Working with RSF Social Finance is an entirely new way to engage with money.

Our approach is rooted in community, considers everyone’s needs, and restores trust through direct, transparent, and personal financial relationships. Whether you are an investor, donor, or social entrepreneur, our purpose is to help deepen your connection with money and unlock the beneficial impact it holds.

Dear Friends,

I am thrilled to share inspiring stories from our community in this year’s annual report, such as the story of Lotus Foods. We have known Caryl Levine and Ken Lee for many years. They started the company in 1995 with the kind of passion and determination we look for. Not only do they want to make fundamental changes in how rice is grown, encouraging consumers to connect with the source of their food, Caryl and Ken also recognize that their capital is a critical ingredient in their business. Just as they support fair-trade conditions for workers and sustainable organic methods for growing rice—they also want to know where their money comes from and what they are supporting with their payments.

Lotus Foods’ original angel investor is a longtime RSF client. Their subordinated debt investor is also an RSF client. And, Ken attended one of our quarterly pricing meetings in San Francisco so he could meet more of our investors. Caryl and Ken want a direct and personal relationship with their capital providers. So what will happen when Lotus Foods’ financing needs exceed our current maximum of $5 million? Will they have to go to Citi or Bank of America?

This is our next great challenge and opportunity in the social finance community. At RSF, we are seeing increased demand from larger scale projects for more capital than we can provide to any single borrower. Going forward, we don’t want to “graduate” these clients to big banks. Instead, we want to create a vibrant trust network of participants who can come alongside us to extend these loans to meet borrowers’ financial needs. This will ensure that entrepreneurs like Caryl and Ken know their capital is coming from deeply values-aligned sources.

In 2013, we consciously began building this network with our existing community of investors and donors, as well as a wider network of trusted individuals, family offices and family foundations, wealth managers, community foundations, and community banks. In doing so, we began to recognize the real potency of our community. This co-lender/participant network is just one example of that. In the following report, you’ll hear from an array of RSF stakeholders—investors, donors, borrowers, grantees, and staff. From investor reactions to our quarterly pricing meetings, to staff appreciation for opportunities to build direct connections with clients and the work of Rudolf Steiner, I hope this report will provide a glimpse of the extraordinary individuals united by a shared purpose to transform the way the world works with money.

We are more committed than ever to building the networks necessary to create a robust system of social finance. I look forward to exploring this further with many of you.

And, I thank each of you for bringing your unique sense of purpose to the RSF community.


All my best,

Don Shaffer
President & CEO

Social Entrepreneurs

Rebecca Burgess, Founder, Fibershed

Fibershed received a $30,000 grant from the RSF Local Initiatives Fund to conduct a six-month study to assess the operational and market viability of a Northern California wool mill.

I started Fibershed in response to travels in Southeast Asia in the mid-2000s.  Viewing the supply chains that are responsible for creating the clothing that we import into the United States and observing the impacts – fresh water pollution and labor abuses in production facilities – was a devastating wake-up. In contrast, I observed villages in Laos, Northern Thailand, and Vietnam that were still using traditional cloth creation processes.

And, it was in these small villages where I observed multi-generational families thriving, children being afforded the opportunity to go to school with the earnings that were paid directly to the weavers for their textiles, and clean and abundant water sources that were stewarded by these communities. The contrast between the effects of industrial global capitalism and the longstanding textile traditions of indigenous communities was stark.

Fibershed is a response to the human and environmental exploitation in the apparel supply chain. Its purpose is to bring the means of production in proximity to those who wear, just as the food movement is a response to industrial agriculture that invites us to get up close and personal to that which we eat. We are trying to build a regenerative fiber system starting with the soil by working with ranchers and farmers to produce wool using environmentally beneficial methods, and by developing a regional value chain, so that our natural fibers are washed and prepared within our own state.

