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RSF Honored as ‘Best for Communities’ For Creating Most Positive Community Impact

July 24, 2014

This week, RSF Capital Management was recognized for creating the most positive community impact by the nonprofit B Lab with the release of the third annual ‘B Corp Best for Communities’ list. The ‘B Corp Best for Communities’ list honors 85 businesses that earned a community impact score in the top 10% of all Certified B Corporations of their size on the B Impact Assessment, a rigorous and comprehensive assessment of a company’s impact on its workers, community, and the environment. Honorees were recognized among micro, small, and mid-sized businesses.

Best for the World Community RSF

RSF Capital Management is a wholly owned subsidiary of RSF Social Finance and was formed in 2008 to manage all of RSF’s lending activity to for-profit social enterprises. RSF Capital Management provides senior working capital and subordinated term debt to businesses meeting a rigorous social enterprise profile.

Each honored company is a Certified B Corporation. They use the power of business to solve social and environmental problems and have met rigorous standards of social and environmental performance, accountability, and transparency. Today there are over 1045 certified B Corporations, across 60 industries and 34 countries, unified by one common goal: to redefine success in business.

The ‘Best for Communities’ companies come from over 35 different industries such as consulting, educational support services, retail and financial services. A quarter of honorees are based outside North America, with 25% of companies operating in emerging markets including Chile, the Republic of Korea and Kenya

Other honorees include d.light design, supplier of affordable, renewable energy to 30 million people in 60 countries, Greyston Bakery, which provides job opportunities regardless of work history through their open hiring policy, and Minnesota’s Sunrise Banks, which invests in projects to develop strong communities that provide homes and jobs to their residents.

Click here for full list of honorees

Integrated Capital for Social Enterprises

July 17, 2014

Originally published on the Stanford Social Innovation Review

Don Shafferby Don Shaffer

A thriving social enterprise sector is essential to increasing community resilience and improving the lives of those who’ve been marginalized by the global economy. Social enterprises—which are in business to solve social and environmental problems—are willing to tackle complex systemic problems, build new infrastructure, and develop products and services that address pressing needs even if their profit potential is not obvious or will develop only over a long term.

These enterprises’ ability to succeed is hampered, however, by the current division of capital resources into overspecialized sectors, such as venture investing and charitable foundations, that fund only narrowly defined types of enterprises at particular stages. This situation won’t produce the breadth of social enterprises we need to solve systemic problems, because these enterprises confound the expectations of conventional funders in many ways:

  • They may have to build a supply chain or other systems (rather than just plugging into an existing infrastructure), which results in relatively high up-front costs.
  • They may have slower revenue growth or relatively low profit margins—by definition, they aim to maximize social value before profit.
  • They may have hybrid business models that put them outside conventional for-profit and nonprofit funding models (for example, a revenue-generating business with nonprofit charitable status).
  • They think about growth as a way to serve their mission, not as an end in itself. They may intend to remain rooted in a community and serve as a model to others, for example, rather than pursuing rapid and far-reaching expansion.

To build a thriving social enterprise sector, we need to rethink the purpose of capital and employ an integrated capital strategy. Integrated capital is the coordinated and collaborative use of different forms of capital (equity investments, loans, gifts, loan guarantees, and so on), often from different funders, to support a developing enterprise that’s working to solve complex social and environmental problems.

Read the full article here

Don Shaffer is President & CEO at RSF Social Finance

Ethical Fashion Event at Cavallo Point

July 14, 2014

This is a guest post by INDIGENOUS

Cavallo Point – August 22, 2014:

It only takes one look to know that Cavallo Point is an extraordinary place. The warm ambiance and charmed location make Cavallo Point Mercantile the perfect place to shop for elegant, sustainably made clothing, jewelry and accessories. Join us there on August 22nd to celebrate an innovative partnership. You’re invited to preview the future of fashion with CAVALLO POINT MERCANTILE, INDIGENOUS and RSF SOCIAL FINANCE.

Cavallo-Point-Mercantile-Event-with RSF logo

Want to do more than change fashion trends? Clothing brands linked to charitable works and fair trade initiatives not only improve working conditions and alleviate poverty, they’re also successful! Ethical fashion companies, both large and small, are raising awareness about the realities of “fast fashion” and leading the way to a more sustainable business model.

