In March of this year, the Sonoma County GoLocal Cooperative received a grant from the RSF Seed Fund for development of the Sonoma County TimeBank.  This Seed Fund grantee was selected by an RSF staff advisory group that felt their work was especially aligned with RSF’s mission to transform the way the world works with money.

Time Banks are a pay-it-forward system that helps people exchange favors and skilled work in the currency of time rather than dollars (click here to watch a short video about the Time Banking movement). In February, Sonoma County community members such as BALLE, Transition Cotati, Sonoma State University and GoLocal collaborated to launch this county-wide Time Bank.  They have gathered nearly 80 members so far and have received an outpouring of interest and enthusiasm for the project. They are using their Seed Fund grant to manage Time Bank activity, give community presentations, and publicize and do outreach for the Time Bank.  For more information or to sign up, please visit www.SonomaCountyTimeBank.org.

The Sonoma County TimeBank will be a part of the larger work of Sonoma County GoLocal Cooperative. This organization is a network of locally-owned businesses, citizens, non-profit organizations, and government agencies working together to build a resilient and thriving local economy by supporting local, independently-owned businesses and promoting sustainable practices. Their goal is to reclaim local economic power by encouraging local exchange through banking, buying, eating and drinking, shopping, healing, and giving.

Watch A Short Video About Sonoma County GoLocal Cooperative

Click here to view the embedded video.

To learn more about Sonoma County GoLocal Cooperative, visit http://sonomacounty.golocal.coop/.

To learn more about the RSF Seed Fund and how you can help support new and innovative projects like Sonoma County TimeBank, click here.

Kelley Buhles is Program Manager for Philanthropic Services at RSF Social Finance.

By Leslie Christian

I began this series by questioning the assumption of infinite growth, which is embedded in modern portfolio theory and underlies the asset allocation practices of the majority of investors.  Ecological limits will eventually constrain the expansion of gross domestic product (GDP) as natural capital is depleted and the ecosystem services upon which we rely for survival and prosperity can no longer meet our demands.  In the face of ecological limits, investors have choices in how we respond to the very real possibility of negative GDP and how we choose to allocate our investment assets.  I offered a new asset allocation framework based on long-term economic value and integrated risk in place of short-term individual returns and risk defined as volatility of returns.

This new framework flies in the face of conventional theory and investment strategies.  And, no matter how logical the argument or reasonable the concepts, these ideas will be dismissed by many investment professionals, including members of foundation investment committees, consultants  to pensions and wealthy families, brokers, Wall Street investment bankers, and advisors to Congress and the White House.  They are part of a system that equates speculation with investment and looks with doubt upon those who suggest that investing might mean more than that.

Nevertheless, we need a new framework.  It is not physically possible to continue the same kind of growth we have experienced, and we can’t try to fit what we know about ecological limits and growth into the existing investment framework.  If we don’t seriously consider the long-term impacts of ecological limits, we will encounter one unpleasant surprise after another.  And the term “unpleasant” is an understatement.  Already, vast numbers of people are suffering as a result of climate change, but they are primarily poor and live at the economic margin.  Eventually, no amount of money will protect us, and the entire global economy will be affected.

As we shift to a new investment model that replaces short-term financial returns and the risk of price volatility with long-term economic value and integrated risk, we face significant challenges.  First and foremost, we have to shift our thinking from “I” to “We” and recognize that our financial decisions don’t exist in a vacuum.  Everything is interconnected.  Increasingly, long-term economic value will depend upon cooperation, collaboration, and adaptation.  In the face of ecological limits and the potentially wrenching social changes that may ensue, the riskiest investments will be those that depend on the existing economic order to continue.  Investors who consider the big picture—the whole system—will benefit, and those who remain fixated on short term exploitation will be exposed to increasing risks.  Even ecological carpetbaggers will find it increasingly difficult or impossible to financially exploit our natural systems.

As I write this, I am reminded that I am asking a lot of myself and you.  I am suggesting that our investment process consider the long term condition of all members of the economy, including the environment.  We risk not being taken seriously by “real investors.”  While that may be true to some degree, I have been encouraged by the openness and interest of many professionals who sense that this new framework addresses issues that are increasingly relevant.  At this early stage in the rewriting of investment theory to address the reality of ecological limits, we must be bold and courageous.

