Blog

RSF in the Wall Street Journal

August 20, 2014

|||

Dear Friends,

The RSF Social Investment Fund was recommended in the Wall Street Journal for the first time last Saturday, August 16, in an article titled “The Payoffs of Investing Locally.”

We’re thrilled to get such prominent coverage, and I have one brief clarification:

In the article, the journalist wrote, “returns are often lower than other fixed-income investments.” I want to address this statement.

Working directly with our investors over the past seven years, I have observed two primary reasons why they choose the RSF Social Investment Fund:

  1. They want to support inspiring social entrepreneurs.
  2. They want a low-volatility, liquid investment that has minimal downside risk.

Regarding #1, we have a track record of finding great social enterprises to support, often before a commercial bank will step in.

Regarding #2, we have a 100% repayment rate (principal + interest) to our investors since RSF was founded in 1984.

The investment is structured as a 90-day note, similar to a bank certificate-of-deposit (CD). Because of the liquidity and the low-risk profile, investors should consider the RSF Social Investment Fund as a part of their cash/savings asset allocation, not their fixed-income allocation. This is the critical point.

The Wall Street Journal writer correctly observes that the average return on our 90-day note over the past year has been 0.53%. This is two times the average financial return of bank CD’s with similar duration, according to Bankrate.com.

And with a big-bank CD, you have no idea where your money is being invested. It may be going to support small-business loans in your community, or it may be going to support clear-cutting of rainforests in Malaysia through the bank’s proprietary trading operations.

Nowhere else but with RSF can you find a bank CD-like investment (in terms of high-liquidity and low-risk) in a diversified direct-loan portfolio of over 90 phenomenal social enterprises, with an institution that has been a pioneer and a leader in social finance for over 30 years, with a minimum investment of $1,000. You know exactly which social enterprises receive loans from us (see a list of all our borrowers here). And the financial returns are actually superior to any comparable-term savings account or CD at a bank!

Thank you for your attention and interest. Again, we certainly appreciate the great story in the Wall Street Journal.

All the best,

Don Shaffer

President & CEO

RSF Seeks Social Impact Fellows

August 13, 2014

In the spirit of building the field of social finance we are excited to announce a new fellowship opportunity for talented graduate students and professionals. We are eager to support the development of the next generation of inspiring leaders and to bring a fresh perspective to our business development activities.

RSF seeks exceptional, analytical, and entrepreneurial Social Impact Fellows to serve in an eight month Fellowship role. Open to graduate students and professionals within the US and Canada who are seeking a career in social finance, Social Impact Fellows identify, vet, and pitch promising social impact businesses and organizations to RSF for financing (senior-secured debt.) The Fellow is responsible for scanning and understanding the local, regional, and national landscape for high potential innovations, trends, and movements within RSF’s focus areas that emphasize the creation of social value and impact; sourcing for-profit and non-profit social enterprises that exhibit both financial sustainability and significant social impact; conducting preliminary due diligence including financial analysis and underwriting on live deals within RSF’s pipeline; and presenting the business case for investment to senior staff at RSF. Successful Fellows will gain a reputation for his/her strategic ability to spot and qualify ground-breaking and pioneering approaches to solving pressing social problems through business. The application deadline is September 18th.

This fellowship requires a 5 hours per week commitment through June 1, 2015.

Please visit our Jobs page to learn more or apply for this opportunity!

How Can We Fix Our Broken Food System? Start With the Base of the Supply Chain

August 7, 2014

Originally published on TriplePundit

Triple pundit food systemsby Don Shaffer

Social equity in the food supply chain was a strong thread running through the annual Sustainable Agriculture & Food Systems Funders forum this June in Denver. If we’re going to fix our broken food system so that it delivers healthy food to the whole population while enabling farmers to make a decent living, we’ll need new models and alternatives across the entire supply chain.

The most potentially transformative enterprises, however, often face the greatest funding hurdles. The forum’s theme, “Stronger Together,” reflects a growing recognition that collaborative funding strategies involving investors, foundations and communities are essential to getting these types of enterprises off the ground.

