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In the heart of Detroit, a movement is underway to rebuild democracy and economic power from the ground up. The Detroit Community Wealth Fund sits at the epicenter of this movement, providing non-extractive capital and technical assistance that empowers local businesses and cooperatives. Co-founder Margo Dalal and director of community programming Rosie DeSantis joined Building Local Power to discuss their approach to fostering solidarity, building community wealth, and reshaping their economy by starting with what’s best for the people of Detroit rather than corporate shareholders.
Cooperative Economic Network of Detroit
Detroit Community Wealth Fund on Non-Extractive Financing
Books (these are free, you can read them today):
- The Jackson-Kush Plan: The Struggle for Black Self-Determination and Economic Democracy by Kali Akuno
- Community, Democracy, and Mutual Aid: Toward Dual Power and Beyond by John Michael Colón, Mason Herson-Hord, Katie S. Horvath,
Dayton Martindale, & Matthew Porges
| Rosie DeSantis: | So when I say deep democracy, we’re not talking about representational democracy, we’re not talking about a thousand people needing to reach one person in order for a single thing to maybe kind of change eventually. I’m talking about democratic modality, where the resources and the things that affect the life of a community they have direct control over. |
| Reggie Rucker: | Hello and welcome back to the final installment of Building Local Power: Detroit, our first stop in a multi-city series where we explore how to build local power from the experiences of people who are doing just that on the ground in their respective cities. I’m here as always with my co-host, Luke Gannon, and as all of you know by now, Luke is the real star of the show, I’m just the supporting talent. But Luke, I got to say, after spending the last couple of months getting to talk to these community leaders and advocates, activists and social entrepreneurs, all who have these really powerful stories about the drive to write Detroit’s next chapter, I feel bonded to Detroit in a way, and really, it makes me a little emotional. I’m kind of sad to leave. |
| Luke Gannon: | Reggie, yep, I’m playing it for you. |
| Reggie Rucker: | Luke, you are the best. But seriously, I know you’re probably tired of hearing me talk about my hometown, Modesto. We built this whole glorious Modesto campaign around, but talking to all of these really passionate, dedicated, smart folks in Detroit, it really gives me all of those glorious vibes. |
| Luke Gannon: | Oh, yes, truly. I am with you, Reggie. I am seriously a little sad to leave, but before we do, we have a fabulous final Detroit episode lined up for you. Today on the show, we are joined by two phenomenal people from the Detroit Community Wealth Fund, co-founder and senior fellow Margo Dalal, and Rosie DeSantis, the director of community programming. The Detroit Community Wealth Fund fosters, educates and finances democratic and cooperative businesses by providing technical assistance, trainings and implementing resource networks to put power in the hands of the workers and communities. |
| Reggie Rucker: | That’s great, Luke. And we think these stories will, as always, be illuminating in their own right, but I hope that they also inspire you on your journey to build local power wherever you’re listening from. |
| Luke Gannon: | Let’s dive in. Here’s Margo. |
| Margo Dalal: | I live in Detroit and I’ve lived here for just over 10 years now. And I moved to Detroit from Massachusetts where I was in school, and I was really interested in entrepreneurship and worker ownership and what was happening in Detroit in 2013 when the city filed for bankruptcy. So I ended up moving here while I was in school and then staying. I grew up in Northern Virginia and went to high school in DC and love that part of the country. My dad is an immigrant from India and he started a business. I was in maybe sixth grade when he started his business. My uncle started a business and they’ve always been quite entrepreneurial and kind of financially focused. And then my mom is kind of like a renaissance woman and she can do just about anything and then will start a business doing that. So whether it’s sewing or baking or crafting of any kind, she has a pretty successful ceramics business now. |
| So just that was a huge part of my childhood of playing business and seeing my parents do that. I also grew up in a part of Virginia that had a lot of small businesses. I was lucky to see that, and my friends’ parents own small businesses, so that’s always been part of my life. And when I was in school, you get awakened to the problems of capitalism and also alternatives like worker-owned businesses. Those things, I think, resonated with me a lot. I have lots of other interests of course, but to me, it made a lot of sense to think about alternative forms of financing that included community in the decision-making process, and then ultimately serves community-owned businesses. | |
| Luke Gannon: | While Margot eventually found her way to Detroit and called it home, Rosie was born and raised there. Here’s Rosie. |
