Good MoneyWhat to Do About a Segregated Economyscroll down arrow


To be serious about fixing this country’s wealth inequality, we need to somehow shift wealth from the rich and invest in the poor. How do you do that without pitchforks and torches? One solution is to use the vast amount of wealth sitting around — capital — in more productive ways than betting on Wall Street and propping up capitalism’s destructive industries. We’ve explored five opportunities to move some of our biggest pots of money into communities that need it — our tax dollars, philanthropy endowments, inheritances, fossil fuel divestments, and people with money to spare.

What to Do About a Segregated Economy

Co-ops and community farms are important local economy enterprises. Circulating local dollars, though, can’t create wealth when there’s not enough to begin with. Black communities especially need outside money to catch up.

Malik Yakini is executive director of the Detroit Black Community Food Security Network

Malik Yakini is executive director of the Detroit Black Community Food Security Network. “This is us latching onto a historical strategy that Black people have used in this country to try to build collective wealth.” YES! photo by Brian Rozman

Residents of one of Detroit’s historic neighborhoods have been looking forward to next year’s opening of a food co-op. It will help bring to market produce from a community farm and is part of a larger community development project that will include a health food cafe, an incubator kitchen for food entrepreneurs, and space for events. The project expects to employ 20 people from the mostly low- to moderate-income area.

Zenobia Jeffries Warfield

Zenobia Jeffries Warfield is an associate editor at YES! Media. She covers racial justice and is based in Detroit. Twitter: @ZenobiaJeffries

Twenty jobs may not seem like a lot when unemployment in the approximately 80 percent Black city is 8.7 percent, twice that of state and national rates. But this is what economic progress generally looks like in many Black communities: cooperative ventures like grocery stores and community farms. Over 150 years ago, Black people emerging from slavery formed cooperatives to grow, sell, and distribute food together because their very survival depended on it.

“Black people have a long history of using co-ops as a way of navigating through an economic system that has been intentionally aimed to disinvest in our communities and prevent any kind of parity,” says Malik Yakini, executive director of the Detroit Black Community Food Security Network, which is spearheading the project. “So, this is us latching onto a historical strategy that Black people have used in this country to try to build collective wealth.”

Yakini believes in the cooperative strategy, and has made it his life’s work of 40-plus years. When he was a college student, at Eastern Michigan University in Ypsilanti, he and a group of colleagues started the Ujamaa Food Co-op Buying Club. “We would come to Detroit on Saturdays, buy in bulk, and bring it back to campus,” says Yakini. “Members — students and faculty — would [then] pick up their baskets.”

He also understands what cooperatives don’t fix.

From the Editors

The Good Money Issue

“The United States is one of the richest countries in the world. So why can’t we have X?” We hear this question all the time, where X is universal health care, affordable education, reliable infrastructure … take your pick.

Cover of YES! Issue 88

It’s true. America is swimming in wealth. Problem is, too few people have access to it.

In this issue, we’ve asked what if that weren’t the case? What can be done about systemic inequality of wealth? To answer that, you’ll have to hang with us as we talk about capital, the big money needed to really change lives.

Consider the New Hampshire Community Loan Fund, which is showing what creative people can do to provide capital and credit to low- and moderate-income residents.

Research shows that access to capital and credit works best for them to improve their economic situations. Yet it’s precisely what has been in short supply for low-income Americans, who are often seen as high-risk by potential lenders. So the fund makes loans — to home-buyers, to nonprofit organizations, and the like. The fund’s money comes from upper- and middle-income New Hampshirites, who receive a fixed rate of return (for example, up to 5 percent for 10-year investments) that outstrips that of standard bank certificates of deposit.

Since it was founded in 1983, the fund has never failed to pay out for investors, and it maintains a pool of money to cover any potential losses on loans. It’s a virtuous circle, where members of a community all benefit.

There are other opportunities across the economy to solve the shortage of capital. There’s a lot of money out there, and it can be shared better. The first step is to accept the limitations of some traditional progressive solutions. For example:

• Cooperative and self-reliance enterprises can’t by themselves build equity to overcome the vast disparity in wealth between Black and White communities. It’ll take a massive injection of reparations money to compensate for centuries of slavery, racial discrimination, and disenfranchisement.

• Charitable foundations have been a force for good, true. But most endowments are invested in Wall Street markets, reinforcing the same capitalist system that creates the need for charities in the first place. The industry has been on a 20-year trajectory to shift directions. Maybe it’s time to shift faster, because the sector’s $827 billion in en­dowments could do a lot of good invested compassionately.

• The city of Seattle voted to divest $3 billion in municipal banking from Wells Fargo because of its funding of the Dakota Access pipeline. But Seattle couldn’t find another big bank and had to backtrack. This is giving new energy to the movement to create local public banks as a viable alternative to Wall Street giants.

Money does not have an inherent moral value. But when it gets to where it is needed, improving the lives of the many, that’s “good” money.

Return to the story

Cooperatives are a $500 billion industry, so clearly they have capacity to build wealth. But little of that reaches Black and other marginalized communities. Of the approximately 30,000 co-ops holding 350 million memberships in the United States, only a fraction are Black-owned.

Other efforts aimed at amassing Black dollars have fallen short. The number of Black-owned banks and credit unions continues to dwindle. A decade ago there were over 50; that number is now down to 20. And Black-owned businesses in general struggle financially.

As much pride and empowerment as there is in community ownership of food-producing gardens and financial services such as credit unions to support local businesses, research shows those sorts of grassroots efforts cannot close the ever-growing wealth gap that has been historically and systematically created along racial lines. Controlling wealth by buying and banking Black is one piece of self-determination, but undoing economic segregation may be a problem too complicated for cooperative ownership alone to solve.

That problem needs a “set of solutions,” Yakini says.

Banking Fail

Mehrsa Baradaran’s The Color of Money: Black Banks and the Racial Wealth Gap unpacks the history of Black banking and the laws that have created and continue to sustain separate economies for Black and White Americans.

Baradaran tells the story of the Freedman’s Bank. Following the emancipation of enslaved Africans, the bank was established with about $200,000 in unclaimed funds of Black soldiers who had died in the Civil War. Chartered by Congress and operated by White managers, Freedman’s was based on a popular new philanthropic banking model of savings banks for the poor. The purpose of savings banks was to hold money instead of growing it, unlike commercial banks, used by White people, that made loans and investments.

Within a decade, more than 70,000 Freedmen depositors made over $57 million in deposits. Most of the money was being saved to buy land, tools, and agricultural supplies, as the freedmen believed that turning wages into landownership was the way to climb the economic ladder.

But the bank closed in 1874 with more than half of the accumulated Black wealth having disappeared through mismanagement and fraud by managers.

If the racial wealth divide is left unaddressed, median Black household wealth will hit zero by 2053, a decade or so after households of color reach a majority in this country.

The loss of all that capital was something Black populations never recovered from, says Baradaran, who is also a banking law professor at the University of Georgia Law School.