Working with a mission-aligned financial partner like RSF is incredibly important to me. For me, RSF stands for a “right relationship with money.”  For this “right relationship” to be the norm we have to develop an economy that has its feet on the ground and understands where true success derives from – balance, equity, and parity.  Biological systems thrive when these conditions exist, and thus, so do economies. RSF has been an instrumental guide in helping usher in the regenerative fiber economy through hands-on consulting and financial support from the RSF Local Initiatives Fund. For me, financial support is more than dollars, it can also be an invitation to collaborate and guide.

Social Entrepreneurs

Tracy Bennett, Head of Administration, Seattle Waldorf School

The Seattle Waldorf School received a $2.5 million construction loan to expand and renovate its facilities, which included several green building features.

I was new to Waldorf education when I arrived at the Seattle Waldorf School three years ago.  I immediately became deeply engaged in the pedagogy, the community, and the impact that the school has on students and families. Coming from a career in independent school education, what’s unique to me about the Waldorf model is the sense of shared vision and authenticity – the way in which we approach education in terms of the unfolding of human development, both in children and adults. This really brings us face to face with the real stuff of life and human relationships. It can be challenging and sometimes even painful, but it’s these incredibly genuine experiences that help us all grow and learn.

Our construction project added 2,500 square feet to our grade school facility, however it was much more than a renovation and expansion. I still get tingles every morning when I arrive and see our vision tangibly realized. Through the design, we created spaces that are filled with light, that have natural materials, that truly support and enhance the ways in which students learn and interact. This undertaking sent an important message to our students and faculty – it affirmed for our community: a) you’re worth investing in and b) we can do this.

A big reason RSF has been such a beneficial partner is their ability to understand the significance of this investment for the school. It’s demanded that we be extremely careful in our financial planning and management – RSF really held our feet to the fire. In contrast to a more traditional financial institution, we’ve welcomed the mentorship that comes with working with RSF – they’re walking this path with us. We enter into a long-term and intimate relationship when we’re taking on this level of debt. Having a partner that truly understands our mission and values is important to us. It’s so much more than a financial transaction. It is a holistic and enduring relationship, for which we are very grateful.

Social Entrepreneurs

Caryl Levine & Ken Lee, Co-founders, Lotus Foods

In 2013, Lotus Foods received a $950,000 line of credit to support their growth, including developing and distributing new value-added products in major retailers like Whole Foods, Safeway, and Costco.

In 1993, while visiting rural farmers in China, we learned about the incredible culture of rice. At the time, the most unique rice in major markets was basmati. Yet there were thousands of rice varieties going extinct because there was a lack of a market, and because farmers were being encouraged to replace their traditional varieties with new seeds requiring more water and agrochemicals that degraded their ecological systems, often for meager yields and earnings. Nearly half of the world’s population relies on rice as its dietary staple and about 75% of that supply is generated by small farmers cultivating rice under irrigated management.

This farming method consumes up to one-third of the Earth’s annual freshwater supply, depletes soils, and after cattle, is the second leading cause of man-made methane pollution.

We started Lotus Foods to give farmers an incentive to continue growing their traditional rices, and to guarantee a living wage for them from fair trade prices. Years later, our commitment to working with farmers using System of Rice Intensification (SRI) methodology deepened our mission of sustainability. SRI uses significantly less water than the conventional flooding methods used to grow rice, and results in higher yields and the need for fewer inputs like seed, synthetic fertilizer and pesticide, and labor. We want to expand the market for our products so that more farmers have an opportunity to grow rice this way. Global warming, diminishing water resources, food sovereignty, poverty alleviation – major issues worldwide – can all be positively affected just by changing how rice is grown. As these farmers flourish, so does our business.

The loan from RSF made complete sense for us. We’ve always valued working with a mission-aligned financing partner, and we were blown away when we attended our first pricing meeting. It’s thrilling to be a participant in the avant-garde of social finance. The current financial system is broken and we applaud RSF for creating space where a more sensible and holistic model can emerge and be practiced.

