Lending

The Next 25 Social Enterprise Stars: Ecological Stewardship

May 18, 2015

RSF_SocentStarsLOGO-300dpi (2)As part of our campaign to add 25 social enterprise stars to our loan portfolio over the next year, we’re looking for new borrowers in all three of our focus areas: Food & Agriculture, Education & the Arts, and Ecological Stewardship. Because it’s not always obvious whether an enterprise is a fit for us, we’re delving into what we look for in each area. In past months we covered Food & Agriculture and Education & the Arts. Up this month: Ecological Stewardship.

In this category, we’re seeking social enterprises that practice integrated, systems-based, and culturally sensitive approaches to regenerating and preserving the earth’s ecosystems. In general, borrowers in this area help mitigate climate change, reverse the depletion of natural resources, and support biodiversity. We’re particularly interested in enterprises focused on ecosystem preservation; resource recovery, reuse and recycling; and water and energy efficiency in buildings. These examples from our current portfolio illustrate what we’re looking for:

  • facebookPACT Apparel makes its Fair Trade-certified line of super soft cotton underwear from 100 percent organic, non-GMO cotton and ensures its farms and factories treat workers ethically and pay living wages in addition to engaging in sustainable farming practices. RSF provided PACT with an asset-based line of credit for a bridge loan.
  • IceStone, which came to RSF for working capital, makes a gorgeous, durable, hard surfaces for countertops and the like using recycled glass, portland cement, and pigment. The material is Cradle to Cradle certified and free of plasticizers and resins that emit harmful fumes; it reduces dependence on imported mined natural stone and keeps millions of pounds of glass from the waste stream.
  • Recycleforce - john_hill_demanufactureRecycleForce deconstructs electronic waste and other recyclables, separates the reusable materials, and disposes of the waste safely and cleanly using a workforce of recently released ex-felons. Financing from RSF enabled RecycleForce to equip its facility to divert millions of pounds of electronic waste from landfills while training and supporting a marginalized workforce.

If you know of enterprises in any of our focus areas that could expand their impact with greater access to capital, send them to Wanted: Social Enterprise Stars.

And please pass our quest for borrowers on to your network! The more #SocentStars posts there are on Twitter, Facebook, and LinkedIn, the more social enterprises we can reach and assist. Many thanks to all those who’ve been tweeting and posting so far.

Here are a few post ideas:

  1. Are you an eco enterprise looking for #funding? @RSFSocFinance has loans for #socents: bit.ly/1tH0ytE #SocentStars
  2. Does your #socent need capital to grow? See if you qualify for an @RSFSocFinance loan: bit.ly/1tH0ytE #SocentStars
  3. Pass it on: @RSFSocFinance has loans up to $5M for the next 25 #SocentStars: bit.ly/1tH0ytE #socent

RSF Extends Additional Financing to GREEN CREATIVE

April 22, 2015

logo11RSF is pleased to announce a new loan to GREEN CREATIVE, a San Francisco Bay Area-based developer and manufacturer of commercial and specification grade LED lighting solutions. RSF financing, in participation with New Resource Bank, will be used to fund working capital needs and build inventory for this ever rapidly growing company.

According to the US Energy Information Administration, lighting accounts for 23% of the commercial sector’s total electricity consumption. As energy demands increase, the energy production required to power buildings will expand the US carbon footprint and weigh heavily on the planet.

Traditional lighting sources such as incandescent and halogen lights contribute to high energy usage and high monthly electric bills. GREEN CREATIVE provides state of the art lighting solutions that reduce carbon footprint and lower electricity, maintenance, and cooling bills. These products generally use 80% less energy than traditional lighting sources. In addition, GREEN CREATIVE lights do not contain Mercury or any other harmful substance.

“RSF is pleased to extend a loan to GREEN CREATIVE and work with a values aligned partner like New Resource Bank,” says Mike Gabriel, RSF Lending Manager. “Together we are helping businesses and building owners save money on electricity bills and accelerating a path to a low carbon future.”

“Securing additional financing allows GREEN CREATIVE to continue innovating and answering the fast growing demand for its products,” says GREEN CREATIVE Principal and Co-Founder, Cole Zucker. “Having financial partners whose long-term social and environmental goals are in line with GREEN CREATIVE’s core beliefs and values means a lot to us.”