The promise of banking Black is that doing so will keep dollars in Black communities. While that might be theoretically true, Baradaran says, Black banks cannot thrive outside of the mainstream — mostly White — banking system; by default capital filters into it. And because Black banks often serve communities with high rates of poverty, their assets are smaller. The typical Black bank is one-third the size of an average commercial bank, as measured by assets, and one-quarter to one-third as profitable.

Capital can’t concentrate in areas where capital doesn’t exist.

“These banks have been used by policymakers … presidents, and their administrations as cheap alternatives to land and reparations,” Baradaran says.

Moving the Money

“The racial wealth gap is a byproduct of years, even centuries of economic policy choices and decisions that benefited the economic status and wealth-building potential of White households that has been compounded over time,” says Emanuel Nieves, senior policy manager at Prosperity Now, an organization with a mission of financial stability for all.

“It’s absolutely going to take more than the grassroots efforts [to close it].”

The only “logical” path is through policy intervention, says Nieves, one of the authors of the 2017 report, The Road to Zero Wealth: How the Racial Wealth Divide Is Hollowing Out America’s Middle Class. It lays out the magnitude of racial wealth disparity and suggests policy interventions to address the growing crisis.

According to the report, if the racial wealth divide is left unaddressed, median Black household wealth will hit zero by 2053, a decade or so after households of color reach a majority in this country. Latino household wealth is projected to hit zero in 2073. In contrast, median White household wealth is projected to climb to $137,000 by 2053.

Nieves says the reason policy is important is because the gap is too large to be closed by the private sector alone.

Baradaran explains it like this: Banks make money from loans and investments, not deposits. Even if affluent White — or Black — people decided to open accounts in a Black bank in a less affluent Black community, the money still would not get to the people who need it most.

“People don’t understand the difference between deposits and loans,” says Baradaran. “Loans are what create wealth, not deposits. So you can give a bank deposits, but the bank isn’t lending into wealth-creating houses. And they can’t because they don’t have the dollars. What banks need is capital … good loan potential.”

Then the loans have to be paid back.

But the bank customers in marginalized communities don’t have the money to pay back the money, let alone the interest. And so the very problem that the banks exist to help makes them vulnerable.

left double quoteThe world is very complicated, and trying to create justice in a system where you have hundreds of years of injustice happening on multiple levels in multiple ways, there’s not any one thing that’s going to solve that.” — Malik Yakini

Policy can intervene.

One solution may exist within the Federal Housing Administration, which offers down-payment assistance to low-income people and can provide the kind of guarantees on low-interest loans to Black borrowers that enable banks to lend more freely.

“It’s not impossible,” says Baradaran. “We did it for White Americans. Before the New Deal we had a ton of poor White Americans who, because of the FHA loans, it became cheaper for them to buy a home and have a mortgage than to rent an apartment. And so those people all moved into the suburbs and started paying very little mortgage, and that’s what built White American wealth.”

Baradaran points out that before the mortgage program made them wealthy, or at least middle class, many — maybe most — Whites suffered the same fate as Black people. But where they were elevated, “Black people were cut off” through the FHA policy of redlining — the practice of denying loans in predominantly Black neighborhoods.

There are opportunities now to correct that, Nieves says. And no shortage of ideas for reparative policies that could shift capital into Black communities.

In the “Road to Zero Wealth” report, Nieves and the others suggest, among other things, changes to the tax code to “stop subsidizing the already-wealthy.” They believe that reforming the mortgage interest deduction and other tax expenditures would strengthen and grow the federal estate tax and create a net-worth tax on multimillion-dollar fortunes — freeing up funds for investment in opportunities that allow low-wealth families to build wealth.

Other suggestions have included issuing Baby Bonds — government trust accounts given to babies, based on a family’s household wealth. Economist Darrick Hamilton has presented the concept to members of Congress. While not race-specific, Baby Bonds would give an advantage to Black and Brown children and would be used for a “clearly defined asset-enhancing activity,” like financing a debt-free education, buying a home, or purchasing a business.

Nieves, Baradaran, and Hamilton posit that without policies like these that redistribute capital into Black and Brown communities, they will at best merely continue to circulate the same meager dollars for generations to come — no matter how many local cooperatives and credit unions they have.

Volunteers grow produce such as peppers at D-Town Farm,

Volunteers grow produce such as peppers at D-Town Farm, a cooperative run by the Detroit Black Community Food Security Network. A food co-op is scheduled to open next year. YES! Photos by Brian Rozman

YES! Photos by Brian Rozman

Dealing With Reality

And while policymakers argue the politics of wealth redistribution and the details of implementation, lack of capital continues to present challenges for local-economy organizers like Yakini and the Detroit Black Community Food Security Network.

Obtaining capital is always a challenge, he said, particularly large amounts of capital that can make a big difference in people’s lives.

In recent years, he says, smaller pots in the amounts of $5,000 to maybe $50,000 from philanthropic foundations have opened up. But these are often framed within a competition for one project over others.

“You have to compete against other people [in the same financial position]. It pits people against each other,” Yakini says. “But the larger amounts that are really needed to really do large-scale development, to compete on any level with the development we see happening in the city of Detroit, requires multimillions of dollars.”

And for those large-size grants, grantors want to give money to the group that has the “best capacity” to manage the funds. And that’s when the racial divide kicks in once again.

“Because of historical inequity, and historical underdevelopment which has occurred in Black communities and Brown communities, often we don’t have the mechanisms in place to handle large grants, like a large White nonprofit that’s been around for 20 years might have,” Yakini says. “And so, if the grantor is looking at who has the most capacity, then invariably more established White nonprofits have that capacity over smaller emerging groups.”

And while this may not be intended to function in such a way, certainly the impact is that it concentrates wealth in the hands of Whites, the very problem that these grassroots efforts are trying to solve.

“As I’ve gotten older, I’ve moved away from straight-line thinking,” Yakini says. “The world is very complicated, and trying to create justice in a system where you have hundreds of years of injustice happening on multiple levels in multiple ways, there’s not any one thing that’s going to solve that.”

The smaller projects — planting gardens, building wells — he believes, get people to think about how they act on their own behalf, how they create smaller economies. “When an economy is smaller and more local, people by definition in that locale have more say-so over it, presumably.” Ultimately, he says, it can give people glimpses into the future to ignite within their consciousness what’s possible.

And so, Yakini says, he’s receptive to all solutions that work — from grassroots to government.

“We have to fight on all these fronts,” he says. “The question is how we build the vehicles that are sophisticated enough to function on all of these levels.”

Zenobia Jeffries Warfield

Zenobia Jeffries Warfield is an associate editor at YES! Media. She covers racial justice and is based in Detroit. Twitter: @ZenobiaJeffries


We Don’t Need Butter, We Need the Cow

Or, Why Universal Basic Income is Not the Solution We Think It Is

Yes, I feel the current distribution of wealth is grotesquely unfair. Yes, I believe that those who cannot or will not work should not be allowed to starve. Yes, I would be against plans to eliminate or cut the existing welfare system as long as it is needed. Yes, I believe that we should build a community in which everyone’s needs are met.