Investors & Donors

Christopher Steinrueck

Christopher has had an SIF account since 1985. But it wasn’t until recently, after he graduated from college, that he became an active client.

My relationship with RSF goes back 29 years ago to when I was born. My parents opened an account in my name, just as the organization was starting, but I wasn’t aware of it growing up. It wasn’t until after college that I learned about my account. I immediately felt a connection to the work and started making monthly contributions from my paycheck. I was just starting to have access to money, not a lot by any means, but I had enough to set aside a little every month and I didn’t want it sitting in a big traditional bank. I felt like it was the right thing to do – I wanted to support the organizations that RSF works with, many of which are near and dear to me.

When I attended my first RSF quarterly pricing meeting, it completely transformed the way I thought about money. It was this crazy experience that I’d never heard of before. We sat down with eight or nine investors and a handful of borrowers. We introduced ourselves, and then we just started talking –  talking about what the interest earnings meant for each of us, what we as investors wanted in return, and what we needed the interest for. And, on the flipside, we heard from borrowers on what interest rate they could afford and what they were using our money to accomplish.

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. A lot of money just sits around and you don’t really think about what it’s doing, especially at big banks where it’s just a number on a screen. To me, investing in RSF was an active thing to do with my money. I know a lot of the organizations that RSF lends to and I’m confident that they are generating positive impact.

Investors & Donors

Jennifer Ladd

Jennifer has a Donor Advised Fund at RSF. She opened her account in 2013 to put some of her inheritance towards social justice work.

Professionally, I work with money in a variety of ways. I lead workshops on class and classism for schools and organizations, and I coach individuals with wealth on their philanthropic goals and on managing a financial life that is aligned with their values. I do my best to integrate play, the arts, and levity in all of these activities, because working with money is often full of feelings of shame, anger, yearning, hope, and frustration. I’ve experienced all of these feelings first-hand.

At the age of 21, I inherited about $1,000,000, the source of which was Standard Oil. At the time, I was afraid to talk about my money and where it came from, because I was working side by side for justice with people without many financial resources. Eventually, after addressing my issues head-on, I overcame my fears and “came out.”

The act of diving into the fears one resists most, often through direct dialogue with people in similar or vastly different situations from one’s own, is one of the greatest tools I have found on this journey. This approach enabled me to gain a sense of liberation which has equipped me to deal with money and class issues in a more straight-forward way. However, one is NEVER done. I, along with everyone else, am a work in progress – as is the society in which we live and which we shape, consciously or unconsciously.

I chose to create a Donor Advised Fund at RSF as one way to direct some of my inheritance from my mother, who shared many of RSF’s values. I have been impressed with the consciousness with which money is treated at RSF and the structures that follow from that consciousness. I want to be a part of and support an organization that so genuinely holds the question of how we can work with money in a way that serves the common good, rather than one that tears us and this beautiful planet apart.


Social Entrepreneurs

RSF provides social entrepreneurs with critical financing to meet their capital needs; and, through a close relationship with us, our borrowers and grantees become part of a larger community working to transform the world and the way it works with money.

Investors & Donors

RSF works with investors and donors to leverage their financial resources for positive social and ecological impact. Our clients value knowing where those resources are being put to work because with that knowledge, comes an opportunity to develop a deeper connection with money.

RSF is transforming the way the world works with money by building relationships within financial transactions. Hear directly from our clients on how they are participating in that process.

RSF had a strong year of growth in 2013. We increased total assets by 7% to $163.4 million and grew total revenue by 5% to $20.2 million. In developing an increasing number of relationships with clients, we received a 13.5% increase in total investment funds, reaching over $100 million from 1522 investors. We also made $27 million in loans (12% over 2012) and $12 million in grants (50% over 2012) to social enterprises working across our focus areas of Food & Agriculture, Education & the Arts, and Ecological Stewardship.

