RSF Grantee Investigates Growth Structures for Social Enterprise
December 29, 2011
By Catherine Covington
There has been lots of buzz lately, on our blog and in many other places, about seeking alternatives to big banking. Amidst the activity that resulted from the Move Your Money campaign, including lots of new RSF Social Investment Fund accounts, I was excited to witness one of our donor advised fund clients take action to support the growth and development of community development finance institutions (CDFI’s) by making a grant to Southern Bancorp Capital Partners.
Southern Bancorp Capital Partners (SBCP) is a non-profit affiliate of Southern Bancorp America’s largest rural development bank (RSF has an existing relationship with Southern Bancorp, having made an investment in this CDFI from our Liquidity Portfolio some years ago). Southern operates community banks and development organizations that work together to promote comprehensive development in the Delta region of Arkansas and Mississippi. SBCP is a 501(c)(3) organization and a U.S. Treasury certified CDFI providing development lending services and technical assistance to entrepreneurs and small business owners and facilitating strategic community planning and development in selected communities. The mission of SBCP is to revitalize struggling rural communities by promoting comprehensive development. It does this by supporting quality educational opportunities for residents of all ages, restarting the local economy, rebuilding the civic infrastructure, fostering the emergence of new leadership, addressing health care needs, and creating new homeownership and affordable housing opportunities. SBCP has created and saved thousands of jobs and generated millions of dollars of investments in the communities it serves.
The grant from RSF was directed to a research project focused on exploring capital markets for CDFI banks and other social enterprises, which have historically faced growth and social impact restrictions due to the limited liquidity of their capital. While socially motivated investors may be willing and able to give up some financial returns on their capital, they are rarely eager to give up the return of their capital. This perceived and oftentimes real lack of liquidity related to CDFI’s can be a huge barrier for prospective investors, thus preventing the capital infusions and equity needed for anything beyond organic growth. The goal of the research project is to engage one or more experts with extensive experience in financial analysis of community banks and traditional capital markets to explore possible exit options for investors in CDFI’s and other social enterprises that can be offered without diminishing the organization’s social impact. Key topics to be addressed include maintaining control over social mission while broadening ownership structure, appropriate capital structure and blend of financial returns, the suitability of traditional markets for hybrid enterprises, implications for the entire field of social finance, etc. The goal for the research project is to devise a successful capital structure strategy that will further enable and allow organizations like Southern Bancorp to grow, further their impact, and act as model social enterprises.
This grant to Southern Bancorp was one of 59 recommended by RSF’s donor advisors from their Donor Advised Funds during the months of October and November for a total disbursement amount of $959,352.43!
Donor Advised Funds are a unique charitable giving vehicle offered by RSF that allow donors to make tax-deductible contributions to RSF and then recommend grants from their fund to qualified non-profit organizations of their choice. A donor can be an individual, group, family, corporation, trust, or a foundation, and they benefit from access to RSF’s innovative Impact Investment Portfolios. Unlike other Donor Advised Fund investment programs, a donor’s contribution is invested directly in enterprises and funds with core social and environmental missions to ensure greater mission-alignment and the deepest impact possible.
October and November 2011 Grantees:
Ecological Stewardship
Fossil Rim Wildlife Center
Nature Conservancy
Times Up
Triskeles Foundation
Education & the Arts
Artemisia Associate (AAMTA)
American Society for Technion
AnewAmerica Community Corporation
Aspen Waldorf Foundation, Inc.
Association of Waldorf Schools, North America
Austin Eurythmy Ensemble
Camphill Special Schools – Beaver Run
Camphill Village Copake Foundation, Inc.
Center for Anthroposophy
Charter Foundation
Community Supported Anthroposophical Medicine
Crosspulse
Daily Acts
eLib, Inc.
EPHAS Productions
Fielding Graduate University
Freunde der Erziehungskunst
Green Mountain Branch of the ASA
Hawthorne Valley Association
Heartbeet Lifesharing Corporation
Lawyers Committee on Nuclear Policy
LifeLong Medical Care
Maine People’s Resource Center
Marin Community Foundation
Marion Institute
Pacific Zen Institute
President and Fellows of Harvard College
Room to Read
Rudolf Steiner Fellowship
Rudolf Steiner Press
Shade Tree Multicultural Foundation
Sound Circle Eurythmy
Southeastern Branch of Anthroposophical Society
Spirit Rock Meditation Center
Suncoast Waldorf Association
The Nature Institute
Food & Agriculture
Biodynamic Farming & Gardening Association
Michael Fields Agricultural Institute
Open Space Institute
Slow Food U.S.A.
Spikenard Farm
Sustainable Connections
Sustainable Harvest International
The Cathedral Church of St. John the Divine
Worldwatch Institute
Social Finance
Eyebeam Atelier
Root Capital
Southern Bancorp Capital Partners
Catherine Covington is Program Associate, Philanthropic Services at RSF Social Finance.
- Published by Jillian McCoy
- Categories: Blog, Donor Advised Fund Grantees, Donor Advised Funds, Giving, Investing, Money
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