RSF Board & Staff

Interviews From the Archives: Mark Finser

February 12, 2015

Click here to view the previous interview in this series

We have created a mini series of excerpts from our archive of interviews in the RSF Quarterly. Lots of wisdom was shared by these individuals who hold deep ties to the roots of the organization as early trustees and staff members. We chose to focus on aspects around money, spirit, and associative economics as these themes are core to RSF’s history – and very relevant to our work today.

The interviews were conducted by John Bloom, now RSF Vice President, Organizational Culture. They were part of his exploration of the guiding thoughts that helped to form what was then called Rudolf Steiner Foundation and now RSF Social Finance.

Mark Finser, 1999 & 2002

MAF - Copy (2)John: Why is money such a challenging social force?

Mark: Money itself is connected to the capacity of thinking, feeling, and willing that each person carries. And, the will in each human being is the least conscious of the three soul forces. Consequently money is problematic because a lot of things play into it without people being conscious of what’s happening. RSF brings a consciousness to money, tries to awaken people to its movement and intentions. If one becomes awake to what’s happening in relationship to money within a school, for example, it can actually be the most socially advancing force for a school. We try to help the different organs within a school understand their particular roles in relationship to money. For example, we will help a school form a pledge community that then secures a loan from RSF to the school through pledged gifts. This entails individuals making personal commitments to the project and carrying a consciousness for the well-being of the school. Those individuals can also take an even wider view of their money. They, or anyone, can open a lender fund at any time and thereby participate in a large or small way in RSF’s work for the greater good. When they lend some of their savings to us, they are aligning their values with ours and seeing their money work in a socially-beneficial way.

John: How do you see the Foundation and its responsibilities in transforming the cultural mainstream?

Mark: Money is so connected to everything that we do in life that from the standpoint of its movement, one cannot separate one organization or individual from another in our society. It’s one of the biggest disappointments when an initiative does not see their impact on other initiatives and organizations. Collaboration among groups rather than competition between them would be an appropriate approach to reflect the reality of the movement of money. One could say that money is connected to the life-stream within the whole social body of humanity. Its movement has often been likened to the circulation of the blood. If we are deeply involved in that movement, we can’t help but be interested in and deeply concerned with the current turn of events in the global economy, for example.

We want RSF to be awake to the movement of money, whether it’s in gifts, grants, lending, or borrowing. We constantly ask the question, “Is this particular movement of money socially constructive?” We do not come with a judgment or an answer. We help the projects or donors answer the questions for themselves. We are by intention a third party that accompanies and bears witness. This is the most fascinating part of our work. As we have developed insights over the last 15 years, we have begun to take more leadership in educating people about the conscious use of money as investment. We now say, for example, “collaborative work is important.” This kind of leadership from RSF arises out of a yearning to see how much more we can accomplish in our work together.

Much of the new living economic thinking fits well with some of Rudolf Steiner’s core ideas around the threefold nature of social life, especially working in an economic associative way. When one is involved in dialogue with producers, consumers, and people on the local level, one cannot avoid concern about right livelihood and living wages. At the same time, people’s consciousness is evolving so they can empathize and engage with something going on in Bali or Bangladesh. Because of this new consciousness, RSF will need to develop overtime new tools, financial vehicles, and partnerships to meet all three areas—international, national, and regional.

John: It seems that trust is an essential ingredient of the process of bridging, whether it is on the part of clients or colleagues. How does RSF work with this quality of trust?

Mark: There are many levels to this. One is in being able to listen. It is in the art of conversation. When someone is opening their heart or expressing their intention and the other is not fully taking it in, not really listening, a sense of discomfort can develop. The question arises, “Will that individual or that organization really be able to meet my needs?” Another condition for trust is a track record. Trust is developed incrementally through the experience of RSF meeting requests or needs over time.

If one looks at our historical record in our investment-lending work, one can see the success of our projects and repayments. We have been able to fulfill our clients’ needs, regardless of whether they were planned or incidental. Our consistency and faithfulness build trust and are among the pathways to opening up bridges for alignment of outer and inner values.

