Local dollars, local impact: WSU Extension builds community investment networks

Washington State University Extension is helping communities build local investment networks that connect small businesses with neighborhood investors who believe in them.

Since 2016, the WSU Extension Local Investment Network team, co-led by Snohomish County Extension Director Anthony Gromko and Ferry County Extension Director Trevor Lane, has helped turn neighbor-to-neighbor investing into a tool for rural economic resilience.

"Local investment networks are about more than financing," said Gromko. "They create new relationships between community members who want to invest where they live, supporting entrepreneurs while keeping wealth circulating locally."

Since the program began, more than 150 community investors have made nearly 300 investments across the state, totaling over $8 million and creating or retaining at least 178 jobs.

One of those investment partners is TwispWorks, a nonprofit in Washington's Methow Valley that coordinates the Methow Investment Network. Coordinator Patrick Law said the network gives residents a way to strengthen the businesses they care about.

"People love this community and want to support it," Law said. "For most, it's about community spirit and advancing the local economy, but there can also be financial benefits."

In practice, local investment networks connect residents who want to invest locally with entrepreneurs who need funding to start or expand a business. For small business owners, that can mean access to capital when traditional loans are out of reach.

"Funding is one of the biggest barriers people have to starting a business," Law said. "The investment network can be a straightforward, community-based way for people to access it."

In collaboration and with support from the Association of Washington Cities and the Washington State Microenterprise Association, the WSU Extension Local Investment Network team provides research-based, practical guidance as well as tools and expertise, such as a field guide, a Community of Practice group that meets monthly, and statewide events.

According to Gromko, the team's role is to make it easier for communities to take action while leaving the vision and energy to local leaders.

"Our goal is to help communities design systems that keep investment and opportunity close to home," Gromko said. "When local people have ownership, that's when these networks thrive."

Each local investment network develops its own leadership, identifies its own community champions, and decides which projects best serve shared priorities, while the WSU Extension team offers the framework and technical support.

For Christina Sanders, director of the WSU Extension Community and Economic Development unit that oversees the Local Investment Network project, its strength lies in its flexibility.

"Each community adapts the model to fit its needs," she said. "What works in one county might look different than what works in another, but the goal is always the same: to make sure opportunity stays local."

That approach has helped rural economies stay resilient through disruption. When supply chains tightened and credit markets contracted during the COVID-19 pandemic, several networks continued funding small businesses that banks had turned away.

For some businesses in the Methow Valley, that support in 2020 came at a critical juncture, marking the difference between financial windfall and bust in the years following.

"Local investors are motivated by community well-being, not just the financial returns," Gromko said. "The sense of stewardship makes these networks durable, even in uncertain times."

That flexibility has allowed networks to take on projects ranging from restaurant expansions and skilled trades to outdoor recreation and accounting services.

"You can feel the impact when you go out for dinner, get your oil changed, or visit an accountant," Law said. "These are the businesses that enrich small-town life and make it possible."