Deb Nelson is a familiar face to most of us here at Social Venture Circle. As the former Executive Director of Social Venture Network (1/2 of the two organizations that merged to create SVC), she embodies the spirit of conscious, soulful business. While the concept of money and wealth has earned a bad reputation in our society, Deb encourages us to think about the real purpose of money: it’s power to transform, and even heal, the world around us. Today, Deb is the Vice President of Client and Community Engagement at RSF Social Finance, an organization on a mission to transform the financial system. Read on to learn about her view on how money can empower the people:
First and foremost, can you tell us a little about RSF Social Finance?
At RSF Social Finance, we’re focused on transformation. We help people transform their relationship with money and flow capital to transform financial systems. Our main goals are to:
- Help investors and donors align their money with their values
- Provide catalytic capital to innovative social enterprises
- Advance the field of social finance
Working at RSF keeps me hopeful. I get to learn from and work with the most amazing change makers – social entrepreneurs, investors, donors, and RSF Fellows.
Your site has the following quote: “We envision a world in which money serves the highest intentions of the human spirit and contributes to an economy based on generosity and interconnectedness. Can you elaborate a little more on what this means, and how RSF executes this vision/value?
We use an associative economics approach, in which we bring people together to think about the real purpose of money: it can be used to support very good things, but it can also be used to support very harmful things. Most people are taught they’re not supposed to talk about money. And if you’ve got a lot of money, you were probably taught to not tell anyone about it and to make sure you’re always maximizing your wealth.
Instead, we encourage people to look at their relationship with money. We ask questions like, “How much is enough?” and “What do you really care about?” I’ve found that most people want to do good. Most people say they want enough money to care for their family, and they want to use their money to solve social and environmental problems.
In order for money to do good it has to circulate. Our current culture perpetuates a financial system that does great harm to the planet and most people on it. What we’re working to do is speed the transformation from an economy that’s based on extraction and greed to one that’s focused on regeneration and interconnectedness.
What are some specific programs at RSF that address this approach?
We work to create financial relationships that are direct, transparent and personal, so every quarter, we host Community Pricing Gatherings. This practice came from Esther Park, who used to work at RSF and is now a partner at Cienega Capital. She had the idea of bringing people in a financial transaction together (investors, entrepreneurs, intermediaries) to learn about their motivations and needs. We wanted them to understand one another’s purpose, and how they want to activate money for positive change.
Ten years ago, we began hosting these gatherings to create greater transparency and connection between investors and borrowers in our social enterprise loan program. One of the topics in these meetings was interest rates—how much Social Investment Fund investors earn and the interest that borrowers pay on their loans. We ask, what would it mean if we lowered the interest rate? Usually, when investors see that a higher interest rate would make it harder for social entrepreneurs to make their loan payments, they decide they don’t need a higher rate of return.
With RSF’s Social Investment Fund, you can start investing with as little as $1,000. What difference does this make in the larger scheme of things?
With our Social Investment Fund, the minimum investment is $1,000, which means you don’t have to be wealthy to invest with your values. We want to make it easy for people to support social enterprises focused on sustainable food and agriculture, arts and education, and climate and the environment. Since the inception of the fund 35 years ago, we’ve had a 100% repayment rate to our SIF investors.
Every $1,000 investment enables us to do more with our social enterprise lending program. We have over 1,600 investors. Many of them invest just $1,000, and some invest over a million dollars. The fund totals $140 million, and this catalytic capital makes it possible for RSF to support hundreds of groundbreaking social enterprises.
Tell me more about the Women’s Capital Collaborative, how does it work, and what have been some of its memorable outcomes?
RSF’s Collaboratives are philanthropic initiatives that provide integrated capital to earlier stage social enterprises. Through our Collaboratives, we are able to provide financial, human, and social capital to social enterprises with riskier or more disruptive models.
Over two years ago, we launched a Women’s Capital Collaborative, because it’s so much harder for women founders to raise money. In 2017, only 2% of venture capital money went to women entrepreneurs. Implicit bias is real.
As an entrepreneur, you need people to invest in you. Women are incredible business leaders, but when it comes time to raise money, they face much higher hurdles than their male counterparts.
Our Collaboratives can provide both capital and connections. We’ve raised over $4 million for our Women’s Capital Collaborative so far, and have deployed over $2 million. We’ve supported 28 incredible women-led social enterprises.
One of the ways we deploy gift funding is through Shared Gifting Circles. Female entrepreneurs spend the day together deciding how to best distribute a set amount of money amongst their organizations. We let the people closest to the work make the decisions. It’s participatory grant making, which turns the standard philanthropic model upside down.
Many entrepreneurs have never been in the shoes of a funder. But in this type of program, they can make funding decisions and learn about the complexities of being a funder. They also create meaningful connections with other entrepreneurs and receive vital support for their social enterprise.
Can you tell us about some of your success stories with women-owned businesses?
We worked with The Runway Project, which provides “friends and family funding” to African American entrepreneurs, especially women. They address the fact that many entrepreneurs of color don’t have access to a “friends and family round” due to the enormous racial wealth gap in our country. The Runway Project provides a unique model to address that problem and they also provide entrepreneurs with technical assistance and support services.
We partnered with them to help ensure that their pilot program in Oakland was a success. It was, and now they’re planning to expand into other markets.
What would you say to those who are just understanding the concept of using investments and money for good? How can they begin their journey to align their investments and money with their values?
If we want to address the world’s most pressing problems, now is the time to move your money in a way that aligns with your values. The good news is that it’s actually not that hard. There are plenty of ways to invest your money, and it can support new solutions and enterprises that are creating lasting, positive change in the world.
I encourage people to find out what their money is doing, and if it’s not doing good, move it. If it’s just doing slightly less harm, move it. If people want to learn more about how to leverage different types of capital for good, I suggest they read Joel Solomon’s book, The Clean Money Revolution. It really is possible to create an economy that works for all people and the planet too.