Yet I oppose a universal guaranteed basic income.

My objections have surprised many people, but they are consistent with what I think is the solution to our economic justice problem. I favor deep democracy replacing the rule of capital in our lives. This would require reparations and the reconstruction of the commons to include the Earth and the financial resources that have been created by our labor within exploiting systems.

Guaranteed basic income is simply more widely available welfare. It would only help people have more access to consumption without altering anything about how production is organized. It would not alter wealth distribution and ownership. And it would require a new bureaucracy staffed by agents and experts to regulate and allocate this universal distribution of money.

Our economy suffers from the fact that communities are not having their needs met and a quality of life equitably elevated by all. Neither the self-regulated market nor the intervention of government has been successful in doing this to the satisfaction of the many. We are told not to bother to understand how we got into the situation we are in, but rather forget the past and look ahead to the future.

What I do think we need is reparations, the democratization of wealth, the re-creation of the commons, and the outlawing of financial systems of theft and speculation.

I’m reminded of a story that I was told by the Rev. Bongani Finca who was involved in South Africa’s Truth and Reconciliation work. A Black South African, Tabo, confronted a White man, Mr. Smith, who had disrespected him and stolen his prize cow. With the prospect of amnesty for telling the truth, the White man admitted to having done what he was accused of, recognized how horribly wrong it was, and asked for forgiveness, saying that he was truly sorry. Tabo was visibly relieved for having an opportunity to confront his oppressor and get an apology. They shook hands and embraced. As Mr. Smith, stood to leave, free, with his amnesty, the Black man called out to stop him. The White man turned back with a questioning look on his face, not sure why he was being stopped. Tabo, the Black South African, asked him, “But what about the cow?” Mr. Smith was visibly angry: “You are ruining our reconciliation,” he shouted, “This has nothing to do with a cow.”

That is the question we must ask all those who say the past is long gone but still retain ownership of the herd produced by that old cow. We won’t forgive and forget until we get the cow back. But just suppose that the Mr. Smiths in the world make a counteroffer: “I’ll tell you what, why don’t I just give you a supply of butter?” “The hell,” Tabo might reply. “If you give me back my cow, I can give you butter!”

Guaranteed income is merely a supply of butter.

It makes two assumptions, both of which I think are false: It assumes that the government can simply pay out the money without having other negative consequences for the economy as a whole, and it also assumes that there is a rational amount of money and process for its allocation that experts can figure out and apply fairly.

What is true is that labor is the sole creator of value. Therefore, there is no place for the money to come from but out of the social surplus, either as taxes or reduced wages. In other words, there is a political and economic price to be paid that cannot be avoided.

What I do think we need is reparations, the democratization of wealth, the re-creation of the commons, and the outlawing of financial systems of theft and speculation. Communities must become their own developers through broadly democratic planning and democratic access to nonextractive financing.

A good friend of mine, Dara Cooper, an organizer with the National Black Food and Justice Alliance, sent me an email that ended with this quote from revolutionary and Burkina Faso former president Thomas Sankara:

“We must produce more because the one who feeds you usually imposes his will upon you.”

The key is democracy and expanded opportunities to be productive rather than enhanced consumption. We need the cow back, not just a supply of butter.

Ed Whitfield
Just the Facts

The $30 Trillion Baby Boom Inheritance Can Buy a Lot of Equality

Baby accountant

photo from getty images

We are on the brink of the largest intergenerational wealth transfer in history. Over the next 30 to 40 years, more than 75 million millennials born between 1981 and 1997 will inherit an estimated $30 trillion in wealth from baby boomers.

Certainly, millennials could use some of that money. Adulthood for them began with a recession that saw household savings reduced by nearly half. Homeownership, retirement savings, and easy employment were not part of their general experience. As of June, after the youngest millennials graduated from college, student loan debt averaged $37,172.

The total U.S. student loan debt is $1.48 trillion. So just a speck of the $30 trillion could wipe it out. But not much of it is likely to get to those 44.2 million Americans with student loan debt. Because, in general, people with debts are not wealthy, and it’s wealthy people who inherit.

Here’s how it works


Inheritance is a way to build wealth — for some.About 40 percent of U.S. wealth is inherited, not self-made.

infographic 1


The majority of inheritances are relatively small amounts.But most of the money is large amounts going to few people.

infographic 2


Who inherits affects economic equality.Most dollars flow to people who are White, have more wealth, have higher incomes, and have more education.

infographic 3


With each generation, wealth concentrates in predictable patterns.

infographic 4


Redistribution of baby boomers’ wealth could do a lot to fix inequality.Currently less than 1 percent of all estates are subject to inheritance tax. Yet policies such as estate taxes can distribute wealth more equitably throughout the population.

infographic 5


Even a fraction of the baby boomers’ $30 trillion could:

infographic 6


1 Brookings Institution. Laura Feiveson, Federal Reserve Board, 2016 data

1–5 Federal Reserve Board, Feiveson and Sabelhaus, “How Does Intergenerational Wealth Transmission Affect Wealth Concentration?” June 01, 2018, based on 2016 data from Survey of Consumer Finances. Federal Reserve Board.

6 Student Loan Hero. Wallet Hub. Estimate by HUD official Mark Johnston x 25.5. YES! Magazine, “40 Acres and a Mule Would Be at Least $6.4 Trillion Today — What the U.S. Really Owes Black America,” 2015.


Give It Away: One Way to Skip Wall Street and Invest In Your Community

YES! Illustration by Pablo Iglesias

YES! Illustration by Pablo Iglesias

I recently met a person who, with considerable angst, asked what they should do about their substantial inheritance. My heartfelt response: Give it away. I did it myself over 35 years ago, and it was the best decision I ever made. In 1986, faced with my own intergenerational wealth moment, I passed the gift along to several foundations working for “change, not charity.”

My other advice: Find others who are in the same boat and invite them to think things through together. When I did it, four friends and I made a pact to give away substantial assets. We collaborated on a book, We Gave Away a Fortune, to chronicle the inspiring stories of people who gave away their wealth and lived to survive and thrive.

And if you’re not ready to give away the wealth, set up your life so that you can give it away later on. Learn how to earn a livelihood that isn’t dependent on being wealthy. Build a community of resilience and support. Along the way, try to understand the economic story of the times we are living in and how intergenerational advantage works.

It’s true that a $30 trillion intergenerational transfer is in the works, as the baby boomer generation exits the stage, passing on their accumulated treasure to their children.

But in a time of gargantuan inequality, most of this wealth transfer will take place in the upper canopy of the wealth forest — what we could safely call “dynastic wealth” transmissions among those with $10 million or more, the richest one-tenth of the 1 percent.

Trillions also will change hands among the top 10 percent, not as huge trust funds, but in amounts that still will make a huge economic difference to their recipients.

