Financing a Future: Investing in Communities and Keeping Profits Local

Places can engage in strategies to secure sustained economic benefit from the creation of new firms and the location of innovative activities. The demise of local banking led to a high concentration of financial resources in the largest cities, with entrepreneurs in many small and medium sized cities struggling to secure loans. Alternatives such as the cooperative banking model, which originated in Italy, and other public banking models are explored as alternatives that keep wealth local. A historical example of North Carolina's Plan to Raise Capital for Manufacturing, which used private, local stock offering to build textile mills, provides an equity model that could be reinvigorated with newer crowd funding platforms. Equity schemes that promote employee ownership, such as co-operatives and Employee Stock Ownership Plans (ESOPS) are considered. The paper concludes by examining ways of leveraging anchor institutions as well as incentivizing for-profit firms to invest in local communities.