Building the Next Economy

October 8, 2012

You’ve probably heard of the “new economy,” which often refers to social media, sharing-based businesses, and sometimes socially responsible businesses. RSF Social Finance is working to build the next economy: one that’s rooted in community, considers everyone’s needs, and restores trust in financial relationships through transactions that are direct, transparent and personal.

Through our innovative investing, lending, and giving programs, RSF provides critical access to capital for path-breaking social enterprises working in Food & Agriculture, Education & the Arts, and Ecological Stewardship. We collaborate with like-minded organizations to create a financial infrastructure that will support the next economy. And we’ve democratized impact investing with our Social Investment Fund (SIF), which allows anyone with a $1,000 minimum investment to participate in building the next economy.

This is incredibly ambitious. We’re asking you to help spread the word as we promote our “building the next economy” stories on our website, Facebook, Twitter (#nexteconomy) and elsewhere. We’re focusing on these points:

  • RSF provides critical access to capital for path-breaking social enterprises.
  • RSF collaborates with like-minded organizations to create a financial infrastructure for the next economy.
  • RSF has democratized impact investing with the Social Investment Fund, which allows anyone with a $1,000 minimum investment to participate in building the next economy. More information on opening an account: here

Read our latest borrower stories on the Reimagine Money Blog:

Guayakí Pioneers Market-Driven Restoration

Common Market Boosts Urban Access to Fresh Food, Helps Local Farms Thrive

Indigenous Sets Out to Remake the Apparel Industry

B Lab Seeds a Movement Toward a New Kind of Corporation

Strong Vision Helps Pine Hill Waldorf School Persevere and Lead

RecycleForce Keeps Electronic Waste Out of Landfills and Ex-Felons Out of Prison

 

Strong Vision Helps Pine Hill Waldorf School Persevere and Lead

September 24, 2012

Building the Next Economy

Fire is a defining element for Pine Hill Waldorf School—as both metaphor and history. In a sense that’s true for RSF as well.

The old New Hampshire farmhouse the school had occupied since shortly after its founding in 1972 burned to the ground in 1983. Determined to rebuild, the school formed a fundraising team. Among those they approached was Siegfried Finser, who at that moment was reviving the Rudolf Steiner Foundation (now RSF Social Finance) as a social investment vehicle.

“Our situation ignited the rebirth of RSF,” says Arthur Auer, then a Pine Hill teacher and now director of the Antioch Waldorf Teacher Training program, located during the summer on Pine Hill grounds. “Forces and people coalesced and created a comprehensive school master plan and one of the most striking examples of Waldorf school architecture in the U.S.”

INSPIRATION

“I saw an education for children where their whole beings were tended to and cared for—bodies, minds, spirits—and people coming together who all wanted that,” recalls Sherry Jennings, who has been a Pine Hill teacher from the beginning. “I was very inspired to tend that flame.”

She notes that Pine Hill was at the forefront of a surge of interest in Waldorf schools, which numbered only about a dozen at the time, most of them started in the 1940s. “Parents were looking for a new kind of school community, where they could be part of it and have connections with other adults who shared similar values.”

A similar “hunger” arising again today gives the school fresh inspiration, she says. “We’re coming full circle, in a way. I see that parents are really longing for deep connections.”

INNOVATION

That intense parent connection to the school was an important aspect of an innovative $1.1 million rebuilding package that included $500,000 in pledge loans and loan guarantees through the newly minted RSF and an innovative parent bond program. To spread costs, parents of new students were required to purchase a $1,000 bond that could be redeemed upon graduation; at that point many opted to donate their bond to the school, producing an ongoing asset-building stream.

With Pine Hill as a model, RSF has continued to support Waldorf schools, not only by providing capital but also by helping them to build communities willing to commit financial and other resources to a project’s success.

At Pine Hill, the school community also was integral to designing the new building. The architect interviewed teachers, friends, parents and children, and the children drew pictures of what they thought the building should look like. The result was a building that appears to emerge from the land itself.

“We wanted the building to arise out of a sense of place in the forest, on that granite hilltop,” Auer says, “and we wanted it to be not just environmentally friendly but also to fit into the environment. Its main gesture is a big heart of an auditorium in the center and two classroom wings embracing the children as they stream into the building.”

The auditorium was completed several years later in a second building phase, and unbelievably, a second fire struck as the last coat of finish on the stage was drying. It destroyed the auditorium and damaged both classroom wings. Insurance covered the cost of rebuilding, but “that fire was extremely painful,” says Auer. “That building was built with love by a whole team of parents.”

Now Pine Hill is building again, and again with help from RSF. The Children’s Village, an early childhood education center that fulfills the school’s master plan, is taking shape next to a biodynamic community farm. “We’re really excited about The Children’s Village,” says Jennings. “This is a space where we can protect and honor the needs of the really young child. We’re also doing publicly accessible parent education, which is a way to contribute to the whole community.”

