The Interesting Funder Giving a Boost to Ethical and Sustainable Farmers

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In an industry that overwhelmingly favors large-scale production, small livestock farmers have a lot to gain from banding together, especially when they’re of the sustainable, organic variety. Two years ago, in Arkansas, family farmers dedicated to ethical animal husbandry created the Grass Roots Farmers’ Cooperative. The co-op supports its 13 member farms with loans, training, transport of goods, and marketing, helping ethical farmers get premium prices for premium products.

The Grass Roots Farmers’ Co-Op is already working with Heifer USA, the international organization’s domestic branch. And now, the co-op will benefit from another infusion of cash: $600,000 in customized financing from RSF Social Finance to help purchase and feed animals from member farmers. This is a loan, not a grant, but it’s worth a look. Not only are efforts like Grass Roots a promising development in Arkansas’ fragile economy; RSF is a large and growing social enterprise funder with an interesting story.

The initials refer to its original name, the Rudolf Steiner Foundation. The man isn’t universally known. Unlike the tycoons behind many of today’s foundations, he wasn’t a successful businessman. Steiner was a 19th-century Austrian philosopher and social theorist who developed quasi-scientific approach to living the good life. In the 1920s, Steiner memorably clashed with the upstart Nazi Party, but he died from natural causes before Hitler’s rise to full power. Steiner’s system is known as anthroposophy, and some might recognize him as the originator of the Waldorf schooling system.

Eleven years after Steiner passed away, the Rudolf Steiner Foundation got its start as a treasury of the Anthroposophical Society of America, a status that it maintained for fifty years. Only in the mid-1980s did a group of members imagine something bigger: an organization dedicated to “working with money” in ways consistent with Steiner’s economic philosophy. That is, solvent but less acquisitive, with an emphasis on collaboration between the sectors to meet society’s material needs.

During the subsequent decades, RSF Social Finance grew into a small but strong nonprofit financier with assets topping $150 million. Since 1984, RSF reports making over $450 million in loans, grants, and investments. Its activities are diverse. In addition to simple grants, RSF provides a long list of social enterprises with integrated capital, which it describes as “the coordinated use of different forms of financial capital and non-financial resources” These include loans, guarantees, investments, grants, and non-financial advisory support.

From its current headquarters in San Francisco’s Presidio, RSF Social Finance maintains a number of avenues for philanthropy, including a donor-advised fund, a seed fund, shared gifting, and several new funding collaboratives. Under current CEO Don Shaffer, RSF keeps its investment portfolio aligned to its social and environmental values, staying away from many of the usual Wall Street destinations.

A full $200,000 of RSF’s loan support for Grass Roots represents the first disbursement from the Soil Health Capital Collaborative, one of five such funds RSF offers. The collaboratives cover specific issue areas, providing seed capital and research funding to women-led social enterprises, biodynamics, local food, fair trade, and soil health.

As you can tell, sustainable agriculture and social equity are priorities at RSF. The goal is not only to keep organizations like Grass Roots alive, but to make them competitive in an economy of less-responsible giants, hence the loan.