You eat organic. You choose grass-fed beef. Your chicken is free range. But are you actually putting your money where your mouth is?
Charley Cummings has a proposition for you: If you care about sustainable food, you need to think beyond where you buy — to where you bank.
Cummings should know. In 2013, he founded Walden Local, which delivers grass-fed beef and other locally raised products from scores of farms to tens of thousands of homes from New Jersey to Maine. Working closely with small family farms to create a distribution network, he’s seen firsthand the challenge of building a food economy that can last. Far too often, small scale farming operations seeking to offer a more sustainable way of producing food struggle to find financial backing from traditional lenders.
Now Cummings is taking what might seem like a giant leap in a new direction, even if it’s a model that’s been around more than a century: He’s opening a bank, Walden Mutual, financing farmers and other agricultural entrepreneurs.
Walden will be a mutual bank, the first established in New Hampshire in 99 years. The banking model differs from a commercial bank in that its depositors are owners, and it typically has strong ties to the community where it’s based. Walden will use depositors’ funds to offer loans to local agricultural entrepreneurs in New England and New York.
Cummings has been meeting state regulators and is filing his application with the FDIC at the end of this month.
“Banks are literally the most heavily regulated industry you can possibly imagine, which I didn’t think I could find after working in the meat industry,” the 37-year-old joked recently over lunch in the South End, a stone’s throw from the Walden Local butcher shop. But wading into banking, he believes, could have an even bigger impact than trying to build a sustainable agriculture business on its own.
At the outset, Walden Mutual will pitch itself as a secondary, online-only bank for consumers who want to move their money into a savings account that supports local farms. It plans to have just one branch, at its headquarters in Concord, N.H., which will double as an agricultural museum. The bank’s slogan, Cummings explained with a grin, is “Grow Your Change.”
The idea for Walden Mutual came early in the pandemic. With consumers avoiding grocery stores, Walden Local’s home delivery business was booming. As COVID-19 caused food shortages and outbreaks at commercial meatpacking plants, customers’ appreciation for Walden Local’s more resilient food system deepened, Cummings said. Eventually, he approached them with a proposition: He wanted to grow Walden Local; would anyone be interested in buying bonds? A stake in the company’s future?
He raised a million dollars in two weeks.
This wasn’t a total surprise. Cummings, who worked in consulting and started a clean-energy nonprofit early in his career, has been watching over the last decade as impact investing has grown more popular among people who want to back up their values with their money. Last year, the Global Impact Investing Network reported $715 billion in impact-oriented assets were under management.
That number has likely grown over the last 18 months, according to a recent analysis by the Stanford Social Innovation Review, as a confluence of crises — the pandemic, racial injustice, economic inequality, and climate change — has driven awareness among investors of how their dollars can drive social change.
“You’ve got this whole generation of people that applies a very rigorous set of standards from a values perspective to brands that they want to be associated with, whether it’s clothing or food or cosmetics or cleaning products,” Cummings said. “Except for banks.”
Cummings’s decision to create a mutual bank now may be a reflection of the times we’re in, but it also draws on a rich New England history, he said. A century ago, mutual banks were created as philanthropic endeavors to serve and encourage saving among poor and immigrant populations, who were largely overlooked by banks. In 1914, there were over 650 mutual banks in New England serving 8 million depositors, which accounted for 80 percent of the deposits in the region. Those banks, he said, were also less prone to market fluctuations and panics. They may not put profits first, but they have more staying power.
“Where you invest your idle savings is often many multiples more impactful than where you buy your clothing,” Cummings said. “And so it really struck me that there’s not a bank brand in the market today that is really addressing that. There’s no equivalent Patagonia of banking.”
Vince Siciliano, the former CEO of California-based “socially responsible bank” New Resources and now chairman of Walden Mutual’s board, said such banks operate with a triple bottom line: seeking environmental and social returns as well as financial ones. He said most people don’t consider where their money “spends the night” — or even ask what the bank is doing with it.
“I think it’s a compelling proposition to include your financial world in your efforts to live a more sustainable lifestyle,” he said.
Walden Mutual isn’t seeking to solve all the world’s problems, but Cummings and his board members — who range from cheese-makers to banking executives — plan to rely on their collective expertise to offer loans for things that make some bankers scratch their heads, like generational land transfers between families or helping a farm transition from traditional methods to organic ones, a process that can take years.
“Within agriculture and agriculture lending, the organic and grass-fed producers are sort of the weird ones, and in some cases it’s kind of divisive,” said Tim Joseph, a Walden Mutual board member and founder of Maple Hill Creamery, a grass-fed dairy in upstate New York. “There are agricultural lenders who won’t lend to grass-fed organic dairies. It’s not their specialty, and they’re not comfortable with it.”
Many banks don’t understand the nuances of more sustainable farming operations, Joseph said, and while they wouldn’t bat an eye at lending to a traditional farm with 2,000 cattle, they’d balk at an organic dairy with 100.
That’s where Walden Mutual sees an opportunity.
“There’s a real role for a lender that really understands the food industry,” Cummings said. “We are able to make loans where maybe others aren’t.”
They’re stepping in, for example, to help Matt Gelbwaks and his wife, Julie Whitcomb, with their chicken farming operation, Julie’s Happy Hens, in Mont Vernon, N.H. The couple struggled to get the funding to open their facility in 2014. Gelbwaks wanted to build a type of free-range barn often used in Northern Europe, but, he said, a local bank they’d been working with decided it would lend to Gelbwaks only if he used a more conventional farming model. By then, Gelbwaks had already ordered $150,000 worth of equipment. He was gutted.
“So we liquidated everything we could and said we’d self-fund,” Gelbwaks recalled in a phone interview as he opened the door to his barn, unleashing a sea of squealing chickens into the yard.
The couple were able to cobble together the funds they needed for equipment and to build the free-range barn from friends, favors, and other small loans. They now raise more than 3,000 free-range chickens and sell their eggs for $4.50 a dozen. As for that squeamish bank? It missed out. Gelbwaks and Whitcomb paid off $300,000 worth of loans five years ahead of schedule and now plan to open a sheep dairy farm down the road.
Gelbwaks started working with Cummings as an egg vendor for Walden Local; now he’s partnering with Walden Mutual to refinance his poultry operation, a complicated deal as it’s situated in his backyard.
“It’s a unique piece of property,” he said. “A chicken barn in southern New Hampshire that both commercial and residential lenders don’t know how to lend on.” He said he and Walden have a shared set of values.
And for banking consumers, it’s an opportunity to align their values with their spending, said Joseph. Even if they don’t buy all-organic groceries, they can help build a more sustainable food industry.
“If you move $10,000 from there to here, you’ve done something,’” he said. “It’s so simple.”