LED technology is changing the lighting industry, and producing top products requires ongoing investment in technology development and innovation. GREEN CREATIVE has received significant industry recognition, including several product selections for the prestigious 2013 and 2014 Illuminating Engineering Society Progress Report and the company was a finalist in the 2015 LED’s Magazine Sapphire Award.

“New Resource Bank is thrilled to partner with RSF in supporting the growth of the energy efficiency sector,” affirms Gary Groff, Senior Vice President at New Resource Bank. “GREEN CREATIVE has grown at an unprecedented rate and together we are helping reduce the carbon footprint of households and businesses.”

About Green Creative

GREEN CREATIVE is a 5-year-old solid state lighting development and manufacturing company based in the San Francisco Bay Area, CA. The company specializes in providing cutting edge LED lighting solutions for the commercial and specification markets. GREEN CREATIVE is fully integrated with strong R&D capabilities to constantly offer the latest technology available. For more information on GREEN CREATIVE please visit www.greencreative.com

About New Resource Bank

New Resource Bank is the premier bank for people who are leading the way to a more sustainable world. We match an entrepreneurial spirit with a dedication to achieving environmental and social as well as financial returns. Our mission is to advance sustainability with everything we do—the loans we make, the way we operate and our commitment to putting deposits to work for good. To learn more visit www.newresourcebank.com

The Next 25 Social Enterprise Stars: Food & Agriculture

April 20, 2015

RSF_SocentStarsLOGO-300dpi (2)As part of our campaign to add 25 social enterprise stars to our loan portfolio over the next year, we’re looking for new borrowers in all three of our focus areas: Food & Agriculture, Education & the Arts, and Ecological Stewardship. These are broad categories, but because it’s not always obvious whether an enterprise is a fit for us, we’re delving into what we look for in each area. Last month we covered Education & the Arts. Up this month: Food & Agriculture.

In this category, we fund social enterprises working in these areas:

  • Infrastructure supporting resilient regional food systems, especially food hubs, which provide some combination of aggregation, storage, processing, distribution and marketing of regionally produced food. RSF is the country’s most active lender for food hubs, and borrowers such as Common Market provide working models for newcomers.
  • Increasing access to wholesome and healthy food for people who need it most through food banks and other programs. Ceres Community Project, for example, is an innovative program that delivers organic, whole-food meals, usually for free, to people battling serious illnesses (and teaches its teen volunteers to cook in the process).
  • training program 2Reducing food waste by redistributing food to food-insecure populations or using value-added processing to create new consumer products. A star in this area is DC Central Kitchen, which uses surplus food to provide healthy meals to low-income and at-risk DC residents, as well as job training for people who face employment barriers. The company was recently featured in the Huffington Post.

In the packaged goods sector, we seek out companies whose products are both environmentally and socially responsible. Our newest borrower, Harmless Harvest, is a great illustration of what we’re looking for: the San Francisco–based social enterprise sells the first coconut water in the United States to earn the Fair for Life fair trade certification.

Option_3

Photo courtesy of Harmless Harvest

To achieve the certification, Harmless Harvest had to demonstrate fair trade practices at each level of its supply chain; form long-term, ongoing partnerships with workers who manufacture its 100 percent raw and organic coconut water drinks; establish a safe environment with fair wages and benefits for all employees and partners; and institute a fair trade premium that goes towards social initiatives in local communities in Thailand. RSF financing, in partnership with New Resource Bank, will fund working capital needs and inventory build-up during the peak coconut season.

If you know of enterprises in any of our focus areas that could expand their impact with greater access to capital, send them to Wanted: Social Enterprise Stars.

And please pass it on to your network! The more #SocentStars posts there are on Twitter, Facebook, and LinkedIn, the more social enterprises we can reach and assist. Many thanks to all those who’ve been tweeting and posting so far.