The human cost behind $5 t-shirts and the fast fashion cycle were made abundantly clear—this time on a global stage—with the tragic collapse of Rana Plaza in Bangladesh. In April of 2013, over 1,110 garment workers—most of them young women—senselessly lost their lives. Now, more than ever, shoppers are aware of the impact every purchase makes. The world is ready for change. It’s time that we use business as a force for good, solving social and environmental challenges.

Be a part of the change. Attend this exciting event and meet INDIGENOUS co-founder and President, Matt Reynolds, who will share how INDIGENOUS is revolutionizing the future of fashion. How can fashion have a positive impact? Join the discussion and let your voice be heard.

SPECIAL DRAWING, PRIZES, and GIVE BACK PROGRAM:

  • Cavallo Point drawing for a free Spa Treatment
  • INDIGENOUS drawing for free artisan hand made fashions
  • 10% discount offered to anyone that mentions “Artisan Made”
  • Cavallo Point will be generously contributing 5% of every purchase back to a Fair Values Fund, managed by RSF Social Finance. The Fair Values Fund invests in skills, technical assistance and equipment to benefit artisans, schools and organic farms.

Event Information:

August 22, 5:00 – 7:00pm
Cavallo Point Mercantile
601 Murray Circle
Sausalito, CA 94965

A Celebration of Giving

July 10, 2014

RSF_30th_purpleby Kelley Buhles

As RSF Social Finance celebrates its 30th anniversary, we can be pleased with how much we have accomplished since the organization’s founding in 1984. Our staff has grown dramatically and clients now number well over 2,000. The number of transformative financial transactions has greatly increased and the RSF community is even more deeply rooted in its mission, vision, and innovative work in the world.

In looking back over these 30 years, we feel deep gratitude for all the supportive relationships that have nurtured, inspired, and challenged RSF to expand and deepen how it goes about transforming the way the world works with money and that have brought associative economic principles into daily practice.

Over the next few months we will be posting a series of stories about some key catalytic gifts and givers that saw potential within RSF, seeded future possibilities, and in turn, helped direct our destiny.

THE FIRST FAIRY GODMOTHER

In the fairy tales of old, the fairy godmother gives magical support and wise counsel to the hero or heroine of a story. She also tests their integrity and inner loyalty. In this relationship, the emphasis is always on the giving. Today, we use the word “donor” to identify a similar role in human affairs.

MaryA very special donor to RSF was also one of our first, Mary Theodora Richards. She was a biodynamic farmer, musician, and a student of Rudolf Steiner. Similar to the fairy godmothers in the stories, she advised and supported Mark and Siegfried Finser during the organization’s formative stages. She encouraged them in word and deed.

Her interest in RSF came from her passion for associative economics and the threefold social principles identified by Rudolf Steiner. During their long relationship, Mark Finser and Mary Theodora studied these principles together. She was deeply inspired by the vision of RSF to bring spiritual elements together with practical movement of money in the world.

The number of times Mary Theodora Richards acted as “the first” in RSF’s history is astounding. She opened the first Investment Fund and the first Donor Advised Fund at RSF.

Many of the activities her gifts made possible are early examples of what has emerged as RSF’s innovative approach to financing—integrated capital. Here are a few examples. Mary Theodora was excited about leveraging her gift money to make lending activity possible. She was the first client to guarantee a RSF loan with a gift. She also allowed RSF to use her charitable funds to make loans to schools when not enough investor funds had been raised, in effect creating a bridge loan. In addition, she guaranteed a portion of our reserve funds, providing a larger safety net that was attractive to more investors.

photo 1Mary Theodora Richards was able to plant ideas she knew would be important to our future as a growing organization. She made a challenge gift to RSF to fund the first year of a retirement plan on the condition that it would be included in the budget for the following year. She funded our first computer and database system knowing the importance of technology for the future. In addition to all these deeds, she helped to fund the purchase of the original building on Fern Hill in New York which housed RSF until the move to San Francisco.

