Triangle Green Fund: A Sustainable Community Energy Project
Our goal will be to develop a new financing model, attracting private sector investment to create and operate a local, voluntary carbon mitigation fund, the Triangle Green Fund (TGF). The Fund will provide both micro-lending and grants to community-based, green businesses and projects. Additionally, working with partner organizations, The Fund will leverage funding from existing financial institutions, training lenders in green practices, providing interest rate reductions and offering loan guarantees. The Fund will help capitalize organizations that meet strict criteria in environmental sustainability, social equity as well as economic viability. Grants will be provided through an application and advisory board review process to those groups with the highest potential, measurable impact in reducing pollutants, or can provide maxim multipliers in promoting community sustainability. The Fund will take approximately a year to raise initial funding, constitute an Advisory Board, hire staff and market to area organizations, with the goal of providing its first loans and grants in early 2010.
A unique feature of The Fund is that it has the ability to create profound environmental protection through its voluntary carbon mitigation system. The Fund would establish a way for organizations and individuals to offset their greenhouse gas emissions by purchasing carbon offsets from local sources. The Fund will then loan green businesses that provide products and services in a variety of sectors, including but not limited to: transportation, renewable energy, water conservation, energy efficiency, green space and green workforce development. This Fund will effectively internalize external costs of pollution, while instilling a sense of community, keeping money local (maximizing the economic multiplier effect), while financing the local, emerging green economy. Funding may also come from Federal and State grants to promote renewable energy and energy efficiency investments, inabling low interest loan systems working with local governments and lending institutions.
The jobs will be created in the first year, with the expectation to maintain low overhead using existing infrastructure of partner organizations, maximizing the amount of funds redirected into the community. The multiplier effect for The Fund in employment in both direct and indirect job creation may average approximately 5 direct jobs and 20 indirect jobs per $100,000 invested/donated. With each local governmental entity in the Triangle signing on to carbon reduction, the existence of The Fund will greatly help in facilitating real and measurable goals and may become a significant player in growing the green economy.
Importantly, this model can be emulated across the State as a national system of carbon trading or pollution tax may be years from taking effect and will be national in scope, focusing resources away from our State. Environmental affects can be calculated for each of the investment sectors and using academic resources in the area, many indicators can be developed and used to track and evaluate the effectiveness of The Fund. The plan is to market to Triangle organizations with existing commitments for carbon mitigation, who are currently purchasing carbon offsets using products outside of the Triangle or the State and wish reduce their environmental and social impacts by investing locally. Self-sufficiency will be achieved through an administrative fee and interest on loans to cover Fund management. Additional funding may come from individuals and foundations wanting to provide capital for sustainable community development. This project will be a collaboration with Good Work, The Forest Foundation and other local organizations with expertise in these fields.
The Fund will budget approximately $150K per year for 3 staff members, housed within existing non-profit organizations, with a goal of achieving a $2 million endowment (or annual, mitigation/donation flow rate) to cover its basic overhead. Roughly 90% of the funds will be available for reinvestment and grants, leveraging capital at an estimated 5 times the expected donation income. The hope is to double The Fund size within 3 years to $4 million in capital annually, increase staff and to leverage local financial institutions to take responsibility and leadership for carbon mitigation, pollution reduction and sustainable community development. Staff will provide technical assistance in reviewing mitigation equivalents as well as applications, and others will be involved in marketing and liaison as well as training and assisting financial partners. Some part-time staff borrowing from partner institutions may be required to help during certain times of the year as applications are received and selections for funding made. The Advisory Board will be responsible for final selection of grant recipients.
Triangle Green Investors Club
Another option is to establish an “investors club,” which have shown remarkable success in communities across the nation (See www.usinvestorclubs.org). Michael Shuman, the Author of The Smallmart Revolution, has been promoting these types of systems across the US. Working with organizations like Plenty, and the newly forming Business Alliance for Local Living Economies (BALLE) groups here in the Triangle, small to medium size business could be identified, resources found to help in business management, and business plans developed for review. Loans and investments could be made to these organizations showing growth potential, solid management and good business plans. The Club can work with The TGF and CSE Projects, creating and providing several tiers of capital needs and promoting more sustainable, local community development.