Here are a few post ideas:

  1. Are you a food or ag enterprise looking for #funding? @RSFSocFinance has loans for #socents. bit.ly/1tH0ytE #SocentStars
  2. How could your #socent grow with the right #funding? Apply for an @RSFSocFinance loan: bit.ly/1tH0ytE #SocentStars
  3. Help find RSF’s next 25 #SocentStars. Send your faves to @RSFSocFinance loan info page: bit.ly/1tH0ytE #socent

RSF Makes a Loan to Harmless Harvest

April 14, 2015

Harmless_Harvest_logoWe are pleased to announce a new loan to Harmless Harvest, a San Francisco-based social enterprise that sells 100% Raw & Organic Coconut Water, which is sourced and bottled in Thailand from the harvest of a specific species of coconuts called Nam Hom. RSF financing, in participation with New Resource Bank, will be used to fund working capital needs and build inventory during the peak coconut season to sustain the growing demand of Harmless Harvest products in the United States.

Driven by a belief in positive consumerism and the need for more integrity in our brand-based culture, Justin Guilbert and Douglas Riboud founded Harmless Harvest in 2009. Their business is based on the belief that production and industries don’t have to be detrimental to the environment or the communities at the source, their intention being to promote constructive capitalism. This model values and rewards every stakeholder and contributor in the supply chain, from the farmers to the end consumers, and is committed to positive ecological impact.

Option_3

“The values of Harmless Harvest are directly aligned with RSF’s dedication to supporting new economic models that support sustainable food and agriculture,” says Ted Levinson, Senior Director of Lending at RSF. “They are making this happen at all levels of the company—production, distribution, and retail—while also raising public awareness of the value of organic farming.”

Option_4In September 2014, Harmless Harvest became the first Fair for Life fair trade certified coconut water in the United States. In order to achieve this certification, the company was required to demonstrate fair trade practices at each level of its supply chain; form long-term, ongoing partnerships with workers who manufacture their products; establish a safe environment with fair wages and benefits for all employees and partners; and utilize a fair trade premium that will go towards social initiatives in local communities in Thailand. The company plans to apply its fair trade premium towards creating funds for health and education related improvements in Thailand.

“With a mutual focus on social and environmental impact, the partnership between RSF, New Resource, and Harmless Harvest is a clear fit,” says Douglas. “With this loan, we are able to expand our business along with the fair trade and organic practices we require.”

Justin adds, “The loan from RSF and New Resource means more land and water is safeguarded from chemical pesticides and fertilizers, more individuals are employed with a decent wage, and more people are able to consume healthy products. We are proud to work with like-minded organizations and to use this loan to prove that better products can be made in better ways.”

Harmless Harvest has worked hard to form partnerships with Thai communities, offering stable options for employment and income with a focus on long-term growth and sustainability. By investing to build a modern production plant near the Thai farms, the company is now able to employ over 200 local workers, with a goal of doubling that number over the next two years. The co-founders are working with local co-ops to develop new capacity throughout the region, and they expect the number of coconuts available to increase by 200% by 2016. The company has also developed a teaching farm in Thailand promoting organic and sustainable farming practices to Thai farmers.

“It is very encouraging to see that the core values with which Harmless Harvest operates, values that benefit the environment and promote the well-being of local economies, can be a catalyst for success,” notes Bill Peterson, Chief Credit Officer for New Resource Bank. “At the same time, it is great to have a partner like RSF Social Finance that recognizes that financial institutions can act as agents of change by supporting companies that operate sustainably.”

Option_2

About Harmless Harvest

Founded in 2009 by Douglas Riboud and Justin Guilbert, Harmless Harvest is a progressive food & beverage initiative set on demonstrating that an ecosystem-based business model can and should be how food is made. By combining innovative scientific methods with local traditional knowledge, Harmless Harvest integrates the long-term welfare of all its stakeholders – from plant to customer – in the creation of better products for all. For more information, visit www.harmlessharvest.com

About New Resource Bank

New Resource Bank is the premier bank for people who are leading the way to a more sustainable world. We match an entrepreneurial spirit with a dedication to achieving environmental and social as well as financial returns. Our mission is to advance sustainability with everything we do—the loans we make, the way we operate and our commitment to putting deposits to work for good. To learn more, visit www.newresourcebank.com

 

Innovative Meal Delivery Program Heals More Than Just Bodies

April 10, 2015

Cathryn Couch traces the start of her non-profit, the Ceres Community Project, to one irritating phone call. She was living in Sonoma County in 2006 and working as a chef at a retreat center, when an acquaintance called, asking Couch to hire her daughter. The catch? The teen couldn’t cook.