Money is itself a bridge. People can begin to see that how they manage their own finances and other resources can bridge relationships, or keep them isolated. One of RSF’s guiding principles, right from the beginning, has been transparency in finances. It is key that there be enough transparency that people can experience where their money is working, how it is being received, used, and repaid in the case of a loan or activity generated in the case of a grant. All of these mechanisms serve as bridges between the clients and the projects and initiatives. They are vehicles by which money can follow intention. We’ve seen many, many times, the personal satisfaction and quality of community that is created when one joins others in investing or giving, in aligning intentions and values. We have been privileged to experience this in so many different ways in the various activities at RSF, and to have contributed to this positive and evolving view of money.

Mark Finser is former President & CEO and current Chair of the Board at RSF. He was a founding member of the group that revitalized RSF in 1984.

Interviews From the Archives: Ann Stahl & Clopper Almon

February 3, 2015

Click here to view the previous interview in this series

We have created a mini series of excerpts from our archive of interviews in the RSF Quarterly. Lots of wisdom was shared by these individuals who hold deep ties to the roots of the organization as early trustees and staff members. We chose to focus on aspects around money, spirit, and associative economics as these themes are core to RSF’s history – and very relevant to our work today.

The interviews were conducted by John Bloom, now RSF Vice President, Organizational Culture. They were part of his exploration of the guiding thoughts that helped to form what was then called Rudolf Steiner Foundation and now RSF Social Finance.

Ann Stahl, 1999

Ann Stahl2 (2)John: What do you mean by the myth of scarcity?

Ann: It is part and parcel of our present-day materialistic society. The message we hear everyday through all the media is that we don’t have enough of something. If you open a magazine, you see for example: “Your teeth are not white enough,” “Your hair is not shiny enough,” “Your body doesn’t smell sweet enough.” All the messages conspire to point towards a human being who is not sufficient just as he or she is.

John: Those all exploit a tendency for fearfulness.

Ann: Absolutely! You’re not like the others who do have enough. If we think that we don’t have enough, then we certainly are not going to be in a place where we feel we have lots to give away – whether that’s time, warmth, health, or money. The mindset is: Hang on to what you have, you haven’t got enough. This affects finances very strongly. It is really at a very deep level that we feel we are not sufficient as we are.

John: What drives this phenomenon?

Ann: I think it is fear that drives it. We’re all caught in this, regardless of whether you have a spiritual practice or not. This question of “enoughness” is tied to our every thought. It affects whole organizations as well. I think that it is a very laming condition to be in, to think that you can’t do something until you get enough money, enough enrollment, enough space, enough whatever, rather than figuring out a way to do it.

John: Do you have a cure for this myth of scarcity?

Ann: When you consider the polarity of excess and scarcity, what is the balancing tendency? What I would place in the middle is abundance. And we all have an abundance, it just has different qualities and colors. If you look around to see what different people have in abundance, you come up with a wonderful basket of abundances! Working with those is quite different than working with either the “too much” or the “not enough.” Part of the abundance is money, part is time to do things, part is capacities and skills. So abundance in that middle place is as varied as the people who will come when they see that you’re working out of that recognition – a belief in the abundance of life. There is plenty of everything in the world. There is plenty of money and human beings with wonderful capacities.

Ann Stahl is a former staff member of RSF


 

Clopper Almon, 1999

almonJohn: What do you consider the spiritual basis for economics?

Clopper: Economics is about the determination of values, and the exchange of products. In its physical matter, each product incorporates a tremendous amount of thinking, imagination, and organization. Think of that pen that you are writing with. Imagine how much went into designing it, into extracting the ores of the metals that it is made from, organizing the transportation system, the trade, the marketing, and even the advertising that got you to buy that pen and not some other. All of that takes human imagination and thinking—and all of that is spiritual content. When you realize that behind everything that we think of as matter is spirit, then rocks are spiritual; plants, animals, humans, all of the creation has a spiritual foundation. How one awakens people to that realization, I wish I knew.