| Rosie DeSantis: | I was born and raised on the east side. I’ve been here my whole life except for college. Essentially, the east side in contrast to the west side, a particular area where I’m from, there’s just these swabs and swaths of vacant land. But at times, you walk down a certain block and it feels like you’re growing up in the countryside. On the other hand, it’s just normal to have an entire block of burnt down bungalows, and I don’t like painting that picture because of the way that it feeds into ruin porn or whatever. It was facts. And so that’s really what it looks like. |
| What folks are very good at in Detroit is making things by and for themselves with whatever tools that they have and making it special and making it meaningful to them and their neighbors. So I think very early on, what I witnessed in terms of that reclamation of agency is squatting on land, and just creating these little corners of the world that really mean something to people. These little almost handmade parks or little movie screening places or assembled gyms outside. Using their houses as little community centers and block clubs, folks in Detroit love a block club more than anywhere I’ve ever seen. And so I witnessed a lot growing up with people finding ways to prioritize their own vision for their neighborhood, whether or not they were given the power to actually enact it, but they used the tools that they had to enact that with the space that they were surrounded by. The land that we were surrounded by provided a particular opportunity for that. | |
| I was raised around a lot of community planning, community visioning happenings, processes, and my mom founded a nonprofit. And what she kind of hammered into me with the way that she wanted this thing to move was a very simple idea that people deserve to be and are the experts of their own experience and deserve to have control over the resources and the situations that affect their neighborhoods and their lives and communities, which unfortunately, is kind of a radical idea. And so I was really raised seeing how these community planning processes facilitated this kind of agency that I got really obsessed with as I became an adult. And also having had some experiences of witnessing that agency being ignored or limited and also seeing how Detroiters are able to take it back in certain ways or build it for themselves has always really inspired me. Yeah, that’s kind of been really the theme of my life and my organizing and what brought me into the Wealth Fund. | |
| Luke Gannon: | In 2016, Margo met the three other co-founders of what would become the Detroit Community Wealth Fund. At the same time, there was an emerging network of organizations that formed the Seed Commons, which, as Margo details, is now a national organization that finances cooperatives all over the US. |
| Margo Dalal: | Detroit Community Wealth Fund was started to become a member of the Seed Commons and do the type of place-based lending and cooperative development that all organizations with Seed Commons do. So we started to do that type of lending and work in Detroit, and since 2016, we’ve grown our organization. It was a really perfect fit for me. I was interested in doing work with businesses, but not in the typical kind of capitalist way. And I saw that having actual real consequences for Detroit. And so thinking about how we can do economics differently in a way that’s actually serving Detroiters and as built by Detroiters who are primarily black and primarily low income, that felt important to me. So it was really a gift to be able to do the work of the Detroit Community Wealth Fund. And now to see where that’s gone and share it others is really exciting. |
| Luke Gannon: | Detroit has always epitomized the spirit of people power. Detroiters recognize that they must create solutions for the people and by the people. |
| Margo Dalal: | There’s a culture of getting things done in Detroit by Detroiters for a long time, and that has often been because there weren’t services, there weren’t resources that were available. And so there is this culture of cooperation, of working together, of meeting the need. 2013, when the city filed for bankruptcy, prior and after that, there was a long period of assessing how that was going to play out in the city. Since 2013, there’s so much that has changed and some that hasn’t changed. I think it really became obvious what parts of the city were going to be benefiting from further investment and from attention, what parts were not. There were entire city plans that decided on which neighborhoods were going to exist and which might not exist. I guarantee you that was not necessarily a conversation that included those residents. |
