Taking care of business: Saving the local economy, $50 at a time

Ever since Goldman Sachs's (GS) recent offer of $500 million to help small businesses, financial reporters have been torn. Some think that CEO Lloyd Blankfein might be -- in his words -- "doing God's work," while others argue that the move reeks of cynical public relations.

Either way, one thing is beyond dispute: With retail and food-service revenues at four-year lows and a small-business loan failure rate that has passed 12%, it's clear that America's independent retailers need some serious help. One solution might be the grassroots 3/50 Project, which asks consumers to choose three favorite local businesses and commit to spending $50 per month in them.
Small Plans, Big Potential

That modest goal can have a massive effect: according to the project, if half of all adults spent $50 per month in locally owned businesses, their purchases would generate $42.6 billion in annual revenue. In addition to ensuring the continued health of small businesses, 3/50 could also boost the local economy: 68% of the money spent in local stores returns to the area as taxes, payroll, and other expenses. Chain stores, on the other hand, keep an average of just 43% in the area, and online retailers contribute almost nothing.

The brainchild of Minneapolis-based retail consultant Cinda Baxter, the eight-month-old 3/50 Project has 24,600 Facebook fans, 13,600 local businesses on its list of supporters, and working relationships with more than 400 chambers of commerce. Baxter attributes much of the project's success to its small scope, endorsing simple, pragmatic consumer spending instead of a radical, all-or-nothing approach, or boycotts of massive chains.

Getting Corporations Involved

And by encouraging participants to pick three stores they want to save, the project puts a personal, intimate face on America's endangered small town retail businesses. That intimacy is key to the project: one of 3/50's goals, Baxter says, is to "reconnect consumers and retailers by focusing on the point of purchase." Where products are manufactured can seem an abstract concept to consumers, but deciding where to buy something is within their control.

The 3/50 Project is entirely funded by Baxter, but she hopes to attract corporate supporters. The project's local focus automatically alienates some large corporations, but Baxter notes that "Many companies, especially communications companies and the media, are vital to the life and longevity of small businesses, but aren't selling a product."

With more extensive funding, Baxter hopes to expand the project internationally; supporters in Canada, the U.K., and Australia have expressed interest in developing versions of the site. In the meantime, the 3/50 Project will stay focused on its simple message: "Pick 3. Spend 50. Save your local economy."
Read Full Story