The mother was insistent, despite her daughter’s lack of skills, so Couch suggested that they cook meals together and take them to the homeless shelter. Then she remembered a family whose mother had Stage 4 breast cancer. After three weeks of cooking for that family and two others with a similar need, Couch woke up one morning with the thought: Why not train teens to cook for families affected by serious illness? “When people are sick,” says Couch, “they’re thrown into this incredibly stressful situation, and preparing meals goes out the window, even though that’s when they need healthy food the most.”

Seven months later, Couch launched Ceres with a small group of teen volunteers cooking out of a church kitchen one afternoon a week. Since then, with the help of RSF Social Finance, Ceres has expanded to serve more than 90,000 meals this year alone to seriously ill people in Sonoma and Marin counties.

Inspiration

Though Couch’s business model is straightforward—teaching teens to cook for seriously ill people and their families—her hope is to change the entire food system, from how food is grown and prepared to an understanding of its role in wellness. “The way we feed ourselves is fundamental to our well-being and connectedness to the world,” she says.

Photo courtesy of Ceres

Ceres client, Robert Karcie.

The organization’s premise is that food has healing power. Many clients come to Ceres at the suggestion of a doctor, friend, or former client. After an initial screening, they receive up to 24 weeks of organic, whole-food meals delivered to their door, usually free. Because many of the families are low income (82 percent have household incomes below $45,000), it’s often the first time they’ve eaten a whole-foods diet. This is an opportunity, says Couch, to change eating patterns for life. She says clients often tell Ceres, “I thought I was eating healthy, having Cheerios and skim milk for breakfast, but now I’m having a kale smoothie.”

The teens also get healthier. “Ceres lets kids know that they’re a vital part of the community and that they matter,” says Ted Levinson, senior director of lending at RSF Social Finance. They also learn to eat more fruits and vegetables and prepare homemade foods. “If we don’t know how to prepare our own food,” says Couch, “we’re really pawns in a food system that, for the most part, doesn’t have our best interests at heart.”

Photo courtesy of Ceres

Innovation

Ceres’ greatest challenge has been that there are more ailing bodies in Sonoma County alone than one small non-profit can properly nourish. Couch has doggedly pursued funding, and today has a funding base that includes thousands of individual donors and dozens of foundation and corporate partners, many in the organic food industry. Whole Foods Market provides cash support and in-kind food donations, and also sells 12 Ceres-branded salads in their Northern California stores. One dollar from each pint goes to the non-profit.

But by 2010, Ceres (which is named after the Roman goddess of agriculture) still hadn’t found a permanent home. It had 12 staff members, no office space, and was using a catering kitchen available only two days a week. So when the town of Sebastopol offered Couch a building late that summer, she jumped—but it was a run-down, 3,200-square-foot modular facility badly in need of renovation.

Couch approached RSF Social Finance in early 2011 with a financing request that required some creativity: the property was zoned for community use and would be difficult to resell if Ceres were to default. RSF asked Couch to assemble a small guarantee community to support the loan. She did so, and in 2012, RSF lent her $340,000, enabling Ceres to purchase the building and pay back a donor who had contributed funds for an extensive kitchen remodel.

Photo courtesy of Ceres

“It was kind of a no-brainer to have RSF come on as our lender,” says Couch. “I’ve always been interested in developing collaborative relationships with organizations that share our values.”

The new building provided not only a commercial kitchen but also a place to hold meetings and training sessions. Couch has already helped nine communities—including Syracuse, New York, and Nashville—launch similar programs. Ceres’ affiliation with RSF has also helped Couch connect with like-minded thinkers as she tries to influence healthcare policy. She’s currently working with several Sonoma County hospitals to design a pilot program to measure the effects of Ceres meals on reducing readmission rates. “It costs Ceres $476 to provide eight weeks of meals to someone, but one readmission costs the hospital $6,000,” says Couch.