We know this approach can work. A growing number of social enterprises supported by what we call ‘integrated capital’ are successfully addressing problems related to food production, processing, aggregation and distribution in ways that contribute to social equity and agricultural sustainability. They’re flying under the media radar, but they’re worth examining as models for the field.

Real progress on tough challenges

Problems at the beginning of the supply chain — dwindling agricultural land, fewer farmers, lack of access to production facilities, and missing distribution links between metropolitan areas and their surrounding farms — are among the most difficult to solve. But several enterprises we’ve worked with in these areas have made real progress.

Viva Farms: Cultivating new farmers

In terms of food production, the biggest hurdles are affordable access to land near consumers and the need to encourage and train more people as farmers (the average age of farmers in the U.S. is 57). Viva Farms, an incubator program operating on 33 acres in Washington state’s Skagit Valley, addresses both issues, working with a mix of highly skilled migrant farm workers who have no access to land or capital and young, educated urbanites who have little agricultural experience. Viva Farms gives these new farmers training in sustainable farming practices, small land parcels with shared infrastructure and marketing support.

The goal is to transition the farmers from incubator to farm ownership with secure long-term prospects. Once farmers establish stable agricultural enterprises at the incubator, Viva Farms helps them relocate to new land and expand operations via a loan fund that provides affordable start-up and growth capital. Start-up costs for beginning farmers in the Valley can range from $30,000 to $500,000; with Viva Farms’ support, farmers’ costs drop to less than $5,000.

The program, launched in 2009, has provided training to about 250 people and launched 15 farm businesses that produce on more than 70 acres.

The primary challenges for the Viva Farms model are maintaining and expanding capital for land purchases and national immigration policy. Migrant farm workers who have the skills and desire to be the next generation of farmers often are hindered by their immigration status. Even if they personally have legal status, an immediate family member may not, and the ever-present possibility of deportation makes it difficult to invest for the long term.

Read the full article here

Don Shaffer is President & CEO at RSF Social Finance

Uncle Matt’s Organic Revolutionizes Florida’s Citrus Groves

July 31, 2014

With its subtropical climate and rich pest population, Florida has been slow to embrace the organic movement: fewer than 8,000 of its 541,328 acres of citrus groves are organic. Matt McLean has made it his mission to change that. As the founder and CEO of Uncle Matt’s Organic—the largest and oldest organic orange juice company in the U.S.—McLean not only sells delicious juices, he’s making it easy for other small Florida citrus growers to transition to organic.

noelle mcleanUncle Matt’s sells a huge quantity of organic orange and apple juices, lemonade and whole fruits to retailers such as Whole Foods and Publix each year. But its most innovative initiative is its agricultural management company. Uncle Matt’s Ag provides “one-stop shopping” for grove owners who want to go organic. The company actively recruits conventional farmers, handles all the paperwork for them throughout the transition and certification process, creates a full farm plan and oversees every aspect of caretaking, from riding the tractor to tamping down the weeds. Uncle Matt’s then markets all the grower’s fruit at top dollar, ensuring that organic farming is economically viable.

It’s a model that—with the help of a credit line from RSF—has fueled both consistent sales growth and positive changes in Florida agriculture.

Inspiration

McLean didn’t set out to be an organic grower. A fourth-generation Florida citrus grower, he grew up working in the groves, and escaped to college as soon as he could to get away from “manual labor in Florida’s summer heat.” After earning a business degree from the University of Florida, he started an import-export company, selling juice to companies in Europe. When one of his clients asked for biologic white grapefruit juice, he consulted his father and grandfather.

His grandfather, who had used organic methods in the past, insisted that “not only could we grow that way, we should be growing that way,” McLean says. “We are too focused on single-factor analysis—if you have a pest, then you’re told to find a pesticide. Instead, we should think holistically: why is that pest attracted and how can we help the trees’ immune systems defend against it through better soil and plant health? This is an organic farmer’s way of thinking.”

UMO

Innovation

McLean started Uncle Matt’s Organic in 1999 with just five acres. As the company grew, it needed more fruit, which meant it also needed more organic farms. But farmers were hesitant, even afraid, to go organic—despite the fact that prices for organic fruit are consistently higher—and McLean knew he had to make the process as easy as possible. Thus Uncle Matt’s Ag was born in 2002.