These are the many ways Mary Theodora Richards acted as RSF’s first fairy godmother, encouraging its growth and giving direct support when it was needed. This turned out to be the special quality in all of our most collaborative donors—the ability to see and cultivate in us what we have not yet seen ourselves. Like so many others over the last 30 years, she acted anonymously, never wanting to place herself in the foreground.

It seems very appropriate now, 24 years after her death, to honor her role in the life of RSF Social Finance.

Kelley Buhles is Director of Philanthropic Services at RSF Social Finance

RSF Summer Quarterly: What Kind of Stewards do we Want to be?

July 7, 2014

Our role in stewardship is top of mind in the latest issue of the RSF Quarterly. Katherine Collins, founder and CEO of Honeybee Capital, explores how investing can be realigned with the natural world through biomimicry. In Clients and Conversation, Tim Brownell of Eureka Recycling, an RSF borrower, and investor Ben Gordon discuss how social transformation is at the core of the environmental change they seek. Also, learn how RSF grantee Tamalpais Trust is building the capacity of indigenous-led organizations to promote a culturally sensitive approach to environmental stewardship.

To download an electronic copy of the Quarterly, click here.

Summer-2014-Newsletter

Announcing RSF’s 2013 Annual Report

July 2, 2014

AR cover

Photo credit: Paige Green Photography

We are excited to announce the publication of our 2013 Annual Report. This year we wanted to share a deeper picture of what our community looks like by taking a closer look at the investors, donors, and social entrepreneurs that make RSF’s work possible. Hear clients reflect on how they are transforming the way they work with money; catch up on highlights from our lending, investing, and giving programs; and meet the people who drive our work forward.

We hope you enjoy the new digital format for our annual report. We’d love to hear your feedback!

Click here to download the report

Raising Capital: Challenges and Opportunities for Socially Responsible Businesses and Social Enterprises

June 27, 2014

cutting edge

This is a guest post by Cutting Edge Capital

Raising capital from banks, venture capitalists, and professional investors is a challenge—especially when your business falls into the category of a social enterprise or socially responsible business (“SE/SRB”). Despite the best efforts of SE/SRBs at sorting out financial projections, putting together business plans, applying for loans, and making presentations (a.k.a. pitching), most will be turned away by these types of investors.

It would be easy to declare the situation a result of a cabal of financiers that has it out for SE/SRBs the world over. But in reality, traditional finance just has its own evaluation guidelines for determining the companies that are eligible for financing. These guidelines have been devised to maximize the returns of business underwriting on a large scale, typically with no consideration of socially responsible factors.

The metrics employed by traditional finance are remarkably effective at streamlining the process of evaluating the many thousands of applications and pitch decks that banks, venture capitalists, and professional investors receive each year. This has led to a robust financial services industry and a large amount of capital flowing to forms of businesses that meet the standardized requirements of banks and investors. What this process has not done so well is channel capital to businesses that base their success on more than profits alone—that is,SE/SRBs.

RSF Social Finance’s loan recipients are growing businesses in the areas of food and agriculture, education and the arts, and ecological stewardship. As triple and quadruple bottom line businesses, they are also doing this while paying living wages, lowering their carbon footprints, and generally following sustainable business practices. And yet, if you were to subject these same companies to the evaluation criteria of traditional finance, these things would likely appear as extraneous liabilities, and many of these businesses would be passed over for funding.

Similarly, at Cutting Edge Capital we don’t believe in the one-size-fits-all capital raising solution offered by traditional finance—instead, we bring our experience, legal knowledge, and passion for social change to help our clients determine the best way to achieve their goals. Using a variety of innovative financing tools, including Direct Public Offerings (DPOs), we work with SE/SRBs to raise capital from both wealthy and non-wealthy investors in compliance with securities law.

A DPO allows companies to self-underwrite and self-administer public securities offerings to both accredited and non-accredited investors in one or more states. With a DPO, a company can market and advertise its offering publicly by any means it chooses—through advertising in newspapers and magazines; at public events and private meetings; and on the internet and through social media channels.

There are several legal compliance pathways that can be used to conduct a DPO. Depending on various factors, a company or nonprofit organization can use a DPO to raise up to $1 million per year and, in some cases, more.

