At this time last year, RSF investor Rosemary Feerick, brought her two sons to our office to open their very own Social Investment Fund accounts. Later, she decided to share the story of her experience that day.
This essay was originally published in the Harvest Time newsletter.
by Rosemary Feerick
When we arrived at RSF Social Finance, Ellie, the receptionist, asked if we wanted a cup of tea. It was the day after Easter, a day off from school for my sons. I told the boys that we were going to San Francisco to invest some of their college savings.
On the way to the city, we stopped at our credit union and withdrew money from a savings account I had set up for my eight year old son Ian. I gave Ian the check to hold in the car. He studied the piece of paper carefully. When we got to RSF Social Finance, he was still holding the check with care.
“I would like a cup of darjeeling, please,” Ian responded to the receptionist’s question.
“Darjeeling. Hmm. Let’s go see if we have some,” she offered, leading us into the kitchen.
Mark Herrera, RSF’s Client Development manager met us there. As Ian and Ellie focused on tea, Mark showed the composter to my 11 year old Roddy and explained what biodynamic sugar is. “These are some of the products made by the companies supported by the fund in which you’ll be investing,” Mark explained.
Next, he led us upstairs to the conference room overlooking the Golden Gate Bridge. We felt very important.
In the conference room, Mark gave the boys samples of organic cookies. Together they read the ingredients, all of which actually sounded like food. Then, Mark told the boys about a company that employs people who are newly released from prison. Next, he described with excitement a sustainable fishery in Alaska that is allowing the Eskimo people to keep their way of life. “These are more of the companies the fund you are investing in supports.” The boys nodded.
Mark then sat down with Roddy and Ian and explained the mechanics of the investment, making sure they understood how it worked and what the rate of financial return would be. Together they did the math to figure out what that translated to in terms of the boys’ investments.
Rose with her sons Ian and Roddy.
When Mark was satisfied that Roddy and Ian understood what they were getting into, he had them each fill out an application and sign it. Their accounts were officially open.
On one level, this exchange felt like no big deal; it seemed like how making an investment should work. But as I watched, another part of me wanted to celebrate. I was aware that what I was witnessing was the result of years of my searching for a different way with money.
Twenty years ago, I received a gift of love that came in the form of a financial portfolio. At the time, I understood little of how investments worked. But as I learned about the mutual funds in my portfolio, I realized that I was invested in companies whose products and ways of doing business offended my conscience. I searched for other models of investing and discovered socially responsible mutual funds.
Initially, I felt good about moving my money into those funds. But as I read through the prospectuses and annual reports, I soon realized that in spite of a variety of social screens I was still invested in companies whose products I would not buy. The socially responsible mutual funds I had in my portfolio felt to me like the lesser of two evils.
A few years later, I was attending a conference on Sabbath Economics when Rob Baird of Progressive Investments (now Portfolio 21) got up to speak about investing. He did not have any fancy visuals, but as he spoke, I felt as if fireworks were going off. Listening to Rob, I saw for the first time a way that investments could do something good in the world.
Up until then, I felt I had to hold on to some of my investments in order to care for my family. But I felt horribly conflicted about doing so because it felt that my money was sitting inside of a global economic system that is causing harm. As Rob spoke about different models of investing, a door to a whole new world opened for me. I started to search for investments that could do good.
I learned about investing in microcredit; in affordable housing mutual funds; in community development banks; fair trade companies; and social investment funds. I worked with Andy Loving, an advisor who shares my faith and began to move some of my money into those kinds of investments. When the financial statements came each month, I noticed how differently I felt opening the ones that came from investments I had chosen. Instead of feeling guilty, I felt excited. It felt like a privilege to participate in the work of fair trade companies and local organic farms.
Shifting to alternative economic models required that I let go of the possibility of a high financial return. Having been raised to believe that receiving a high financial return was “good stewardship,” that was hard at first. Didn’t I have a responsibility to seek high returns for myself and for my children?
But as I learned about the impact many corporations are having on the ecosystem and the human family, I came to believe that that definition of good stewardship was inadequate. Good stewardship, for me, needed to take into account the world that I am passing on to my children as well as the money that will eventually change hands. I wanted any investments that I participated in to be part of creating a world full of life.