Clopper is a Professor of Economics and a former Trustee of RSF

Click here to view the next interview in this series

Interviews from the Archives: Philip Mees

January 29, 2015

Click here to view the previous interview in this series

We have created a mini series of excerpts from our archive of interviews in the RSF Quarterly. Lots of wisdom was shared by these individuals who hold deep ties to the roots of the organization as early trustees and staff members. We chose to focus on aspects around money, spirit, and associative economics as these themes are core to RSF’s history – and very relevant to our work today.

The interviews were conducted by John Bloom, now RSF Vice President, Organizational Culture. They were part of his exploration of the guiding thoughts that helped to form what was then called Rudolf Steiner Foundation and now RSF Social Finance.

Philip Mees, 2000

John: What from the bank environment informed or changed the way you could work in RSF?

Philip: The way I originally learned to approach a loan was so much more relevant in this environment of RSF than it was in the environment of the big bank. First you need to know your customer, to trust your customer, and to be trusted by the customer. However, each project also has to make sense on its own merits. That’s why you have to do credit analysis. Underlying the techniques of credit analysis and objective judgment, there is a subjective world of people being able to get along together, wanting to work with each other to accomplish something. All of these factors are important to us.

John: We try to be somewhat objective about those subjective aspects, don’t we?

Philip: Absolutely. That’s where the art comes in. Banking is not a science by any means. Banking is an art because one deals with people who want to do something in the world. One needs to make judgments on what one thinks of what they want to do in the world, and then whether one wants to support it. That’s not a scientific process. I’ve never called it an artistic process, but I’ve always talked about the art of banking.

John: Behind financial transactions and relationship is money. What is money?

Philip: Money is something that belongs to us. We have the clothes that belong to us, we live in the kind of house that belongs to us, we live the kind of life that belongs to us, and we have the illnesses that belong to us. The money we have is intimately connected with our karma. The decisions that we made before we were born for the kind of life that we were going to lead have financial consequences. Daily we face the consequences of the decisions that we made before birth and all the way through our life. In that way, money is the expression of very deep spiritual realities.

One of the ways we build our existence in the world is by doing things in it. We find our identity through the things we do. We make a living and acquire things, and those things are represented by money today. We acquire that which we have earned.

Money is earned by thinking, thinking about things of the world and being able to transform things and organize activity, as well as by physical labor. When you look at how people have made money throughout history, the one thing that stands out is that people who work only with their hands, do only manual things, never make any money. Society seems to be organized in such a way that they are able to subsist, they are able to continue doing that, but they will never build a surplus.

Through the ages, the people who really made money had other people work for them, even back to when the capital was accumulated through conquest. The economic or business way of accumulating capital is quite new. In the old days people went out, made war, plundered, and acquired land. Land and natural resources were the real base of capital. The kings or rulers who directed these conquests had their people bring them the spoils and gave them a small part back. Thinking has always been connected with accumulated capital.

John: What is capital? Is it something other than a specialized form of money?

Philip: I have trouble drawing a line between the two. When you direct the kind of thinking I’ve just described, you make money. Almost automatically you build up a surplus, and that surplus is today called capital. It’s an interesting word, because the Latin word caput, meaning head, is the origin. It never comes from the hands. Capital is the result of spirit and the spiritual activity of thinking. That’s why it needs to go back into creating new spiritual activity, so that people develop the capacity for new thinking.

John: Money is also then connected to the renewal of human capacity.

Philip: I love the statement by Rudolf Steiner where he says, “The gift is the most productive economic transaction that you can create.” A gift helps create new spiritual capacities. A gift to a school, for example, enables a number of new children to learn things that will make them productive in the economy one way or another.

John: The picture of thinking and capital that you have outlined depends on an individual at the head of a hierarchical structure. The pyramids are the classic example of architecture reflecting cultural and economic hierarchy. Do you think that there are new models of people working in businesses that are not so individual-driven, or is that a challenge for the future?

