Giving Compass’ Take:
• Meredith Storton, writing for GreenBiz, discusses lessons learned after working with the Food System Transformation Fund, a pooled loan fund launched in 2010 to help rebuild regional processing, manufacturing, and distribution infrastructure that was lost as the food system industrialized.
• How can these insights help investors drive capital effectively in the food system? What are the major hurdles for food system sustainability?
The COVID-19 crisis has highlighted the inequities and fragility of our industrialized food system and accelerated the movement to create strong regional food systems that support local growers, provide food security, give communities agency over their food supply and yield environmental benefits.
These systems will remain out of reach, though, unless we address persistent, decades-old structural issues. Price pressures continue to challenge the viability of decentralized food systems and communities of color continue to be underserved — as farmers, food chain workers, supply chain entrepreneurs and consumers. We need to change both who we fund and how we fund if we want to create equitable, thriving regional food systems.
What will it take to achieve such massive shifts? RSF Social Finance has been reflecting on that question as we wind down our Food System Transformation Fund, a pooled loan fund launched in 2010 to help rebuild regional processing, manufacturing and distribution infrastructure that was lost as the food system industrialized. Restoring these supply chain links is essential to creating viable regional food systems, yet community-based infrastructure enterprises have limited access to both startup and growth capital.
Over the past decade, the fund provided $6.5 million in debt to 27 organizations across 14 states. More than 25 percent of borrowers grew into our senior secured loan portfolio or accessed traditional debt, while nearly 20 percent had to cease operations or substantially change ownership.
The enterprises between those two poles continue to need patient, flexible and diverse capital structures. That’s not because they’re failing, but because the finance ecosystem has failed to develop tools fitted to the needs of food system enterprises. This truth informs three fundamental insights from our work in the field of food system transformation.
- In food systems, high impact and high returns don’t mesh
- Farmers and communities can’t bear the risk
- Transforming the system will require philanthropic, public and private capital
Read the full article about investing in regional food systems by Meredith Storton at GreenBiz.
Interested in learning more about Funding? Other readers at Giving Compass found the following articles helpful for impact giving related to Funding.
Looking for a way to get involved?
A good way to complement your interest in Food and Nutrition is to connect with others. Check out these events, galas, conferences or volunteering opportunities related to Food and Nutrition.
Are you ready to give?
If you are looking for opportunities to take action and give money to Food and Nutrition, here are some Giving Funds, Charitable Organizations and Projects aggregated by Giving Compass where you can take immediate action.