Impact

Photo courtesy of CeresAs a result of RSF’s investment, Ceres has grown rapidly. Its staff increased from 12 to 23 people and it now has two locations in Sonoma and one in Marin. The organization has gone from feeding 28 families in 2007 to feeding 513 in 2014, and, during the same period, from 21 teen volunteers annually to 410. Estimates for 2015 are serving 640 families and 475 teen volunteers.

The organization is eyeing two possible new branches, including one at a soon-to-open Sonoma County facility for kids coming out of foster care, and another at a site in Oakland. Ceres also continues to collaborate with communities around the country. “We look at our work as using a meal delivery program to create healthier food systems, community systems, and healthcare systems,” says Couch. “We want to bring all the pieces together because, really, it’s all one.”

For more information about Ceres, go to: http://www.ceresproject.org/

The Next 25 Social Enterprise Stars: Education & the Arts

March 16, 2015

RSF_SocentStarsLOGO-300dpi (2)As part of our campaign to add 25 social enterprise stars to our loan portfolio over the next year, we’re looking for new borrowers in all three of our focus areas: Food & Agriculture, Education & the Arts, and Ecological Stewardship. These are broad categories, but because it’s not always obvious whether an enterprise is a fit for us we’ll delve into what we look for in each area over the next three months. Up this month: Education & the Arts.

We support many different types of enterprises under this umbrella, including:

Marimi common mealOne of our current borrowers provides a great example in the last category: Camphill Communities California (CCC), a Santa Cruz supportive life-sharing community where volunteer caregivers and individuals with developmental disabilities live and work in a cooperative and rewarding environment. CCC offers everyone the opportunity to learn, grow, and live up to their highest aspirations. CCC is a model and inspiration for how to address the needs of the whole person: body, soul, and spirit. RSF has provided CCC with mortgage and construction loans to expand and improve their facilities.

If you know any enterprises in any of our focus areas that could expand their impact with greater access to capital, send them to Wanted: Social Enterprise Stars. General criteria for borrowers includes:

  • Incorporated in the US or Canada
  • Funding needs ranging from $200,000 to $5 million
  • Enterprise is profitable, or can demonstrate a clear path to profitability in 12 months
  • Annual revenue of $1 million or greater

Please pass it on to your network! The more #SocentStars posts there are on Twitter, Facebook, and LinkedIn, the more social enterprises we can reach and assist. Many thanks to all those who’ve been tweeting and posting so far.

Here are a few post ideas:

Are you an arts or edu enterprise looking for #funding? @RSFSocFinance has loans for #socents: bit.ly/1tH0ytE #SocentStars

Does your #socent need capital to grow? @RSFSocFinance provides loans up to $5M: bit.ly/1tH0ytE #SocentStars

@RSFSocFinance is #funding the next 25 #SocentStars. See if you qualify: bit.ly/1tH0ytE #socent

Foundation For the Challenged

March 10, 2015

This article was originally published in the Winter 2015 RSF Quarterly.

By Meredith Storton, Client Development Associate

Over seven million Americans have an intellectual or developmental disability. These individuals are some of the most marginalized and underserved members in our society. They face poverty, unemployment, and discrimination, all of which combined make finding affordable housing a particular challenge. Fortunately, there are housing options that provide independence, dignity, and a sense of community to the developmentally disabled: community-based living. Foundation for the Challenged [FFC] is a non-profit that is working hard to meet the high demands for community-based living by making homes available for the developmentally disabled to rent. Tucked away in a suburb of Columbus, Ohio, FFC provides homes to 350 developmentally disabled individuals in 94 residences located across 11 states. With support from RSF’s financing, FFC has been able to weather the 2008 housing crash and continue on its mission to buy homes for the developmentally disabled, positioning themselves as a social enterprise helping those with the most need.

Residents of FFC housing work on an arts & crafts project. Courtesy FFC.

Residents of FFC housing work on an arts & crafts project. Courtesy FFC.

