Emergence and Growth of Community Supported Enterprises - NIU Center for Governmental Studies

With support from the North Central Regional Center for Rural Development, the NIU Center for Governmental Studies recently published a report, Emergence and Growth of Community Supported Enterprises describing how Community Supported Enterprises are organized and operate in the U.S.  The report authored by Norman Walzer and Jessica Sandoval, is featured in full below.

The research details more than 20 CSEs in Vermont, Iowa, Wisconsin, Illinois, and other states showing how they not only provide essential services but also retain or rebuild social capital in the community.  For instance, several of those described hold monthly community dinners for investors and/or other residents.  Many stock locally produced merchandise such as food, crafts, arts, and other items.  In most instances, local residents and investors donate time to help manage the store, stock shelves, and other needed services that otherwise would increase the cost of operations.

For sure, it is difficult for a small store to compete with large retailers due the small volume and high costs of merchandise. Some of them have failed. However, as the populations in many rural areas age, they will depend more on local access to essential items such as food and drugs. The analysis in Emergence and Growth of Community Supported Enterprises documents that leaders in small communities understand this need and are addressing it. Thus far, many have succeeded.

There is evidence that similar approaches are underway in other countries and I am interested in learning about these experiences. We are considering compiling an edited scholarly book-length manuscript with refereed chapters about these efforts and best practices in various countries. Some of these examples could be shared at future PASCAL conferences or other academic-professional meetings. A call for papers may be released in the near future for this type of volume.  If you are interest in sharing experiences, contact me at: [email protected]. 

Community Supported Enterprises

Many rural communities, especially those facing population declines and economic stagnation, are finding that with the aging of the population and retiring business owners some of the essential establishments crucial to the future viability of the communities are coming under stress. The markets for some of these businesses have shrunk to the point that new capital is no longer interested. Local lending institutions are unwilling to make loans to the businesses because of limited profit potential.

At the same time, businesses such as a grocery store, restaurant, or similar establishment are a key source of social capital in the community.  Absent these stores, the community would be less attractive to both current and prospective residents.  So, what are the options?  One is for local residents to organize—LLC, nonprofit, cooperative—and pool their funds to either buy the building and property or make a loan to the current or new operator to continue operations.  The funds contributed by each person may be relatively small and they may not even expect a return, but the overall effort may be sufficient to keep the business going or revive it. 

These Community Supported Enterprises (CSE) are becoming more common in the United States. While there is no official count at this time because of the many approaches used, it is clear that this approach may be one of few alternatives for residents wanting to avoid traveling many miles for essential goods or services. The advent of crowdfunding platforms and revised legislation by some states lowering the wealth requirement for local investments simplify the ways in which residents can invest in a local establishment.