Pine Hill child care center

IMPACT

“Without RSF we would not have been able to develop as full a master plan and model school,” says Auer, adding that the impact is not just local: The Children’s Village speaks to other Waldorf schools about the value of establishing their own early childhood education centers.

“One could become very anxious about taking such a risk in a recession,” Auer says. “But I think The Children’s Village is the right decision, to have the courage to go outward and serve the community. Others might say this is not the time to do it, but we are not doubting. Having gone through two fires has proven that Pine Hill has a strong body of life forces. I always have had confidence that those forces will prevail and bring us through to another new phase.”

VITALS

Organization name Pine Hill Waldorf School
Impact area Education & the Arts
RSF relationship Loan recipient, RSF investor
HQ Wilton, New Hampshire
Annual budget About $2 million
Employees 20+
Students 180 children, 125 teacher trainees (summer campus)
Communities served Local area and Waldorf education nationally

 

Indigenous Sets Out to Remake the Apparel Industry

September 19, 2012

Building the Next Economy

Seventeen years ago, Indigenous co-founders Scott Leonard and Matt Reynolds were picking burs out of hand-knit South American sweaters before delivering them to The Nature Company. Today, their company produces a full line of premium fashion knits sold online and at 500 independent stores, as well as clothing for major brands and private labels hanging on racks at the likes of Bloomingdales, Neiman Marcus, and Nordstrom.

That might not sound like lightning progress, but consider this: Indigenous works with a supply chain of more than 1,500 artisans from small knitting groups around the world; pays fair living wages; and uses organically grown fibers, low-impact dyes, and handmade fabrics. They pioneered Fair Trade certification for apparel and developed the Fair Trace Tool™, which lets consumers see their clothing’s supply chain. And they’ve done all this in an industry where labor conditions cause ongoing protests and “organic” often translates to “unfashionable” or “unaffordable.” Viewed in that light, Indigenous looks like a revolution.

INSPIRATION

The spark was Leonard’s travels in Ecuador. “I had seen firsthand that women were not necessarily being honored for their weaving and knitting skills,” says the Indigenous CEO. “They weren’t being paid the wages that they could have been, or they didn’t have the opportunity to apply those skills to the marketplace.

“We really wanted to make a difference in the world with women in economically marginalized communities,” Leonard says. “We thought that bringing in fair wages and technical assistance, and marrying environmentally friendly fibers with more sophisticated designs, was a way to do that.”

INNOVATION

Indigenous had two major problems: quality control and financing. “How do you elevate a cottage industry’s quality control? When you’re dealing with 1,500 artisans and they’re in pockets of three to 30, how do you aggregate their work and have continuity and consistency that’s truly premium? There were a lot of quality-control glitches, from fibers to knitting, to consistency of sizing and fit, to timing of delivery,” says Leonard, a serial entrepreneur whose past businesses include an environmentally friendly surf shop.

Indigenous President Reynolds, who is a store buyer and has a background in developmental economics, adds that systems integration was a major issue. “We’re dealing with a unique production model—it’s diversified, it’s spread out—and we had to create a new systems model,” he says. “That took a lot of time and collaboration and money.”

Financing was a huge obstacle. “It’s not just that we were a start-up, visionary company trying to do something no one else had done,” Leonard says. “But once we collect an order and give it to an artisan, how does that artisan pay for the fibers, and if they’re the lead, how do they pay the other people in the group? They don’t want terms. They do the work and they want to be paid.”

Looking for a better way to finance its supply chain, Indigenous began engaging with RSF around 2001. “Conventional banking was just not going to work. That our balance sheet was not looking so great was a difficult hurdle,” says Leonard. “RSF provided working capital, helped us to formalize our financial strategies, and helped us attract other socially minded investors.”

RSF encouraged Indigenous to include a section on social returns in the business plan for its Series A funding round. That ended up being the aspect some investors were most impressed with, Reynolds says, adding, “RSF has been a pioneer and supportive spirit in trying to push the social and environmental return aspect into financials and into evaluating the success of a business.”

In 2010, RSF provided Indigenous with a PRI Fund loan to assist in creating standards and procedures for the Fair Trade apparel pilot program and to develop the Fair Trace Tool, which allows shoppers to scan a hang tag QR code to find out where the garment originated, who made it, how the fibers were raised, and what the social impact was.

“We hope that by educating people to actually look into things, they’ll see how clothing can be made responsibly,” Reynolds says.

IMPACT

Indigenous has worked with its longtime suppliers in South America to obtain Fair Trade certification, and the company was the only clothing manufacturer certified in South America as of mid-2012. On top of that, the Fair Trace tool is a breakthrough that could change how organizations verify supply chains and microfinance results, Leonard believes.

Indigenous now runs at a profit and has invested in RSF’s Social Investment Fund as a way to help other social enterprises grow (and earn a competitive return, Reynolds points out). In addition, Leonard and Reynolds have created a donor-advised fund with RSF to support their artisans’ communities through grants.