Inspiration

Fran Wesseling has been at the helm of this organization since 2002, when FFC started buying homes for the developmentally disabled to rent. Wesseling started her career in nursing, but after an interaction with a developmentally disabled person she decided she wanted to focus all of her energy towards helping that community. Soon thereafter, she started working at Alternative Residences, Inc. [ARI], the predecessor organization to FFC. ARI was a non-profit that focused on managing group homes and providing direct services to the developmentally disabled. These support services include taking residents to the grocery store, helping them dress, and preparing dinner for them. There are many service providers like ARI, however, and ARI’s board, led by Wesseling, believed they could do something else – something more impactful for the developmentally disabled. So, in 2002, ARI sold its service provider contracts to other providers and became Foundation for the Challenged. Their goal became to improve the quality of life for the developmentally disabled by encouraging community inclusion and providing a place for them to live affordably and comfortably. Buying houses and starting a charitable program, it turns out, enables FFC to do just that.

Innovation

Developmentally disabled Americans receive monthly financial support from the Supplemental Security Income (SSI) program. They use a portion of their SSI funds to pay rent. FFC is the landlord in the homes they own. They use the rental income to pay down their mortgages and to support their slim operations (FFC has two full-time and two part-time employees). Because FFC is not providing the at-home services, the separation of service provider and landlord roles ensures that the residents are treated fairly. FFC is a compassionate landlord that understands the various needs their residents have and the challenges they face. They provide the residents with the opportunity to live with other developmentally disabled individuals in a place where they feel at home. This integration into the wider community is better for the residents and better for society as a whole. As Kathy Streblo, FFC’s Associate Director of Housing Operations, sees it, the benefits of community living are significant, “The developmentally disabled are able to enjoy all the things that you and I are able to enjoy about living in a community – choosing roommates, picking where you live, and what activities you do.”

The need for real estate for the developmentally disabled is enormous. For decades, many developmentally disabled people, regardless of their disability level, were living in state-run institutions segregated from society and stripped of their independence. In 1999, a landmark Supreme Court decision declared that the segregation of people with disabilities is a form of unlawful discrimination under the Americans with Disabilities Act. As a result of the so-called Olmstead decision, community-based living became the desired solution to institutional settings. Now, however, there is a new problem – a shortage of homes available for the developmentally disabled to rent. Tens of thousands of developmentally disabled people linger on waitlists for years for homes like those FFC owns. In the meantime, they live with aging caregivers or they remain in institutions. FFC does not have control over the state-run waitlists, but they are attempting to fulfill the need one home at a time.

When FFC started purchasing homes, they were able to acquire them quickly using the affordable housing financing available through Fannie Mae and Freddie Mac. Then in 2008, the housing market crashed. Affordable housing financing dried up and suddenly instead of making 10% down payments on a new home, FFC was required to put down 30%. They were forced to hunt for state and federal grant dollars to help supplement their purchases. Even then, the budget was tight and their ability to buy houses slowed significantly.

FFC went to several small lenders that specialized in housing for the developmentally disabled, but they weren’t able to provide a loan that was large enough to cover FFC’s needs. In 2010, Wesseling, still on the hunt for financing options, met RSF Senior Director of Lending Ted Levinson at a Social Enterprise Alliance meeting. Wesseling recalls, “there was synergy in that RSF valued what we were doing and the mission that we had when other banks didn’t care what we were doing and the social impact we were having.” RSF was able to provide FFC with a $3.9MM mortgage loan, which brought their interest rates down and enabled them to use the savings from the refinanced mortgages to do much needed repairs and improvements on several homes. Levinson is grateful RSF was able to support the critical need FFC is addressing. He explains, “RSF shares the view that every person, regardless of ability or disability, deserves to lead a full life. This includes their emotional, social, and spiritual needs. A permanent place to live – one that a person can truly consider a home – is a critical first step in achieving this full life.”

Impact

Though they provide much needed housing for 350 individuals, FFC felt the need to give back in a more direct way to the community they work with. In 2006, FFC launched the Community Living Fund that supports the developmentally disabled by providing basic living necessities such as wheelchair ramps and walking devices. Individuals have the opportunity to apply for up to $1,000, which goes a long way for someone living on SSI payments. One of Wesseling’s favorite stories is about a grant that was used to pave a bike trail in a rural area so that a boy with down-syndrome could safely ride his bike near his home. FFC has provided over $130,000 in grants to individuals since the fund started in 2006.