Households in this tier — 9.9 percent of the population, excluding the top 0.1 percent — have maintained a steady share of the wealth pie over several decades of accelerating inequality. As a class, they have witnessed (and in some cases facilitated) the siphoning of wealth from the bottom 90 percent to the powerful top 0.1 percent, while taking their cut.

I’ve met thousands of people wrestling with having way more than they need and seeking alternatives. They deeply understand the dangers of our economic and ecological crisis, and the polarization of race, class, and culture. And they want to play a constructive role.

In the absence of taxpayer-funded investments in public institutions to alleviate poverty and expand opportunity for the nonrich, wealth transfers reinforce a new physics of inequality: compounding advantage for the have-a-lots and accelerating disadvantage for everyone else. This explains the persistence of the racial wealth divide where median White households have 35 times more wealth than Black households and 25 times more wealth than Latino households.

If you find this troubling — or, more viscerally, repulsive, grotesque, or maddening — there are opportunities to join with movements that are trying to put a brake on the dynastic concentration of wealth.

And if you happen to be in the class that won the birth lottery or are a future beneficiary of this intergenerational wealth transfer, and you want to live in an equitable economy, you are not alone. I’ve met thousands of people wrestling with having way more than they need and seeking alternatives. They deeply understand the dangers of our economic and ecological crisis, and the polarization of race, class, and culture. And they want to play a constructive role.

My invitation to them has been to “come home” and put down a stake, not in an enclave of the wealthy but in a community with race and economic class diversity. Instead of “opting out” of the community and privatizing their needs, opt in with gusto, by relying on public transportation, education, recreation, and other community resources, and fighting for them alongside everyone else.

I also advise them to bring their wealth home — out from the shadows of the hidden wealth system, the trusts and offshore shell corporations. Shift wealth from the casino of Wall Street to the real economy of goods and services that people depend on. Use it to invigorate regional food systems and local production and services. Divest wealth from the fossil fuel economy (ideally in a very public manner) and shift capital to the clean energy economy and vibrant new economy enterprises.

Bringing the wealth home means joining a growing field of impact investors and social venture entrepreneurs who are allocating capital directly to socially beneficial enterprises.

It also means recognizing the limits of the charitable industrial complex. Philanthropy is not a substitute for a progressive tax system and a vibrant and democratically accountable public sector at the local, state, and national levels. In the end, coming home means speaking up for a fair tax system and paying one’s own fair share.

The act of considering giving away your wealth will propel you forward. The reality is, wealth is usually only a small part of the package of other intergenerational advantages. I’m a personal sociological experiment: I’m White, male, and with four generations of intergenerational advantage. Even without the inheritance I gave away 35 years ago, I have plenty of other hard-wired advantages: my race and gender advantage, debt-free college education, social networks, a sense of agency, access to health care, and dozens of other benefits.

We must find others in the same boat. Renewal Networks’ “Play Big” conferences bring wealthy people together to share strategies that help align their money to their values. Another group, Resource Generation, is creating a support community for people under 35 seeking to take bold action to leverage their privilege for good.

Kate Poole, a Resource Generation member who co-founded Regenerative Finance, a network making zero-interest loans to locally controlled enterprises, told Money magazine that, for older generations, “building wealth was a loving thing to do for your family. I’m thinking more broadly about what is meant by ‘family.’ ”

For the sake of the extended planetary family, it’s time to break the intergenerational cycle of wealth advantage.

Ed Whitfield

Surprising Standing Rock Legacy: A Push for Public Banks

What a City Needs to Divest from a Wall Street Bank.

Matt Remle, opposite far left, and the organization Mazaska Talks led months of protests

Matt Remle, opposite far left, and the organization Mazaska Talks led months of protests at Seattle’s pipeline- and tar-sands-funding banks: Chase, Wells Fargo, Bank of America, TD Bank, and US Bank. Here, a group in front of Wells Fargo in Februrary 2017 after President Trump granted approval of Keystone XL and Dakota Access. Photo By ALEX GARLAND

In February 2017, Seattle became the first city to pass legislation to divest from a financial institution due to its role in funding the Dakota Access pipeline.

Dani Burlison

Deonna Anderson is the Surdna Reporting Fellow for YES! Media. Twitter: @iamDEONNA

Months of rallies, public testimony at city council meetings, and protests at Wells Fargo branches across Seattle led to the unanimous vote to divest billions from the bank. Los Angeles and Philadelphia would follow. But when the time came to withdraw its money from the bank at the end of 2018, Seattle instead renewed its contract with Wells Fargo. The political decision to divest city money from one of the biggest banks funding DAPL was reversed because the city hadn’t found an alternative financial institution to house its money.

Pipeline Divestment Starts at Standing Rock

Throughout 2016 and after, indigenous activists (often referred to as water protectors) protested the DAPL at the Standing Rock camp in North Dakota. Despite opposition, the camp at Standing Rock was cleared in February 2017, and oil started flowing through the DAPL in June 2017.

But the camp wasn’t the only site of resistance. In October 2017, organizers — under the name Mazaska (“money” in Lakota) Talks — launched a campaign that urged individuals and larger entities, especially cities, to take money out of banks funding the DAPL and other pipeline projects transporting oil from Alberta’s tar sands, including Keystone XL, Trans Mountain, and Energy East.

The idea was that removing money from the banks could put a stop to the projects. The phrase “Kill the funding. Kill the pipelines” was commonly spoken by divest advocates.

Wells Fargo was one of 17 funders of the DAPL; others included Bank of America, Goldman Sachs, and ­JPMorgan Chase. In September 2017, Mazaska Talks reported that the divestment movement was responsible for over $5 billion being withdrawn from DAPL-funding banks. That figure included the billions divested by Seattle, Philadelphia, and Los Angeles and over $80 million in individual accounts.

When Seattle announced it would stop banking with Wells Fargo, city officials cited the bank’s choice to fund the DAPL — as well as the 2016 customer fraud scandal — as reasons to move its money.

Public Banks as an Alternative

Moving city money out of Wells Fargo was a way for local politicians to put their money “where their values are,” said Seattle resident Matt Remle, co-founder of Mazaska Talks and a member of the Standing Rock Sioux tribe. That’s because councilmembers would be removing city money from financial institutions that fund projects that hurt the environment and communities. Some of the banks that fund fossil fuel projects also fund private prisons, detention centers, and weapons manufacturers.

“We want an avenue through which ordinary people can access banking services regardless of income and in a way that does not engage in any exploitative practices,” said Seattle City council member Kshama Sawant, who was a co-sponsor for the divestment ordinance.

Once the city of Seattle had committed to move its money, the city needed somewhere to move it to.

“When we were organizing around getting [Seattle] to divest, the question all along was what to do with the city’s money,” Remle said. “And our philosophy was it’s not going to be a victory to close accounts with Wells Fargo and go to Bank of America.”

Organizers saw public banks as the solution.

