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Moving our Money in Somerville

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Across the nation, local and independent businesses are organizing. The "local movement" is experiencing a boom, BusinessWeek recently observed. In 2006, about 40 communities had 'buy local' organizations. That number now tops 130. These Local First Networks and Independent Business Alliances are independent community-based nonprofit organizations, with a mission and vision of a sustainable and thriving local economy. More than 30,000 independent business owners are now leading this movement, together, and that number grows by the day. Somerville Local First in Somerville, Massachusetts, one of the nations most densely populated communities, on the border of Boston and Cambridge, is one of these networks, and we've seen our message embraced in and around our community over our first two years.

But this rapid growth is based on more than just a feel-good mentality. An emerging body of economic research shows that doing business with local independents is the fastest way to restart and reshape our economy. Civic Economics, a leading research firm, published the LocalWorks study, commissioned by LocalFirst in Grand Rapids, MI. That study revealed that a 10% Shift from non-local to local purchasing would provide significant and fast economic paybacks. If the 600,000 people in the Grand Rapids metro area shifted 10%, they would:

  • Create 1,600 new jobs, reducing unemployment by .5%
  • Create53 million in new wages
  • Create137 million in new economic activity for the region
The study results have since been replicated in New Orleans, and spawned the 10% Shift campaign in New England, and now in more than 10 US States. In Somerville, everything we do in community education and messaging relates back to this achievable and reasonable goal: Shift 10% of whatever you're now spending to Local Independents and we can reshape our local economy.

And now, Somerville Local First has turned our attention to the financial sector. Locally owned banks and community based credit unions have been shown to provide a significantly higher level of responsiveness, service and, most importantly, lending to our community. While the largest 20 banks control 57% of the total deposits in the United States, they do only 28% of the small business lending. Compare that with small- and medium-sized banks, who control only 25% of the deposits but dispense 54% of the dollars loaned to small businesses.

Based on all of this, we've decided to launch a Move Your Money campaign, asking all sectors of our community to move their money out of the banks that are too big to succeed, and put it into the financial institutions that are truly rooted in our community.

Stacy Mitchell, a leading researcher and author in the local movement and an expert on community banking, says "Moving your Money is one of the most important things that you can do to promote sustainable local economies. Local businesses depend heavily on small, local financial institutions for loans, as these organizations do the majority of lending to small businesses, local nonprofits and entrepreneurs. By moving your deposits to a local financial institution, you're helping to build and reinvest in your own local economy."

We're confident that this hyper-local campaign will succeed. We're using all the tools at our disposal, avenues both proven and innovative. From printing flyers and financial learning sessions to social media campaigns and electronic surveys that provide near-instant feedback to our community partners, we're leaving no stone unturned. We will also, as we always do, keep our message 100% positive. Sure, we'll make comparisons to illustrate the differences between Local and Non-Local banks, but we'll leave the vitriol to someone else. This isn't about revenge against big banks; it's about revealing the overwhelming strengths of the local financial institutions already in our midst. In our community, it's simply accepted that Bank of America and the other Too Big to Fail banks don't have our communities' best interests at heart.

Individuals and organizations in Somerville, Boston, and beyond, are recognizing the added value that local businesses deliver to our communities, and are choosing to buy local first. Our Move Your Money campaign is centered on changing behavior, raising awareness, and continuing to plant the seeds of change. And, as we've witnessed through our work thus far in the community, we predict that people will begin to proselytize their friends and neighbors, and the movement to support local financial institutions will to spread virally. As campaigns like this one take off and their success becomes apparent, more and more communities will take up the buy local banner. In fact, just this week in New England's 2nd largest city, Worcester Local First announced their Move Your Money Campaign.

The energy surrounding movements like Move Your Money, Slow Food, and The 10% Shift is encouraging and should give us all hope. If we've learned anything from the financial meltdown, it is that we must start thinking much more carefully about how we choose to exercise our economic influence. When we choose local as customers and consumers, we take back ownership of our community. The local movement is growing, and it's reaching across industries and sectors like food and finance. In Somerville, we feel that the movement to reclaim our local economies is what's truly Too Big to Fail.