The Joys (and Perils) Of Community Ownership/Investment

A possible strand in the farmer’s safety net is getting customers to invest in you

Like my article on co-ops, this month’s strand in the farmer safety net isn’t for everyone, but it can be very powerful in the right situation. Have you ever considered your customers as investors? What about lenders, or even co-owners? This month we’ll be talking about the different ways your community can invest in your farm, and how you can cultivate that relationship before you need it.

Qualities of the Ideal Community-Invested Farm

The perfect farm for this is a diversified operation in an urban or peri-urban area with a track record and high-net-value customers. Why? Diversification plays into the public’s perception of what a farm should be. I mean, it’s right there in Old MacDonald’s Farm, and clearly the cluck-clucks and moo-moos are what every farm in America is doing, right?

Farms that are in urban or peri-urban areas are more likely to have had members of the community visit the farm, or to at least know that the farm exists. And a farm in these areas is less common, so non-farmers are likely to notice and think about it fondly. If your farm is farther out but you do have direct-to-consumer sales in urban areas, this can also work to your advantage. Basically, you want to have as many touch points as possible with customers and people who live around your farm.

Having a track record also plays into those touch points with customers. It’s not impossible for a new farm to gain community support, but it’s way easier if that farm has been serving the community successfully for several years. And if you’re looking for financial investment in your operation, it helps to have high-net-worth customers. We can debate the morality of making high-quality food available to everyone in the community, but at the end of the day it’s hard to raise significant sums of money from folks who feel the absence of the $20 they’re contributing.

That said, there are different types of investment, and your community balance sheet is just as important as your financial one. If your farm is in a space where you can realistically invite the community onto your farm, or you can share scenes from your farm with your customers and followers, you may find that those relationships pay you back tenfold over time. You have to invest in them without the expectation of return — community support isn’t a quid pro quo.

If you’re considering borrowing money from your customers, you absolutely must have solid financial records and a sound business plan. Why? The same reason you should be careful about borrowing from family — if things don’t work out according to plan, folks get weird when they’re owed money. Your customers can be way more forgiving than a bank ever would, but the bank also isn’t going to ream you out on social media or leave bad reviews about your farm on Google because you missed a debt payment.

In some situations, a farmer growing a specialty crop for a specific buyer may be able to get that buyer to contribute toward an expansion or equipment upgrade, either as a lender or investor. This is something you’re going to want to feel out on a case-by-case basis. Food brands are feeling the consumer push for organic and regeneratively grown ingredients, and not many farmers are able to provide them. Brands are becoming more and more willing to provide price guarantees, to pre-purchase crops and even to cover the cost of equipment needed to grow the ingredients for their products. Read the fine print very carefully and consult a lawyer, but when your goals as a farmer are aligned with those of your buyer, it can be a win-win for both.

As a farmer, I’ve had to tap into my community several times over the past few years. When I abruptly lost my land lease in 2020, I was able to raise $85,000 through a crowdfunded loan to build out infrastructure in our new site. I also ran a couple of crowdfunding campaigns that each raised about $10,000, and I took on informal loans from friends and supporters and guaranteed them myself.

Farmers considering customer or community ownership and investment need to be doing so from a stable place in their lives and businesses, not from a place of emergency. As generous as your community can be, it’s rarely able to lift you from crisis to stability. When it rains, it pours, and when you’re poor, it rains — very rarely is a community able to come together to support a business through the entire process of rebuilding during or after a crisis if the business didn’t have a solid foundation to start with.

If you don’t have a solid business plan and you don’t know your production numbers or your cash flow, you’re not the ideal candidate for community support. That’s not to say that you won’t get it if you try, but community support is a currency you want to spend wisely. Give yourself the best possible chance of success if your community comes together to support you!

And this may sound obvious, but this strand of a safety net won’t be appropriate for the farmer who doesn’t want to interact with the public. That’s fine — not everyone does! I once was processing chickens at the old farm location in a very walkable neighborhood and forgot to close the gate. Two ladies with wine glasses out for an evening walk wandered up as I was slitting throats, and I spent a few uncomfortable minutes answering question with my hands covered in blood! I don’t know if those ladies ever bought anything from or supported my farm, but I know that interaction added to the general support for my farm in the neighborhood and helped us when I needed to move.

How to Tap Into Community Investment

So, what does community and customer support look like, and how can you tap into it? We’ve focused on financial support, but this support can also include things like attending events on the farm, turning out in support of your rezoning application, neighbors going to check out any unusual nighttime activity, or supporters sending resources like tools and equipment your way when they find them.

The best way to cultivate your community is to keep in touch with them. You don’t have to maintain the perfect social media accounts or send out a daily newsletter, but you do need to make an effort to put some content out into the universe for people to engage with. Tell your customers how your product is grown, post the occasional picture or video of life from your farm, or drop the occasional story in your customer’s inbox. This isn’t about looking perfect — tell the truth, post the bumps and bruises, and you’ll be more relatable when you do need to ask for help.

When you’re asking for money, think carefully about your ask and how you’ll use the funds. You want it to be clear what you’re asking for and show why you’ll be successful. It’s possible to ask for money directly, but most businesses opt to go through crowdfunding platforms such as Kickstarter or IndieGoGo. You can also consider a crowdfunded loan platform through a company like Steward or Honeycomb Credit. If you have an active chapter near you, and if you’re able to make the time to get to know the chapter members, Slow Money can also offer flexible low- or zero-interest loans. Raising funds from your community is all about the relationships, and you need to have these in place before you choose to spend your social capital asking for money.

Build your farm into your community’s routines, becoming a source of happy memories and fondly remembered conversations. Doing so ensures that when you need to rely on this strand of your farmer safety net, it will be strong and resilient.

Kirsten Simmons is the co-founder and Chief Farming Officer for Good Agriculture ( goodagriculture.com ), a company dedicated to helping farmers find funding, manage finances, reach new customers and get certified. She also farms at Ecosystem Farm ( ecosystemfarm.com ), the only u-pick strawberry farm inside Atlanta.