As a community-led philanthropy and impact investor in Central Wisconsin, Incourage is committed to aligning all of our assets in ways that advance our core purpose of co-creating an inclusive, adaptive and sustainable community. To that end, and in partnership with Confluence members, we are advancing a new practice that we are calling Place-Based Shareholder Engagement.

Our experience shows that creating truly inclusive, adaptive and sustainable communities requires coordinated, long-term strategies. In urban, rural and tribal communities across the nation, it requires local investment; active participation of local business owners, workers and residents; active ownership of companies operating in local communities and employing local workers; and flexibility to respond to changing market conditions. Macroeconomic changes can be dramatic over time. They often present overwhelming risks locally, which as active owners we can begin to address.

Incourage has learned first-hand the importance of this multi-faceted approach. Located within the nation’s top paper and timber manufacturing state--traditionally recognized as America’s Dairyland, as well as the world’s largest cranberry-producing region--Incourage operates within a largely rural area.

Our local industries are increasingly challenged by global economic forces, ranging from restructuring of the paper industry with the rise of digital media and lower-cost timber imports, to the rise of corporate agribusiness and ongoing price volatility for the region’s broad range of agricultural products. An additional, pervasive theme is ownership by outside, narrow interests—often private equity funds willing to bleed local companies to drive short term profits while leaving communities in disarray.

Between offshore and private equity interests, the question of who owns rural America has become a grave concern for communities accustomed to local control.

To preserve local ownership and control, Incourage has established active ownership positions in all traded companies headquartered in—or with a substantial employer base in--our state via the Wisconsin Shared Stewardship Equities Fund, a customized passive index fund.

The paper industry is a window on our work in process.  Nationwide, mill closings have displaced some 500,000 workers in recent decades—almost entirely in rural communities.  Within a 100-mile radius of Green Bay, there are more paper mills than anywhere else in the U.S., with more than 106,000 people employed by Wisconsin’s pulp, paper and printing firms. Under ownership structures now largely private equity-led, a number of those firms have already experienced bankruptcy or other restructuring, leading to massive job losses, retiree benefit slashes and shirked local contractor payments--while owners took payoffs.  After the CEO of our local paper company ignored our initial outreach, we visited the Annual Shareholder Meeting.  We voiced concerns as both a shareholder and stakeholder, securing a CEO commitment for an in-person meeting.  We’re working with paper industry allies on a meeting agenda that can surface win-win opportunities.

We know that the trends affecting our rural economy are experienced nationwide and in an ever increasing range of economic sectors.  They call for new forms of engagement between shareholders and stakeholders, aimed at more sustainable prosperity for all.  Building upon the leadership of our partners ICCR, As You Sow, Confluence Philanthropy, U.S. Endowment for Forestry & Communities, Avivar Capital, Aperio Group, Proxy Impact and others, and with the support of the Nathan Cummings Foundation, Incourage is developing Principles of Corporate Community Stewardship that can be used as a basis for shareholder engagement—particularly when the threat of local downsizing may loom.