As a leader in the field of social finance, we approached 2013 as a year in which to take advantage of the slightly improved economy and the ever-increasing interest in leveraging financial resources for social and environmental benefit. At the same time, we continued to wrestle with the residual effects of the great recession. We have been rethinking the social impact of risk management, as well as forging new links between our current lending and philanthropic programs to leverage our resources in impactful and innovative ways. The need for social finance is growing immeasurably, as more and more people call for change in the financial system. We hope that as you read through our financial highlights, you will see not only our steady growth, but will also gain a sense for the values-driven quality of our work.

In the current macroeconomic environment, as the Federal Reserve tries to stimulate the economy, interest rates are so low that unusual challenges have arisen. There is excess liquidity in the banking system and not enough qualified loan opportunities to fund. As a result, most lenders have been forced to become investment managers looking to invest excess cash. We have experienced this with our Social Investment Fund (SIF) and there is a cost to RSF to hold excess SIF funds in this unusual environment. Therefore, at the end of 2013 we determined that we needed to increase our base spread by 0.25% (to 4.25%) for the first time since 1991.  This increase has allowed us to maintain competitive rates to our borrowers and investors, and for RSF to remain financially sustainable.  We will continue to review our base spread on a quarterly basis, as part of our pricing meeting discussions.

In 2013, we continued on a trend of growth for RSF as an organization. For the four year period of 2011 to 2014, we determined that for RSF to be most effective and to meet the demand from our community, we needed to expand our capacities.  Over the past several years, we have funded additional personnel and rent costs from specific reserve funds and operating fund revenue.  As we wrap up this initial growth phase, we will begin to focus on operating leverage.  RSF operating revenue is generated from our lending and philanthropic services programs, and also from gifts received. Our existing cost structure will be stable going forward, subject to inflation increases, and we will leverage our improved capacity to generate additional revenue, primarily from lending activity.  We are focused on increasing our lending portfolio balance by retaining existing borrowers, adding new borrowers, and reducing volatility in the portfolio.

We invite you to participate in the growth of all our programs as we connect more social enterprises with values-aligned investors and donors.

Warm regards,

Gary Schick
Chief Financial Officer




Consolidated Statement of Financial Position

2013 2012 2011
Cash and Cash Equivalents $29,275,660 $20,542,469 $9,538,278
Restricted Cash 366,752 429,899 664,000
Loans Receivable – Borrower Funds, net 71,670,971 78,443,790 70,421,764
Investments, at fair value 60,873,889 51,811,590 52,381,111
Prepaid Expenses 1,058,947 994,351 1,711,975
Furniture and Equipment, net 116,501 94,408 40,843
Total Assets 163,362,720 152,316,507 134,757,971
Liabilities & Assets
Notes Payable – Investor Funds 101,806,773 89,664,637 75,358,320
Notes Payable – Other 0 1,999,702 1,973,599
Other Liabilities 501,222 242,508 278,080
Total Liabilities 102,307,995 91,906,847 77,609,999
Net Assets:
Reserve Funds 8,273,738 7,855,399 6,323,517
Philanthropic Services Funds 52,986,572 52,849,887 51,225,572
Mark to Mark on Swap Contracts (205,585) (295,626) (441,960)
Total Net Assets 61,054,725 60,409,660 57,107,129
Total Liabilities and Net Assets $163,362,720 $152,316,507 $134,717,128