Philip: Well it depends how you use your thinking. In the economy there is no equality. The spiritual capacities of people are unequal, and they result in unequal work in the economy. In the political sphere and before the law, we are all equal. But, in the economy, in the art of applying the spiritual capacity of thinking to matter, we are not all equal.

Philip is a former Trustee and staff member of RSF.

Click here to view the next interview in this series

Interviews From the Archives: Siegfried Finser

January 15, 2015

We have created a mini series of excerpts from our archive of interviews in the RSF Quarterly. Lots of wisdom was shared by these individuals who hold deep ties to the roots of the organization as early trustees and staff members. We chose to focus on aspects around money, spirit, and associative economics as these themes are core to RSF’s history – and very relevant to our work today.

The interviews were conducted by John Bloom, now RSF Vice President, Organizational Culture. They were part of his exploration of the guiding thoughts that helped to form what was then called Rudolf Steiner Foundation and now RSF Social Finance.

Siegfried Finser, 1998

John: The term associative economics keeps surfacing. What does it mean?

finser_seigfriedSiegfried: I see three different trends all based on what’s happening in the development of the human soul. One of them is this yearning in the soul for being affiliated with others, for being part of something—community. A great part of that yearning harks back to the time when we were actually part of a clan or family, when we were not so alone standing so completely, self-sufficient, independently in the world. In that ancient time, when we felt part of a whole community, we were all devoted to service, but it was unconscious service. That is the one force in society today.

The second stream has to do with trying to ameliorate humanity’s suffering and starvation, poverty, and pain in our lifetime. We struggle, somehow, to make this earthly life into a better place, a paradise. We long for it to be better, to be as perfect as we can possibly make it.

The third stream is the one that I am and RSF is connected with. I would use the word esoteric to name it. There are young forces deep in the human soul from which our future world will be built. They are just being born and contain incredibly strong potential. Our work is the awakening of those inner forces to the building of a world that is actually derived from human consciousness and creativity. When we work with money, we try to awaken the ethical individual in each of us. The movement and flow of money will be the first earth-bound material to be transformed by human forces to reflect spiritual purposes.

John: This quality of abstraction and money is a hard thing for this culture to understand. Partly, money is usually marketed as something real, something you own. You have commented that money should have a living quality. I wonder if you could elaborate.

Siegfried: The way that we view our wealth, our personal wealth, is to bring it all to a standstill and count it. A balance sheet is nothing else but finances caught at a particular moment. But “balance sheet” itself is an interesting phrase. It implies that it constantly changes, constantly self-adjusts. However, one freezes it for the moment only to be able to grasp it with one’s intellect. Our present way of dealing with money in establishing our wealth is to bring it to a total standstill. In actuality, the greater one’s so-called wealth appears to be, the more it’s moving all over the world.

Siegfried has been a Trustee at RSF since revitalizing the organization in 1984.

Click here to view the next interview in this series

Personal Stories of Change

June 19, 2014

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

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

Neil Blomquist, Trustee
President, Sustainable Solutions

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

Dorothy Hinkle-Uhlig, Investor

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

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

Mark Censits, Trustee
CEO, CoolVines

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

David Lapedis, Investor

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

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

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

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

Taryn Goodman, Staff

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

Coleman Lyles
Executive Director, Camphill Communities of California, Borrower

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

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

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

Birju Pandya, Investor & Partner

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

Kelley Buhles, Staff

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

Nicole Dawes
CEO, Late July Snacks, Borrower

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

Healing Through Financial Transaction

May 9, 2014

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

Dear Friends,

We’re so happy to be celebrating RSF’s 30th anniversary this year.  It is an honor and a privilege for me to be leading this amazing organization, having been here for just 22% of that time (since 2007).

Since 1984, we have made nearly $300 million in loans to social enterprises.  We have a 100% repayment rate (principal + interest) to our investors, and a 2% cumulative loss rate on our loan portfolio (which is extraordinarily low by any objective measure.)  We now have over 1,500 investors and $100 million in our flagship Social Investment Fund.

Additionally, we have facilitated over $100 million in grants, with the pace increasing to between $10-15 million per year recently.  We currently have a staff of 38 with a $6 million annual operating budget.