A public bank is an institution owned by a governmental body, funded with taxpayer money, and mandated to serve the public interest. In summer 2017, Remle and other Seattleites started advocating for the city to establish a public bank, a process that could take years.

Sawant said a public bank “would be accountable to the people of Seattle in a way that you could never hold a private bank accountable,” adding that the city could better direct the bank’s resources, like loans, to projects that support community-directed goals.Remle noted affordable housing, homelessness services, and funding for higher education as causes the city might fund.

Matt Remle, co-founder of Mazaska Talks

Moving city money out of Wells Fargo was a way for local politicians to put their money “where their values are,” said Seattle resident Matt Remle, co-founder of Mazaska Talks and a member of the Standing Rock Sioux tribe. YES! Photo by Alex Garland

Ultimately, the city’s historic move to divest from Wells Fargo was undermined. It intended to end its relationship with the bank at the end of 2018 but the city failed to find a new place to house its $3 billion.

So it renewed its contract with Wells Fargo for three more years.

“At that moment there was no other choice but to continue with Wells Fargo, but it’s a reminder of how the movements work. Winning the Wells Fargo divestment was sort of step one,” Sawant said.

The next step, the council member said, is to demand that obstacles — such as the inability for credit unions to serve municipalities and the Washington law that bars cities from establishing any type of business entity — are removed so that the city or state can establish a public bank.

Bank of North Dakota

As it stands, North Dakota is the only place in the continental U.S. that has a municipal bank. The Bank of North Dakota was founded in 1919 and, for public bank advocates, it serves as a model.

Opponents of public banking have pointed to the failures of the 1800s public banks in Vermont and Indiana as examples of why public banks don’t work. While serving as the director of financial regulation studies at the Cato Institute, Mark Calabria argued that the public banks of this era were “characterized by rampant corruption.”

But advocates point to the success of Bank of North Dakota, established at a time when farmers in the state had trouble obtaining credit for their businesses, as evidence that a municipal bank could work. The bank was started to provide farmers credit and serve as the state’s financial repository. It has since evolved to finance the state’s infrastructure projects.

“We need banks that are publicly owned so we can take our very substantial public deposits and public revenues and public resources and leverage them for local purposes instead of sending them to Wall Street,” said Ellen Brown, founder of the Public Banking Institute. “Cut out the middle man, basically, which is what the Bank of North Dakota does.”

While some profits from Bank of North Dakota are used to fund mission-driven loan programs related to economic development and infrastructure, the bank has also faced criticism for lending nearly $10 million for the law enforcement response to the #NoDAPL protests in North Dakota.

With that in mind, advocates in Seattle and elsewhere have been considering how to ensure transparency and accountability in municipal bank charters.

Barriers to Public Banks

Seattle is just one entity looking to move its money out of corporate banks and into socially responsible ventures from which local communities would benefit.

Philadelphia, New Haven in Connecticut, and Santa Monica and Davis in California, have divested money from large banks, and others — like Santa Fe in New Mexico, Oakland in California, and Washington, D.C. — have completed feasibility studies for public banks. But not many of these efforts have really taken off. Each location comes with its own set of challenges.

left double quoteWe need banks that are publicly owned so we can take our very substantial public deposits and public revenues and public resources and leverage them for local purposes instead of sending them to Wall Street.” — Ellen Brown, founder of the Public Banking Institute

One barrier to getting a public bank off the ground is high startup costs. This was the case in Massachusetts, where a 2011 report from the Federal Reserve Bank of Boston — which used Bank of North Dakota as a model — estimated that startup costs for a state-owned bank in Massachusetts would have been $3.6 billion. Some advocates say this figure is an overestimate; banks generally need tens of millions to start, said Brown. The figure varies based on the bank’s location, growth prospects, and risk profile, according to the Partnership for Progress, a program of the Federal Reserve System.

Because proposed banks have unique business plans, market competition, and local economic context, among other factors, the FDIC does not prescribe a minimum of initial capital. But the agency does suggest that organizers examine “the risks inherent in the institution’s business model, the potential variability in earnings projections, and the skill and ability of the management team to carry out the business plan” when planning to apply for insurance.

There are also legal challenges to establishing public banks in some locations. Many states and cities — including Sante Fe, San Francisco, and Los Angeles — have clauses in their charters that inhibit them from establishing public banks. There’s movement in some cities and states to overcome institutionalized policy barriers to establishing public banks. In Los Angeles, there is a measure on the November ballot that would amend the city’s charter and allow it to explore establishing its own financial institution. And in San Francisco, a task force was established in February 2018 to examine legal barriers and startup needs, such as insurance, a government-issued charter, and costs. In November 2018, the task force will have wrapped its examination.

Both Los Angeles and San Francisco are part of the California Public Banking Alliance, with members across the state working to establish city and regional public banks that are “socially and environmentally responsible,” as noted on the coalition’s website. Additionally, the alliance has pushed for state legislation that would instruct the California Department of Business Oversight to issue a special license for cities to form public banks and allow them to bypass regulations that apply to private banks.

Taking the First Steps

Over the years, Seattleites and Washingtonians have been pushing for a public bank. Since 2009, Senator Bob Hasegawa — who represents Seattle’s 11th State Senate district — has introduced nine bills to establish a state bank and he championed a city-owned bank during his mayoral campaign in 2017. While none of the bills passed, state legislators funded a feasibility study in the 2017–19 operating budget.

The main obstacle to starting a public bank in Washington is that the state constitution prohibits the state and its cities from loaning money or credit to individuals, associations, or corporations.

left double quoteThat movement for divesting from Wells Fargo not only did the groundwork, but also set a line in the sand that this is something that we believe the city of Seattle should be going toward … ” — Kshama Sawant, Seattle City council member

The fight against the DAPL brought new energy to the effort in Seattle. Organizers believe a public bank could allow the city to have more funds to address the needs of residents.

“Recapturing some of that would create major savings that could help us fund things like education, housing, and transit,” wrote organizer Alec Connon on a blog for the climate justice group 350 Seattle. “Done right, a public bank would save city money, create jobs, and provide affordable loans to small businesses.”

While the city of Seattle had to postpone its divestment from Wells Fargo, organizers — and city council members — have continued to push for the idea.

“That movement for divesting from Wells Fargo not only did the groundwork, but also set a line in the sand that this is something that we believe the city of Seattle should be going toward,” Sawant said, noting that there is still hope of establishing a public bank in the city.

“We don’t expect a straightforward path but we also believe that this is the correct thing to do.”

In December 2017, city council members voted to allocate $100,000 to conduct a feasibility study for a municipal bank. The city hired a consulting firm in April 2018 to complete that study, and expects a report for release in fall 2018. From there, the city will have the responsibility to move forward.

“We’re still looking at very long-term. Even if the study comes back positive, the city council says yes, the mayor approves — we’re still looking at probably, I would assume, another year plus to get the actual infrastructure and everything kind of set,” Remle said. “But the wheels are definitely in motion.”

