Shareholders: Community building through finance

We're used to putting our money where our mouth is when it comes to consumption, but what about finance? The Wall Street Journal ran an article exactly a month ago on Susan Gibbs and Martha's Vineyard Fiber Farm:
(Her blog is the source of this goat picture, and believe me when I say there are many more ridiculously cute animal photos where that came from!)

This Etsy seller keeps her goat farm going by selling shares in each season's "yarn harvest." How does it work? Each supporter pays $125 for a share upfront, which goes toward buying hay and feed for the animals (as well as keeping the human caretakers afloat, presumably!). At shearing time, the farmer divvies up the yarn to each shareholder. This system is known as Community Supported Agriculture, or CSA. This type of organization is recognized by the US government and promoted by the USDA.

What fascinated me about this story is the use of Etsy as a financing tool. Most people use Etsy as a marketplace - a place to sell something that already exists. All responsibility for buying supplies falls to the seller (though some sellers manage this risk by not making multiples of an item until an order is placed). CSAs have historically been used to help farmers manage risk by lining up buyers before the season starts. Also, shareholders are only entitled to a certain percentage of the harvest - so if a crop suffers, due to poor weather or what have you, the farmer isn't the only one to suffer. (Likewise, if the crop is stellar, shareholders get a share of the benefits.)


Small-scale crafty makers do not generally have access to this type of risk sharing. What I keep being struck by is how capital-intensive a lot of the goods on Etsy are. "Capital intensive" just means you need to pay a lot of money upfront to make these goods. Sewing machines, woodworking tools... handmade stuff typically requires some pretty expensive tools. (Vintage, of course, requires little upfront spending or skill - that's why vintage sellers multiply like ragweed on Etsy, with no disrespect intended to the vintage sellers with great taste who I love on the site.)

CSAs are a great risk-reducing institution for farmers. What type of institution could be imagined for small-scale makers? Maybe the best way to reduce risks for crafty small business people is to think about reducing personal risks. For example, focusing on finding an affordable way to provide healthcare for the self-employed -- something a nation that prides itself on being so entrepreneurial should have figured out ages ago.