Article by Ben Bingham, Founder & CEO of 3Sisters Sustainable Management, LLC
Prologue
From Jean Ritchie’s apocalyptic mountain song, The Cool of the Day:
My Lord, he said unto me
Do you like my garden so fair
You may live in this garden if you\’ll keep the waters clean [1]
And I\’ll return in the cool of the day
Now is the cool of the day
Now is the cool of the day
O, this earth is a garden, the garden of my Lord
And he walks in his garden
In the cool of the day
This song sets the context for the following description of 3Sisters Sustainable Management and a model that has been created to meet the needs of our time and the next 20 years…
No matter what religious belief or non-belief, “my lord” in this song can be universally felt as the voice of conscience. Now is the “cool of the day:” the twilight time to reflect on what we have been doing lately, from industrialization to globalization to the human mechanization of the approaching “singularity,” when, it is reckoned by some, that robotics, bio-genetics, and nanotechnology will reach exponential potential and humans, as we know ourselves, will be considered a thing of the past.[2]
Now is the time of reflection and action, the “Blessed Unrest,” as Paul Hawken aptly put it, when all the NGO’s that have recently emerged around the world to care for the earth and its creatures outnumber government and corporate bureaucracies, but have yet to realize their power. A time that is proving the premise that “evil thrives when good men fail to act” and the positive echo: “never doubt that a few good people can change the world.” In the words of Martin Luther King:
“True compassion is more than flinging a coin to a beggar; it is not haphazard and superficial. It comes to see that an edifice that produces beggars needs restructuring.”[3]
3Sisters Sustainable Management, LLC
What is it that 3Sisters is doing to begin restructuring the financial edifice? And by the way, who are the 3Sisters?
Let me use the metaphor from gardening that gave us our name to illustrate the way we work with money: The original ” three sisters” are the three symbiotic plants traditionally grown together by the indigenous people of North America: corn, beans, and squash; only for 3sisters the financial ecosystem is built up of cash, fixed income and equities or gifts, all planted in social enterprises within innovative business models that expect to yield a productive “harvest” of social, environmental and economic benefit to all stakeholders. The investors are like members of a Community Supported Agriculture (CSA) garden, who primarily want to support local, organic farms and gardens, and secondarily enjoy the valuable produce. The investors in 3Sisters’ managed funds primarily are investing in a new sustainable world economy, and secondarily anticipate a long term financial benefit. Our premise is that the two are mutually inclusive.
Let’s describe the actual investments. First, the “corn seed” cash is planted in a private pooled fund: Scarab Enhanced Cash. This fund is almost entirely invested in MicroVest’s institutional short duration fund. This relatively new fund in turn invests in a rolling ladder of short notes to small financial enterprises in the developing world who once more micro-lend to entrepreneurs in need. So this cash is primarily fueling a global system of support. The investment is liquid for the investor as some loans mature monthly and the interest is variable but in this economy it has been points above big bank money markets. MicroVest is known for its thorough due diligence, only lending to small financial firms who are known and liked by the entrepreneurs who borrow from them.
Second, the loan “bean seeds” are planted in the private pooled fund: Scarab Global Community Impact. This fund lends to non-profit and for profit social enterprises globally with innovative business models that allow them to borrow at 6% or better, and with ability to collateralize their loans. This is a painstaking and creative process, to make sure investors receive the equivalent of a high yield bond fund return and are as protected as possible from defaults, all while meeting critical social and environmental needs. Loans have supported conversion to thousands of acres of organic cotton in Nicaragua, restored wilderness, provided green housing for the homeless, expedited close to a billion dollars in benefits to people in need who were lost to the systems of support in the US. Currently this fund is supporting a program that develops systems to formalize the ownership of land and housing to thousands of families in Eastern Europe…Again prioritizing the common good while secondarily providing a return equivalent or better than most current high yield bonds.
And thirdly, the “squash seeds” of investments are planted in three (3) private pooled funds for long term future growth:
• Scarab All-Cap Global, 50+ public companies from micro-cap to large cap that trade daily for liquidity and are chosen first because they have products and services that meet the needs of our time, with natural life enhancing solutions;
• Scarab Green Real Assets, which focuses on sustainably managed timber and green real estate, and
• Scarab Fund of Positive Impact Funds (currently launching): a private equity and venture debt fund of up to 20 managers focused on key areas of conscience for this time, the “Cool of the Day.”