Thousands of companies have successfully used DPOs to raise capital from the crowd. Ben & Jerry’s, Annie’s Homegrown, and Real Goods are just a few household names that have used DPOs in the past. Here are a few more:

  • Farm Fresh to You in California’s Yolo County, has raised over $1 million from its customers and is continuing to raise capital on an ongoing basis. Interest on the notes purchased by investors is paid in credits toward organic produce rather than cash.
  • Greenfield, MA-based Real Pickles reached its goal of $500,000 in just two months by offering non-voting preferred stock to investors in Vermont and Massachusetts and converted to a worker-owned co-op.
  • People’s Community Market in West Oakland has raised almost $1.2 million and will open a neighborhood grocery store that helps West Oakland families thrive by offering quality fresh foods, affordable groceries, health services, and a place for community building and recreation.
  • Quimper Mercantile in Port Townsend, Washington, raised about $750,000 by selling common stock to Washington residents and opened for business, ensuring that local residents could continue to buy essentials in their own community.

While SE/SRBs are hindered from accessing traditional sources of financing, a great deal of opportunity exists for raising capital with DPOs and other, non-traditional approaches. Our SE/SRBs clients are using these financing tools to engage their communities and raise capital from the widest possible circle of stakeholders—not just banks, venture capitalists, and professional investors.

Please continue to learn more about Cutting Edge Capital’s work with social enterprises and socially responsible businesses on our website.

A New Purpose for Philanthropic Services

June 24, 2014

KelleyBuhles_Books_Small

by Kelley Buhles

“Where do natural resources come from? Did humans buy them from somewhere?

What about our knowledge and abilities? Did we also buy those? Or are they on loan to us?”

John Bloom, RSF’s Senior Director of Organizational Culture, recently posed these questions to staff. The response was a long stretch of thoughtful silence, it was clear these weren’t easy questions.

Perhaps that is because it isn’t often that one is asked these types of questions; they are often delegated to the philosophers and spiritual practitioners of our time. Yet, if we take the time to search within ourselves for the answers, what we arrive at can dramatically change how we frame our relationship to the world around us.

Can we begin to explore the idea that the bounty of life, our ability to physically engage with the world, and our mental capacities to imagine, reason, and learn are all gifts to us? How differently would one behave in the world if we started to see everything we have as a gift, rather than something we earned? And if we can, how might that transform our relationship to money?

The Philanthropic Services team at RSF has been working with Rudolf Steiner’s thinking around the vital role gift plays in our lives. We observed that gift is typically left out of modern economic thinking. As part of RSF’s work to transform the way the world works with money, we also feel it is important to transform the way the world works with gift. We are excited to announce a new purpose statement for our philanthropic services department:

To cultivate giving as the source of economic life

As a transformative intermediary we:

·        Move the field of philanthropy towards a gift economy

·        Support and honor our client’s deepest intentions

·        Integrate gift money into catalytic capital

·        Facilitate the circulation of gift money

With this framework we can start to build a new understanding of the role that gift plays in economic life. Gift moves at the beginning of the cycle, rather than being something that happens at the end, once an individual has accumulated adequate wealth. By seeing gift as the primary igniter of economic activity we can start to understand what Steiner said in World Economy, “We cannot arrive at a healthy economic process unless, in the first place, it is made possible for people to have something to give and, in the second place, unless they have the good will and intelligence to give what they have.” (Lecture 5)

This transformation of our understanding of the world from something we have earned to something we are gifted with can inspire us to live into the spirit of interdependence with each other. Ultimately it can transform our understanding of the primary purpose of economic life, from meeting our own needs, towards working together to meet each others needs.

Kelley Buhles is Director of Philanthropic Services at RSF Social Finance

Personal Stories of Change

June 19, 2014

This article was originally published in the Spring 2014 RSF Quarterly.

RSF’s theory of change is based on driving transformation at the individual level. We decided to reach out to our community to see exactly how people have transformed the way they work with money.