We are proud of our growth, but more important is our focus on potency, not scale.  We have worked extraordinarily hard to create a culture in which each relationship is sacred.  We want to shift the conventionally antagonistic power dynamic between provider-of-capital and receiver-of-capital.  This takes time and considerable effort.

I recently visited one of our borrowers in central Florida, called Uncle Matt’s.  As a 4th generation citrus grower, “Uncle Matt” McLean and his family make organic orange juice.   It’s super tasty, and it comes with a twist.

Today, there are over 600,000 acres of citrus groves in Florida—only 3,000 acres are certified organic.  Uncle Matt’s oversees the majority of this organic acreage.  About 15 years ago, they were told by scientists from the University of Florida that their groves would likely be in serious jeopardy due to what’s known as “citrus greening” – a bacteria that is steadily wiping out citrus fruit worldwide.  It turns out that the organic groves are much more resistant to the bacteria than conventional groves.  The scientists were wrong—they thought the genetically-modified, pesticide/herbicide regimes of the conventional growers would be more successful, and had told the McLean’s they were crazy.  Now these same scientists are visiting the McLean’s farms on a weekly basis in order to study exactly how their organic methods are working.  Currently, we are working to help the McLean family to purchase a 170-acre grove that is being threatened by housing development from nearby Orlando.  It’s possible the solution to the global “citrus greening” epidemic lies in the organic methods from this tiny plot of land, and could ultimately save millions of trees worldwide.

This is an example of our focus on potency.  We have been to the McLean groves twice in the short time we’ve had this loan—their previous bankers from Orlando had never visited the farms, only wanting to see the processing facilities.  We are trying to find investors for the land purchase, introducing them to biodynamic growers around the country, and connecting them to other organic food entrepreneurs in the RSF borrower community.

We believe we’re helping to create an energetic field where healing-through-financial-transactions is possible.  Our plan is to steadily expand our trust network over the next 30 years, one relationship at a time.  We look forward to engaging all of you in that process.

Warmly,

Don

Don Shaffer is President & CEO at RSF Social Finance

RSF Pricing Meeting: Resetting Rates, Recognizing Interdependence

July 8, 2013

by Jillian McCoy

Inspiration

For many years, we based our investors’ return rate on the 13-week U.S. Treasury Bill.  Each quarter we recalibrated the rate based on this well-publicized benchmark.  In 2006, we shifted to a different benchmark – LIBOR, or the London Interbank Offered Rate – which at the time represented the most commonly accepted barometer for short-term interest rates worldwide.

In 2009, well before the now notorious LIBOR scandal, RSF staff knew that a seemingly arbitrary rate, disconnected from the needs and activities of our community, was not a right fit. During a staff study group of Rudolf Steiner’s lectures on economics, we realized that the community of participants in the RSF Social Investment Fund were best suited to accurately determine a price that meets the needs of all parties.

Innovation

As of October 1, 2009, RSF adopted a community determined rate recommended each quarter through collaborative conversation with representatives of all three stakeholders in the RSF Social Investment Fund – investors, borrowers, and RSF staff.  A 4% spread (used to fund RSF’s operations) is then added to this customized SIF rate to determine RSF Prime, the base rate for borrowers in our Social Enterprise Lending program.

This collaborative process begins at each of our quarterly Pricing Meetings where stakeholders gather to meet one another face-to-face, discuss their needs and intentions, and share how an increase or decrease in the rate might impact them.

To date, we remain the first and only lending institution that has facilitated meetings between investors and borrowers to determine loan pricing.  With RSF staff at the table facilitating the conversations, all three stakeholders are reminded of the impact of their financial decisions. In this environment of direct engagement, the conversation is elevated beyond efforts to pay as little as possible or earn as much as possible. Instead, the stakeholders seek to achieve a balance between the financial and impact needs of everyone present.

Over 100 guests joined us for a community reception following our most recent pricing meeting in San Francisco.

Over 100 guests joined us for a community reception following our most recent pricing meeting in San Francisco.