On one level, my visit to RSF Social Finance to invest a portion of my children’s college savings on Easter Monday was simply the next step in my process of shifting the investments I manage into such vehicles. But that day in the conference room I felt as if something else was happening too. There was something there that felt holy.
As a mother, I feel a responsibility to form my children in Easter hope. I try to do that by modeling and letting my children know about ways of living that respond to the crises of this historical moment with alternatives that bring life. My children will inherit this world. For me, it is not enough to bring them to church. I feel I also need to show them how to discern where God is moving in the world and teach them how to participate in that.
That is what it felt like was happening that day at RSF. In the conference room, I sensed that my boys and I were participating in a way of investing money that brings life to everyone it touches. In addition, Mark’s taking the time to teach the boys about how their investment would affect others was powerful. It was as if he understood that giving children life-giving possibilities when it comes to money is a radical investment in the future.
As I witnessed the exchange, I felt a sense of awe and gratitude. I felt a Holy Presence with us as we sipped tea, ate cookies, and filled out investment account forms on Easter Monday.
It’s heartening to see RSF borrowers supporting one another. The San Francisco Chronicle recently published this article about Oakland School for the Arts and Revolution Foods working together to offer healthier school lunches. In addition, Revolution Foods has nabbed a major contract with the San Francisco Unified School District. Congrats to Rev Foods and bon appétit to students!
By Jill Tucker
Ajna Singh, 12, nibbled on the cheese enchilada with a side of rice served in the Oakland School for the Arts cafeteria, using fingers instead of a fork.
In between bites and balancing the meal’s recyclable tray in one hand, she said she liked the school food, which included rice, packaged grapes, milk, dinner rolls and a self-serve tray of broccoli.
“It’s especially better than my mom’s cooking,” Ajna said. “I’m appreciative.”
photo courtesy Revolution Foods
Not all of the sixth-grader’s classmates at the Oakland charter school were as enamored with the offerings, provided by Oakland’s Revolution Foods, with one seventh-grader describing the meals as “like, nasty.”
The indiscriminate tastes of preteens notwithstanding, the Oakland students are getting what many parents and school officials across the country consider the top-shelf version of school lunches.
Revolution Foods never serves reheated tater tots, greasy pizza or mystery meat. The meals are prepared by chefs using local ingredients, no high-fructose corn syrup, and nothing is ever fried or frozen. They are in the hands of students 24 hours after coming out of the oven.
Starting Monday, those fresh meals will be in San Francisco schools.
While Revolution Foods has been around since 2006, few large school districts have signed up, despite parental pleas for higher quality cafeteria food, because of the higher cost.
But over the last few years, Revolution has been among the fastest-growing urban companies, with production centers in California, Colorado, Texas and the East Coast, serving more than 200,000 meals every day to children in private, public and nonprofit school programs.
Cost savings came with the growth, allowing Revolution Foods to compete for bigger contracts, going up against national school lunch providers offering frozen meals shipped to school sites all over the country.
The company, created by two moms as part of a business school project, nabbed its biggest client yet in December, when it beat out bigger companies to get a $9 million contract with San Francisco Unified.
“We’re really excited,” said co-founder Kristin Groos Richmond. “I feel like it’s such an honor for us.”
Adding workers
In less than a month, Revolution has had to prepare for serving 33,000 meals to 114 schools in San Francisco and has added 40 workers to the Oakland site, bringing the company’s total to 965 employees nationwide.
In addition, the company often uses local suppliers, including meat from Diestel Turkey Ranch in Sonora and rice from family-owned Massa Organics in the Chico area.
To meet the increasing demand, Revolution Foods has shifts going 24 hours a day, prepping, cooking, refrigerating and packaging the meals.
“There are so many school organizations out there who want good food for kids,” Richmond said.
Richmond started the company with UC Berkeley classmate Kirsten Tobey, creating the equivalent of a high-tech Silicon Valley startup in the food industry.
