Community finance: a Permaculture approach

ABOUT COMMUNITY FINANCE:  We are living at the peak of human achievement, but also at the peak of our resources. A change towards sustainability includes handing over to future generations the possibility to create for themselves a standard of living at least equivalent to that we enjoy. This requires fundamentally re-thinking how we use resources, indeed many of the social arrangements we take for granted, including our relationship to money. And we need to start now. The basic values in this article come from Permaculture: People care, Earth care, Fair share. However, you do not need to know Permaculture to understand the article.  We will  explores ways, within the current financial system, to create communities that align to these values.

 A Financial Permaculture approach to forming a service-providing community

One of the founders of Permaculture, Bill Mollison once said

“That is, what I’m trying to tell you, it’s no good any longer just being an organic gardener or farmer, we have to be effective financial and political units. And we’re gonna have to face that. Just as it was very hard for us to learn to garden, then hard for us to learn to collect seeds, once the multinationals took over the open-pollinated seed market; we had to become seed growers. Now it’s very difficult, we have to become bankers. There’s no good trying to pretend we don’t have to. We can run away to the bush, build a mud hut and grow ducks in the garden, it’s not gonna do it. The coals will still be burnt, the land will still be eroded, and the forests will still be cleared for newsprint if we run away to the bush. So, there’s no escape, we’ve just gotta stop running away, stay where we are and start to face up and fight. Good, as long as you’re fully persuaded of that we can get on with the course.” — Bill Mollison, 1983 PDC

The Permaculture ethics comprise

Earth Care, People Care, Fair Share.


What is the difference between a company and a community?

A community is a group of people who work together around a common intention and shared assets to create services for themselves, often in a resilient way. In contrast, a company is a group of people who put money into the organisation in order to get money out.

Companies use business models, Communities have other models

A company needs a business model to clarify how this money will be created. A community needs a financial and operational model to clarify how the assets will be obtained and the services provided and paid for. Both companies and communities share some qualities, but there are some key differences as we will see as we work through this article.

Company financial modelling takes as its starting point the idea that people have two roles: producer and consumer. As producers they make money by selling to consumers. In the role of consumers they use their earned money to buy, among other things, the essentials of life. Consumers have the option to choose products and services that have more or less impact on people and planet, and as producers they have the challenge of finding a feasible level of impact against the price they can sell their goods and services.

Communities can use operational models

Community finance   (with a Permaculture approach) takes as its starting point the idea that people can come together and invest their time and money into creating places that, encompassing a fair share approach, provide the essentials of life (or some proportion of what they consider important) in way that cares for people and planet. From that point of view, people have one role: a villager.

Another starting point for financial Permaculture is that everyone owns a fair share and therefore they organise themselves into a community. It is the community that will work using the property and infrastructure to provide services for itself. Because of this no-one is only a consumer and no-one is only a producer.

 Taking care of basics is at the heart of community development

No financial approach to Permaculture would be complete without taking into account the concept of a community that provided the basics of a roof over your head and food on the table. According to a recent study by Statistics Sweden, including meals bought from a restaurant and electricity and heating costs, food and housing make up about 50% of the average Swede’s monthly budget. This is probably true for most developed countries.


Given that many who come to Permaculture seek to find a path to resilient communities, investing to ensure food and housing security must be central. Note that community design does not intend to cover all the private economy of the members, only a percentage that creates security and peace of mind that the members’ ecological impact is minimised for those services.

Another part is designing the operation of the community so it takes care of the Earth.  For example, if we are dealing with food then our model needs to encompass the chain of nutrient flow, and environmental impacts from field to table to field. This does not mean all of the community activities need to include all these steps, but that to fulfil the aim of Earth care the community needs to have control over the flow of nutrients.

 Framing what you mean by intentions of the community

Defining the community needs careful thought. Firstly, a community can consist of several overlapping circles of people. Some circles may be more inclined to participate in ownership than others. It can be helpful to visualise these circles as people standing in a circle; they all have a context they share, probably shared values but most importantly a shared intention.

Shared intention

It is helpful to spend time formulating the intention rather than be content to identify just a shared interest. Consider the following:

We have the shared intention of making a garden

(intention: creating a garden)

Why do you want to create a garden?

Because we want to grow our own food

(intention: growing own food)

Why do you want to grow your food?

Because we want to create food security for us all

(Intention; creating food security)

Notice that by asking “why” the intention clarifies. Another point is that the intention becomes more compelling for more people. For example, not all like or have the physical ability to grow food, but many more are interested in food security, so the final version of the intention widens the number of people who can be involved.

Even if the community’s intention is food security and a potential member thinks that security is not an issue but wants to be involved anyway, at least by clarifying intention it makes it easier for people to decide if they want to be a part of the community or not. This is better than having to clear up misunderstandings later on.

Finally, by clarifying intention you often open up to more solutions. In the case above creating food security could include engaging a farmer.

 Size and scale are important

The other thing to consider when identifying community is size and scale.

There may be restrictions like travel distance, local population density or municipal boundaries that affect your definition of where you will find community members and other stakeholders.

The community can be the group of people who can best

  • Provide responsible stewardship for the land and other assets
  • Have the ability to mutually own, rent or lease the property and other assets
  • Benefit directly from the services provided by the land and assets on it

The community should be small enough that everyone can talk to each other, and large enough to provide a variety of perspectives and experience and skills to be able to pool capabilities to address challenges.