Impact

In 2012, RSF Prime decreased by 0.25% to 4.75%. This was the first decrease since RSF Prime was first established. Since 2012, the rate has dropped an additional 0.25%. The driver behind the decrease was to ease some of the financial burden of existing borrowers and increase RSF’s ability to attract new borrowers.

Perhaps not surprisingly, at our most recent pricing meeting in San Francisco, there were requests from the investor community to increase the rate. However, over the course of the evening, their understanding of the impact of the interest rate shifted from their natural self-interest to an understanding of the whole system.

As one RSF staff member who attended the meeting commented, “One of the significant moments came when one of the borrowers talked exactly about how an increase in the interest rate would affect her company financially, and prohibit them from making a key hire at a time when her company needs additional staff to support growth. Investors could see in no uncertain terms the consequences of their stated need for a higher return. The resulting recognition of how their interest was directly connected to the borrowers was a transformative moment.”

In fact, although most of the investors noted that they would like an increase in the interest rate, they decided not to recommend an increase after learning how it would negatively impact the borrowers. At one point, one investor became emotional while expressing just how much it meant to her to be a part of this community, and learn more about how each borrower is having a positive impact in the world.

The borrowers were also touched by the conversation. One participant reflected, “It is thrilling to be a participant in the avant-garde of social finance. The current system is broken and we applaud this process where a more sensible and holistic paradigm can be practiced.”

Before the close of any quarter the RSF Pricing Committee, an internal RSF team, meets to discuss and reset the interest rate. The committee considers the input from the Pricing Meeting attendees in addition to reviewing macroeconomic conditions and the competitive market. The committee determined that the interest rate will remain the same for Q3 2013 – 4.5% for RSF Prime and 0.50% for investors.

Jillian McCoy is Senior Associate, Communications at RSF Social Finance. 

What Funders of Social Enterprises Want

June 5, 2013

Don Shaffer - Default

Originally published by Sustainable Industries

by Don Shaffer

Interest in social enterprises is growing—and believe it or not (some entrepreneurs may have their doubts), so is the pool of capital available to them.

The broad field of impact investing—which involves directing capital to enterprises that are doing good, rather than simply screening out companies that have strong negative effects—is projected to grow by a billion dollars this year. Impact investors surveyed for a J.P. Morgan and the Global Impact Investing Network (GIIN) report released in January said they plan to commit $9 billion to impact investing in 2013, up from $8 billion in 2012.

Of course, much of that money will go to larger, more established businesses, not to emerging social enterprises. But RSF Social Finance does finance social enterprises that need growth capital—and our investment funds mirror the broader trend. RSF’s main investment vehicle, the Social Investment Fund (SIF), grew 20 percent in 2012, to $90.5 million.

In addition to a larger pool of capital, several other trends are creating opportunities for social entrepreneurs:

  • There’s a growing focus on developing social entrepreneurs through the use of accelerators and technical assistance groups. Some examples are Village Capital, Ashoka Fellowships, and Hub Ventures.
  • Investors are looking at alternative forms of investing, including royalty payments.
  • There’s increased interest in investing regionally, specifically in the United States.

What are investors looking for?

Many of the investment organizations funding social enterprises specialize in particular niches, or work on a few key focus areas at a time. If you’re seeking capital, your first stop should be a funder that specializes in your area—they’re more likely to understand the business opportunity, and can plug you into a valuable network.  For example, one of RSF’s current focus areas is the creation, support and expansion of decentralized, regional food processing and distribution operations, because they contribute to strong local economies by providing markets for small and midsize farmers, helping with the logistics of aggregating food from multiple suppliers across a region, and serving as market creators by connecting producers with local food buyers.  We’re also seeking to build relationships with impact-making borrowers in our other two focus areas: ecological stewardship, and education and the arts.

What qualifies as a social enterprise?