At the time, small, parent-driven movements were kicking soda and junk food out of schools, and Berkeley chef Alice Waters was making sure that children knew what kale looked like through school garden programs.
Richmond was pregnant at the time, and she was advised to wait to kick off such an ambitious endeavor.
She refused to listen.
“I remember thinking at the time, no way,” she said. “This is the right time for this movement in the country.”
The company has had some growing pains in recent years, including tangles with labor unions in New Orleans.
The new contract in San Francisco will require working closely with union cafeteria workers who will reheat and serve the food. School board members reiterated their support for the union workers before unanimously approving the Revolution Foods contract.
Cost increase
Despite the concerns raised by labor organizations, district officials and parents celebrated the new contract, which will cost $1.95 per lunch, up from $1.79 charged by the previous provider, Preferred Meal Systems. The 18-month contract caps the costs at $9 million annually.
Students not eligible for free or reduced-price meals will be charged $3 for lunch and $1.50 for breakfast.
District officials hope that more students will buy the meals, helping to offset the higher costs.
At Oakland School for the Arts, which serves about 50 Revolution Foods lunches each day, several students are willing to pay the $4.50 the school charges.
Sure, some of the veggies – squash, beans and carrots – are sometimes a hard sell, said Kai Johnson, who monitors the cafeteria during lunch.
“It’s just like at home, when you’re sitting at the table saying ‘eat your vegetables,’ ” she said. But with Revolution Foods, “it’s not an option. They’re going to eat healthy no matter what.”
This article was originally published by Jill Tucker at sfgate.com and is republished with permission of the author.
Earlier this year, Mark Finser, RSF Board Chair, had a lively conversation with Chris Mann, Guayaki CEO, and Matt Reynolds, Indigenous Designs President. Matt and Chris were energized about the RSF pricing meeting in which they had just participated and were enthused by the community spirit. They started asking several questions including: How can RSF borrowers better acknowledge their relationship with RSF? In what ways can the borrowers cross-promote their brands and support one another? How can the borrowers leverage their communities to raise more awareness about RSF and the Social Investment Fund, which allows individuals to make a return on their investment while providing loan funds to phenomenal social enterprises?
Chris and Matt’s spirited energy is something we always see following the RSF quarterly pricing meetings and community receptions.
There’s no question that RSF’s pricing meetings are unique. The three stakeholder groups in the RSF Social Investment Fund—investors, borrowers and RSF staff—come together to discuss the interest rate for the upcoming calendar quarter. As far as we know, this process is unprecedented in the world of financial services. What bank is out there asking investors what rate they should receive or inquiring of borrowers what a fair loan rate would be? But, it’s not just the discussion of price that makes the pricing meetings so revolutionary. It’s what happens during the meetings while the participants are sharing their needs and motivations. It’s the stories they tell about what led them to become an RSF investor or, as a borrower, what the RSF loan has allowed their social enterprise to accomplish. It’s community building around financial transactions. Through our expanding and engaged community, amplified by the impact of our borrowers, we’re building the next economy—one that considers everyone’s needs and restores trust in financial relationships.
After several discussions and brainstorms following up on Mark, Chris, and Matt’s enthusiastic conversation, we launched a Facebook campaign: Impact Investing for All. Along with Guayaki and Indigenous Designs, we’ve been joined by additional RSF borrowers: gDiapers, Happy Family, Late July, Mary’s Gone Crackers, and Nutiva.
Impact Investing for All highlights the RSF Social Investment Fund (SIF), in which anyone can become an impact investor with a minimum of $1000. All of the money in SIF is loaned to path-breaking social enterprises. If you open an account, you know where your money is working while you receive a financial return! (And, you’ll be invited to participate in the quarterly pricing meetings.) For the duration of the campaign, the borrowers will be promoting each other and highlighting this incredible community of social enterprises.
These participating social enterprises are passionate, inspiring, dedicated, and making a world of difference. We are honored to have them as part of our borrower community and we are all lucky to have such committed, mission-driven businesses in the marketplace.
Wondering if you should participate in the Impact Investing for All campaign by opening an SIF account?