I believe that if investors truly understood their investments, they would want to make changes.  Just as well-off travelers who witness poverty and starvation find it hard to return home without “doing something about it,” investors who really understand what they own are more likely to take action.  By seeing a place as it truly is, tourists transform.  By rigorously examining all aspects of our investment portfolios, investors transform.  As Don Shaffer has said (and as I quoted last time),  “Instead of having all your money tied up in a financial system that has become increasingly complex, opaque, and anonymous, based on short-term outcomes, you can now help create an alternative that is direct, transparent, and personal, based on long-term relationships.”   In the face of ecological limits and associated risk, this is the route that promises the highest long-term economic value.

I am ending this series with some suggestions for evaluating your current and potential investments.

1. Follow the money.  Whenever you do not personally know the recipient of your investment dollars (which is the vast majority of the time!), go on a fiduciary hunt to trace the flow of funds through every intermediary until you get to the end.  Try to figure out how much of your money actually gets to the end user and what they are doing with it.
2. Investing in publicly traded stocks is like buying used cars.  You aren’t really giving your money to the company, so it’s hard to follow the money in the way I’ve described above.  However, even though your money doesn’t actually go to the company, you are supporting the company by buying its stock.  Higher stock prices are generally favorable to businesses and management.  So, go find out whether you want to “help out” the companies whose stocks you own.
3. Avoid being an apologist for corporations.  If you’ve invested in publicly traded, multinational corporations, acknowledge it and the associated risks and problems.  Don’t try to make the case for the sustainability of a fundamentally flawed system.
4. Consider the life cycle.  If you invest in a small company or a start-up, find out what the company’s plans are.  Does it intend to remain in the community, or is it planning to sell as soon as possible? How big does it want to get, and what is it willing to sacrifice in order to achieve that growth?

Stand your ground.  Speak up.  Teach others.  Walk the talk.  Question everything and everyone, including your investment advisor!

Leslie E. Christian is Chief Investment Officer and Chief Executive Officer of Portfolio 21 Investments. She has more than 35 years of experience in the investment field, including nine years in New York as a Director with Salomon Brothers Inc. She received her bachelor’s degree from the University of Washington and her MBA in Finance from the University of California, Berkeley. Leslie is Chair of the Board of Upstream 21 Corporation and Portfolio 21 Investments and serves on the RSF Social Finance Investment Advisory Committee.

Previous Posts in This Series:

1. Getting Serious About Long-Term Investing
2. Allocate Your Risk Response: Ostrich, Musical Chairs, or Plan B?
3. Investment Strategies: From Carpetbagging to Community
4. Investment Strategies: Getting Down to Details on Eco-Carpetbagging, Global Good, and the Transition to Community

RSF has a long history of innovation, driven by our mission to transform the way the world works with money.  When creating our Donor Advised Fund Impact Investing Portfolios, we went through several strategies before finding the one that best aligned with our investment thesis to be direct, transparent, long-term, relationship-based, and with a focus on place-based economies (see this past blog post).   The current portfolio holdings are a result of actively aligning investments with RSF’s investment thesis while also seeking out catalytic investments that can have deep impact.  For example, RSF has supported the first real estate fund to protect and restore ecologically important ranchland, as well as a fund supporting women-led co-ops in Latin America, and we have also invested in the only loan fund to exclusively provide short-term bridge loans to non-profit organizations.

In addition to the above investments, RSF has actively worked with fund managers to create funds that address our specific focus areas, such as Ecological Stewardship.  When searching for a community development bond fund that invests in environmentally friendly bonds, we and our investment advisors at Imprint Capital realized that no such fund existed.  We saw this as an opportunity rather than a hurdle.  After reviewing the landscape of bond managers, we contacted Community Capital Management (CCM) to inquire as to whether they could create a customized portfolio of environmentally-focused bonds for us. CCM was up to the challenge and partnered with us to create guidelines for the portfolio.

Building on CCM’s knowledge of the bond universe and our desire for environmental impact, it was decided that investments would be made in alternative energy, conservation, smart growth development, green retrofits, energy efficiency, brownfield development, and environmental remediation.

One of the projects RSF is able to support through our innovative partnership with CCM is the Comprehensive Everglades Restoration Plan (CERP).  CERP is a joint project among state, federal, tribal, and local governments to restore, preserve and protect the Everglades ecosystem in South Florida.  CERP also provides for other water-related needs in the region, including water supply and flood protection.  It goes without saying that this valuable environment bordering the Gulf of Mexico needs preservation and protection now more than ever, given the recent oil spill.