Dani Burlison

Deonna Anderson is the Surdna Reporting Fellow for YES! Media. Twitter: @iamDEONNA

When You Own the Bank Down the Street

A National Network of Financial Cooperatives Is Keeping Community Money Out of an Extractive Banking System

Me'Lea Connelly

Me’Lea Connelly developed the idea for Minneapolis’ Village Financial Cooperative as a Black-owned credit union in 2017. “I think our project has given people something to opt into that’s hopeful and that has a real, tangible outcome connected to it.” YES! Photo by Lauren B. Falk

Me’Lea Connelly is from the Bay Area of California, but she has deep roots in Minnesota. Her mother’s family was one of the first to migrate to the state after slavery ended. When she was 15, her parents divorced and she moved with her mother to Minneapolis.

Ivy Brashear

Ivy Brashear is the Appalachian Transition Coordinator at the Mountain Association for Community Economic Development. Twitter: @ijeb24

“I’ve always just felt more at home here,” Connelly said. “All my ancestors are just calling me home.”

But that home, in Minneapolis’ Northside, has a severe shortage of shopping centers, grocery stores, and banks. In 2017, Minnesota was named the second-most unequal state for Black people in a study of Black and White inequality by 24/7 Wall St., a financial news and opinion website.

Despite the strong sense of community that comes with a long history, the African American families of Minneapolis’ Near North and Camden neighborhoods weren’t thriving. As an activist against racial economic injustice, Connelly understood that she was witnessing how systemic oppression strips wealth and prevents generational wealth accumulation.

Regardless of previous attempts by outsiders to invest in the Northside, Connelly and others realized that no one from outside the Northside was going to help their community revive itself and thrive into the future.

“There’ve been a lot of big promises made by philanthropy to folks on the Northside, and very, very few — if any — have come to fruition,” Connelly said.

She knew — as did many others in the Northside — that power lies in who controls the money. “How do we take control of our own community and not let the lack of financial services in our community dictate our future? We have to have our own,” Connelly said.

Connelly had previously started Blexit, a grassroots nonprofit that organizes boycotts of financial systems that have historically extracted wealth from Black communities and increases support for the Black-owned economy. And, in 2017, she developed the idea for Village Financial Cooperative, a Black-owned credit union. Connelly intends to find people with more financial experience to run it once it receives its charter, which she hopes happens by 2019.

Connelly’s credit union is part of a strategy by a nonprofit consortium of investors, financial organizations, and community development groups known as the Financial Cooperative to set up locally controlled loan funds across the country.

The cooperative’s founders believe investing and lending in marginalized communities can counteract historical wealth extraction, which happened in a number of interconnected ways, including removal of natural resources, discriminatory housing and banking practices, underinvestment in physical infrastructure, and a lack of well-­paying, sustainable jobs.

The Financial Cooperative calls its task “nonextractive” or “regenerative finance.” The goal is to give control of capital to communities that have been most marginalized, but also to funnel capital into those communities.

It believes in cooperative control of community financial institutions and set itself up as a cooperative nonprofit, with each participating community getting a say in how the whole operates. The founding members of the cooperative are longtime leaders in the movement with years of experience in all areas of “impact” investment and cooperative finance: The Working World, the Southern Reparations Loan Fund, the Climate Justice Alliance, and the Baltimore Roundtable for Economic Democracy are all founding member organizations.

Ed Whitfield, co-managing director of the Fund for Democratic Communities in Greensboro, North Carolina, was one of the co-founders of the Financial Cooperative. He says our current financial system isn’t set up to meet the needs of community.

Northside neighborhood

Minneapolis’ Northside neighborhood is trying to revive itself with the help of a national network of financial cooperatives. YES! Photo by Lauren B. Falk

“Currently, we live in a world where the surplus of human labor is accumulated by individuals for the purpose of increasing their own level of luxury, privilege, and power,” Whitfield said. “It comes from an accumulation that knows no limits and sees no end.”

There are now 23 member financial institutions actively lending or in development around the country. Most are in urban centers — such as the Detroit Community Wealth Fund, the Boston Ujima Project, and Cooperation Richmond in California. Some newer members are in smaller cities or rural regions, such as the Cincinnati Union Co-op Initiative and Cooperation Central Appalachia in Charleston, West Virginia.

The Financial Cooperative currently has $7 million available for lending, and hopes to raise $20 million within the next five years. It’s set up as a revolving loan fund — a self-­replenishing pool of money that uses interest and principal payments on old loans to issue new loans.

Brendan Martin is the founder and president of the Working World, a nonprofit investment firm solely devoted to countering traditional “extractive finance” by funding cooperatives. His New York-based organization pools investor money from around the world to incubate worker cooperatives, providing loans that don’t require collateral or go into repayment until the co-op makes a profit.

The Financial Cooperative was Martin’s initial creation. The co-op seeks out capital from people who want to see their investments have a big impact while also carrying a relatively low risk.

“Because they’re small, they can be locally connected. Because they’re locally connected, they can be locally controlled,” Martin said.

“[The Financial Cooperative] is infrastructure on behalf of the borrower, and the borrower is the rest of us; it’s not the 1 percent of the world who are capitalists,” Martin said. “It’s so radical, but also it’s just really obvious.”

Most of the money raised so far has come from funding sources that are more politically aligned with the Financial Cooperative’s vision, Martin said. But the hope is that the organization will grow large enough in the future to absorb funding from less aligned sources, perhaps from more extractive sources that have interests in fossil fuels or multimillion-dollar businesses, for instance.

“It’s really not been on my mind to think about the investors as aligned vs. nonaligned, or extractive vs. nonextractive,” said Marnie Thompson, project officer with the Southern Reparations Loan Fund. Thompson also serves on the Financial Cooperative’s investment committee. “It’s been on my mind to take money that’s been generated through human labor and put it to work building a more democratic, just, and sustainable economy that is owned and controlled by the communities that have been most excluded and extracted from.”

“Minnesota is one of the most amazing places to live if you’re not Black,” Connelly said. She was among the activists and organizers who were outraged by the recent police killings of Jamar Clark and Philando Castile. After she formed Blexit, she saw the need for community meetings to discuss what actions residents wanted to take to improve the Northside’s future.

Almost 200 people showed up to a community meeting after Castile was killed. That’s where the idea of establishing a Black-led financial institution in the Northside came to the fore.

“Here are folks who are mourning the death of another Black man killed by police, who are absolutely emotional, but they have the clarity of mind to say the crux of all of this is financial advocacy and institutional ownership,” Connelly said.

That’s when Village Financial was born. About 1,300 community members have pledged to put their money into the credit union once it’s established. A typical community-driven credit union raises just 600 members.

