Circle of Aunts & Uncles
The Circle of Aunts & Uncles is a multi-generational project to share financial resources and expertise with under-resourced entrepreneurs in order to co-create a more equitable, sustainable, and vibrant local economy in the Greater Philadelphia region.
We envision a prosperous local economy in our region that supplies basic needs to the local population, works in harmony with our ecosystem, supports vibrant, joyful, and inclusive community life and has broad-based business ownership reflecting the demographics of our population. We aspire to:
- Strengthen regional self-reliance by supporting the production of basic needs locally, replacing imports with local production/manufacturing and services.
(This is of particular importance, not only to build the wealth of our local economy through local ownership, but also to address climate change by reducing the carbon omissions of long distance shipping, which also limits our reliance on global supply chains easily disrupted by increasingly unstable weather and social unrest.)
- Support local business owners in historically marginalized communities and populations, which will create jobs and increase community wealth and vibrancy.
- Build a community of investors and entrepreneurs who experience the collective joy of working collaboratively toward a common vision for our region.
- Increase the regeneration and protection of our local ecosystem.
The Circle of Aunts & Uncles offers qualified local entrepreneurs with demonstrated need a new vehicle for accessing local investors for low interest loans, as well as mentoring and networking opportunities. (Accredited investors may choose to make equity investments when appropriate.) The Circle intentionally creates trusting relationships between investors and borrowers, in the spirit of actual aunts and uncles, enabling investors to understand the true needs of the business and provide advice and contacts.
The focus of support is on businesses that:
a. Produce, distribute and/or retail goods or services that serve the basic needs of our region in areas such as sustainable agriculture and food; renewable energy and no-emission transportation; sustainable clothing and textiles; green building materials and construction; eco-friendly cleaning; repair/reuse/recycle; health, well-being, and personal care; household furnishing, crafts and artisanal products; independent media; local arts and culture, and neighborhood tourism. (We expect that many of the businesses we assist initially will be involved with local food.)
b. Import products not available locally which comply with fair trade practices that support sustainable local economies elsewhere;
c. Export goods or services needed by other communities while providing our region with living wage jobs and a respect for the health of our local eco-system.
d. , Develop growth and exit strategies that maintain local independent ownership, ie, not selling to a publicly traded corporation.
Priority is given, but not limited to entrepreneurs who:
a. Come from low-income communities and/or populations traditionally excluded from business ownership, such as women and people of color.
b. Embrace advanced eco-friendly business practices, especially those that limit input of natural resources and output of waste, make use of waste from other businesses, and not only maintain, but restore and enhance our local eco-system.
Building a Network: Approximately forty “aunts and uncles” committed to supporting the next generation of local business owners.
Members of the Circle are willing to accept a low (3%max), slow, or no financial rate of return on loans in order to serve this vision, and value the “living return” they will receive by living in a more inclusive, sustainable and vibrant community. Each commits to loaning a minimum of $2,000 per household per year to the slate of entrepreneurs. (The Circle will also become a Kiva trustee, enabling any person committed to the mission who cannot afford to join as a member to invest as little as $5 in an entrepreneur.) The Aunts & Uncles are also advocates for local businesses and locally made products, creating an energy field that moves our local economy forward.
Loan Account: A special bank account housed and managed by The Enterprise Center (TEC). Aunts & Uncles write an annual check for $2,000 to TEC where it is deposited in our account. When a loan is approved by a majority vote of the Circle, a check is sent from TEC to the entrepreneur. An amortization schedule is calculated based on the amount and term of the loan and interest amount. Electronic auto-payments are made from the entrepreneur's bank account to the Circle account at TEC. At the end of the loan term, checks including principle and interest will be sent to each Aunt & Uncle. 10% of contributions are held in a reserve account to help cover any defaults.
Advisors, Pipelines and Co-lenders: Growing mutually beneficial relationships with non-profit organizations that work with local entrepreneurs. To help identify qualified entrepreneurs, receive advise from professionals in the field, and partner in making loans, the Circle will maintain relationships with local business support organizations that provide training and/or loans and grants. These include The Enterprise Center, Entrepreneur Works, the Merchant’s Fund, Untours Foundation, The Reinvestment Fund, Kiva Zip, and the Sustainable Business Network.
Gatherings: Three gatherings scheduled per year in the homes of Aunts & Uncles. The gatherings include a reception with wine and hors d’oeuvresand are intended to build community while providing the opportunity to introduce the Circle to entrepreneurs. Members of the Circle contribute $30 per person to cover the cost of each gathering. Two potential borrowers will be invited by a committee of the Circle, supported in preparation for the gathering (filling out an application, preparing for standard questions, etc.), and treated as welcome guests. The intent is to build a high-trust relationship between entrepreneurs and members, so that the entrepreneur can fully leverage the resources of the group—not just pitch their strengths.
The Aunts & Uncles will be sent materials in advance of the gathering with information about the prospective borrower including the purpose of the loan, history of the company, financials and other information, so that questions can be formulated in advance. After a brief presentation and discussion with the prospective borrower, members privately discuss their individual interest in supporting a borrower. If advice is recommended, a group of members form a team to support the entrepreneur. They later recommend to the circle whether a loan should be considered. A vote on the loan is taken and majority rules.
In addition to the 3 gatherings a year to meet entrepreneurs, 3 or 4 events may be scheduled for educational programs, conversation and community building that help to strengthen the work and increase enjoyment and meaning.
Social Capital: Providing Non-financial resources
Like real life aunts and uncles, members of the Circle of Aunts & Uncles also provide social capital. Here are examples: Buy the entrepreneurs’ products and bring in more customers by spreading the word to your friends and colleagues. Use social media. Take a photo of the entrepreneur and/or the product and post it on Facebook, etc. Make connections for the entrepreneur such as with a store that might sell the product, a reporter that could do a story, a successful friend in the same industry that could give advice, a local supplier to purchase from that helps build local supply chains, or the availability of storage space, shared office space, or other resources.
Volunteers:Coordinating the Circle with volunteers. Some members of the Circle will volunteer to host gatherings in their homes. Additionally, a steering committee of three volunteers will build relationships with advisors/pipeline organizations that recommend entrepreneurs for loans. The steering committee will arrange in advance for the gatherings three times a year, choose the entrepreneurs (with the advice of pipeline organizations and circle member volunteers who review the proposed entrepreneurs) and support them in preparing their presentations for the gathering. During the first year, the Circle will be coordinated by a steering committee of Judy Wicks, Kate Houstoun and Zoe Selzer.