Community Supported Enterprises as a Financing Tool

APA Illinois Chapter


Thursday, September 14, 2017
4:15 p.m. - 5:45 p.m. CDT


In response to declining populations and potential business closings, group of residents in small towns are pooling funds to invest in those businesses considered essential to the future of the community. Community Supported Enterprises (CSEs) are common in Vermont but are now used in Midwestern states such as Illinois, Iowa, and Wisconsin. Residents create a fund, buy the business, and lease the space to an operator who pays rent to the organization. Investors do not always expect a financial return and the amounts invested usually are relatively small but they leverage other business loans to start the business.

The most common CSEs include grocery stores, restaurants, book stores, coffee shops that allow residents to gather and build social capital. Sometimes, the CSE is motivated by a pending business closure due to a business owner’s retirement with no local heirs to continue the business. However, it is likely that this model will expand to other services in the future. Walzer and Sandoval, Emergence and Growth of Community Supported Enterprises published by the NIU Center for Governmental Studies, provide a more complete discussion of CSEs (see

The increase in CSEs was partly motivated by the JOBS Act (2012) that relaxed requirements for investments by residents with a smaller wealth base.  Interest in these investments grew with the use of Crowdfunding approaches. In 2016, Illinois passed legislation permitting investments of up to $4 million (with audited statements) or $1 million (without) in a local venture and up to $5,000 per investor per offering. The CSE approach was used in Illinois communities such as Washburn, Toulon, and Nauvoo but the Nauvoo venture closed in 2017.  In New Glarus, WI an organic restaurant and food mart was successfully financed using a CSE approach and Bonaparte, IA has financed Township Stores for nearly 30 years using a local investment approach. Currently, Oregon, IL is working with The Local Crowd to use a Crowdfunding effort to support a business.

The session will examine experiences of several communities in organizing local investors to launch a business seen as important to the future of the area.  CSE operations in Vermont and other states will be presented along with examples in Illinois and Wisconsin. The plan for the session is to start with an overview (35 minutes) of CSE approaches in various states and their applicability, especially in rural communities, by Norman Walzer, Ph.D. (Senior Research Scholar) at NIU. Walzer has researched and written about rural areas for more than 40 years.  The opening presentation will provide a setting for two shorter explanations (10 minutes each) on CSEs in Illinois and Wisconsin by principals engaged in these local efforts. Each will discuss the motivations for the venture, how it was planned and organized, impacts on the community, and ingredients necessary to make it succeed. The remaining 20 minutes will  involve a structured audience participation allowing them to ask questions, describe similar or related efforts in their communities, and ways that planners can promote these efforts.

The learning objectives include: a) inform participants about relatively new ways to launch business ventures with local investment and explore opportunities in their home communities; b) explain the strengths and limitations of this approach and how local planners can be involved in the efforts; c) provide resource materials to guide further inquiries or efforts if participants so choose; and d) interact with both a business leader and a municipal employee directly involved in these efforts to identify potential use in other situations.


Norman Walzer

Senior Research Scholar at Center for Governmental Studies Center for Governmental Studies at Northern Illinois University University of Illinois Specialties: Innovative local entrepreneurship programs Community Supported Enterprises and Business Governmental consolidation and restructuring service delivery Financing local public services on a regional basis in rural areas with declining populations Collective ... Read More

Robert Muller, AIA, LEED AP

Robert Muller, AIA, LEED AP Owner at THE Creative THE Creative University of Cincinnati Read More

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