Powerful lending that builds better communities
You may not have heard of Austrian philosopher Rudolf Steiner, but his legacies have had long-lasting effects on farming, education, and ideas of how we can interact with one another in the economy.
Steiner, who lived and worked at the turn of the 20th century, was the father of Waldorf education, which emphasizes developmentally appropriate and play-based learning, as well as biodynamic farming, a holistic approach that integrates all aspects of farming (such as soil fertility, livestock care, and plant growth), generating health and fertility from within the farm itself.
His ideas of how to shape a community-based economy have also been influential, and were the roots of what would grow into RSF Social Finance, one of the longest running social investment firms in the US.
RSF Social Finance began in the 1950s as the Rudolf Steiner Foundation, formed to advance Steiner’s ideas that money should be used to connect and strengthen communities.
The foundation gave its first loan in 1984, when the Pine Hill Waldorf School in New Hampshire was devastated by a fire and needed money to rebuild.
“RSF is working to build an economy that is rooted in community, considers everyone’s needs, and restores trust in financial relationships through transactions that are direct, transparent, and personal,” says John Bloom of RSF Social Finance.
“This approach is rooted in Steiner’s theory of associative economics, which recognizes the interdependent role we all play (producers, distributors, and consumers) in the economy.
Essentially in this view, human beings participate in the economic sector to meet one another’s needs, rather than out of pure self-interest.” 30 years after its first loan, RSF Social Finance has over $170 million in assets, with a loan portfolio of over $85 million.
Staying true to the ideals of Rudolf Steiner, RSF Social Finance focuses on supporting nonprofit and for-profit social ventures in the fields of food and agriculture, education and the arts, and ecological stewardship.
One project funded by RSF is Common Market, a nonprofit enterprise in Philadelphia.
Common Market was founded by Philadelphia residents Tatiana Garcia-Granados and her husband, Haile Johnston, who noticed a lack of fresh food in their north Philadelphia neighborhood.
The couple realized that by connecting nearby farmers with shoppers and institutions in the area, such as hospitals, universities, and charter schools, they could both bring fresh food into their community while bringing more business to local farmers.
The couple searched for financing through conventional lending institutions but did not find any takers. Common Market turned to RSF Social Finance and received a line of credit through the RSF’s Program-Related Investment (PRI) fund, which made the organization’s growth possible.
Common Market now works with over 75 producers and processors within the mid-Atlantic region and connects them with schools, workplaces, hospitals, and other institutions.
“No one understood our business model or the sustainable agriculture piece and why what we were doing was meaningful,” says Garcia-Granados.
“Common Market is a nonprofit social enterprise—it runs like a business but invests all profits in expanding access to markets for farmers and to fresh food for urban communities.
The people at RSF were the only ones who understood.” Common Market is one of the many enterprises that investors can impact directly through investing with RSF Social Finance, which works with individual investors as well as foundations.
Individuals can invest in RSF’s Social Investment Fund, which has a minimum investment of $1,000 and an interest rate similar to most Certificates of Deposit (CDs).
Investors in the RSF Social Investment Fund also get an opportunity to meet one another and borrowers at quarterly meetings, at which RSF’s interest rates are recommended.
And by taking an approach that emphasizes personal relationships and interactions between lenders and borrowers, RSF Social Finance is doing more than supporting worthy and important enterprises—it is changing the way people interact with money and the economy at large.
“When I attended my first RSF quarterly pricing meeting, it completely transformed the way I thought about money,” says RSF individual investor Christopher Steinrueck.
“All of a sudden, there was this surreal moment where I actually grasped what money was. It holds power. I can place that power in a big bank or I can place it in the RSF community. I know a lot of the organizations that RSF lends to, and I’m confident that they are generating positive impact.”
[Note: Investing in the RSF Social Investment Fund involves risks since, like most investments, it is not federally insured. To date, the RSF Social Investment Fund and its affiliates have maintained a 100% repayment rate to investors since its inception, with a loan loss rate of 2.04%.]