“We are proud to say that we are now hanging next to mainstream, high-end fashion design brands in stores across the country, and we were able to do that without sacrificing values,” Reynolds says. “The other thing is that even though we still are a small business, we’ve put over $20 million into the artisan and organic supply chain, and that has really affected lives.”

VITALS

Company name INDIGENOUS
Impact area Food and agriculture
RSF relationship Former working capital borrower, current PRI Fund loan recipient, Social Investment Fund investor, donor-advised fund advisor
HQ Santa Rosa, CA
Revenue About $6 million annually
Employees 15
Communities served Weavers and knitters in South America and elsewhere; U.S. consumers


 


 

B Lab Seeds a Movement Toward a New Kind of Corporation

September 14, 2012

Building the Next Economy

Jay Coen Gilbert and Bart Houlahan are a business success story. They were part of a team that created the basketball footwear and apparel maker AND 1, built it into a $250 million company, and sold it profitably. One of the lessons they learned: the definition of success needs to change.

“It became clear to me that business, if harnessed appropriately, could create tremendous positive change. But the current legal environment in the U.S. doesn’t support that work,” says Houlahan. “There needed to be a way for a company to scale, raise capital, have a liquidity event, and remain true to a social and environmental mission.”

The solution: Houlahan and Gilbert, with investor Andrew Kassoy, created B Lab, a nonprofit that’s building a community of Certified B Corporations, which meet rigorous governance, social, and environmental performance standards. At the same time, B Lab is driving the state-by-state movement to pass benefit corporation legislation that allows such businesses to protect their mission as they grow.

INSPIRATION

Houlahan and Gilbert ran AND 1 as the kind of business they wanted to work for, treating employees and suppliers like family and minimizing the company’s environmental impact. But as the company grew, staying true to those values became more challenging. As a result, the commitment to employees, the environment, and community lagged. “Not because investors weren’t supportive; it was just that we were acutely aware of our fiduciary duty to maximize shareholder value,” Houlahan says.

Gilbert, Houlahan, and Kassoy believed that others could succeed where AND 1 hadn’t—with the right cultural and legal support. B Lab, founded in 2006, provides that support by promoting the B Corporation certification as a way to differentiate good companies from companies that simply have good marketing, spreading the use of its Global Impact Investing Ratings System (GIIRS) among institutional investors, and establishing the benefit corporation—a legal form that bakes high standards of purpose, accountability, and transparency into a corporate charter—as an option in all 50 states.

“We are not a change agent—our change agent is the entrepreneur,” Houlahan says. “We exist so they can scale, they can affect change, and they can solve society’s greatest challenges.”

INNOVATION

Houlahan is quick to note that B Lab stands on the shoulders of giants. The B Impact Rating Assessment, used to certify B Corporations and as a basis for GIIRS, was built on the work of the Global Reporting Initiative (GRI) and the thinking of a host of sustainable business pioneers; ideas about new corporate forms have been developing for decades.

B Lab’s great step forward was to build the infrastructure for a movement that could make those ideas reality. Prior to the B Corporation, Houlahan says, “all the certifications were focused on a particular product or practice; the B Corporation certification was the first to focus on the whole business.”

And by certifying B Corps, B Lab created a community that could advocate for the legal changes needed. Policy makers work for constituencies, not ideas, Houlahan points out, and B Corps form the constituency for benefit corporation legislation. “Without the businesses that would use legislation for a new corporate form, earlier initiatives didn’t get much traction,” he says.

B Corp certification also represents a shift in thinking for corporate social responsibility, from focusing on doing no harm to focusing on doing good. “Our assessment only provides points for positive impact. We don’t measure whether you’re doing no harm,” says Houlahan. “We assess whether you are improving society and the environment.”

RSF Social Finance played a central role in all these developments and continues to be a core supporter. “RSF has been a pioneer in B Lab’s work from day one,” says Houlahan. In addition to providing a $250,000 loan from the RSF PRI Fund and ongoing fundraising support, “they were on our first board and on our first standards advisory council. They were the first to use the impact rating system to evaluate loan prospects, their RSF Capital Management unit is a Certified B Corporation, they are a pioneer fund for GIIRS, and they are a pioneer investor for GIIRS. They’ve participated in every level of our development.”

IMPACT

B Lab has certified close to 600 B Corporations, provided GIIRS ratings for nearly 300 companies, and signed on 60 GIIRS pioneer investment funds. Eleven states, including California and New York, have enacted benefit corporation legislation. B Lab is working with a group in Chile to pilot expansion throughout South America. And the B Corp brand is gaining power.

“For more than five years, companies joined this community out of an act of leadership,” lending their own brands’ power to build the B Corp brand, Houlahan says. Now the B Corp community is at a tipping point, where the B Corp brand will enhance the value of companies that earn it.

“Our mission from day one has been to harness the power of entrepreneurs to solve social and environmental problems,” Houlahan says. “We want to redefine success in business so that people are competing to be not only the best in the world, but the best for the world.”

