Sustainable Capital

William Underwood

Can capital be stewarded sustainably? Yes, it can, and should be. However, the following description of what that looks like will almost certainly surprise you.

The economy is the place where we collectively exchange goods and services, and if we do this well and efficiently, we create wealth, or capital. This is the place where we meet each other’s needs. An individual doesn’t open a gas station because they need to fill their own tank; they do it so we can fill ours, and hopefully, we will then provide enough in return to meet their needs. The economy is truly the most altruistic place where we come together because the fruit of our labors is actually produced for the benefit of others. We aren’t able to see it that way because we become lost in the money.

In today’s world, when we create excess capital in the economy, it belongs to the one who “earns” it. However, the money comes to the “one” from the “many,” and the day this ceases, the business fails. Recognizing this fact brings about an economic realization: whether we like it or not, we are all mutually dependent on each other. No business can survive without the support of customers.

The second realization is, we need to hold back some of the “capital” crop, like apples or wheat, to be sown as seeds for the future. A portion of our capital needs to “die” to the economic realm, so it may be sacrificed and “planted” in the cultural realm, ultimately to bear cultural fruit.

Currently, in the cultural realm, nonprofits essentially have to beg for the necessary capital for their long-term investments, which are people. Nonprofits are constantly developing capacities in children and adults that are realized as a benefit to the community. These capacities are the inspiration for new economic breakthroughs and innovations (as well as other less easily monetized benefits), which create fresh new sources of capital. The arts renew the soul, so that on Monday morning we can all dive back into the economic trenches with renewed vim and vigor, and more effectively provide for the needs of others.

How do cultural institutions receive their funding? By gifts, or by forced wealth redistribution, known as taxes. Ideally, taxes would not be necessary, but living off of the uncertainty of free gifts makes it difficult to plan and hard to meet the needs of those we are trying to serve. Shopping with chain stores drains a community of tax revenue and of capital. Shopping with local merchants re-circulates your dollars in the local economy, and creates more tax revenue for nonprofits.

Economic activity is wealth generating, short run return. Cultural activity is wealth consuming, long run return. We all need to embrace a structural mechanism that recognizes and balances this every time a dollar changes hands.

If by giving money away to nonprofits with each transaction, merchants can increase the frequency at which you visit them, and can also see an increase in how much you spend with them, they will actually become more profitable through gaining market share. Merchants are spending marketing dollars daily to increase sales, and they will choose to spend those dollars on whatever reaches customers and is effective. Merchants need your support and if they offer donations to nonprofits with each transaction, it is then up to you to respond.

Just think, intentional purchases from socially supportive businesses that reinvest in our community. We can give back daily, no matter what our income is, and when businesses are supported by committed customers, they can more easily support the nonprofit community. Nonprofits are not economic engines and should not have to raise their own funds from the economic realm. Rather, the funds should be freely apportioned from their share of economic activity, so they may receive the sustenance they need to rightly take up their essential work and provide important services within the community.

Tom Maguire admires the art at the “Lucky Number Seven” exhibition, Site Santa Fe