The bond that helped fund the project is part of the Build America Bond program and was issued by the Florida Department of Environmental Protection. The Build America Bond will not only create ecological impact by supporting CERP, but will also be a catalyst for important economic benefits to the region, including recreation, tourism, and agriculture.

We believe that this holistic approach is essential for successful restoration and preservation, of both the natural ecosystem and of the local communities that call the region home. Participating in the creation of cutting-edge, common sense investments such as this one with Community Capital Management is exactly why we created our Impact Investing Portfolios, and we look forward to more excellent opportunities like this in the future.

Visit www.ccmfixedincome.com to learn more about Community Capital Management, and visit www.evergladesplan.org to read more about the Comprehensive Everglades Restoration Plan. To read a press release from CCM about this project, click here.

Taryn Goodman is Impact Investing Manager at RSF Social Finance.

This past June, while most financial institutions set their third quarter interest rates based on global financial market conditions, RSF staff held our sixth quarterly pricing meeting in community with our borrowers and investors. Rather than study abstract numbers on computer screens or ticker tapes, we met in the beautiful (and LEED certified) offices of Seventh Generation in Burlington, VT, to have a conversation among stakeholders – hearing each others’ needs, and considering the consequences of raising or lowering the RSF Social Investment Fund quarterly interest rate, and subsequently, RSF Prime, the rate for our borrowers.

RSF investors and borrowers traveled to Burlington from all across New England to meet with myself, Taryn Goodman (RSF Impact Investing Manager), and Don Shaffer (RSF President & CEO). Nicole Dawes of borrower Late July drove several hours from their Cape Cod offices for the occasion. Dan Fulham of borrower Otter Creek Brewing Company/Wolaver’s Organic Ales made a special trip to Burlington in the midst of a busy work itinerary involving several Northeast destinations. Dale Rodriques of Mary’s Gone Crackers traveled all the way from Chico, CA, to participate in both our pricing meeting and the Slow Money Alliance National Gathering (more on that below). Cory Greenberg represented Ten Directions, which operates the Guest House, a retreat and conference center in Connecticut. (An experienced social finance practitioner, Cory has served on the board of the Cooperative Fund of New England since its inception.)

The high number of borrowers representing RSF’s Food & Agriculture focus area was no coincidence. We planned this quarter’s pricing meeting to coincide with the RSF-sponsored Slow Money Alliance National Gathering, during which 600 investors, entrepreneurs, financiers, journalists, non-profiteers, and foundation staff gathered  just down the road from Burlington at Shelburne Farms to learn about the latest efforts to connect investors to local food systems, catalyzing new forms of social investing and philanthropy for the 21st century.

In fact, all of the investors who attended RSF’s pricing meeting also attended Slow Money’s event, including Ari Derfel, who announced that he has recently been appointed Slow Money’s new Executive Director!

The RSF pricing conversation covered a variety of topics. One investor noted that over the last several quarters, RSF’s financial returns to investors have been high compared to three-month CDs or money market funds, with much higher social benefit. “Why,” he asked, “aren’t there so many people invested that RSF would grow to a billion dollars in assets, serving hundreds more high-impact borrowers? The world needs that, society needs that!”

In fact, it is only because we de-coupled the RSF Social Investment Fund pricing from the London Interbank Offered Rate (LIBOR) that we have been able to offer any return to investors at all! Had we decided to continue linking our investor returns and borrower interest rates to LIBOR, investors would have had to pay RSF for the privilege of investing… which didn’t make sense given our investors’ needs, our borrowers’ ability and willingness to accommodate higher interest rates, and RSF’s own operating needs.  (For further details, see this post from November 2009 announcing the shift in how RSF sets pricing, plus a breakdown on how the numbers add up.  You may also be interested in this post from Siegfried Finser, RSF trustee and co-founder, on RSF’s decision to offer interest to investors at all.)

Ari’s reflections after the experience summed up my own favorite moments of the pricing meeting. “It was very encouraging,” he said, “to hear RSF investors who were willing to consider lower returns in order to support the work of the borrowers, and borrowers  who would pay higher interest rates on their loans if that meant that RSF could attract more investors, and therefore support even more projects [like the food companies that would present later during the Slow Money Entrepreneur Showcase]with loans.”