“I think our project has given people something to opt into that’s hopeful and that has a real, tangible outcome connected to it,” Connelly said.

left double quoteHere are folks who are mourning the death of another Black man killed by police, who are absolutely emotional, but they have the clarity of mind to say the crux of all of this is financial advocacy and institutional ownership.” — Me’Lea Connelly

Connelly recently helped one of her clients get what Village Financial calls a “New Day Loan,” an alternative to payday loans which target marginalized communities across the country. New Day Loans provide options for people struggling to pay off payday loan debt. The hope is that through the Financial Cooperative, others can learn from Village Financial’s example and potentially establish similar solutions in their communities.

Connelly’s client is a county employee who had been using a Walmart cash card as her financial institution because she had no credit or bank account. Every time she used this card, she was charged a fee. After 12 years, those fees amounted to $24,000.

“I don’t need to have 20 years of financial experience to know that this is crazy and to do something about it,” Connelly said.

Providing financial services is an emerging role for what the Financial Cooperative calls its “peer members,” most of whom got involved to make loans to people starting worker-owned cooperative businesses.

But Connelly said improving financial literacy and providing people with an avenue to establish healthier and more stable financial lives are crucial before any kind of worker-cooperative development can happen.

“We can’t develop worker co-ops if people can’t make it paycheck to paycheck,” Connelly said. “We have to start where people are at.”

Ivy Brashear

Ivy Brashear is the Appalachian Transition Coordinator at the Mountain Association for Community Economic Development. Twitter: @ijeb24

Philanthropy’s Little Secret

About 93 percent of charitable foundation money is parked in Wall Street investments. But foundations are starting to make better choices.

Photo by John Lund / Getty Images

Photo by John Lund / Getty Images; Source: The Foundation Center, 2015 data

Good-hearted philanthropic foundations make news headlines when they funnel millions of dollars into charitable causes. Even smaller foundations make a splash when they lend their support, such as when the Landfall Foundation of Wilmington, North Carolina, stepped in early to distribute $388,000 to 82 local nonprofit organizations and schools after Hurricane Florence.

Chris Winters

Chris Winters is a senior editor at YES! Media. He covers the economy and politics. Twitter: @TheChrisWinters

But that’s not the whole story. In fact, it’s only about 5 percent of the story.

We seldom hear about the really, really big money: philanthropy’s own investments. Federal law requires that foundations give away 5 percent of their endowments each year. The other 95 percent is typically invested in Wall Street markets to sustain and grow the philanthropic pot.

According to the Foundation Center, about 86,000 charitable foundations hold more than $890 billion in assets. In 2015, they gave out a total of $62.8 billion, averaging 7 percent across the industry. What to do with the rest of that money — $827.3 billion — has presented both problems and opportunities.

When a donor writes a check to a foundation, unless that donation was earmarked for a specific purpose, that money goes into this large pot of capital, and most of that gets invested in Wall Street. Some larger foundations, with more than $5 billion in assets, get annual returns as high as 6.3 percent on their investments, according to a 2016 analysis done by the Quarterly Journal of Economics. And often, maximizing returns has been accomplished without much consideration of the foundations’ overall missions.

More foundations are starting to recognize the wasted opportunity for investing their massive amounts of capital and are correcting course.

The FB Heron Foundation, a private foundation with a $275 million endowment as of 2016, has been a leader in this shift. The foundation’s primary mission is to help communities and people help themselves out of poverty, and investing in job creation is a major component of that.

In 1996, after a Board of Trustees meeting in which too much time was spent on investment returns and not enough on its charitable activities, the foundation began to regularly take a deep look at its investment holdings, a process that involves diving into complicated financial instruments, often managed by outside institutions, to find out what it really owned.

That has resulted in a few surprises, said foundation President Dana Bezerra.

In 2015, Heron noticed that within one of its holdings in a real estate investment trust, one company in particular was generating a large number of jobs in the communities in which it operates. That company was the Corrections Corporation of America, the largest operator of private prisons in the United States.

“It’s hard for a private poverty-fighting foundation to justify why we hold private prisons in our investment portfolio,” Bezerra said. “That was a moment of pause for the Heron foundation,” she said.

That experience emphasized for the foundation that it had to look at its investments not just for jobs production but also for community, social, and environmental impacts.

The Ford Foundation, the nation’s third-largest foundation, with a $12 billion endowment, in 2017 announced it was shifting $1 billion in assets to mission-related investments. … What about the other $11 billion?

“Every enterprise consumes capital. Air, water, labor,” Bezerra said. “They emit things. Wages. Pollution. What’s being consumed, what’s being emitted?”

The result is that the Heron foundation created its own metric for evaluating the investments in its portfolio, which it calls its “net contribution.” The foundation now reviews all its investments through that wider lens, and, as of December 2016, said all of its assets are fully aligned with its mission.

To be sure, these are often small shifts, just one fund to another, still within conventional Wall Street vehicles. But more foundations are changing their views on the function of their investment portfolios.

Starting in the 1990s, an initiative spearheaded by the Annie E. Casey Foundation, FB Heron Foundation, and others created a clearinghouse of information, networking, and best practices for those philanthropies that wanted to engage in what is now called “impact investing.” The result of that work today is an independent nonprofit called Mission Investors Exchange. It has more than 200 member foundations, including multibillion-dollar institutions like the Bill and Melinda Gates and Ford foundations.

Impact investing is broadly defined to apply to many different kinds of financial support, said Matt Onek, the chief executive of the exchange. That support includes everything from making sure the foundation’s endowment is invested in markets that are supportive of the mission to making low-interest loans available to nonprofits working in those narrow markets.

It could mean taking an equity stake in a for-profit company if that company’s goals — developing life-saving medications, for example — aligned with a foundation’s mission of finding a cure for a disease. It could also mean divesting the foundation’s investment portfolio of assets that could undermine the mission or exacerbate the problems that the foundation was set up to solve.

That’s what Heron did with its private prison assets.

“It could start with knowing what you own on the endowment side, and slowly learning how to make that more aligned with your mission and values,” Onek said.

And while it’s true that some foundations still set their grantmaking budgets at the federal 5 percent minimum, some are going further.

The Bill and Melinda Gates Foundation, the largest foundation in the U.S., with a $50.7 billion endowment, runs a $2 billion Strategic Investment Fund to pursue mission-related investments that can draw on the power of private enterprise to solve global problems. That’s outside of the usual charitable grants that the foundation makes to nonprofits each year, which amounted to $4.7 billion in direct grants in 2017, or about 9.2 percent of the foundation’s total endowment.

Increasingly, more foundations, Onek said, are “starting with the problem, instead of the type of capital, and asking what is the best tool to address this problem.”

Chart of the 10 largest foundations in the U.S.

As a career programming executive at several foundations, Edgar ­Villanueva found that threading that needle is often tricky in the rarefied world of private foundations.

A self-described Southern Christian Native American, Villanueva said he was under tremendous pressure to conform to a corporate culture when he took his first job at the Kate B. Reynolds Charitable Trust in Winston-Salem, North Carolina. Its initial endowment came from the family of the former chairman of the R.J. ­Reynolds tobacco empire.

