In 2005 Blake [Jones, co-founder of Namaste Solar] and some colleagues had created this beautiful alternative company with a very democratic structure. And they were facing, like many companies, not the danger of failure, but the danger of success.

At Equal Exchange we just saw it over and over: these awesome, innovative ethical companies would reach a certain scale — and almost inevitably they would get bought out. What we realized was that you really needed a structure in place to define the rules of the game to take that option of selling out off the table. And Namaste was thinking, “We’re gonna get an offer that’s too big to refuse!”

On the other hand, they knew if they wanted to compete on these higher levels, they needed a lot of outside capital. They discovered that the model they had dreamed up was already very close to a worker co-op, they just hadn’t been familiar with that model. And they were very intrigued by it.

I can remember them asking me very specifically, “Can we still raise outside capital in a way that doesn’t threaten the model?” And I said, “Look, if you convince the employees to convert, I will find you the damn capital.” And they did convince them.

It was a little audacious of me to promise that, but they brought me on as their first outside board member. And I’m still on the board, eight or nine years later.

Yes, it’s helped them because the economy has gone up and down — in the solar industry they call it the “solar coaster.” So having that committed capital has been essential.

A couple years ago, all the things that could go wrong went wrong. But they didn’t get a bunch of calls from investors threatening to sue or demanding their money back. The investors said, we’re very concerned, can we help out more? And I’m thinking: you guys got a whopping 0% dividend but you’re coming to us and saying “What can we do to support you?” But that was the response. And the company did pull out and thrived even during the worst of the pandemic.

In Equal Exchange’s case, remember there were almost no other businesses of this kind out there at the time. There was Organic Valley and a few others, but really, very little that was following that non-voting, preferred stock model. I call it “dequity.” It works as equity on the books. Legally, it’s equity. You can use it as collateral for other debt. But basically, people are giving you money. You’re just paying a return. They have no voting rights or anything but after a certain number of years, they get the investment back from you. That sounds like debt.

A lot of lawyers didn’t know what to do with this idea. Accountants asked us, why would anyone do that? That’s not what people are looking for.

And I kept saying, there are enough people looking for that. Compare your situation if you’re a Microsoft shareholder. You get proxy votes, but guess what, they’re not counting it. So you’re not really a voting member of all these companies you think you own.

I introduced Namaste to a lot of the networks that I had, and more than that, to the philosophy that I outlined for Blake, and they followed it. I said, I don’t take anyone’s money unless they’re willing to have a conversation with me.

Sometimes I would have these financial advisors say, this person inherited a bunch of money. They’re really hard to get ahold of, they’re willing to write a check for $100,000. And you’re telling us you have to have a meeting with them?

I’m saying, if they’re not willing to meet with me for 15 minutes, how will they ever be happy with this investment? You know what’s going to happen if we run into trouble. So the investors would meet with me and I’d just make sure that they understood this was very different from all their other holdings.

And that’s why they should be excited — if we paid them 0%, if we ever lost their money, they should still be excited about it. And if we did pay a return, they could feel good about that, too. So it’s very different from most investments. Not that worker co-ops want to lose anyone’s money! The workers have more to lose than anyone. But you don’t want investors demanding a pound of flesh for every dollar of profit.

Blake took that on that kind of thinking, where the investment wasn’t just a transactional thing, it was about working with investors who are mission-aligned. The company spends some time and maybe money to engage with them as stakeholders — but not because they have money and we must bow down to them.

Yes — some of the regulations changed, which made it easier for smaller companies to operate. Previously, if you weren’t a tiny company looking for a $10,000 loan or a massive company looking for tens of millions, almost no one was out there to help you.

Today, if you can do a simple offering, where you’re not paying the lawyers $50,000 to write up a bunch of documents, suddenly it becomes feasible. And lawyers like Jenny Kassan, she and her former law partner, John Katovich, the two of them really helped revive this whole direct public offering model that later became part of the JOBS Act.

For equity crowdfunding, you also had the rise of donation crowdfunding, which helped. But you have to be careful what you’re offering. Securities law is not for the faint of heart. You don’t have to be scared off and not do securities offerings. But when you do it, you need to talk to a lawyer and follow the rules.

But these things aren’t that hard that you need to always just limit it to accredited investors and deal with venture capitalists. So you’re also seeing the rise of this very select group of financial advisors at firms like Natural Investments and Revalue Investing who realized that the “socially responsible investing” and “ESG” models were mostly BS, and very limited in what they could do.

I helped CERO Cooperative in Dorchester start their direct public offering before they even launched their business. And it’s hard because often with co-ops, you get the activists and the nonprofit people who don’t have the business experience, but they understand the need for it. They’re frustrated with the limits of the nonprofit model but they’re scared of the business model — like it’s all about sharks eating each other. Often the ones who are starting these co-ops specifically to support marginalized groups are also the ones that don’t have any resources.