Are you a mom or dad in love with the Happy Family lines which offer delicious and nutritious food for your kids? Or, are you a gMum or gDad, committed to your baby’s comfort and a healthier environment by going with disposable gDiapers?
Perhaps you’re gluten free and can’t get enough of Mary’s Gone Crackers? Or are superfoods your thing and Nutiva products a dietary staple? Do you appreciate delicious organic snacks and reach for Late July when you need a treat?
Maybe you’re a Guayaki yerba mate aficionado (we have a few on staff!)?
Is fair trade fashion a passion and Indigenous Designs a trusted purveyor?
If you’re interested in participating in building the next economy and know that direct, transparent and personal transactions are necessary for a resilient financial system, become an investor at RSF. All of the participating borrowers have offered generous discounts, so we have gift packages for those who open a Social Investment Fund account before Dec 31, 2012. The gift includes a $50 Indigenous Designs gift card, a $25 Happy Family basket, and much more! The gifts are limited – get yours today!
To learn more about the participating borrowers, check out the campaign page: here
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:
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
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)
“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.comImpact 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
RSF has elected to lower the interest rate by 25 basis points (0.25%) for the third quarter of 2012. RSF Prime will now be 4.75% and investors will earn an interest rate of 0.75%.
RSF’s most recent pricing meeting was held in Sebastopol, CA earlier this month. This was the twelfth such meeting we’ve had since RSF made the decision to change how our quarterly interest rate is determined. Prior to October 2009, we used the London Interbank Offered Rate (LIBOR) as a benchmark to determine our rate of return. Since then we’ve been using this customized rate established by our Social Investment Fund (SIF) stakeholders — RSF staff, SIF investors, and borrowers in our Social Enterprise Lending program. The SIF investor rate is then added to a 4% spread (for RSF’s operations) and the resulting rate, named RSF Prime, is the base rate for borrowers.
This pricing mechanism is more deeply aligned with our values to make financial transactions as direct, transparent, and personal as possible. Further, we’ve been able to offer a significantly higher interest rate to investors than if we had continued using LIBOR. Important to note: with this change in pricing, investors will continue to earn a rate several times that of a conventional bank CD.
Following the meeting we reflected on an important conversation that took place: would lowering RSF Prime make us more competitive in attracting high impact social enterprises in need of financing? Ultimately the answer was yes.
With that said, we are aware that the average RSF investor, for this next period, will experience a lower return (a decrease of $125 annually for the average $50,000 SIF Investment Note). For borrowers the impact is greater, as their average loan size is over $900,000, and their annual costs will be lowered by $2,000 to $2,500 annually.
We believe that lowering RSF Prime to 4.75% will help us retain and attract worthy projects to support through our Social Enterprise Lending program. To learn more about the projects we fund, visit the RSF Impact Map.
Thank you for your attention to this matter. In a spirit of transparency, we are happy to talk with you about our decision directly.
Current investors can contact Mark Herrera, Senior Manager, Client Development at mark.herrera@rsfsocialfinance.org or 415.561.6160.
In my work here at RSF, I consciously try to embody our values. One that stands out among these is Trust—ensuring that our work is direct, transparent, and personal, based on long-term relationships. This week I was struck by the outstanding display of this value by RSF community member, Indigenous Designs.
Indigenous Designs is a pioneer in ecologically and socially conscious apparel. Since 1994, Indigenous has provided high quality fair trade organic cotton clothing produced by a network of over 1500 highly skilled artisans and knitting cooperatives in the developing world. The company is committed to supporting fair trade wages and artisan cooperatives, utilizing organic and environmentally friendly materials, and increasing consumer awareness of eco-fashion. In 2010, RSF provided Indigenous with a PRI loan to create the very first standards and procedures for US apparel and home goods Fair Trade Certification.
Over the last 2 years, Indigenous has accomplished this and much more. The company piloted the first Fair Trade Certification program 2010, and received their Certification from FairTrade USA in 2012.