Both the Scarab Green Real Assets and the Scarab Fund of Positive Impact Funds are 7 to 10-year fund of funds. Imagine cleaning up the waters of the world, building living environments for the poor and needy with materials and designs that not only save energy but promote community; imagine small farmers and gardeners helped with appropriate technology, local food processing and coordinated distributions, meeting the needs for local organic food globally; imagine women-owned ventures that prioritize the common good and smart technologies that maximize positive impact, and secondarily aim to accomplish this with a private equity-like return factoring in the fact that some initiatives may fail in the next 7-10 years and beyond. These are our equity seeds for the world economic garden.
It can be emotionally helpful to associate equity investing with gifting only because both are future oriented and it is more conscious to acknowledge that investing in a positive future can only be done without knowing exactly what the future holds. This unknown is rarely spoken of except in the fine print of legal disclaimers. We recommend embracing the risk of equity investing with an attitude of generosity. This encourages a possible reduction in short-term public equities, a peaceful mind enjoying long-term thinking and higher values standards. It does not automatically imply a lower financial return. We argue that long term positive returns reflect good management and products and services that are meeting human needs. In the long term this can be expected to be a financial advantage.
In closing I want to bring to mind two examples of individuals in collaboration, changing the world. Van Jones and Julia Butterfly Hill first recognized that the poverty crisis and the environmental crisis are intimately related, as remote as the image of a stranded polar bear on a chunk of ice may be to someone in the heat of the inner city who sees no hope. Green Jobs was their vision, teaching inner city workers to retro-fit buildings and “green” their own communities. In my lifetime, I also saw the unlikely combination of a law professor at Columbia named Robert Kennedy and a folksinger on the Clearwater Sailboat named Pete Seeger, clean up the Hudson River which was close to death and is now one of the most productive fisheries in the world.
Trillions of dollars will not move to the Common Good without unprecedented collaborations like these. It is relationship that changes the world.
Common Ground Epilogue
Without counting carbon emissions or any other metrics we still know the joy of clean air to breathe. Some of us know the taste of clean water from a well. And all of us know what it feels like to be rejected and to be loved.
It is time to wake up to our inherent common sense for the common good. Money can then become the best metric for this awakened common sense of deep long term human values. Please join us in collaboration to build a new pattern for humankind. Think imaginatively about the cash you spend or lend, give or invest. When you spend cash or offer products for sale, consider past work done and materials used to set or pay a price that is fair; be inspired to borrow or lend for current solutions like infrastructure for equal access and opportunity; and give or invest for future value in today’s most intuitive and innovative thinkers. There is no enemy in this battle for the Common Good. We are allies investing in our common future.
“You may live in this garden if you feed my lambs…if you keep the waters clean…if you keep the people free…and I’ll return in the Cool of the Day.”
Despite global warming, now is the Cool of the Day.
Article Notes:
[1] www.last.fm/music/Jean+Ritchie/_/Now+Is+the+Cool+of+the+Day
[2] note: the projected year according to Ray Kurzweil, the inventor, is 2045.
[3] Martin Luther King, Jr., civil-rights leader (1929-1968)
Article by Ben Bingham is the Founder & CEO of 3Sisters Sustainable Management, LLC. (www.3sistersinvest.com )
Mr. Bingham assisted in the formation and founding of the company after several years managing investments for wealth advisors. Starting in 2000, he developed a unique portfolio management strategy for socially conscious investors at Legg Mason and Citigroup/Smith Barney. He began by advising a network of social entrepreneurs and philanthropists who were dissatisfied with the lack of imagination and direct positive impact found in mutual funds or screened portfolios. Changing the emphasis to positive screening, Mr. Bingham has found it beneficial, financially, socially and environmentally to look for companies that, by their numbers seem to be undervalued by the market, not followed by Wall Street, and with positive stories that meet current problems with long term solutions.
Mr. Bingham is a Fellow of Economists for Peace and Security (EPS). He is a member of the Investor’s Circle and the Social Venture Network, and, as a social entrepreneur/investor/money manager, draws on broad experience from hands on management experience at two technology start-ups, one in biological healthcare, and the other a global workflow solution provider.
Mr. Bingham is a Certified Financial Planner, with a background in philanthropy. In the seventies and early eighties he was a founder of a mixed use residential community with special needs students and apprentices, raising approximately $1M to fund a start up furniture production, farm and housing. His understanding for the ecology of how things work was also schooled by 10 years of work as a trained bio-dynamic farmer in the 70’s and 36 years of marriage, with five grown children and four granddaughters. His training in Gestalt Psychology may also help in understanding the psychology of the market! He attended Groton School, Yale University and Emerson College in England. He is working on two books and writes for New View magazine in the UK.
