Ξ June 23rd, 2011 | → 1 Comments | ∇ A Day at a Time, Interviews, Technology, Wine & Politics, Winemakers, Wineries |
Just when you think you’ve seen it all, just when cynicism and indifference seems poised to win the day; when wall-to-wall coverage of the absurdities of Bordeaux, its pricing, and the Great Thirst of China for the same swamps all reflective intellection; when wine education is trivialized or pilloried in favor of mere consumer preference; when commercial bombast goes unchecked; and when Monsanto grows stronger every day; I am here to tell you a bit of good news. Quiet, subtle, but very good news.
Facebook announcements generally have all the luster and impact of lost pet fliers stapled to telephone poles. But two caught my eye the other day. First Parducci, then Paul Dolan Vineyards. The subject was microfinance and a San Francisco-based organization named KIVA.
But just what is microfinance?
“Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services.
More broadly, it is a movement whose object is a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers. Those who promote microfinance generally believe that such access will help poor people out of poverty.”
This is new to the wine world I’ve come to know. And KIVA?
“We are a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world.”
As far as I am aware, the Mendocino Wine Company is the first to utilize this lending model. But that is hardly surprising considering their track record and range of accomplishments. And now we may add to their list a gentleman, Jofre Descatre from Ecuador. Just announced today. But so, too, may we join in this adventure. I encourage readers, and wineries, to join and donate to Wineries For Good. Or start a team of your own.
I caught up with Mr. Dolan and asked him about all of this. Enjoy.
Admin Good afternoon, Mr. Dolan. How remarkable it was to read on Facebook of your winery’s new association with the micro-finance organization KIVA. How did this come about?
Paul Dolan It was Kelly [Lentz, Marketing and Sales Coordinator], she was the first one to actually recommend it. She was curious about the organization. And then it was my daughter, Sassicaia; she discovered it at about the same time. Then we got my grandkids involved. Instead of giving them money for birthdays, you give them an allowance to invest. It connects them up with the larger world.
And the farming side of it made a lot of sense to us. As you know, our philosophy is organized around supporting small family farmers, particularly organic farmers, or one might say, sustainable farmers. So it made a lot of sense. We now have a Paul Dolan profile and a Parducci profile. Kelly has a profile. We’re seeing if we can’t generate some interest from some other wineries.
Indeed. Absolutely remarkable. Mr. Thornhill and I talked about this some time ago, around the time of the Wine Bloggers Conference in Walla Walla, Washington. How will you decide who to distribute funds to?
PD At this stage of the game we’re just sort of exploring. It will come from relationships we’ve established. Having visited Ecuador and Kenya, those are sort of naturals. I’ve got a buddy in Lebanon. There is really no rhyme or reason to it at this stage. It’s hard to evaluate because you’re reading something someone has written up; you don’t know how much of it has been embellished. You don’t always know what the reality is. [Laughs] So you have to just trust in the nature of it.
I like the ones, the requests, where they’re looking for equipment and supplies; where they are going to lease property, or rent property. For sharecropping, for example. I like that model. I like it when they want to buy farm animals and raise them. Or milking cows and goats in order to sell the milk. Like the Heifer project. I’ve always thought that was a great project. I’ve been a supporter of theirs for a long, long time, probably 20 years.
KIVA, micro-financiers generally of course, help those who cannot necessarily go to a bank for a loan. They have no way to secure credit. They often have no collateral. Neither can they secure such small loans, especially when offered at usurious interest rates. But such a loan can be life-changing for them.
PD Exactly. Muhammed Yunus was inspirational, how he saw that vision. And I love the fact that it connects us up. I particularly love the fact that my daughter sits down at the computer and takes the time to read and evaluate and learn about the people to whom she will decide to make a loan. Just the process of reading it [the KIVA website], the mental gymnastics of trying to determine what and who she wants to put her money in… it’s fantastic!
Wonderful. Now as far as your particular group is concerned, Wineries For Good, can anyone join under your umbrella organization?
PD Exactly. They can join what KIVA calls the team. So our first outreach has been through Facebook, both Paul Dolan Vineyards and Parducci Wine Cellars. We’re not just trying to explore outreach through Facebook. I don’t generally like to ‘Friend’ companies. I like to ‘Friend’ people. So we have the Paul Dolan winery and I have my own Paul Dolan site. So I’ll take it to my site. I’ll take it to my son’s site and my daughter-in-law’s site; my daughter’s site. We’ll start spreading it out. It’s a fun way to get things going.
I think you and your company will, once again, be the first in California, among wineries, to work with micro-financing. I find it extraordinarily praiseworthy. And once word gets out — I’m certainly going to push it hard — even karmic gifts will flow back to you and yours.
PD Have you become a member?
I signed up just today. [6/21]
PD I guess another way would be to reach out to some bloggers.
Another thing: We also discussed, here at the winery, the idea of how we as a company could provide financing for small farmers here in the states. I am particularly intrigued by small truck farmers in the Mendocino area. So Tim [Thornhill] has been working with a grain farmer, a guy that came to the community not too many years ago. He and his son are growing grains for bread primarily. So we’re doing a trial of different grains to grow between the grape vine rows, kind of like cover crops. We’re trying to get a sense of how that would work. It’s a competitive environment, so we have to figure out how much we can plant, what the spacing is, what the width of the row can be. That’s one of the ways we’re contributing there. For the small farmer, sometimes it’s difficult to get bank financing for small amounts. And they can get to be a little bit bigger amounts as well. Eventually we’ll probably find ourselves in the dynamic of helping small farmers who are starting to expand. But at a certain point it will be time to pass them off to a bank.
As I’ve read the material, many of those looking for loans will have max’d out their credit cards, if they ever had one, and the bank, should they even lend at all, will charge a usurious interest rate. And many of them, the small businessmen and women, need so very little to make a go of it. How is the interest rate determined? Via KIVA, or do you set it?
PD Well, we haven’t gotten too far into it. We’re just exploring. Right now we’re profitable enough to venture into it. We’ve set ourselves some goals to achieve. From there we can start to develop a small system.
There are a couple of other things have come on the radar screen. There is an organization called Slow Money that is probably worth a little exploration. It was started by a guy named Woody Tasch. I was one of the early small investors providing seed money to get the thing going. And it is organized around communities supporting local investments in food. It really is a fascinating project. They are just now starting to gear it up.
I’ll give you a hypothetical example of what they might do. Maybe a farmer wants to grow a particular crop. Maybe they want to grow lettuce. Maybe lettuces in the Spring, tomatoes in the Summer, and potatoes in the Fall. They need, let’s say, $30,000. You’d find maybe five people who would put in $6,000 each, and then you’d organize some sort of interest rate. But the interest rate would be more in the range of 3 to 5 percent. You would create a dynamic where they didn’t have to start paying the money back for three years. Bear in mind this is just a hypothetical. And then they would start the process of paying back, quicker or longer term. But the idea is much, much more about the investors wanting to invest in the health of the community. So the dynamic is about how we create a healthy food system, a health food network, that is sustainable. All of this rather than putting $6,000 into GM stock where you get 2 1/2% dividend and maybe some appreciation. I think it is just a great, great model. And I am so hopeful that something like that can really work well.
Thank you very much your time, Paul.
PD We look forward to building a team.