Several times over the course of the Slow Money National Gathering, Ari and others pointed to RSF’s pricing meetings as an example of the type of financial innovation the world desperately needs in order to bring money back to earth, and to bring personal (if not also spiritual) values back to financial transactions.

It amazes me to think that something as simple as bringing investors and borrowers together with RSF staff to discuss the terms of our relationship is a radical idea. Given how complex the financial world has become, is it possible that the very concept of simplicity has become revolutionary?

As is true of all of RSF’s innovations, we do not create direct, transparent, and personal systems, like the pricing meetings, with the intention of trade-marking them and keeping them to ourselves; quite the contrary, we hope that the idea of holding pricing meetings will catch on amongst other financial institutions.

After hearing people talk about the pricing meetings at the Slow Money event, at least one leader of another financial institution remarked, “That’s a good idea, maybe we should do that, too.”

We hope they will! If other institutions follow RSF’s lead, it will only accelerate our progress toward our mission to transform the way the world works with money.

Elizabeth Ü is Manager of Strategic Development at RSF Social Finance.

Through the generous and sustained support of parents and friends of the school over the past 16 years, the Foundation has been able to acquire, develop and maintain the downtown site that houses classrooms, administrative offices, and three retail shops. The city of Sebastopol has also shown its support for this unusual mixed-use project, viewing it as an example of smart growth planning that adds vitality to the city’s downtown core.

This past spring, with the school facing significant state funding cuts, the Charter Foundation determined that paying off the mortgage early would free up resources it can now use instead to support teacher salaries and student programming.

As a public charter school, the Sebastopol Independent Charter School receives no public funds for facilities, so the entire community is proud of this rare achievement of owning its campus outright. We at RSF are glad that our loan was able to contribute to this enormous success.

For more information about the Sebastopol Independent Charter School, contact Susan Olson, Executive Director, at seolson@sonic.net or visit www.sebastopol-charter.org.

Curry Without Worry giving out food in San Francisco's Civic Center area

This past July, RSF was pleased to make 47 grants totaling $437,394. RSF is able to support these projects through the generosity of our donors who recommend grants to us through their Donor Advised Funds.  While the funds are being held at RSF, we invest the money in our cutting edge Impact Investing Portfolios, which ensure deep-impact, mission-aligned investments.  Featured below is one of our grantees from July, as well as a list of all of the organizations that received grants from RSF last month.

Spotlight On: Curry Without Worry

Curry Without Worry provides free, healthy, soul-pleasing Nepalese food to hungry people in San Francisco’s Civic Center once a week. The meal is accompanied by a dignified and rich Nepalese cultural experience, including drumming, singing, learning, and leisure. It is their philosophy that hunger is not defined by an empty stomach, and for this reason, Curry Without Worry is open to whomever hungers to join. Learn more about Curry Without Worry by watching this video.

Ecological Stewardship

Brunswick Park and Gardens
Claude Pepin
Pachamama Alliance

Education and the Arts

Be Present
Charter Foundation
Christ United Methodist Church
Curry Without Worry
Duane Elgin
Earth Island Institute
Freunde der Erziehungskunst
Friends of CRAFT, Inc.
Friends of Preschool Family
Global Citizen Year
Green America
Green Map System, Inc.
Hawthorne Valley School
Housatonic Valley School
KQED
KRCB
Marin Waldorf School
Oberlin College
Pacifica Foundation
Pasadena Waldorf School
Portland Waldorf School
Positive Futures Network
Ryerson University
Seattle Waldorf School
Shining Mountain Waldorf
stone circles
Tucson Waldorf Education Association
Waldorf School of Atlanta
Waldorf School of Orange County
Washington Waldorf School
Woodland Star Educational
World Affairs Council of N. CA
Yuba River Charter School

Social Finance

BALLE
Dane County Timebank

Other

International Center for Traditional Childbearing

Kelley Buhles is Program Manager for Philanthropic Services at RSF Social Finance.

We are excited that Resource Generation has committed to incorporating more impact investing tools and resources into all the organization’s programs for young people with wealth, including this event, in addition to its comprehensive offerings related to philanthropy and giving.

If you have ideas, tools, or other resources to share with this audience, we encourage you to submit a workshop proposal by the August 9th deadline. If you are between the ages of 18-35 and want to meet, learn, and co-create with others who are using their wealth and privilege for social change, don’t wait to register: makingmoneymakechange.org/registration.