| And so I think for something like the Detroit Community Wealth Fund, and again, what the Wealth Fund is doing, the role that this organization is playing, I say it’s helping to add economic value to the skills that Detroiters already have. Detroiters already have skills, they already have resources, but how can we add economic value to those? And that means how can we create living wages? How can we create profit that the community owns, and then how can we do it in a way that is not extractive? Which if you know anything about Detroit in the last 10 years, you know that there has been one out of four homes has been foreclosed on and tax foreclosure. This was illegal. This was an illegal thing that should never have happened. And why did that happen, right? Because there was a financial system that benefited from it in many different ways. | |
| And so we can’t use that same financial system to build back businesses, especially businesses that we want to be owned and controlled by the community who would’ve never let this happen in the first place. And so those are, I think, the two roles that DCWF is playing. How can we do financing in an ethical and non-extractive way that doesn’t ever leave community worse off? And also, how can we build back businesses that are owned by the community and have the community’s interests first and foremost? How are we building businesses that are rooted in specific neighborhoods and communities in Detroit? | |
| Luke Gannon: | The Detroit Community Wealth Fund provides non-extractive capital to finance worker cooperatives. Banks provide loans with the condition of minimizing their risk, essentially, meaning that one needs existing wealth to acquire more. |
| Margo Dalal: | So if you wanted to start a business, you would go to the bank, you say, “I want $100,000.” And they’d say, “Okay, cool. What is the collateral? What are you putting up that if we can’t get our $100,000 back, what are you going to give us?” And that means that you have to have some kind of asset to begin with. You might need to have a home. It’s often property. You might need to have cash in your bank account. That’s the first thing that you have to do. If you fail or even before you fail, if you’re not making money in the first few months, or maybe the first year, you still owe on that loan, you have to pay every month, regardless of if you’re making money, regardless of if you can feed yourself. If you fail, now, whatever you owe, the bank is going to come and take assets from you in order to make good on the loan that they gave you. |
| That’s extractive, right? We’ve seen that play out in all sorts of ways. That’s damaging, right? And there’s a whole bunch of complicated ways that that has been played out. Another way that capital is extractive is if you can’t get a loan from your bank, you might go and take out a few credit cards that allow you to rack up tens of thousands of dollars of debt. And if you’re not paying every month, you’re probably paying 15%, 20%, 25%, sometimes even 50% or more on your interest. Same thing with a payday loan, right? You cannot afford something. The payday advance. You are sometimes paying 100% or more of that amount of money just to get it for a week or a few days. That is how capital maintains itself, and that’s how normal people are totally exploited for essentially not having resources. We all know that that is incredibly problematic on so many levels, and this gets even more complicated when you think about the housing crisis and all these other larger systems. | |
| Non-extractive capital is doing, and Seed Commons coined this, it is fortunately increasing in popularity, and I think there are different ways that you might be able to do this, but the way that the Seed Commons and the way that the Detroit Community Wealth Fund does it is there’s a few things that contribute towards non-extractive. One is that we’re not taking collateral. So immediately, our capital is accessible to people that don’t have historical wealth. The second is that we only require repayment when profit is made after living wages are made. So it’s sustainable. You don’t owe money the first month. You might not owe money the first year unless you’re breaking even. The repayment is a percentage of profit. So that means the business needs to be doing well and needs to be sustainable before we, as the lender, are even successful ourselves. And then the third part is that we understand that it is really hard to run businesses, and that requires a tremendous amount of technical assistance. | |
| It’s impossible for one person or even a group of people to run a business on their own. So we provide ongoing assistance for the businesses that we work with. If pivots are necessary, if changes to the business plan are necessary, often if there are interpersonal issues, it’s just a really hard thing to do, and we provide free ongoing technical assistance until a loan is repaid. So those are the three I think big things. If a loan fails, no one is personally responsible for that loan. If a business closes, and that happens, that does happen, we’re not ever going after assets that aren’t secured as part of the loan that we have provided. | |
| Luke Gannon: | Rosie facilitates the Cooperative Economic Network of Detroit, which is a platform for co-ops to come together and share resources and create community and economic partnerships. |