And last week Indigenous, embodied the direct, transparent, and personal nature of their work with the release of the Fair Trace Tool™, a mobile enabled web-technology using QR codes. In sharp contrast to the hidden doors and dark realities found in much of the fashion world supply chain, Indigenous invites consumers to experience the origins and stories of any garment they purchase and the artisans behind the work with the simple click of a button.
“The Fair Trace Tool™ is one more way that Indigenous is raising consumer awareness of the vital importance of fair trade fashion to artisans in the developing world, and to the environment. It is part of our commitment to create fashion that honors the people who wear it, and the people who produce it,” says Scott Leonard, Indigenous Designs Co-founder and CEO.
As consumers, it is our common responsibility to know and value the sources of our goods. Thank you to Indigenous Designs for opening the door to such a connection and for setting such a strong example of transparency in the apparel industry.
Check out this video to learn more about how the Fair Trace Tool™ works.
http://youtu.be/aKFs28bZUgQ
Jillian McCoy is Senior Associate, Communications at RSF Social Finance.
In July, over twenty RSF borrowers convened at the San Francisco Waldorf School for our third annual RSF Borrower Gathering. One would be inclined to describe the energy of the group as “engaged and enthused.” The feeling is mutual amongst the many people with whom there exists a direct relationship based on reciprocity and common values – RSF staff & board, investors, donors, partners, and friends. We fondly refer to this group as the RSF Community. This community is united by the impact we collectively bring forth into the world, the transformation we seek. The impact is evidenced in a number of ways: supporting Fair Trade practices, organic alternatives to store bought foods, Waldorf Education, environmental stewardship, food security, social finance, and much more. Among all this activity, progress is made with the creation of innovative and transformative ideas, through co-creative conversations. The RSF Borrower Gathering is an excellent representation of one of these conversations.
Over the course of one and a half days, the RSF Borrower Gathering brought together a variety of RSF borrowers, all with extensive hands-on experience in building successful non-profit and for-profit social enterprises. Borrowers shared insight into their respective industries from many different geographic areas and across all three of RSF’s Focus Areas (Food and Agriculture, Education and the Arts, and Ecological Stewardship). During a session titled “Engaging Your Local Economic Community,” moderated by Raphael Bemporad of BBMG, a panel of RSF borrowers discussed the many innovative ways they engage with their communities. Jessica Rolph of HappyBaby, Jason Graham-Nye of gDiapers, and Denise Hamler of Green America shared the thought processes and methods that have contributed to the stellar communities grown around their organizations. Denise said that to advance your mission, “know what you do well, and find out who is good at what you need.” Jason spoke about how gDiapers corporate culture extends beyond the walls of their offices and also about their use of social media to communicate with customers. Jessica discussed the importance of utilizing community engagement in their decision-making process and how the business truly took off when they “really began to listen” to the HappyBaby community.
Other highlights to the gathering included:
A presentation on Co-Creation from Raphael Bemporad of BBMG, a “brand innovation studio” focusing on “sustainability, technology, and social purpose.” Click here to read more.
“Managing an Intelligent Organization” with Dale Rodrigues from Mary’s Gone Crackers.
Break-out sessions with RSF’s senior management team and industry sector experts.
Updates about RSF, including the Social Impact Assessment Project, new initiatives, and the future of the organization.
The gathering was held at the San Francisco Waldorf High School. The school is registered with the U.S. Green Building Council as a LEED Project, and is currently working on its Gold Level Certification. RSF is deeply appreciative to the school and staff who allowed us to use their beautiful facilities.
Each member of the RSF community is a cornerstone in our organization. If there were no value-aligned investors how could social enterprises maintain their values when seeking financing? Without the high-impact borrowers, would capital be channeled to organizations our investors would not be proud to support? The Annual Borrower Gathering is an example of how RSF utilizes community, transparency, and direct personal relationships to achieve our mission of transforming the way the world works with money. This event continues to grow in both size and content each year, bringing new borrowers, investors, and staff together to generate valuable learning experiences and to build stronger relationships. Thank you to RSF Community for contributing to the success of the 2011 RSF Borrower Gathering.
Reed Mayfield is Lending Assistant at RSF Social Finance.
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.