In mid-November, FFC held a fundraising event to expand and endow the newly named Wesseling Community Living Fund so that even when the organization faces financial hardships like the 2008 housing crash, they’re able to give back. So far they’ve raised 70% of their fundraising goal for the fund and the donations are continuing to come in. The event doubled as a retirement celebration for Wesseling. After serving the organization for 28 years, she is stepping down and in her stead Kathy Streblo will become the Executive Director. They have plans in place for a smooth transition. Over the next few years, FFC will focus on growth in the markets they’re already in – states like Ohio, Tennessee, Iowa, Florida and Washington – where they already understand the state regulations and have vetted the service providers. They hope that they’ll be able to keep serving those most in need for a long time to come. RSF hopes to keep supporting FFC’s work and other like-minded organizations that are providing dignity, stability, and independence to people with developmental disabilities.

Growth Financing for Social Enterprises: 5 Options and How to Make Them Work for You

February 19, 2015

Originally published on TriplePundit

A regional food hub funded by RSF, Common Market in Philadelphia has grown rapidly through a series of integrated capital financings.

A regional food hub funded by RSF, Common Market in Philadelphia has grown rapidly through a series of integrated capital financings.

by Don Shaffer

Social entrepreneurs seeking growth funding often get caught up in the culture of venture capital: They position their enterprise as a rocket business, look for a miracle angel investor and start giving away equity. They’re not thinking about how the investors will get their money back, or whether other options might better support their goals.

At the same time, conventional funders often see social enterprises as too risky or too hard to understand, especially if they’re building a new supply chain, sacrificing some profit to maximize social value or using a hybrid business model.

Fortunately, there are ways around traps and barriers like these for social enterprises that are past the bootstrapping stage. First, here are a few general guidelines:

  • Before you seek financing, define what you ultimately want to do. Are you planning to sell this business? Do you see it as a legacy business that you’re building to last? A long-term, slow-growth plan won’t nix your chances for funding; you’ll just need to look at different kinds of funding.
  • Seek out funders that focus on social enterprises and that have expertise in your field. They’ll have a better understanding of the market opportunity, and they won’t expect your business to compromise its mission in order to grow.
  • Expect a funder to add value beyond financing, such as connections to a network of advisors or technical assistance.

Below are the ins and outs of five funding options — some top of mind, and some you may not have considered.

1. Debt financing

Borrowing money over a defined period of time — from a bank or an alternative lending institution — allows you to maintain your ownership position and thus retain control of the enterprise. This is a good option for enterprises that have the cash flow to make payments and the assets to secure the debt.

Debt financing takes a variety of forms, each with its own underwriting standards: working capital lines of credit, asset-based loans (secured by account receivables, inventory and other assets), equipment loans, mortgages and so on. You will want to seek advice on the best structure. The key questions to ask at the outset are: How will I be able to pay back the loan, and what is the lender likely to do if things go sideways?

Read the full article here

Don Shaffer is President & CEO at RSF Social Finance

The Next 25 Social Enterprise Stars: How to Spot One

February 17, 2015

RSF_SocentStarsLOGO-300dpi (2)We’re happy to report that our campaign to add 25 social enterprise stars to our loan portfolio over the next year is generating referrals. It’s also inspired some of our friends to ask, “How would I know a social enterprise star when I see one?”

Excellent question. When we say “social enterprise” we mean a for-profit or non-profit venture that generates revenue not as an end, but as a means toward creating significant social or ecological benefits. Just giving profits to good causes doesn’t qualify; the mission must be embedded in the organization. A “star,” by our campaign definition, is an enterprise that’s been in operation for at least three years and has annual revenue of over $1 million (signs that its leaders have shown the ability to stick with it and grow), advocates for or demonstrates social change in its field, and has the potential to achieve significant positive impact through its own operations and as a model. We also have specific loan criteria; see the Social Enterprise Stars campaign page for details.