| Rosie DeSantis: | It’s just a platform for them to support one another as well as build up these solid tangible partnerships towards the creation of a larger cooperative ecosystem. One of the main aspects of this program is they pay member dues, and those dues go into a large fund that we have that’s also supported by outside funding. But these dues go into that fund, and folks can ask to withdraw from that pooled money for anything that they need, up to $800 twice a year. And essentially, it’s all democratic, so any withdrawal that’s requested has to be voted on by the rest of the membership. We call it the Member Solidarity Fund. And yeah, there are a lot of different aspects of this program, but essentially, it was created to try to build up an insular cooperative economy that right now, is less the focus. So much is the relationships that need to be built between these folks, between the membership in order to do this sort of deep work, this deep organizing. |
| So right now, particularly in this phase of it, we’re really focused on getting them to connect with one another and fleshing out what types of partnerships, how can they meet each other’s needs in this solid way? Who’s sourcing what from who? Who’s taking on what project with who, for what? There are 11 members right now, and a lot of these folks come to us. A lot of folks become members in order to get support with their transition into becoming a co-op. We also don’t just accept co-ops. Basically, requirement for membership is that there is some sort of pooling of resources, sharing of resources within your organization, and you run democratically, or if you need support with your democratic processes and structure, that’s why you’re getting into the network. And so there are a lot of smaller projects that aren’t so much like businesses, but are more focused on building out democracy within their respective community, some piece of sharing of resources, which might be as small as a tool library. We offer workshops that are exclusive to our membership. | |
| Luke Gannon: | While Rosie has built the Cooperative Economic Network, they have faced one big challenge. |
| Rosie DeSantis: | The biggest thing is just folks’ capacity. Asking folks to get together to do anything is a challenge when these folks are really dealing with limited resources in many ways. And so it’s like we’re trying to support them connecting, and then our capacity, because I run this program by myself, we’re trying to both facilitate these connections while also offering this ongoing technical assistance towards their transition while also doing these workshops. So it’s just a lot, but I would say that and because we’re stressing the relationship building so much, almost all of our events and stuff are in person, and that’s deliberate and that’s a challenge. And otherwise, it’s really just supporting people through the earliest phases of them building out their governance and democratic processes and making sure that they stay on track with a work plan for that because it’s like if you’re not committed to that, then membership might not make sense to you. |
| So we’re really trying to think through what is it going to take to get folks aware of what’s being built right now? One thing that we’re doing is free neighborhood workshops, essentially like food and childcare provided, and we’re going to talk to you about what a co-op is at the most essential level, and what is our vision for what a local self-reliant cooperative economy looks like. In terms of the members’ response, the biggest thing that I perceive is they’re just very excited to be with each other, just very excited about the connections that they are building, and I feel like it’s many times rarer than we think. Just people coming together based on shared values. Explicitly, that is why we’re here to fundamentally support each other because of that. | |
| Luke Gannon: | Rosie has had multiple highlights throughout their experience working with cooperatives. |
| Rosie DeSantis: | The first one was when we did a version of our incubator program where essentially, a local nonprofit approached us after surveying their neighbors about what businesses they wanted to see, and a co-op was created out of that based on that, from folks involved in that area or living in that area. Challenges with that co-op, and they’re still developing, but just to know that this model is possible gave me just a lot of hope in terms of just how our programming and this model can be used to facilitate deep democracy and prioritizing the visions of Detroiters for themselves. So when I say deep democracy, we’re not talking about representation of democracy, we’re not talking about 1,000 people needing to reach one person in order for a single thing to maybe kind of change eventually. I’m talking about a democratic modality or whatever where the resources and the things that affect the life of a community they have direct control over. |
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Music Credit: Mattéa Overstreet
Photo Credit: Em McPhie, ILSR’s Digital Communications Manager
Podcast produced by Reggie Rucker and Luke Gannon
Podcast edited by Luke Gannon and Mattéa Overstreet
Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.
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