VITALS

Company name B Lab
Impact area Supporting social enterprise
RSF relationship PRI Fund, field-building partner
HQ Berwyn, PA
Budget $4.5 million in 2012 
Employees 29
Community served Mission-based businesses in the U.S. and abroad (pilot program)

 

 

Common Market Boosts Urban Access to Fresh Food, Helps Local Farms Thrive

September 6, 2012

Building the Next Economy

When Tatiana Garcia-Granados and her husband, Haile Johnston, moved to North Philadelphia’s Strawberry Mansion neighborhood in 2002, they found themselves in a fresh-food desert.

“Most of our neighbors were getting their food from corner stores. You walk into these stores and there’ll be all these different flavors of potato chips and Twinkies, but no fruits or vegetables,” says Garcia-Granados. The couple started working to bring a farmers market to the neighborhood and discovered a much bigger problem. “It wasn’t just neighborhoods like ours that didn’t have a link to the farmers right around us; it was also hospitals, universities and schools.”

Working with other local farm and food advocates, they created Common Market in 2008 to forge a distribution link between threatened farms and fresh food-deprived urban communities. Today, with a crucial assist from the RSF PRI Fund, Common Market supplies about 200 customers—institutional kitchens, retailers, restaurants and buying clubs—with produce, dairy and meat from about 100 sustainably run regional farms.

INSPIRATION

“Fifty years ago there were deep connections between the farmland right around Philadelphia and city residents,” notes Garcia-Granados. “With the rise of global commodity agriculture, that has changed—we’re more likely to find peaches from California than peaches from New Jersey.”

“When we started planning this, the distribution void was not on people’s radar,” she says. “We got blank looks when we talked about what we were working on. People didn’t realize this was a problem.”

What drove them forward was making the connection between health problems in the city and the loss of farmland. “We were seeing the health disparities that exist in our neighborhood and realizing what a huge role food plays in people’s lives and their ability to pursue opportunity. And every time we went to Lancaster County we would see more farmland being turned into housing developments.”

INNOVATION

Common Market’s key insight—the big step forward in solving the farm-to-city problem—was the value of cultivating institutional customers.

“With the amount of food an institution like a hospital is purchasing, we could have an immediate impact on the farms,” says Garcia-Granados. “We also targeted institutions that serve a cross-section of the population. That allows us to reach people who didn’t already have access to fresh food through farmers’ markets and high-end retail.”

Common Market had ready suppliers and buyers; the big challenge was cash flow—institutions are used to paying in 60-100 days. “But supporting farmers requires paying them quickly, as close to 15 days as possible,” says Garcia-Granados. “As we grew we realized we were facing a huge cash flow gap. That’s where RSF came in.”

The founders made the rounds of commercial banks and state and municipal development lenders, “but no one understood our business model or the sustainable agriculture piece and why what we were doing was meaningful,” says Garcia-Granados. “Common Market is a nonprofit social enterprise—it runs like a business but will invest any profits in expanding access to markets for farmers and to fresh food for urban communities. “The people at RSF were the only ones who understood.”

In 2010 RSF provided a $150,000 credit line (it’s now $350,000) through the RSF PRI Fund, which supports non-profit and for-profit social enterprises addressing key issues in food production, food access, value-added processing, distribution, retail and waste management.

“We had the customers and the infrastructure, but it was that access capital that allowed us to increase our sales and have an impact,” says Garcia-Granados.

IMPACT

Common Market nearly doubled its sales from 2010 to 2011 and its customers include more than 50 public and charter schools in Philadelphia and New Jersey. That’s a key audience given the enterprise’s big goal: changing what people eat and how they get their food.

Achieving that goal will require many more Common Markets, and the enterprise increasingly serves as a model. “Every other week we get a call from an enterprise or development agency,” says Garcia-Granados. “We share our business plan and feasibility study widely and invite people to come see our operation.”

The benefits accrue widely, she says. “For our farmers it’s giving them the ability to differentiate their product and take it out of the global commodity chain. For entrepreneurs, it’s allowing them to serve and sell local produce. For people who wouldn’t otherwise have access to local produce, it’s changing the food they are eating.”

VITALS

Company name Common Market Philadelphia
Impact area Food & Agriculture
RSF relationship PRI Fund
HQ Philadelphia
Revenue $1.6 million in 2012 (projected)
Employees 12
Community served Delaware Valley (New Jersey, Pennsylvania and Delaware)


 

Guayakí Pioneers Market-Driven Restoration Business Model

August 27, 2012

Building the Next Economy

“We had this incredible product—yerba mate—that gives you the strength of coffee, the health benefits of green tea and the euphoria of chocolate. We thought if we work with people on forest projects we can make the mate be the driver for reforestation, and inspire other companies to do similar work,” says Guayakí founding partner Chris Mann, describing the genesis of the company’s pioneering “market-driven restoration” business model.