Consolidated Statement of Activities & Changes in net Assets

2013 2012 2011
Revenue, Gains & Other Support
Fee Income $879,576 $839,036 $553,629
Net Interest and Investment Income:
Interest Income – Borrower Funds 3,975,145 4,468,071 4,215,891
Investment Income, net 3,181,235 (678,576) 3,524,401
Grants and Contributions 12,200,250 14,635,328 10,812,576
Total Revenue, Gains and Other Support 20,236,206 19,263,859 19,106,497
Program Services:
Grants made from Programs 11,994,989 8,381,981 4,989,079
Personnel Costs 4,400,357 3,956,968 3,499,801
Interest Expense – Investor Funds and Other 677,987 937,827 919,826
Loan Loss Provision, net 535,000 1,042,830 2,851,591
Other Projects and Program Expenses 172,256 488,077 539,945
Supporting Services:
Management and General 1,810,552 1,153,645 1,345,289
Total Expenses 19,591,141 15,961,328 14,145,531
Changes in Net Assets 645,065 3,302,531 4,960,966
Net Assets at the Beginning of the Year 60,409,660 57,107,129 52,146,163
Net Assets at the End of the Year $61,054,725 $60,409,660 $57,107,129

RSF is committed to supporting our greatest internal resource—the people who work here. We attend to developing the individual capacities of staff and to building a strong organizational culture, in order to be of deep service to our clients and community.

Alex Haber
Program Manager, Philanthropic Services
Anna Lin-Campbell
Administrative Assistant to Executive Team
Anastasiya Litvinova
Credit & Portfolio Manager, Social Enterprise Lending
Carmen Poe
Loan Documentation Associate
Carrie Jones
Business Systems Analyst
Catherine Covington
Manager, Client Development
Cres Van Keulen
Executive Assistant
Dan Dao
Associate, Credit & Portfolio Mangement
Dave Shong
Lending Counsel
Don Shaffer
President & CEO
Ellie Lanphier
Program Associate, Philanthropic Services
Emily Jones
Accounting Manager
Gary Schick
Chief Financial Officer
Ghion Dessie
Staff Accountant
Jenn Raley Miller
Manager, Human Resources
Jillian McCoy
Communications Manager
Joe Avenatti
Managing Director, RSF Capital Management
John Bloom
Senior Director, Organizational Culture
Kate Danaher
Senior Lending Associate
Katrina Steffek
Director, HR & Staff Development
Kelley Buhles
Director, Philanthropic Services
Mark Herrera
Senior Manager, Client Development
Megan Mendenhall
Communications Assistant
Melinda Cheel
Senior Manager, Marketing & Communications
Meredith Storton
Client Development Associate
Mike Gabriel
Lending Manager
Mike Miller
Senior Lending Manager
Natalia Morozova
Staff Accountant
Nina Maystrovich
Director, Loan Operations & Portfolio Management
Rebecca Newton
Director, Systems & Operations
Reed Mayfield
Senior Lending Associate
Steven Chai
Loan Servicing Associate
Subina Mahal
Senior Associate, Systems & Operations
Tammy Childers
Loan Servicing Manager
Taryn Goodman
Director, Impact Investing
Ted Levinson
Senior Director, Lending
Tim Green
Senior Counsel, Lending & Compliance
Val Esway
Office Coordinator
Vickie Yee
Director, Accounting
Don Shaffer
President & CEO
Jessica Rolph
Mark Finser
Chair of the Board
Mark Censits
Mark Retzloff
Martha Daetwyler
Neil Blomquist
Rachael Flug
Ron Alston
Sara Ellis Conant
Siegfried Finser

Staff Tenure

RSF staff members are dedicated to staying connected to our mission and to supporting one another. We commit 10% of our time to activities that support this goal. In 2013, we held:

Eight staff and team retreats to reflect on our goals and culture

Staff retreats energize and connect the whole staff. I always walk away thinking about how much I care about the people I work with and what we’re trying to accomplish together.

– Rebecca Newton

Ten brown bag lunches to learn more about our clients and social finance partners

Our day-to-day activities sometimes feel indirect. Brown bags with clients really give me perspective on how our work makes a difference in people’s lives.

– Steven Chai

Twelve study group sessions to explore Rudolf Steiner’s Associative Economic principles

I see more clearly how personal experiences and values can shape our relationships with money. This awareness is helpful in being more receptive to the needs and actions of others in relation to money.

– Anastasiya Litvinova