Villanueva, now board chair of Native Americans in Philanthropy and vice president of programs and advocacy at the Schott Foundation for Public Education, is the author of the new book Decolonizing Wealth, which describes many problems in the philanthropic field. He agrees that foundations are starting to align their investments with their missions, citing the Nathan Cummings Foundation, which had $443 million in assets in 2016. That philanthropy in March 2018 announced it would redirect 100 percent of its assets into mission-related investments.

He doesn’t see aggressive enough action, however. The Ford Foundation, the nation’s third-largest foundation, with a $12 billion endowment, announced in 2017 it was shifting $1 billion in assets to mission-related investments.

“I basically said that’s a start,” Villa­nueva said. “It’s not really moving the needle or anything. What about the other $11 billion?”

“But you know, the fact that Ford is Ford, if they are taking that one step ... it’s going to draw a lot of attention, and other foundations, I hope, will begin to have those conversations about what they can do,” he said.

That includes making changes to how foundations operate inside their walls.

Villanueva’s book covers the legacy of exploitation and trauma that elite foundations inflicted, often inadvertently, on marginalized communities and his personal journey toward discovering how that can be repaired.

He saw that firsthand at the Kate B. Reynolds Charitable Trust, where he was hired by the trust’s first Black president specifically to make inroads into minority communities.

“There’s a major good old boys’ network, right?” Villanueva said. “Looking at where the money was going — when we said that this money was explicitly for low-income families, communities — we were finding well-resourced organizations, Duke University, all these health care systems. … ”

Making those changes proved to be a challenge in negotiating built-in networks and learning how to say no to some long-standing grantees to make room for others, changing expectations and requirements that previously had eliminated some groups from eligibility, and getting out of the ivory tower and into those communities.

“I actually rewrote the job description of the program officer, which historically was like a loan officer job description out of the bank, to be more like a community organizer,” he said.

Chris Winters

Chris Winters is a senior editor at YES! Media. He covers the economy and politics. Twitter: @TheChrisWinters


Revaluing MoneyThe “Natural Wealth” of Community That Really Can Solve Problems

YES! Illustration by Pablo Iglesias

YES! Illustration by Pablo Iglesias

Being wealthy crept up on me. I only noticed it during a recent interview, one of many since the new edition of Your Money or Your Life came out this spring. A reporter from Die Zeit, a German weekly newspaper, perched on my sofa asking questions, scribbling notes, and more than once commenting on how nice my house and yard and view are.

You can live in a house comfortably, shuffling from bed to kitchen to desk without really noticing the overall effect of everything you’ve collected — paintings, furniture, rugs, dining table, plants. Then a reporter comes to talk about revaluing wealth, and the entirety of your home is part of her story.

As the reporter marveled at my house, I started to marvel as well. How did someone who has taken home very few paychecks plus a small inheritance in the last 50 years end up with a 2,000-square-foot house with a view in a seaside village?

After she left, I did the math.

My wealth came to me the old-fashioned way: I saved and saved and saved. For the first 10 years after the publication of Your Money or Your Life, I donated the earnings to a wide range of social change organizations. Since then, whenever I got a big check, I stored that money in durable goods: this house, a car, a camper — and cancer treatment (which kept my body durable). The house I turned into a triplex; that rental income adds to my savings. I’ve lived most of my life like a pensioner: passive income from safe investments plus Social Security.

Am I a frugality saint? Hardly. I became well-known in the frugality movement in the 1990s when Your Money or Your Life first published. It took several years to shed my hyperfrugality and relax into a balanced relationship with money. Then there was the panic in my early 60s that I would outlive my money. A friend advised me: “If your money disappears, we’ll probably all be in the same boat, and we’ll figure it out together.” The natural wealth of community anchored my mind, heart, and soul.

While my frugality habit has made me the classic millionaire next door, I’ve also — more importantly — invested in nonmonetary wealth.

I call money “national wealth” and this other “natural wealth.” The distinction is crucial to revaluing wealth, and necessary for the attitude adjustment of a country afflicted with wealth inequality and addiction to Wall Street. To state the obvious, amassing dollars for the sake of amassing dollars is not building the right kinds of wealth.

Here’s how building natural wealth works on a personal level.

By saving money, I’ve liberated time. This “time wealth” has afforded me great expanses for thinking and doing: visiting friends, volunteering, writing, self-inquiry, travel, and so on. I’ve often said, “I buy my freedom with my frugality.” Whatever well of wisdom I’ve plumbed, I’ve earned it through these expanses of time.

With this time, I’ve also developed a wealth of skills. Whatever we can do for ourselves, do for others, or even do for money is wealth. I still own my handyman and survival skills books, but nowadays anyone can go on YouTube and learn anything, from gardening to running an online business. In one three-year stint in rural Wisconsin and another in the desert outside Florence, Arizona, in the 1970s I chalked up these skills: gardening, putting food up, butchering, engine repair, building, plumbing, attaching anything to anything with screws, nails, and glue — and even making wine out of flowers, fruits, and vegetables.

To state the obvious, amassing dollars for the sake of amassing dollars is not building the right kinds of wealth.

I’ve also had the time to build close friendships that are like family to me. They see me through hard times, celebrate wins, challenge my assumptions, show up with food when I’m bedridden, and they will bury me in a shroud in the cemetery up the hill when I die. While the Gallup Sharecare Well-Being Index shows Americans have fewer supportive friends now than a few years ago, I’ve invested time in building friendships through small kindnesses and regular check-ins.

I’ve also invested in my community, not out of duty but gratitude. Soon after I moved here I sought a way to say thank you to this little two-street town that welcomed me. I priced shoes at the thrift store. Then I helped facilitate community meetings. A few naturally funny people and I formed a comedy troupe and performed in my garage for friends. As my life has shuttled through dances and events and fundraisers and performances and parties and projects here, I’ve gained a visceral sense of a strong social safety net that runs in parallel to government services. It is here for me, and I am part of it, and this is a quiet yet breathtaking “asset.”

In economic terms, I have amassed social capital. Community is the ultimate unit of wealth: real people in real places solving real problems together — with love.

I know my sweet life is part of the larger, troubled world. Sea level rise is an issue in a seaside village. A military base here is building up fighter jet pilot and warfare training to the detriment of everything we’ve worked on: farms, tourism, sanctuary, and more. Even the relatively small population (65,000) is deeply polarized with internet trolls at their worst. Because of the military expansion, and Airbnbs replacing rentals, and people buying second homes, we have scant affordable housing and are losing artists, young families, and blue-collar workers.

All the forms of wealth I’ve built over a long and satisfying life do not insulate me from our collective challenges. But they buy me the time to work on the gnarly big stuff.

We all care so very much. We all want to help in these challenging times, be it writing a letter to the editor or attending a march or gathering with groups to stop something destructive or start something important. Take heart. People from all income brackets are buying back their lives and bringing forward a diversity of natural wealth that can solve our problems.