California-based Guayakí sells the stimulating rainforest plant as a loose-leaf tea and in canned and bottled drinks. The company partners with farming communities in South America’s Upper Paraná Atlantic rainforest to produce shade-grown organic yerba mate and to reforest their land with native hardwoods, and it pays a premium to support living wages, healthy working conditions and community development projects.

INSPIRATION

Co-founder Alex Pryor introduced the four other Guayakí founding partners to yerba mate in the 1990s, when he arrived in the California central coast college town of San Luis Obispo from Buenos Aires toting a traditional gourd cup for the hot brew—favored over coffee by a wide margin in several South American countries.

Yerba mate is mostly cultivated on industrial farms in full sun, but it is native to the canopy of the Upper Paraná Atlantic rainforest, which stretches across Argentina, Paraguay and Brazil. When Guayakí’s founders started their business in 1996, they thought they would help preserve the rainforest—one of the world’s most endangered—by giving local communities a way to make a living from it without cutting down trees. A few years in, faced with a map showing 95 percent deforestation since 1900, they realized that preservation was not enough.

“We needed to develop a model for how they could get paid to plant hardwood and nurture it,” Mann says. “We were really surprised there weren’t many people doing restoration. The timber companies were planting monocrops to cut down again. One of the large conservation groups had a project, and there were a few smaller-scale research things, but we didn’t find any market mechanisms.”

INNOVATION

Guayakí’s market-driven restoration model, developed in pursuit of a mission to restore 200,000 acres of the Upper Paraná Atlantic rainforest and create more than 1,000 living-wage jobs by 2020, involves cultivating relationships with indigenous communities that often have had “hellish” experiences with outsiders, Mann says. “It’s little by little, building that trust network and educating the community on what we’re trying to do, and listening and being educated on what’s working for them and what they want to do. It’s a slow process,” he says.

Guayakí made steady progress and by 2008 it was delivering on its mission. Revenue was at about $8 million a year—but the company was losing money. “We’re competing with a lot of brands that are just trying to grow market share as fast as possible, which means paying distributors and giving away tons of product,” says Mann. Guayakí needed more capital to thrive, but the founders wanted to maintain control of their business—and their mission—and banks weren’t lending money to pre-profit companies at the depth of the recession. “We were in the lurch,” Mann says.

RSF Social Finance had just launched its Mezzanine Finance fund to fill precisely this sort of funding gap: growth capital for social impact businesses that don’t want to take on more equity partners and aren’t seeking a quick exit. When RSF stepped up with $500,000, Guayakí was able to roll out its canned beverage line, develop its small-store delivery distribution model and build inventory.

In addition to its financial relationship, Guayakí is engaged with RSF to advance thinking on business structures and practices that respond to community needs and are sustainable in the long term. For example, Mann has participated in RSF meetings that bring together investors and borrowers to discuss and recommend interest rates. The last pricing meeting session was inspiring, he says: “If you create a system that’s not based on every single person having to maximize, there’s room for everyone to do well.”

IMPACT

Guayakí’s moves with the RSF capital infusion paid off, and the company was profitable on $15 million in revenue in 2011. With its strengthened financial position, Guayakí now qualifies for RSF’s Social Enterprise Lending Program and has a $1.9 million line of credit.

The company is about 15 percent of the way toward its 2020 goal, providing about 150 jobs (including 35 U.S. employees) and restoring 30,000 acres of forest. Because of the carbon those new trees capture, purchasing one pound of Guayakí yerba mate tea reduces atmospheric CO2 by 1.26 pounds, according to a third-party life-cycle analysis.

“A core aspect for us is providing a dignified way of life and dignified working conditions” in indigenous communities, says Mann. In the U.S., he adds, “we’re really passionate about the need to create local living economies. There is no business if there is no community.”

VITALS

Company name Guayaki, guayaki.com
Impact area Food & Agriculture
RSF relationship Mezzanine Finance (2009), Social Enterprise Lending Program (current)
HQ Sebastopol, CA
Revenue about $15 million (2011)
U.S. employees 35
Communities served U. S., Canada, and south-central America

 

Waste Not, Want Not

August 22, 2012

By Melinda Cheel

If you take a long hard look at a landfill you’ll see both tremendous need (where do we continue to put all this waste?) and undertapped opportunity (how can we redesign, reuse and repurpose to avoid the landfill altogether?)

We’ve been exploiting natural resources at an unsustainable level for nearly a century to create material goods for our well-being and pleasure. Over that time we’ve become a consumer society, increasing our demand for goods and pushing the limits of our ecosystem. Products are often manufactured with planned obsolescence and there’s little accountability for disposal. With true costs of manufacturing externalized, it’s easy to keep the cost low and the demand for the latest and greatest high.  Not only does the creation of material goods create waste at the end of the product’s life but also throughout the extraction, production, and distribution processes.

In stark contrast to our wastefulness, in nature there is no such thing as waste. Waste is a design inefficiency of human creation. In nature, one organism’s waste is another’s nutrient. It’s a closed-loop self-rejuvenating system. Manufacturing is a linear non-restorative system where raw materials are used to create goods which are eventually disposed of.  This linear system isn’t sustainable in the long run for the planet, people or business.