Neil Blomquist, Trustee
President, Sustainable Solutions

“How I work with and think about money has not changed a whole lot since mid-1970’s when I found the organic community and embraced it as my life, but the transformation has come with my own maturity and the deeper understanding that Rudolf Steiner and RSF Social Finance have provided. It has deepened my conviction for change and confirmed that this is the path toward a more positive future for humanity and the planet.”

Dorothy Hinkle-Uhlig, Investor

“Many years ago I was led to meditate on a beautiful watercolor by Liane Collot d’Herbois titled “Money”, and subsequently I experienced a spiritual awakening about the nature of money and my responsibility toward this important gift of the spirit. Many important conversations with others and within followed as I tried to articulate what money is, and how am I to work with money. Money became alive as I, in my small way, sent it into the stream of life and saw it transform whatever it touched and then beyond as it flowed into society.

The work with money begins in the very personal realm of a personal decision and then continues on touching, transforming and realizing. Am I awake to the importance of each transaction with money? Does it support transformation and healing? Does it hinder the good? I strive to understand the answers to these questions within each deed with money. When I buy my food and my sweater and my computer, I send money into the social flow; when I invest my extra money and borrow for that big need, I send money into the social flow; when I gift to an emerging initiative and to the needy, I send money into the social flow. I have learned that my personal transformation continues to happen one moment at a time when I am awake to this flow in the moment. May the flow continue to enable the good. It is sacred work. It is community work.”

Mark Censits, Trustee
CEO, CoolVines

“I am working on an initiative that I believe will transform the way money flows in my town of Princeton, NJ. While this is not simply a personal behavioral change with respect to money, my efforts in initiating this new venture are indeed very much driven by my personal relationship to money, specifically with regard to building local economies. When I was looking for a loan for the expansion of my Princeton CoolVines store, I was very disappointed in the lack of connection that I felt from the local “community” bank. The experience was anything but personal, transparent and direct – and it drove me to imagine other ways that local businesses like CoolVines could tap into the resources of the local community for capital support. That combined with the changes afoot with the JOBs Act and web technology spurred an idea that we call the Community Investment Exchange. It is still in the concept stages but we hope to launch it sometime this Spring.”

David Lapedis, Investor

“I have the transformed the way I work with money by seeing it as a part of me and all living things. Each time I make a purchase, I remind myself of that with an affirmation. I actually pause every time I use my credit card and focus on that. Money is just the energy of this universe coming back and circulating through me. I find that I am more grateful for my experiences and the material things in life when I am in touch with that.

A particular experience that changed the way I deal with money was taking a class with Katherine Revoir

called Money, Metaphysics, and the Meaning of Life. That changed the way I look at anything that shows up in my life. She taught me to see money as me and related to all of the energy here on this planet.

Another experience that shifted how I look at money was when I realized that I was making a good interest rate on an online savings account (approximately 3%), but I didn’t know where that money was being invested. I realized that it is very important for me to know what my energy (money) is being used to create. I moved my money out of that account and into one that actively creates the world I want to live in, investing in renewable energy. I felt so much better knowing my money was going towards that even though the interest rate was significantly lower.”

Taryn Goodman, Staff

“I seek complete transparency in all of my investments – it enables relationships and allows me to be more comfortable with the investment because I can fully understand the risks involved.”

Coleman Lyles
Executive Director, Camphill Communities of California, Borrower

“I have been in association with RSF for over 30 years in a kind of organizational alliance, one anthroposophical organization to another. What I have experienced about money is that through anthroposophical insights and principles, money becomes incidental to what is accomplished outwardly and more connected to what is happening spiritually.

A metaphor for this can be taken from art and the way one could relate to a production of Rudolf Steiner’s Mystery Drama. An audience appreciates what is happening on the stage not necessarily because it is a polished performance, but rather because it senses that the spiritual world is interested in what is happening on the stage. This is a new way of relating to drama and art as such. What matters as much as the finished product is the spiritual striving and the intention behind it.

Like deep appreciation in art, money begins to flow towards that which the spiritual world is taking an interest in. Often it is something that is quiet, unassuming and of a seed nature, rather than a fully formed, hot house fruit that is the next big thing to hit the market.”

