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How a Pioneering Impact Investor Made a Difference in Appalachia

Amy Cortese October 4, 2015

Jones and his wife Rosa Lee Harden, an Episcopal priest, moved from the Bay Area to Asheville a couple of years ago to be closer to their grandkids. “I want to invest in companies that are within a morning’s drive of where my grandsons go to sleep,” explains Jones.

Upon arriving in Asheville, Jones, never one to sit still for long, began looking around for ways to invest and make an impact in his adopted hometown. “I was trying to do here in Asheville what I had done in San Francisco reasonably well, which is venture capital and equity kind of things,” he says.

There was just one problem: he quickly discovered that what works in Silicon Valley does not necessarily work in Asheville.

Sure, there were plenty of good businesses looking for a modest loan to boost their growth, but Jones found few companies with the kind of goto-the-moon ambitions that venture investors (even the impact kind) crave. “There’s an audacity gap in the entrepreneurs in Asheville,” he says.

Also missing was a community of angel investors active in the area.

“No pipeline of companies. No pool of investors. So what do you do?”, he wondered.

That question led him on a quest to figure out how to invest in and strengthen communities like those in Southern Appalachia, the mountainous corridor stretching from West Virginia to northeastern Mississippi, far from the money centers, tech hubs, and billion-dollar unicorns. It’s a quest that has important implications for much of the country, because, as Jones points out, “There are many more places like Mississippi than like Silicon Valley.”

Jones is dismayed by communities that try to model themselves after Silicon Valley. “We should just get over the fantasy that we’re going to create Silicon Prairie or Silicon whatever – we’re not,” he says. “Venture capital works in rare places, and you need a critical mass of all the right factors for that to work. And most places don’t have that.”

Instead, communities would do better to take stock of the assets that they have and invest in them with local funds, he believes. “We need to focus on the rest of our economy. That’s where I’m finding it super interesting to work now.”

For the past year, he has immersed himself in the details of community-building, place-making, and resiliency – the hallmarks of local economy groups such as the Business Alliance for Local Living Economies (BALLE) and Transition Towns. But he’s brought to it a professional rigor and venture investor’s desire for scale and impact. That’s meant studying the flow of capital and resources on a community level, engaging diverse stakeholders, and devising ways to channel funds into projects and ventures that can strengthen the community. “This is like capital meets community organizing,” he says. “It’s a new kind of field.”

His first step was to create a Neighborhood Economics Network made up of big and small Appalachian towns stretching from Allentown, Pennsylvania to Nashville, Tennessee. The idea is to share ideas about what’s working, accelerate learning, and promote regional resilience.

He cobbled together a funding toolkit tailored for non-Silicon Valleys, like the towns in his network, where venture capital does not work. The Neighborhood Economics Funding Kit, as it is called, culls from existing ideas like low-cost lending, donor-advised funds, giving circles, and community savings bonds. The idea is to blend different forms of capital and bring them to bear when and where they make sense – and to let all residents participate, whether they have $25 to give or $25,000.

And, betting that there is a larger shift going on, possibly as big as the one that led him to create SOCAP a decade ago, Jones launched a brand-new event called (what else?) Neighborhood Economics.

In announcing the new initiative, Jones noted a return to the local economy as an underlying trend and motivation. “The movement toward place-based innovation and a network of resilient towns and small cities in an economy that is ultimately rooted in relationships of trust is a movement we must learn from and humbly participate in,” he wrote.

The first Neighborhood Economics gathering, held in Louisville last fall, was a modest affair. Whether the second one, scheduled for November 17 and 18 in Cincinnati, is dramatically bigger is almost beside the point. Jones takes the long view.

“Kevin is the rare combination of pioneering vision and humility,” says Tim Soerens, co-founder of Parish Collective, a faith-based community development group and Jones’ partner in Neighborhood Economics. “He sees ideas that could make real change and works hard to see them come into reality, but at the end of the day it’s not about him. He often says, ‘it just seems like this is the thing that wants to happen.’”

In many ways, Jones has come full circle. He started out his career in Appalachia, first in northeast Mississippi, where he was a reporter for a weekly community newspaper owned by Rosa Lee’s father that served the residents of Fulton. “My perspective on community comes from my father-in-law,” says Jones. “He had to build a community so his business could survive.” From there, Jones bought and ran other publications in Mississippi, as well as a subscription service that monitored local legislation, before starting a catfish farming business – a brand new concept at the time.

