Rootstock Investors Newsletter Spring 2009
- AGM and Conference – London, Sat 23rd May 2009
- Turning the crisis into an opportunity
- Coventry Peace House 10th anniversary
- Another house for Out of Town
- 10 years of Stepping Stones in the Wye Valley
- Rootstock & Radical Routes – how it works
Alternatives needed now more than ever.
Our financial system has failed. We’ve long argued that it was failing people and the planet, but now it has failed even on its own terms. Major High Street banks have needed government bailouts or nationalisation; major High Street retailers have gone bust; and we are entering a deepening recession. For 21 years Radical Routes has argued that we need a world based on equality, co-operation and care for the environment instead of the unjust, manipulative, fraudulent and destructive system that we live under. We need this now more urgently than ever.
Because of this, we’ve decided to combine this year’s Rootstock AGM with a conference on “Radical Alternatives to a Failed Economic System”. The venue is Conway Hall in central London, and we hope this will be welcomed by investors who have asked us to hold an AGM in a place that is relatively easy to get to. There have already been quite a few conferences on what to do about the financial crisis, climate change and depletion of natural resources such as oil. Ours will be different, as it will focus not so much on what governments should do but on what ordinary people can do. At the same time, it will be a celebration of 21 years of the Radical Routes network, and 18 years of its loan fund. It will also be a celebration of the co-operation and mutual aid that is at the heart of Radical Routes and Rootstock.
Co-operation and mutual aid has enabled Radical Routes’ relatively small loan fund to remain free of bad debts while major banks collapse around us. Running a co-op isn’t easy, especially in times of economic uncertainty, but in Radical Routes you’re not on your own. If a co-op has problems, another can help out. This was recently demonstrated when one co-op asked for help, and people from a similar co-op in another city went to visit. Within a short time they found a way that the struggling co-op could save £500 per month, and soon they were out of the worst of their problems.
We may be small, but we are not alone. Radical Routes’ name comes from our idea that there is more than one route to the radical social change which the current crisis shows is so necessary. The conference will give a chance to see some of the wide range of radical alternatives that are happening right now.
Governments don’t really know what to do about the economic crisis. Gordon Brown has more or less admitted as such at the World Economic Forum in Davos. They sometimes end up jumping in different directions in their efforts to be seen to do something – cutting VAT in the UK but increasing it in the Republic of Ireland. Seeing this sort of behavior, it is no surprise that many people are looking around for alternatives right now.
Catalyst Collective, which handles enquiries about setting up co-ops, have seen three times as many enquiries as usual. This in turn means that it is likely that more new co-ops will want to join Radical Routes and seek finance.
At the same time, falling property prices are a window of opportunity for co-ops that have been struggling for years to afford a place to live or work. Both existing co-ops and new co-ops will be looking to grab this opportunity. However, just as before there is often a gap between what a co-op needs to buy a property and what it can raise from supporters and the bank or building society. Radical Routes has been successfully filling gaps like this since its first loan in 1991.
Rootstock is seeking additional investment to help Radical Routes continue making loans to co-ops taking advantage of the lower property prices. An application form should be enclosed with this newsletter – alternatively, you can contact us or download the form from our website.
Coventry Peace House celebrated its 10th anniversary in January. As we put together a display of all our experiences over the years it was heartening to look at photographs of the row of 6 grey dilapidated buildings with gardens full of rubbish and realise just how far we had got. We now have a cheerful yellow building which includes co-op living space, a recycling bike project, a peace project office and a community space which is used at night as a shelter for homeless refugees. Outside is parked an electric van for the vegetarian catering enterprise we run.
Radical Routes helped us with a loan for £10,000 for initial renovation work and has been a source of support ever since through sharing experiences and good ideas with other co-ops dedicated to social change and helping us to understand any new legislation which may affect us.
The Peace House is well known in Coventry and beyond. We reach people through the resources we have produced – books, films, etc. through our peace and environmental campaigning and through the practical projects we run. Many thanks to the many who have supported us by volunteering time, skills or money.
After years of renting property and sub-letting to members, Out of Town Housing Co-op in Brighton has now bought a house for the first time with the help of a £50,000 loan from Radical Routes. This new house is in addition to the two housing association properties which they are renting. When fully converted, the new house will have 9 bedrooms.
It will be ten years this April since we first arrived at Highbury Farm in a procession of removal vans full of excitement at starting our new lives together on the land. The first months were spent camping in the garden while it rained almost without break and we worked on the house replacing and repairing joists, floors and ceilings. Now ten years on we are in the midst of a rolling insulation programme which will reduce heat loss from the house to at least 25% less than currently required for new build. We have also replaced our ageing and ineffective heating system with new radiators, installed under the expert guidance of a plumber from another Radical Routes coop and are awaiting delivery of a super efficient log boiler and solar water heating panels which will be installed and commissioned before the coops tenth birthday.
When we first arrived our 28 acres seemed enormous as we got to know our land and what it could give us, learning to set aside our desire to impose our will on the earth and to accept gratefully what it gives us. We now have a small flock of pet sheep which are kept to graze the grass and maintain the wildflower meadows which are a haven for much wildlife. We have also planted new hedgerows and replaced old fencing. Vegetable plots have been dug, sowed and harvested, fruit trees planted, the cider orchard restored (and cider made). People have come and gone; some have stayed years, others visited for a weekend. Some have even been born here. All have learned from the wonderful and beautiful environment that we have at Highbury. Children are an important part of our community bringing fresh inquisitive eyes to everything we do.
As we pass this significant anniversary it seems not only appropriate to look back and celebrate our achievements, but also to look forward. Now that much of the hardest work has been done in the house, in the fields, in the woods and in the garden we will have more time to grow our dreams a little larger.
Who’s who and how it all works
Rootstock is a community co-op. People and organisations buy shares in Rootstock and choose to receive full, half or zero interest on their shares. The Rootstock committee (made up of interested Rootstock shareholders) then set the interest rate paid on the shares. The shares are a special type called “withdrawable shares” which means that investors who want their money back can normally withdraw some or all of their shares after a period of notice.
The committee has the power to suspend share withdrawals if necessary. Rootstock keeps some money in ethically screened bank accounts, but most of the money is used to buy shares in Radical Routes. These too are withdrawable, so Rootstock can ask Radical Routes for money back if a lot of investors want their money back at the same time. Radical Routes is a network of coops.
Every 3 months, each co-op in the network sends a representative to a meeting. If a co-op wants a loan from Radical Routes, they have to put in an application to this meeting. Decisions are normally made by consensus – i.e. by EVERY co-op agreeing to the loan. This “peer-group” lending method means that lots of people with experience of running co-ops check the details and help sort out any issues. So, while scrutiny of business plans can be in-depth and may seem hard or even harsh, it is a supportive process which has reliably produced solid investments in successful co-ops. And, if things do go wrong, other co-ops can help out, as mentioned in the article on the AGM.
The upshot of all this is a 100% lending record where Radical Routes has never lost money due to a co-op failing to repay its loan. The banking crisis has led to calls for more regulation of finance. Radical Routes isn’t currently regulated but Rootstock is a Charter Member of the Community Development Finance Association which is introducing a self-regulatory system. We’ve introduced lots of new policies and procedures ready for this to improve even further our stability and good practice.