Related DAF at RSF makes a recoverable grant to Beneficial Returns to found and develop the Reciprocity Fund
For impact investment fund managers, balancing risk against return, along with the pressure of generating financial returns, often means that some of the very businesses, communities, and nonprofits that can benefit most from access to capital cannot qualify as borrowers.
For example, for early to growth-stage businesses and non-profits that are led by Indigenous individuals or communities, often with limited financial track records, increased risk, and less ability to generate immediate revenues, access to capital is scarce, and when it is available interest rates are often excessive if not predatory.
Despite the critical importance of indigenous communities and their stewardship of land and society, indigenous communities throughout the world are disproportionately affected by extractive industries and experience disenfranchisement, economic isolation and exploitation that is far more tragic and profound than is reported through government data or mainstream media, and they are often overlooked as investees.
Thus an innovative model was born to solve this problem – a “recoverable grant” to seed the Reciprocity Fund.
Though funding for the Reciprocity Fund is technically grant monies, because the grant is recoverable, the Reciprocity Fund is expected to pay back the Related DAF at RSF and to redeploy the funds to the next borrower.
Though Reciprocity Fund borrowers are both qualified and legally bound to meet their obligations, there are occasions in which a default is unavoidable, and it’s these cases in which the grant status of the fund supercedes the recoverability.
In this way, the Reciprocity Fund can reach an underfunded group of deserving entrepreneurs and business people to meet its mission:
“We provide debt financing to social enterprises that build individual agency, community resiliency, and economic self-determination in indigenous communities, as well as fight the world’s greatest challenges of environmental degradation, declining soil health, and shrinking biodiversity.”
The Reciprocity Fund is founded and managed by Ted Levinson (who is currently also a consultant for Highlands SRI) and who is the CEO for Beneficial Returns – an impact investment debt fund that supports the growth of leading social enterprises that alleviate poverty and protect the natural environment in Latin America and Southeast Asia, while generating a return for investors.
Make a Recoverable Grant to the Reciprocity Fund here: https://www.thereciprocityfund.com/#work
Listen to Ted Levinson discuss his work here: https://www.latinfinance.com/web-articles/2020/6/podcast-ted-levinson