Every funder has their own criteria, but ability to demonstrate impact and capacity to run a successful business will probably always be top of the list. RSF defines a social enterprise as a for-profit or non-profit venture in which the economic activity is a means toward creating significant social or ecological impact. We vet borrowers for:

  • Social and ecological impact for public benefit: Is the organization’s economic activity a means toward directly solving or alleviating society’s greatest challenges in our focus areas?
  • Advocacy for change: Is the organization an advocate for or does it demonstrate social change in its field? Does the organization hold itself accountable and is leadership committed to the social mission?
  • Capacity to accomplish the mission: Does the organization have the capacity to tackle the problem? Do its activities have the potential for scale?
  • Commitment to financial and operational sustainability: Is management committed to and capable of growing a profitable or self-sustaining independent enterprise? Could RSF’s involvement be catalytic? Does the business meet high standards for workplace and environmental practices?
  • Community building: Is the organization building a community committed to its success?

If you have an enterprise that meets those criteria and needs a finance partner to reach the next level, please get in touch. If you’re not there yet, I encourage you to take advantage of the resources available to social enterprises. There’s never been a better time to be a social entrepreneur.

Don Shaffer is President & CEO of RSF Social Finance, as well as an alumni speaker at the Sustainable Industries Economic Forum.

Announcing the 2013 RSF Seed Fund Grantees!

May 31, 2013

by Ellie Lanphier

Every spring, RSF provides small gifts to seed new initiatives that offer innovative solutions in the field of social finance, or address issues in one of our three focus areas. Thank you to all of our individual investors, donors and staff members who make the RSF Seed Fund possible!

Introducing the 2013 RSF Seed Fund Grantees:

Rising Sun 1Rising Sun Energy Center is a leading green workforce development and retrofit services organization located in Berkeley, CA. The Seed Fund grant will support Rising Sun Energy Services, a project that provides highly subsidized energy efficiency audits and retrofits to moderate income home owners in Richmond and Berkeley. Rising Sun Energy Services employs graduates from the non-profit’s Green Energy Training Services program. A successful pilot program was completed in the summer of 2012, which employed 17 graduates and retrofitted over 120 homes.

 

Sustainable Economies Law Center (SELC), iSustainable Economies Law Center 1n Oakland, CA, was founded by two attorneys, Janelle Orsi and Jenny Kassan, to provide the essential legal tools to support a transition to localized, resilient economies. SELC seeks to educate communities about the possibilities and limits of creative economic solutions such as cooperatives, community-owned enterprises, cohousing, urban agriculture, barter and local currencies. They also advocate for laws that clear the way for more sustainable and equitable economic development. The Seed Fund grant will support new pathways to financing for small farms through Direct Public Offerings (DPOs). SELC believes that DPOs could be an effective financing strategy for beginning farmers, as DPOs enable farmers to publicize opportunities to make micro-loans or equity investments in their farms. To test their theory, SELC will manage all legal compliance paperwork for a beginning farmer with the hopes of creating tools to enable others to replicate their work.

Calypso Farm 1Calypso Farm & Ecology Center is an educational, working farm near Fairbanks, Alaska whose mission is to promote local agriculture and environmental awareness through hands-on education in farming ecosystems. The Seed Fund grant will support their Farmer Training program, a residential, experiential program focused on providing the skills and confidence necessary to embark on starting a small farm. Participants learn how to become self-reliant farmers by working alongside practiced farmers through the entire growing season and gain first-hand experience in marketing their produce through operating a CSA, running a farm stand, and selling to local restaurants.

Cultivate Kansas City (Kansas), the city’s center for urban agriculture, grows organic vegetables on two farms, trains farmers, Cultivate Kansas City 1supports local food projects and helps build communities that support small scale city farms. To date, they have helped start more than 40 farms and have provided thousands of hours of technical assistance. The Seed Fund grant will support installation of an irrigation system at the Somali Bantu Community Center Community Garden. Funds will support the design and installation of an efficient watering system, the excavation, permit and the purchasing of equipment and materials.