I think the whole sector has made strong advances in these tools, normalizing them, just as regulators have gotten less freaked out about people doing it. More investors are open to it. But we’re still a tiny part of the economy.

A really fascinating one is OGC, Organically Grown Company. At first, back in the late 1970s, it was a nonprofit helping farmers: they actually helped set the first organic standards. In their history they’d been at various points a nonprofit, a C Corp, an ag co-op, and an ESOP.

But they discovered a huge Achilles’ heel of ESOPs: they are governed by the ERISA laws that treat them as retirement accounts. You often get to this point where a number of older participants have a huge chunk of their life savings tied up in the company and want to retire and pull the money out. If they had done that, it would have forced the company basically to put itself up for sale.

Under the ERISA laws, the trustees have to take the highest offer, even if it’s Monsanto, even if nobody in the company wants to sell to them! And OGC saw that threat.

So before they put it up for sale, they said, How can we protect against this? Because that’s not how we want to go. And that’s not even how the people with the money in the deal want to do it.

They took some time to really work through different models. They said, you know, we’re not a worker co-op, we’re not a farmer co-op, we need something broader. And they came up with this concept of the Perpetual Benefit Trust. I think they ended up calling it the Perpetual Purpose Trust.

I think my main contribution there was just convincing them that they should hold the bar very high and that they would appeal to a certain kind of investor, but to stay away from the Silicon Valley sharks. I helped introduce them to some of the Equal Exchange financial supporters too. But the folks like Natalie Reitman-White and others did the real work.

When I’m talking to prospective investors, what I often do is just say, “Look, let’s not talk about the finances for a minute.” I’m asking them why are you doing this? Why are we having this conversation? What’s your interest here? You know, if you just want to make a bunch of money, this is not the place to do it. If you just want to give your money away to charity, this is also not the place to do it. You’re interested in something different, what is it? How about a social return? What does that actually look like to you? Is this a match for that? Would you feel good if you lost all your money?

That’s what I want people to come away with. Half of what I do is really in educating and bringing those investors on a journey to shaking off their usual assumptions. They’re already most of the way there, but they’re not used to that conversation. And if we can shift a chunk of it, just a piece, we can ignite a whole different part of this economy without the bloodshed of a revolution, you know.

Which leads me to my experience with Downtown Crenshaw Rising. Sales at Equal Exchange had taken a significant hit during the pandemic, and I was part of a dozen or so folks who were laid off at the end of 2020. I began a consulting business, Uncommon Capital Solutions, and began working with some clients like the Main Street Phoenix Project, that’s trying to start a worker co-op restaurant group, and the Pecan Milk Co-op, that’s an amazing Black and Queer-led worker co-op in Atlanta.

In February I got a call from attorney Clark Arrington, who was the first Capital Coordinator at Equal Exchange. He and Equal co-founder Michael Rozyne basically invented the capital model that I later inherited. Clark told me about this amazing organization in South Los Angeles that was fighting a huge anti-gentrification battle and Clark said they needed my help. I think he actually told me that the previous eleven years working on co-op financing was all preparation for this. It turned out he was not far off from the truth.

So there’s this iconic mall in South LA, the Baldwin Hills Crenshaw Plaza, but everyone calls it the Crenshaw Mall. The Crenshaw neighborhood is historically the heart of Black LA. Its roots are in the Great Migration and then redlining, and it eventually came to be the Harlem of California.

The Crenshaw Mall has been the hub of Black commercial activity in an area that has suffered historic racism and disinvestment. In recent years, the Mall was owned by a development group that was owned by a consortium of public pension funds. As malls have hit hard times, the pension funds wanted to unload it. They got DWS, a subsidiary of Deutsche Bank, to manage the sale. In early 2020, they announced that they had a contract to sell the Mall to a major developer that frequently collaborated with Jared Kushner. They put out a call to action and several hundred people showed up for a Zoom meeting.

Housing prices had been skyrocketing in LA, even faster than in most of the country. The Crenshaw Mall property actually has about 40 acres of mostly undeveloped land. It’s one of the biggest development opportunities in LA. And because of the historic disinvestment in majority-Black LA, the surrounding neighborhood is already facing massive gentrification and displacement as wealthier people and hedge funds buy up houses and other properties. DWS even marketed the Mall as a great chance to buy into a “rapidly gentrifying” neighborhood. There are also some subway and other public transit stops coming online soon. These were pushed by the community as part of a move to address racial transit injustice, but now are only adding to the community’s displacement.

So the people who came together ended up transforming one of these community organizations, the Crenshaw Subway Coalition, which was led by the incredible community organizer and visionary, Damien Goodmon, into Downtown Crenshaw Rising. Amazingly, given the power and money behind the forces they were up against, and in the midst of the pandemic, they fought off not one but two Kushner and Trump connected buyers.