Birju Pandya, Investor & Partner

“I am transforming the way I work with money by walking towards fear in small ways, practicing two phrases: ‘resist nothing’ and ‘appreciate the chain’.  The first phrase applies to instances when I am being paid for work. I try not to come from a transaction space but from a space of offering and gift for my efforts.  The second phrase applies to purchase transactions. Whenever I engage with money to receive something, I try to recognize and appreciate the entire value chain involved in it.”

Kelley Buhles, Staff

“Because of working at RSF, I better understand what my money makes possible in the world. Since I began working here I have moved 60% of my personal money into socially responsible investments. I pay more attention to what impact different types of money have on me, for example, loan vs. gift or socially responsible investments vs. not-socially responsible investments. Also, I recently challenged myself to start giving more. I selected two organizations to make monthly donations to. Despite tight budgets, I end up prioritizing these two donations over almost everything else!”

Nicole Dawes
CEO, Late July Snacks, Borrower

“Watching and participating in the way RSF works, particularly in the pricing meetings, has opened my eyes to the importance and impact of transparency in all financial transactions. Understanding how others are impacted by your decisions helps ground your actions. I realize that all negotiations can’t take place in the confines of the RSF pricing meeting format, but in almost all cases you can at least bring some of the elements of open discussion around goals and impact. I have made a conscience effort to bring this open dialogue to my discussions with retailers and vendors and found we both end up happier with the result.”

RSF Makes a Loan to 18 Rabbits

June 10, 2014

RSF is pleased to announce a new loan to 18 Rabbits, a social enterprise that produces organic granola products. RSF provided a line of credit that will help the company bridge funding gaps between production needs and sales.

The story of 18 Rabbits begins in Farmers Branch, Texas in the childhood home of founder, Alison Bailey Vercruysse. Allison used to play in her backyard with her siblings and her rabbit, Blackjack, while her mother made her special granola. One day, Blackjack ran off and returned with a family of 18 rabbits. Alison’s backyard was hopping with an abundance of rabbits, kids, and the delicious smell of her mother’s home made granola. It was that magical, childhood moment and a belief that everyone deserves to enjoy pure, nutritious food made from real ingredients, that inspired Alison to create 18 Rabbits Granola. Using homemade recipes and sourcing from farmers they know by name, 18 Rabbits is committed to using all natural ingredients including only whole grains, coconut, seeds, nuts and fruit, and leaving out fillers, additives, refined sugars, or wheat ingredients. Their products are certified organic and Non-GMO Project Verified.

18 Rabbits sources its ingredients from a pool of high quality organic suppliers. Almonds, dried apricots, butter, cherries, strawberries, walnuts, dates, and figs are sourced from California farmers; cranberries, flax seed, maple syrup, and pecans are sourced elsewhere in the US; and chocolate used is from TCHO made in Italy and Ecuador.

“We are honored to be part of the RSF community, a vast network of people dedicated to making the world a brighter place,” says Vercruysse. “Everything we do at 18 Rabbits is for the love of food. As part of the RSF family, we now can make a broader impact faster.”

In the San Francisco Bay Area, where the company is based, one in four individuals experiences hunger. 18 Rabbits donates 1% of their bars to help fight hunger in their community by working with non-profit partners to get healthy snacks into the hands of kids in need. To date, they have partnered with Second Harvest’s summer kids’ camps, Morning Snack Program through the SF Food Bank, Hanna Center for Boys, and Headstand Yoga for kids.

“In a product category (granola bars) that gives the consumer the perception of being a healthy snack, when in actuality they are packed with refined sugars and other unhealthy ingredients, 18 Rabbits goes to great lengths to be transparent and honest about their products,” says Kate Danaher, RSF Senior Lending Associate. “With 18 Rabbits, what you see is literally what you get. It is a pleasure to work with Alison and other food entrepreneurs that are so dedicated to the integrity and efficacy of their brand.”

photo

About 18 Rabbits

18 Rabbits is a social enterprise that makes organic granola from scratch, using homemade recipes and wholesome real ingredients from farmers they know by name. With a mission of making it possible for everyone to enjoy pure, simple, real food that’s good for you and tastes good, 18 Rabbits is committed to using highest quality ingredients in bringing natural and healthy granola products to the market. http://www.18rabbits.com/

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