When planning community size we use the rule of thumb that the maximum residential community unit should be 200 including children, and the ideal functioning cooperative business about 30 individuals. Of course, there are ways of making other size configurations work. Villages of 1000 could consist of say 5 divisions of  200 each.

Another thing to note about community is that the services the community provides for itself come under different laws that those sold to consumers where the community is, say a cooperative.  As there are no sales to non-members the distribution of goods to members does not come under consumer law. This gives the community greater flexibility in distribution and less red tape to follow.

Consider, too, the circles many people find themselves moving in: the family and their work. With the loss of community and generations moving away to live in different parts of the country, or even world, in the traditional family you have to play many roles: adult, best friend, lover, parent, supporter, counsellor, etc. At work, the support and development you get will all be related to being more effective as a worker, and the relationships will be based on your roles at work.


In the consumer society, your own identity comes from the job you do and the money you can earn that enables you to pay for the activities and the possessions that can shape your life.

A strong, supportive community provides a third leg. It can give you the emotional support you need, the friends to help you out and those whom you help out, it can be an investment that provides food and housing reducing your dependence on your work and the pressure on your family. A community can be the lever to get you out of the consumer trap.

Consider, too the various cultures in the three spheres. The family sphere is one of the clan. The corporate sphere is one with a culture of competition. The community sphere is one of cooperation. All three may have their place; I happen to believe that providing the basics for human needs requires cooperation and is better served by community.

 Community and kindness

People are more and more embracing the idea that community and kindness could to some extent replace corporation and consumption as the way to organize society. If you want to be part of that change, how could  you go about it?

How to go about it?

One approach is, after having identified your tribe or community, to arrange the provision of services and money flows so money stays as long as possible in the community. Some call this plugging the leaks.

Take some ideas from conventional business

To understand about plugging the leaks it is good to review how conventional business works.

In business development, a company is often presented in the form of statements and an operational model (diagram) at organizational level. It is common practice to formulate a mission statement and business concept using “What do we do for whom and how?”

The  MISSION is what do we do in terms of the good we want to bring, for whom is our target customers and how describes the value addition our operations bring.


Follow the red line to see the money flow from right to left,  from customers to owners and suppliers. The legal entity – the company – is represented by the darker shade of grey. Note that the value added by the company is often limited to a few steps in the supply chain, for example, in food production many large companies only work with from producer to shelf in shop. Another thing to note is that the agreements between the various actors in this diagram are often secret. A customer cannot find out what prices the corporation pays for its raw materials. Finally, companies are often set up to leak money from a community. For example the company many have owners who are not resident in the community, and they may source their raw materials and components from outside.

The company is also a hierarchy. This diagram represents a common model but there are many others.


Starting up a business is often described in well-known steps, too.

  • 1. Formulate the  business idea
  • 2. Find finance
  • 3. Test the idea
  • 4. Market it
  • 5. Distribute, deliver, sell.

Now. You have to understand that the only company that has your best interests at heart is the one you own.

So the question becomes, how can we redesign an organisation that we have ownership in and where the organization has our best interests at heart?

The community finance approach

The community finance approach, or a financial Permaculture approach, uses an approach similar to one of starting a business.

We can start with vision in this case the benefits are for the people in the constellation

The first question of MISSION is “What we can do for each other and how?”

What we can do is often formulated in terms of security and resilience, rather than in the service we can provide. Rather than “deliver the freshest food from all over the world to your door”  it could be “ensure the resilient supply of fresh food from locally grown sources.”

Community finance does not describe target customers. Rather, we identify people and organizations that will form part of an eco-system of collaborating entities. And they will be part of the organization from the beginning, not at the end of a marketing campaign.

“How” describes the value added provided by each entity. If the community aims to take control of its ecological footprint, then these chains will stretch from soil to soil and/or from rain to watercourse.

Starting up a services-providing community can be broken into steps, too.

  1.  Identify the people and the place
  2. Based on what is at hand, work out what can be reasonably produced as common services
  3. Do a Permaculture plan ( Roughly, the layout and workings of buildings, land, water, machinery, etc.)
  4. Break the plan down into flows, as circular as possible.
  5.  Identify machinery and infrastructure needed, work and skills needed Identify the money needed to acquire machinery and infrastructure, and how to finance the community.
  6.  Decide on the most appropriate organisation form (s).

An operation model is still useful as a tool to describe the flows, including financial flows, in the community finance approach. In this case, the legal entity is everything within the dotted line in the diagram above. Customers and suppliers are now part of the organisation.


In later articles, among other things, I will cover how to identify the material flows needed to provide the services, and explain the art of unitization as a way of handling the economic side of production. I will also talk about the community finance canvas as a planning tool.

Here a a table comparing company and community

A Company or Corporation A Community
Legal organisation as limited liability incorporated Legal form can vary, although one member, one share is common
Exists to give owners money as return on their monetary investment Exists to provide members basics in return for their investment of time and money
Provides narrow range of products/services as competitive specialty. Seeks niche or monopoly Provides basics, no niche or monopoly seeking
Starts small and aims to grow through increasing number of customers Has optimum size identified from beginning. Aims to provide services in best way to members
Roles include owners, managers, workers, consumers, suppliers in separate people Roles include owners, workers, managers and consumers in one person.
Competition among workers helps organization function Members supporting each others’ growth helps organization function

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