RSF Social Finance Helps Foundations Invest in Sustainable Food

RSF Social Finance, a "pioneering non-profit financial services organization dedicated to transforming the way the world works with money," is delving into sustainable food. The company is laying out a new model for how we might transform our agricultural sector with investing that pays attention to more than just the bottom line.

The organization has just launched its new Food & Agriculture Program-Related Investing (PRI) Fund, which aims to infuse local and sustainable food enterprises with "patient capital," another way of saying investing for the long-term in projects that might not rapidly shell out massive returns.

Considering that growing and providing food is a long-term project that takes its own amount of patience, this approach to investing in these enterprises seems like the most appropriate way. As I wrote previously in my post about the Agricultural 2.0 conference, where investors interested in big, fast profits shook their heads at the prospects of the food industry to play their game, "the health of our food system and the land that sustains it, are far more valuable than a quick buck."

So what's the story with this program-related investing stuff? This method of investing allows foundations to take part of the five percent annual distributions they are required to make by law and put it into recoverable investments instead of grants. RSF will leverage the fund to provide loans of at least $50,000 to both non-profit and for-profit social enterprises that are working to transform important aspects of our food system, from food production and access to value-added processing, distribution, and waste management.

Foundations can invest in the new PRI Fund to the tune of at least $100,000 over five years, which will give them a one percent annual return, allowing them to “recycle” their investment by further investing in PRIs or giving grants using that money. An RSF press release states that "the Food & Agriculture PRI Fund reduces the barriers to entry for foundations that want to leverage their philanthropic dollars for additional impact through PRIs, but that lack the in-house expertise to source, underwrite, service, and monitor loans."

The idea of investing in a way that brings less financial return but more social benefit has been pioneered by Woody Tasch in the concept of Slow Money, the name of a new NGO Tasch has founded to promote this idea.

It's a great thought, and starting with foundations is a good way to get it going. But will very many people be interested in slowing down their rate of return in order to support positive social enterprises? Once we all start understanding more and more that the things we depend on—especially food—cost a lot more than just money, I'm sure the idea will come into its own. For now, RSF is off to a good start.

Photo: drakemor via stock.xchng