The business case for ecological responsibility surfaced in the 1990s when several thought leaders showcased the cost saving and worker productivity potential. The opportunities for innovation inspired by nature, such as biomimicry, and the possible positive social and environmental impacts were brought to life. Over the last decade several businesses have changed course to address environmental issues, and reimagined the way their organizational processes interact with nature. We also saw the birth of social enterprises, businesses created with the mission to confront the world’s most pressing environmental (and social) issues. The goals of social enterprises are as wide and varied as the problems we face, but many of them have committed themselves to addressing how to deal with the abundance of waste, and in the process, are designing beautiful products, attracting dedicated customers, creating jobs, and reducing ecological impact.

Several RSF borrowers are tackling waste by finding opportunities in recycling or diverting materials from the landfill. Electronic waste is increasingly becoming an environmental offender and only 14% of it is recycled annually. Much is exported to developing countries for processing. RecycleForce provides comprehensive, innovative and responsible recycling services, keeping valuable materials in the U.S. while creating jobs for formerly incarcerated individuals.

Here are other examples: to challenge the more than 18 billion “disposable” diapers that end up in landfills every year, taking up to 500 years for each of them to decompose, gDiapers offers fun and fashionable cotton diaper covers with disposable, biodegradable inserts. New Leaf Paper strives to emulate the cyclical processes of nature by offering 100% recycled products, sourcing Forest Stewardship Council certified materials, and choosing paper mills that incorporate the most sustainable design principles. Inspired by the durability and beauty of glass, IceStone transforms waste glass, of which only 34% is recycled every year, into gorgeous countertop materials.

Opportunities abound for social enterprises interested in confronting our wasteful habits. With nature as a source of inspiration and ideas, we’re sure to see some profound and regenerative business models that will one day make landfill either obsolete or productive. We at RSF look forward to continuing to find and fund the innovative social entrepreneurs leading the way.

Melinda Cheel is Manager, Partnerships and Communications at RSF Social Finance

This article was originally published in the Summer 2012 RSF Quarterly.

2012 May and June Grantmaking Activity: Global Greengrants

August 16, 2012

By Catherine Covington

 

Many of our donor advised fund clients recommend grants to domestic organizations that they have a close connection to.  Perhaps they have volunteered with the organization, know someone on the staff or board, have seen the impact of the organization’s work in their own community, or are passionate about an issue or problem the organization is tackling.  However, what does one do if you are passionate about supporting causes outside the U.S. but don’t know where to get started or what support is needed and where?

One of donor advisors recently recommended a grant to Global Greengrants, a domestic non-profit with international grantmaking expertise.   The mission of Global Greengrants is to mobilize resources for global environmental sustainability and social justice. It does so by raising money from individuals, foundations and corporations then donating those funds to worthy charitable causes around the world.  One might ponder the direct impact a gift to a regranting organization but Greengrants is able to add tremendous value to its donors’ gifts through its unique grantmaking model—small grants recommended by local experts.

Bidhichandrapur Chetana (BCC) is a community organization in West Bengal, India. The group has used 4 small grants from Greengrants to spread organic farming in their community. Photo by Tamsin Green.

Greengrants acts as a bridge between donors and local groups on the ground, and it does so through a model of activist-led grantmaking.  Greengrants has strong, local connections with extraordinary community leaders and activists around the world.  Journalists, lawyers, scientists, academics and a variety of other individuals act as advisors on nearly 20 advisory boards.  The advisors provide local knowledge and on-the-ground details, which are two key ingredients for making impactful grants at the grassroots level.  These advisors are often on the front lines enabling Greengrants to find promising grantees and ensure success through active monitoring and mentoring.   To learn more about Greengrants’ grantmaking model and the important challenges it is confronting in areas such as biodiversity conservation, climate justice, and food and agriculture, please check out its website.  My favorite page is the grantee highlights section!

During the months of March and April, RSF’s donor advisors recommended 66 grants from their Donor Advised Funds for a total disbursement amount of $1,002,334!  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 nonprofit 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 Investing 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.

Catherine Covington is Senior Associate, Philanthropic Services at RSF Social Finance

Education & the Arts

Allgemeine Anthroposophische Gessellschaft
Inquiring Systems, Inc.
Villa Esperanza Services
Global Citizen Year
GreatNonProfits
Democracy Now!
Global Purpose
Duke University
Community School for Creative Education
Camphill Soltane
Tides Foundation
Collective Heritage Institute
Awakening Entelechy
Ecole Rudolf Steiner-Montreal
Marion Institute
Center for Biography and Social Art
Rose Rock School Foundation
Women’s Resource Center
Charter Foundation
Spirit Rock Meditation Center
Truthout
Maine People’s Resource Center
The University of Maine System, Inc.
Christian Community in New England
Christian Community – New York City
Consumers for Dental Choice
Pacific Zen Institute