Creative Action 1Creative Action, in Austin, is central Texas’ largest provider of afterschool programming, arts enrichment and character education. The Seed Fund grant was awarded to support Color Squad, a teen program that will teach youth how to design and construct public murals. Color Squad will work under the guidance of a Creative Action teaching artist to identify how a historically underserved neighborhood could benefit from beautification and placemaking. Through extensive interviews of key players in the neighborhood and the city beyond, as well as internet and library research, the team will investigate the space with a focus on history, community aspirations, and current challenges. Using the information gathered, the Color Squad will design a mural and related public art projects that elevate, illuminate, and beautify the space with the ultimate goal of supporting and uplifting local residents. They will build and paint their project, and end with a community celebration of the artwork with neighborhood residents.

Raphael Academy, is a Camphill-inspired private school initiative for students in grades six through twelve and young adults ages 21+ with Aspergers, Autism Spectrum Disorder, and other learning disabilities. Located in New Orleans, Raphael Academy’s mission is to meet its students with reverence and compassion and to educate them wholly, awakening their full potential as unique individuals, actively involved in life and engaged in the community. They are currently enrolling students for the school’s 2nd year. The Seed Fund grant will support specialty, vocational skills classes such as gardening, ceramics, cooking, and weaving.

Raphael Academy 1

Manna Food Center in Gaithersburg, MD, collects and distributes three million pounds of food annually to food-insecure clients in the Washington DC area. The Seed Fund grant will Manna Food Center 1support their partnership with Farm to Freezer. Manna receives a generous donation of unsold surplus fresh produce from local farms and farmers markets during the growing season. Farm to Freezer prepares and freezes surplus produce in season to supplement the shelf stable items provided to the center’s clients in the winter months. The grant will specifically fund the development of an educational component to the program so that clients are equipped with the knowledge and skills needed to integrate the produce into healthier meals.  A Farm to Freezer kitchen manager/educator will work with Manna’s dietician to teach hands-on cooking skills and nutrition classes to Manna’s clients as well as partner organizations such as Family Services, serving psychiatric rehab clients, and Montgomery County Pre-Release program, serving incarcerated residents in their transition back into society.

Catskill Mountainkeeper, of Youngsville, NY, was founded as a community-based environmental advocacy organization dedicated to creating a flourishing sustainable economy in upstate New York. The Seed Fund grant will support their Capital Access program to facilitate farmer-friendly loans and business planning services. The program specifically looks to provide capital to farmers who want to innovate, diversify, grow or otherwise strengthen their business to establish the Catskill Mountains as a prominent foodshed for the New York Metropolitan market, as well as a consistent and reliable producer for the local economy. Catskill Mountainkeeper will include a business planning component as a requirement for participants of the Capital Access Program to help ensure a high success rate.

Catskill Mountain Keeper 1

Ellie Lanphier is Program Assistant, Philanthropic Services.

Investing with a Gender Lens

May 10, 2013

 

This post was originally published on TriplePundit

By Marlena John

As a woman entering the finance world, the title of the session at the Slow Money National Gathering, Female Investors: The Most Important Change Agents on Earth, certainly sparked my interest.

Don Shaffer, President & CEO of RSF Social Finance started by telling the story of when he was a golf caddy in New Jersey, slinging golf clubs for Wall Street traders and bankers. Back then, women were not allowed on the golf course, which reflected the situation of most of Wall Street and the finance industry as a whole. The few women who did work in finance got paid a lot less than the men.

Fast-forward twenty or so years. There are a lot more females in the field, taking leadership in investment opportunities, and playing golf. The Equal Pay Act of 1963, signed by President Kennedy, prohibited pay differences based on sex. Great! But, if you think that everything is hunky dory, then you’d be wrong. As it turns out, women are still making less money than men on average, and this is particularly true on Wall Street. Shaffer claims that females on Wall Street make 55-62 percent as much as males do, though I’ve seen statistics that claim it is as high as 77 percent. Even if the 77 percent stat is accurate, women in finance are experiencing a significant, and unwarranted, pay gap.

So, women are getting paid less, and that’s not cool. We also have many more men than women investing and working in finance. But why should we care how many women investors there are? Don Shaffer laid it out well.

Continue reading on TriplePundit

 

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