One of the biggest challenges in persuading grove owners to grow organically was—and is—the threat of citrus greening disease, or Huanglongbing (HLB), a bacterial infection spread by gnat-size psyllids that can wipe out groves. It hit Florida in 2005 and has killed millions of citrus plants in the southeastern U.S. While Uncle Matt’s groves have not fully escaped the disease, several groves have proved 100 percent resistant—an anomaly the University of Florida is studying. Uncle Matt’s Ag is experimenting with nourishing root and soil health to keep disease at bay, and unleashing parasitic wasps into groves to keep the psyllids’ population under control.

With its innovative approaches to grove management and increasing consumer demand for organics, Uncle Matt’s has grown continually. But like many food and beverage companies, Uncle Matt’s faces a cash flow gap between the time when it pays farmers for the harvest and when the juice hits grocery stores and starts generating a profit. By 2011, McLean needed more financing.

The company had a line of credit with a local community bank, “but it was post real-estate bubble in Florida, and the banks were very risk-averse,” he says. So Uncle Matt’s hired McLean’s friend Aubrey Hornsby, a manager of the Conscious Capital Fund, to help it find additional funding. “Aubrey introduced us to RSF in September 2011,” says McLean, “and at that point a lot of things came together.”

Several members of the RSF lending team visited Florida, where they toured the groves, packinghouse and storage facility and closely examined Uncle Matt’s business model. “They understood our business right away,” says McLean, “and they really had a passion for our space and our mission.”

Based on this, RSF provided a $1.2 million line of credit that Uncle Matt’s uses to finance the juice inventory from season to season—and keep growing.

Impact

For the past three years, Uncle Matt’s sales have grown 20 to 30 percent annually. The company has also introduced two new juice blends, orange-mango and orange-tangerine, and has expanded to new retailers including Safeway, Kroger, Fred Meyer and Walmart Neighborhood Markets.

But the greatest proof of success is in the groves: In the last 12 years, Uncle Matt’s has converted more than 1,500 acres in Florida’s Lake, Highlands and Polk counties to organic cultivation.

“I started Uncle Matt’s as a business challenge,” says McLean. “But my grandfather’s passion just kept me thinking, ‘Hey, this is a better way to farm and we need to be a leader.’”

6D9B2631

Interdependence in Ecological and Economic Systems

July 30, 2014

This CEO letter was originally published in the Summer 2014 RSF Quarterly.

Dear Friends,

The word economy comes from the Greek oikonomia, meaning household management. When thinking of our economy, now on a global scale, how should we define that household? Our current financial system (a subset of economic life) favors a narrow view focusing on the individual and more specifically, the individual with resources. But if we open our perspective, we can see that view expand—the household is our homes, our communities, and the planet that houses us all.

Indigenous wisdom has always been ahead of the dominant paradigm in this regard. Indigenous knowledge evolved from observation of and participation with the natural world. This wisdom holds that humankind meets needs by working with nature and honoring the earth and its systems. This approach recognizes something that has been lost in our economic life—the idea that all is interrelated. People and planet. Earth and economy. In the grand scheme of things, it doesn’t make sense to have a zero sum game in which some win (at the expense of others) and the rest lose.

Here is an example of the opposite: We recently made a grant to The Pollination Project, which makes $1,000 seed grants to individual change-makers. Grants to for-profit ventures are made as zero-interest pay-it-forward loans. Recipients are expected to pay loans back in 24 months, and payment is received in the form of a new loan to another qualified Pollination Project applicant, chosen by the original borrower. This pay-it-forward model is a practical example of working with money in a way that honors interdependence, community, and trust and that values mutual benefit—when one wins, so can all.

Interdependence and community are inherent to how we approach finance at RSF. We have a vested stake in the success of all our stakeholders and we recognize that success for all of us is contingent upon regenerating and preserving the earth’s ecosystems. Financing organizations that are a part of the regenerative cycle is also a part of regenerating the economy that holds the human being as the center. This is one more reflection of what it means to transform the way the world works with money.

All my best,

Don Shaffer

President & CEO

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

Blog

Page 1 of 3412345...102030...Last »

Categories

Latest posts

Archives

Blog Roll