 

Ecological Stewardship

Daily Acts
Science House Foundation
Bikes Not Bombs
Tengri School for Spiritual Ecology
The Cultural Conservancy
Georges River Land Trust
Amazon Conservation Team
Global Greengrants Fund

 

Food & Agriculture

New World Foundation
Filmmakers Collaborative
Dancers’ Group
stone circles
Trust for Conservation Innovation
Adelante Mujeres
Food Chain Workers Alliance
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Towards an Economics of Happiness – Part II

August 10, 2012

Originally published in the Summer 2012 RSF Quarterly

 

Click here for Part I

 

By Helena Norberg-Hodge

Localization for community and the environment

At its core, localization is about shortening the distances between production and consumption, while also encouraging smaller scale and more diversified production – particularly in food, farming, forestry, and fisheries.  All forms of primary production are expressions of a society’s environmental stewardship or lack thereof.  Yet, it is the way we produce food that provides an ideal example of the differences between global and local economies.

The global food system is extremely energy-intensive and inefficient, wasting precious fossil fuels to needlessly ship identical products around the globe.  It has systematically driven people from the land, increasing both unemployment and urbanization in North and South alike. With the absurd distribution of food, we see starvation in one part of the world and obesity in another. Because the global food system is homogenizing diets and food production worldwide, biodiversity is under assault and food security is increasingly at risk.

The continued expansion of the global economy means that local food rarely accounts for more than 10 percent of total consumption.  This is a dangerous position to be in: it is estimated that with any major breakdown in infrastructure or supplies of transport fuel, people in most parts of the world will be scrambling for food within three days. For environmental, economic, and survival reasons, we should be aiming to meet 60-90 percent of our food needs locally or regionally, depending, of course, on the agricultural capacities of the local area. This shift won’t happen overnight, but the localization movement is putting even big cities on the right track.

As we argued in our 1999 report (‘Bringing the Food Economy Home’), the local food movement demonstrates that shortening the distance between farmers and consumers provides huge benefits for both communities and the environment.  A more recent report co-authored by Michael Shuman, an economist with the Business Alliance for Local Living Economies (BALLE), looked at examples of locally-owned food initiatives around the world. Community food enterprises not only helped build local skills and economic networks, but provided tastier, fresher food and cheaper delivery costs.  As just one example, the study found that a $470 share from a Community Supported Agriculture scheme provided the equivalent of $700 of produce bought at a store.  Further benefits of these projects included a closer relationship between producer and consumer, and incentives for the farmer to diversify production to meet consumer demands.

Diversified systems help to sustain the numerous crop varieties that ensure long-term food security.  They also lend themselves better to organic methods, which translates into greater biological diversity on the farm and in the surrounding environment. They provide more job opportunities, with people power replacing the use of chemicals and gas-guzzling machinery. Finally, small, diversified farms can actually produce more food per acre and unit of water and energy than large, industrialized monocultures.  Thus it is clear that local food is one of the most vital links between healthy communities and ecological stewardship.

Going local

There is a heartening movement now of young people choosing to grow food.  They are debunking the myth that farming is drudgery and non-stop, backbreaking labor. When farms are smaller scale and more diversified, the work can be far more rewarding, healthy, and enjoyable than sitting at a computer all day.

There are numerous other examples of localization in action: local business alliances, local investment and finance strategies, Local Exchange Trading Systems (LETS), co-operatives, locally-run farmers markets, credit unions, and municipal bonds. However, many widespread assumptions – often cultivated by vested interests – continue to undermine the localization movement. They include charges of isolationism, elitism, and NIMBYism. There is a great need to counter these reactionary ideas and to debunk a pervasive myth that undermines localization in both North and South: that poverty in developing countries will be reduced through ever more global trade.

After years of colonialism and debt enslavement, it would make more sense to allow people to use their labor and precious natural resources to provide for their own needs as a first priority. To pretend otherwise merely serves the interests of those who stand to profit from exploiting the cheap labor and resources of the global South. Communities that embrace localisation are not turning their backs on the poor; rather, they are giving themselves and others the opportunity to become community-reliant rather than dependent on distant bureaucracies and corporations.

Throughout the cities of the western world, the movement to go local is gaining momentum. People are beginning to realize that it’s possible to increase the number of jobs and productivity on the land while reducing pollution and waste.  It’s becoming clear that there is no fundamental trade off between ecological and human needs.

Once we acknowledge what we lost when we abandoned community life and more diversified economies, it’s easier to see how to redesign our societies, to create a more human scale and human pace of life. This is not about going backwards, it’s about embracing our ecological roots and our common humanity to move toward a lasting economics of happiness.

