Posted by: Francis Koster Published: August 24, 2020

You can help save our local economy

If I asked you where you would invest if you inherited some unexpected money this week, I bet your first thought would be into the stock market.  You may not know that there are other better local opportunities.

The current COVID-19 epidemic has created two major wounds – on the bodies of those infected, and the health of the economy.  One out of five people that become infected have lifelong health damage, so staying at home is encouraged, [1][2][3][4][5] but we know that this has impacts: the economy will suffer, people will lose their jobs, homes, not have food, and may suffer mental stress.

Because of the virus, roughly 3 out of every 10 members of the NC workforce have filed for or are living off of state or federal unemployment.[6] North Carolina’s benefits are paid for  12 weeks and are now expiring for many.  Even so, many unemployed workers (particularly in low wage jobs) are afraid to go back to work before they get a vaccine because they lost their health insurance when they were laid off. They know that hospitalization could easily cost them a year’s wages. [7]

A lose-lose situation for us all.

Hardest hit are the locally owned businesses that makeup about half of America’s economy. [8] We can help struggling local businesses survive and foster the growth of new ones by using some proven tools many people do not know about.

One option is that a group of local investors come together and form a locally-focused mutual fund that has as its mission making prudent investments only in the local economy.  Each investor in the fund earns a rate of return based on the success of the portfolio, which could include an air conditioning company, three restaurants, a car wash, a computer repair shop, a local landlord with a fleet of rental properties,  and a manufacturing plant.

Local investment has two major advantages over the same amount of money invested via Wall Street.  The first is that the investors personally know who they are backing – the owner of the restaurant may go to the same church, or be well known for their civic activities.  Second, have shown that when dollars are spent at local businesses, they have a 3 to 5 times greater local economic impact than if the same amount of money is spent at major chain stores. [9]

You can read many examples of this kind of investment in Michael Schuman’s book called The Local Economy Solution. You can buy the book for $27.76 (including shipping) from Amazon, or for $21.35 at the locally owned South Main Book Company in Salisbury.  Do the math.

In Winston-Salem, North Carolina there is a locally-focused very hands-on investment group called New Ventures which is an integral part of a business incubator located there.  It has screened over 600 startups in five years, coached over 65 startups, and invested in 24 companies. Those local companies have created 89 jobs with a combined valuation that has grown to more than $40 million in less than five years. [10]

The Cabarrus Economic Development Corporation [11] intends to replicate that program when the new Cabarrus Center for Innovation and Entrepreneurship based in Concord opens late this year.  A similar effort, including the Local Mutual Fund concept, is included in the plans of The Rowan Idea Center.

There is a not-for-profit consulting group that travels around the country helping communities conduct an inventory of local assets and leads discussions about how to stimulate the local economy, including setting up local mutual investment funds.   You can learn more about them at

If you want to invest locally, but don’t have the time or desire to set up a new local mutual fund, the internet age has created an alternative.  Many people are familiar with Crowdfunding, where you can post a project or social need on-line, and donors can make charitable contributions.   Similar, but not a charity, a website called Crowdfund Mainstreet allows small local companies (after they pass the rigorous review to eliminate fraud) to solicit investors on-line.  You just enter in your zip code, and if there is a qualified local business looking for investments in your area, you can make investments or purchase shares online immediately. They have a great video on their website. [12]

We know that COVID-19 will have a serious impact on health and our economy for at least another year.   This crisis is both urgent and important.   If your personal situation allows you to invest in a way that can support local entrepreneurs, call the Chamber of Commerce or Economic Development Council, and let them know of your willingness.









[8] The Local Economy Solution, by Michael H. Shuman, p 159


[10] Personal email communication, Mr. Peter Marsh at Flywheelcoworking, August 19th 2020 at 5:12 pm



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Francis P. Koster Ed.D.

Proven local solutions to national problems.


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