One of our newest borrowers provides a great example: Hudson Valley Harvest. This for-profit food hub based in Kingston, New York, provides efficient distribution services that connect small and midsize farms in upstate New York with wholesale food buyers in New York City and surrounding areas. This kind of distribution link is essential to economic success for farmers and to access to fresh food for urban communities. Hudson Valley Harvest, founded in 2011 by a farmer and three friends who met at farmers markets, also buys and processes surplus products for sale under its own label, with the farm source identified. The new line of credit from RSF will help support the company’s rapid sales growth and related inventory expansion.

Know any enterprises that fit the star profile? Send them to Wanted: Social Enterprise Stars.

And please keep spreading the word! The more #SocentStars posts there are on Twitter, Facebook, and LinkedIn, the more social enterprises we can reach and assist. Many thanks to those who were active last month, including 3BL Media, Just Means, SOCAP, Social Earth, Invest with Values, Robert Simons, Green Reads, Karen Ammann, Business for a Fair Minimum Wage, and Finance Weekly.

Here are a few post ideas:

@RSFSocFinance has loans to spare for #socents. See if you could be one of the next 25 #SocentStars: bit.ly/1tH0ytE

Are you a #socent looking to expand your impact? @RSFSocFinance has loans up to $5M: bit.ly/1tH0ytE #SocentStars

@RSFSocFinance is seeking the next 25 #SocentStars. Send candidates here: bit.ly/1tH0ytE #socent

RSF Makes a Loan to Imagine Supported Living Services

February 10, 2015

Logo from FBRSF is pleased to announce a loan to Imagine Supported Living Services, a non-profit organization providing services to adults within Santa Cruz County living with developmental disabilities. RSF financing allowed Imagine to acquire two buildings which will house their administrative headquarters and a community center.

Imagine was founded in 2002 with a mission to empower people with developmental disabilities through service and advocacy. Imagine works cooperatively with individuals and other service agencies to increase access and reduce the barriers which prevent people with disabilities from full inclusion in our society.

IMG_1856

Imagine Client

Imagine offers services which acknowledge an individual’s strengths and abilities, and supports that individual in planning a life that they find personally rewarding. At Imagine, each person designs and directs their own services to accomplish the goals they set for themselves.

“Imagine focuses on the abilities of their clients, not their disabilities,” says Ted Levinson, Senior Director of Lending at RSF. “Similar to our long-history of work with Camphill Communities, it’s this approach that makes Imagine a true leader in the supported living services industry.”

Imagine finds and secures housing while providing on-going and long-term direct staff support for personal care and tasks, money management, facilitation of social and recreational activities, and medical management. Each month, Imagine provides 11,000 service hours to clients throughout Santa Cruz County.

In addition to direct services, Imagine is also engaged in community-building, advocacy, and collaboration. Their Resource Library offers free check out of communication devices, training materials, therapeutic devices, and other specialized resources to anyone living in Santa Cruz County. Imagine organizes an annual community event which celebrates the diversity and abilities of its community members and is attended by over 300 people. Imagine has mentored several other agencies and has led a collaborative initiative which brings together all the providers in the region in order to increase the quality of services and have the opportunity to share resources and best practices.

ernie dave n brianna 2

Imagine Clients

RSF financing enabled Imagine to acquire real estate which will house its administrative offices and a community center. The new location provides more space and is more accessible to clients, some of whom visit the offices by public transportation.

“As an agency that seeks to serve individuals with developmental disabilities throughout their lives, we have community integration as a core value and sustainability as an imperative,” says Doug Pascover, Executive Director of Imagine. “The loan we received from RSF helps us plan our finances toward the same far horizon to which we plan our services. It helps us to be the kind of neighbors in our community that we ask our neighbors to be for the people we serve. Working with a lender as mission-driven as we are makes our new financing relationship a real partnership according to our values.”

About Imagine Supported Living Services

Founded in 2002, Imagine is a non-profit organization providing supported living services to adults with developmental disabilities in Santa Cruz County. Imagine’s mission is to empower people with developmental disabilities through service and advocacy. Imagine works cooperatively with individuals and other service agencies to increase access and reduce the barriers which exclude people with disabilities from full inclusion in our society. http://imaginesls.org/

Lending

Page 1 of 1112345...10...Last »

Categories

Latest posts

Archives

Blog Roll