Businesses that are owned locally are the most likely to make decisions that take into account and benefit multiple “bottom lines” in the community – and are most likely to reinvest in the community because they have a stake in its overall prosperity. Likewise, local governance and organizational leadership that brings the full range of people affected to the strategy-setting and decision-making table, and devises ways to benefit the full range of stakeholders through its choices, is most likely to strengthen – and reduce or eliminate enduring damage to – its wealth of community assets.
Thus, investing in locally owned/directed businesses, institutions, and organizations, and strengthening multi-stakeholder engagement processes, are both important strategies to ensure that rural wealth is created, increased, maintained, and stays within the community and region. This requires “traditional” leaders to learn new ways of acting, shifting power to newcomers and those who have been left out in the past, and providing access to entrepreneurial and leadership training, resources, and financing to strivers who have been underserved.
Building Block Evidence
Evidence suggests this building block is important because inclusive enterprise ownership and governance are among features of local ownership leading to more socially desirable outcomes—and a greater likelihood that an enterprise will “remain committed to benefiting the local community”.1
In rural settings, shared ownership models are examples of multi-stakeholder relationships that can produce mutual and fair value. An ownership model is a legal and governance framework to shape and bind an enterprise, root assets in communities, share resources, align expectations, and provide “an appropriate role for capital”.2 In a shared ownership model, a wider range of interests (employees, community members, the natural environment) are represented in ownership and governance.2 Examples of shared ownership models include producer cooperatives, community land trusts (make ownership of land a community resource while permitting individual ownership of houses, with the possibility of payments from Equity Trusts); conservation easements; working waterfront covenants (shared ownership agreements that attach to property deeds in perpetuity); resident-owned communities with cooperative land ownership; cooperatively owned wind farms with local ownership and management (earning community members more from wind resources than if they had rented the land to absentee-owned power generation companies).2 Rural community foundations have been recognized for effective collaboration with the public sector;3 for example, the Foundation for Appalachian Ohio has supported growing education and health-related community assets.4
Some research finds that locally owned small businesses are positively correlated with communities’ economic growth (specifically, per capita income growth), compared with medium and larger firms which are not locally owned.5,6 Experts note that small businesses are a major employer in some rural areas, recommending support for Main Street revitalization initiatives to create “regional hubs” of locally owned businesses and employment centers, which can “contribute to a sense of neighborhood identity that retains residents and attracts new ones”.7 Main Street initiatives can also include support for businesses converting to employee-owned cooperative models of ownership;8 examples include W.J. Wheeler Insurance in rural Maine.9
- Varghese 2006 in Kelly 2009
- Kelly 2009
- RHI Hub-Philanthropy 2017
- HUD-FAO 2014
- Fleming 2011
- Atlanta Fed-Rupasingha 2013
- Brookings-Love 2020
- UMN Ext-Employee
- NCBA-Brown 2020
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Regional Ownership and Control
WealthWorks blog on how wealth-building is not just about increasing wealth. It must include making sure those stocks of capital stay in place and that people, firms, organizations and communities in the region can make decisions about how they are used and invested in the future.
Explore Regional Wealth Building
WealthWorks for Your Region: An Introduction provides an overview of four primary components of the WealthWorks approach. This PDF focuses on Module 1: Explore Regional Wealth Building.
Keeping Wealth Local
Resources do not represent community wealth unless communities own and control them. This handbook looks at various kinds of shared ownership.
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We see the framework as a living document, which necessarily must evolve over time, and we seek to expand the collective ownership of the Thrive Rural Framework among rural equity, opportunity, health, and prosperity ecosystem actors. Please share your insights with us about things the framework is missing or ways it should change.