The normal process in these things is that the community residents protest and try to extract a few concessions. So the audacious thing that the folks in Crenshaw did was to say, ‘Well, what if we buy it?’ The listing price was $110 million, and they had a couple of hundred thousand in the bank. The median income in the area is about $40,000.

What’s beautiful is the way they’re trying to do this — Black-owned community development — on a scale that I think we haven’t seen anywhere in the country.

And in a community that is very rich in many resources, but not financial ones. And they see very clearly the danger that the sale of this massive property, forty-plus acres in the heart of Black LA, in a community that’s been devalued — the vultures are coming in to snap it up. And if it gets developed with luxury housing and high-end retail, the current residents, majority Black, are going to be displaced.

So they hadn’t been able to raise the money and brought me in while the whole thing was stuck in a lawsuit from a previous bidder who had fallen out. We thought we had six months to raise $5 or $10 million, because that’s how these deals are normally done. You don’t come in with the whole $110 million, you come in with maybe 10% and then you have a period of time, usually 90 days, to do all the inspections and such and arrange the rest of the financing. They had put in a bid previously without much cash on hand, but in the process had brought together a group that included world famous architecture firms, a major real estate development company, lawyers, the co-op funding group Seed Commons where Clark Arrington is the general counsel, and an all-star team of Black development talent including Phil Hart, Paul Yelder from the Dudley Street Neighborhood Initiative, Dwayne Wyatt, and local activists like Niki Okuk and Jackie Ryan.

But then the day after they brought me on, the lawsuit got resolved and the sellers gave everyone five business days to submit a new bid on this property. Basically, the sellers had an inside candidate, and they wanted to claim that they gave the community a shot, but not really.

So within those five days when we got it all together, we just flooded all our networks to get pledges of donations and investments — we didn’t even have anything to invest in!

At the end of the week, we submitted the bid with over $7 million in donation pledges, over $6 million in investment pledges, and about $20 million dollars in letters of potential support from foundations and some of those impact alternative financial advisors. In the next week, they put us on the shortlist. A few days later we got over $21 million in further donations. Which was insane.

And the sellers still decided to go with this other bidder, an LA developer who is horrible. This other guy had a lower bid and a lower deposit than we did, but said he could close the sale in 30 days where we said we needed the conventional 90 days.

We pulled out all the stops. We had a pressure campaign calling on the pension funds to do the right thing and sell to the community group with the highest bid that had a comprehensive plan. We said that this would be a generational asset for the people who live there, controlled democratically, with all of these legal safeguards that Clark and all these other lawyers are putting in to preserve the mission, decades from now, when all of us are gone. It was generating attention as a national model.

Bigger, actually, because it was also going to have this huge downtown commercial element. And at least six acres would have been converted into green spaces, park spaces, with thousands of new housing units, 80 percent of them being permanently affordable.

The goal is to also have music studios and training centers. We don’t want Amazon to build a warehouse, we want them to build a tech training center for the area’s youth, and we want local universities to have a satellite campus. Once we have the property, then that opens up the door for all sorts of state, city, federal housing, funding and grant money.

But again, it’s that thing where everyone says, talk to me when you’re a raging success. Talk to us when you have the property. The challenge is always getting both the visionaries who can dream it up, and then also the people with assets who are willing to believe in a vision. But I think you’re also getting this understanding among the general public that the problems we have are not going to get solved by tinkering around the edges. There’s an urgency in this work.

So despite the fact that the other guy said he could close in 30 days, he ended up taking over six months. He’s backed by Len Blavatnik, a genuine Russian oligarch who made his first billions in the fall of the USSR, but is now a US and UK citizen, and one of the richest people in the world. In the end, they closed the deal and are the new owners of the Crenshaw Mall.

We had raised nearly $34 million in donations and were lining up financing for the remainder from progressive lenders and social impact investors. We could have closed easily given a chance. But we ended up not convincing DWS or the public pension funds from their profits-over-people mentality. Actually, that’s not quite accurate. We had a higher bid. But where Deutsche Bank can make money over and over when a property is redeveloped and refinanced, we were a threat to their entire model. We weren’t going to take their financing. We were a threat to big real estate and the forces behind gentrification.

But here’s the incredible thing — we’re not stopping. We’re going to use every tool at our disposal to stop the new owners from moving forward with their plans, and eventually put the Mall under community ownership. But that’s something that will likely take years.

In the meantime, our donors agreed to let us keep the majority of the funds we had raised and put it towards buying up smaller residential and commercial properties in the area and put them under our sister organization, the Liberty Community Land Trust. We’re going to leverage these funds with public, philanthropic, and mission-aligned financiers to put as much property as we can under community control.