Jones took to the road with a local chef to sell the idea that “catfish is not just something you eat fried as country food.” The bottom-dwelling fish, it turned out, becomes a flaky white fish when farmed. “The technology changed the fish, so we had to tell a new story about it,” he explains.

When Rosa Lee decided to go to the seminary, the couple moved to San Francisco. The dot-com boom was just taking shape, and Jones started a company that produced conferences and events focused on Internet marketplaces. He sold it near the peak of the NASDAQ, before the dot-com era came crashing down to earth.

It was at that time that his daughter asked Jones a question that would change the course of his career. “She said, ‘Dad, what is your life about?’” he recalls. “I realized that I hadn’t answered – or asked – that question since college.”

After some soul-searching, Jones got involved with nonprofits, travelling to Africa to help combat the scourge of malaria. But he chafed at the restrictions and limits of the nonprofit world. That’s when his friend Tim Freundlich, then with the Calvert Foundation, approached him about collaborating. Along with a third partner, Joy Anderson, they created Good Capital LLC, a fund that would invest in for-profit enterprises with a social mission.

The idea was fairly novel at the time, and Jones brought a disruptor’s energy to it. “He was fresh and rambunctious, and it was a shot in the arm for me and the space at that time,” says Freundlich. Like farmed catfish, they needed to create a new narrative for the fund to make sense. Thus was born Social Capital Markets – or SO-CAP, as it’s fondly known.

From the start, SOCAP attempted to bring together a diversity of voices and perspectives, in contrast to the somewhat exclusive nature of philanthropic investing at the time. “Markets are about the valuable stranger and finding the unlikely ally. They need to work for the barbarians and the Byzantines, they need to work for the really fussy and the wild ones,” says Jones.

The first conference, in 2005, drew 600 participants. This year, more than 2,500 SOCAP attendees are expected to fill San Francisco’s Fort Mason Center.

The conversation at SOCAP has evolved. In the last few years, there has been growing focus on community-based investing – no doubt a reflection of Jones’ own evolution.

In the early days of SOCAP, “People didn’t have to think locally in the way they do now,” explains Jones. “The great downside of traditional capital wasn’t as clear to people as it has been post-2008.”

At the same time, he says, people began realizing that, if we want to solve the pressing problems facing our communities and society, we’re going to have to do it ourselves. “One motivation behind community investing is the realization that no one is going to come in and fix it for us, there’s not going to be a Marshall Plan, so we need to rely on each other. People are becoming entrepreneurial because it’s a necessity.”

Back in Asheville, Jones has immersed himself in the task of community-building. There’s a local food hub project, and he and Rosa Lee mentor local entrepreneurs at Accelerating Appalachia, an accelerator for food and textile producers. And the peer-learning network of Appalachian towns is going strong. “We’re learning and listening a lot to each other,” he says.

All of this suits him just fine. “To go from a place like Silicon Valley, where people love change, and go back and work in Appalachia where I started is an odd thing. But it feels really comfortable at the same time,” says Jones. “There are not a lot of investors I know that like to hunker down with rednecks as long as it takes, but I’ve done that for years, so there’s a strange kind of familiarity with what I’m doing.”





Low-cost lending through platforms such as KivaZip, which makes zero-interest loans, or local, relationship-led lending circles.


A donor-advised fund that individuals may donate to. The fund makes debt or equity investments, with proceeds plowed back into the fund.


Giving circles, which can be book clubs, Sunday School groups, or others that meet regularly and trust one another. Members take turns recommending a cause to donate to and track.


Kids’ community savings bonds, which envision schoolchildren saving $1 a week, with the proceeds invested in a community project. After 12 years they get their investment back with any returns.


Amy Cortese is a journalist whose work has appeared in the New York Times, Businessweek, and other publications. Her book “Locavesting: The Revolution in Local Investing And How To Profit From It” helped popularize the concept of community capital. Her latest venture, www.locavesting.com, is a hub for local investing news, education, and resources.

Impact Investing / Stakeholder Capitalism
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