441 208-332-1730 (office)

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