RSF Quarterly Pricing Meeting: Embracing Community
July 5, 2011
By Melinda Cheel
‘Direct, personal, transparent, and based on long-term relationships’ is a sort of mantra at RSF. We talk and write about these values often. It’s how we envision the future of finance. In order for that future to be realized we’ve put a number of initiatives in place to engage our community including our quarterly pricing meetings.
Last month RSF held the most recent pricing meeting at the Summerfield Waldorf School & Farm in Santa Rosa, CA. Not only did we have a spirited meeting with RSF staff, borrowers and investors, we also had a phenomenal community dinner on Summerfield’s campus.
Twenty-one individuals gathered for this pricing meeting including representatives from current borrowers Indigenous Designs, Equal Access, New Leaf Paper, Summerfield Waldorf School, Biodynamic Farming & Gardening Association and the Sonoma Ashram. They were joined by nine investors from the Bay Area and six RSF staff and board members (who are also investors).
Pricing meetings begin with an opportunity for all participants to say a few words about how they became involved in the RSF community and why the relationship is significant to them. Sarah Hawthorne, an RSF investor of five years, said she desired change and wanted to see more socially meaningful and ecologically beneficial projects in the world. She told the group, “I thought money was one of the best ways I could make a statement.” Jane Hein, introduced to RSF by a friend, spoke to how RSF allows her to align her money with her values and noted, “RSF was everything I was looking for but didn’t know I was looking for until I found it.” Jane’s sentiment echoes that of many people’s introduction to RSF – a realization that investments can make a positive impact and there’s an opportunity to engage with the people behind the projects and initiatives the investments are supporting.
When the conversation moved to pricing there were many thoughtful suggestions and questions about RSF’s interest rate. Discussions at all the pricing meetings has varied but there has been a common theme…appreciation for the community. Not only are the borrowers grateful for the investors and their funds, the investors are thankful for the transformational work of the borrowers, and RSF is of course deeply grateful for everyone’s involvement. The combination of the personal and direct experience of the pricing meetings along with this deep appreciation shared by the participants creates a dialogue one might not expect from people discussing their money. One borrower, after reflecting on the transaction from the investor point-of-view, stated concern that the current 1% may not be enough. An investor expressed concern for RSF by asking if the margin was enough to support our work and growth in the field. Have you heard of investor checking in with their financial institution to make sure they’re making enough? It’s truly incredible to see community members engaging this way.
The pricing meeting marked the eighth such meeting we’ve had since RSF made the decision to change how our quarterly interest rate is determined. Prior to October 2009, we used the London Interbank Offered Rate (LIBOR) as a benchmark to determine our rate of return. Since then we’ve been using a customized rate established by our Social Investment Fund (SIF) stakeholders — RSF staff, SIF investors and borrowers in our Core Lending program. The SIF rate is then added to a 4% spread (for RSF’s operations) and the resulting rate, named RSF Prime, is the base rate for borrowers. It is not a decision we regret – not only is the new process more aligned with our values, we’ve been able to offer a higher interest rate than if we had continued using LIBOR. For more information on this decision, see this November 2009 post from our President & CEO, Don Shaffer.
With so many of our clients in the area and Summerfield’s gorgeous location we were inspired to have a community dinner following the meeting. We invited borrowers’ staff, additional RSF investors, the Summerfield Waldorf School community and friends and family of all the above. Indigenous Designs, with their home right down the road, brought close to 30 people! It was amazing to connect with their staff, meet their families and speak with some of their other investors. Scott Leonard, Indigenous Designs CEO, commented on his excitement about RSF hosting an event in his neighborhood and his long history with us. “RSF has stood as a creative and supportive financial partner for Indigenous. The RSF relationship continues to reinvent itself in so many positive ways.”
The plan was to have the dinner on the school’s farm but with the unusual June rain we had to move it indoors. Several last minute changes were required but the Summerfield community volunteers were there to make it all happen. (Special thanks to all the helpful Summerfield board, staff & parents!) The rain was torrential that morning but by the time the dinner bell rang, the skies had cleared, allowing a couple dozen people to tour Summerfield’s gorgeous property and see some of the campus highlights including their biodynamic farm.
The menu for close to 100 people included pizzas prepared by Summerfield volunteers and salads from a local restaurant. The pizza crust and sauce came from RSF borrower, Rustic Crust. The toppings included produce that had been harvested from the Summerfield Farm that morning and local, organic lamb sausage made by one of the volunteers. The organic salads came from Peter Lowell’s Restaurant in Sebastopol. (Lowell is a Summerfield alum.) Paul Dolan from Paul Dolan Vineyards and Paul and Kathryn Sloan from Small Vines Wines served biodynamic wines from their respective vineyards.
It was a memorable evening. It’s hard to go wrong with delicious food, incredible wines and lovely company but it was more than that. The whole room was buzzing with a celebratory vibe. The energy was palpable – created from the excitement of the pricing meeting participants and the connection the community members were making to one another through shared values and stories.
I enjoyed my pizza and wine with staff from Summerfield. The interaction provided me with an opportunity to learn more about one of our borrowers and for them to hear about our values and why we hold the pricing meetings. The reaction from the table was unanimous: Wow! We’ve never heard of a financial institution embracing their community and engaging them in conversations like you are. Nor have we! Our pricing meetings are undeniably unique and radical. As we work towards a financial future that honors direct, personal, transparent transactions based on long-term relationships, we’ll continue to explore how we can engage our community in the transformation.
Melinda is Senior Associate of Partnerships and Communications at RSF Social Finance.