Author and filmmaker Helena Norberg-Hodge is the founder and director of the International Society for Ecology and Culture. She is a pioneer of the “new economy” movement, and has been promoting an economics of personal, social and ecological well-being for more than thirty years. Trained in linguistics, she has given public lectures in seven languages, and has appeared on broadcast, print, and online media worldwide, including MSNBC, The London Times, The Sydney Morning Herald and The Guardian. Her ground-breaking work in Ladakh, or “Little Tibet”, earned her the Right Livelihood Award, or “Alternative Nobel Prize” and her book, Ancient Futures, along with a film of the same title, has been translated into more than 40 languages.

Towards an Economics of Happiness – Part I

August 8, 2012

by Helena Norberg-Hodge

Originally published in the Summer 2012 RSF Quarterly

For most of human history our survival has depended on intimate and enduring bonds of interdependence with one another and with the Earth. We evolved in large extended families, with strong communities and a deep connection to the plants, the animals – the living world – around us.  But today: we’re isolated from one another, and the natural environment has ended up primarily a resource to sustain consumer lifestyles.

In order to shift direction from the destructive path we’re on, it’s essential that we look closely at the economy.  The way we organize the economy largely determines our interactions with other species, natural resources, and the wider environment, and has a profound impact on community – the mainstay of human well-being.

The very structure of today’s global economy is causing instability, artificial scarcity and competition, tearing apart the fabric of community, and causing ecological destruction on a massive scale. On the other hand, diverse, smaller-scale, locally-based economic structures tend to support community, thus furthering both ecological sustainability and quality of life.

Culture, community, environment

Like most Westerners, I grew up under the impression that economic growth meant progress, and that the environmental costs of growth were unfortunate but necessary. After the Second World War, the government of my native country, Sweden – as well as almost every other industrialized nation – dismantled smaller-scale, diversified food production in favor of large-scale agriculture and rapid urbanization.

As people found themselves living alone in high-rise urban apartments, the result was a weakening of the deep ties to family, community, and the natural world. Another result was diminished biological diversity on the land.  By the 1980s more than half of the dwellings in Stockholm were inhabited by one person living alone and, at the same time, the rates of depression, alcoholism and suicide were increasing.

I might not have seen these links between the economy, community and the environment had I not had the privilege, as a young woman, of living in relatively intact local economies in rural Spain, Bhutan, and Ladakh (or Little Tibet).

In Ladakh, I learned to speak the language fluently and lived among the indigenous population. At that time, the Ladakhis still lived in large, extended families.  I witnessed how they nurtured children in ways that led them to feel appreciated, seen and heard; this, in turn, led to a positive, relaxed sense of self. Intergenerational care and exchange was part of daily life, and there was much less fear of growing old than in the modern western world. Because of the intricate webs of mutual support there was also less strain on individual relationships; there was more peace and collaboration, less strife and conflict.

I also observed how the benefits of being able to depend on one another within a community dramatically increase when you have real economic interdependence. Economic exchanges provide a structural relationship of give-and-take that binds people together in ways that provide material, as well as, psychological security. We often use the term ‘self -reliance’, but what I witnessed was ‘community reliance’.

In Ladakh, as in other traditional cultures, people were not only linked to one another, but also to the land which they depended on for their basic needs – their food, clothing and shelter. Their interdependence with nature was deep and spiritual- something that contributed to an expanded sense of self.

The social and ecological costs of globalization

In the 35 years since I first arrived in Ladakh, I have seen the culture and environment eroded in a multitude of ways.  A range of serious problems have emerged that were virtually unknown in the traditional culture: unemployment, pollution, resource shortages, a widening gulf between rich and poor, and violent ethnic conflict.  What was the cause of these problems? They were clearly the result of outside economic pressures over which the Ladakhis had little or no control.

In the modern world today, it is now increasingly recognized that a global casino of banks and corporations is threatening the viability of whole nation states. But the structures behind this irrational system have gone largely unnoticed.

Our tax monies have been used to industrialize and corporatize production in ways that have concentrated profits in the hands of giant corporations like Coca Cola and Monsanto, and big banks like Morgan Stanley and Goldman Sachs.  To increase global trade, transport and energy infrastructures were built up to serve megacities and sprawling metropolises, while neglecting smaller cities, towns and rural areas.  At the same time, governments from both the right and left signed on to trade treaties that opened their economies to outside investment, while scrapping laws and regulations designed to protect national and local businesses, jobs, and resources. In the process, national sovereignty has been relinquished to giant transnational corporations and undemocratic supranational bodies like the World Trade Organization (WTO) and the Bank of International Settlements (BIS).  In the name of growth through increased trade and comparative advantage, governments have blindly hollowed out their own economies.

The connection between centralized power, industrial production, and urbanization needs to be examined if we want to turn away from the global system that today threatens all life on Earth. Whether it’s CO2 emissions, plastic islands in the Pacific, extinction of species, clear-cutting of rainforests, or the growth of poverty and social breakdown, the roots of our problems lie in the destruction of more diversified, community-reliant and productive local and national economies. The realization is dawning that we need fundamental change, and the growing localization movement is beginning to provide some solutions.

Stay tuned for Part II of this essay where Helena discusses the power of localization.

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