Southern Reparations Loan Fund (SRLF)

SRLF makes non-extractive loans to community-based businesses anchored in the most marginalized Southern places.

Photo of Marnie Thompson/Ed Whitfield
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Eligibility

  • I am not an employee of BNY Mellon, or an immediate family member of a BNY Mellon employee
  • I am over 18 years of age
  • My organization is incorporated as a non-profit, for-profit, or hybrid organization, or I have a partner that is incorporated and could accept funds on my behalf
  • I have already piloted my initiative and have some initial evidence of impact
  • My organization is headquartered and creating impact in the United States

Gender

  • Woman

Where are you making a difference?

NC: Greensboro 27405
FL: Miami 33125
MS: Florance 39073
KY: Lexington 40505
NC: Asheville 28806

Focus Areas (required)

  • Business & Social Enterprise
  • Development & Prosperity
  • Environment & Sustainability
  • Human Rights & Equality

Date Started

12/11/15

Organization Type

  • hybrid

Project Stage: Select the description below that best applies to your approach.

  • Growth (have moved past the very first activities; working towards the next level of expansion)

Budget

  • $250k - $500k

Website or social media URL(s) (optional)

https://southernreparations.org/
https://f4dc.org

1.Founding Story: Share a story about the "Aha!" moment that led the founder(s) to get started or the story of how you saw the potential for this to succeed.

In 2008-2010, F4DC co-founders Ed Whitfield and Marnie Thompson noticed that in the face of economic crisis, people were showing an appetite for rebuilding their local economies for long-term sustainability. This put us into new conversations and relationships, which seeded the Southern Grassroots Economies Project (launched in 2011 with the Federation of Southern Cooperatives and others). The SGEP partners quickly saw saw the need for non-extractive finance capital in Southern communities that had been devastated by financial and environmental extraction. At the same time, Ed and Marnie were working to launch a community owned grocery store in Greensboro, and this project too needed non-extractive finance capital.

2. The Problem: What problem are you helping to solve?

People in Southern communities devastated by extraction are coming together to rebuild their local economies and make their communities better places to live. But lack of access to investment capital limits their ability to build on their inherent know-how, relationships, and other strengths. When capital does enter the scene, it usually replicates the same old extractive pattern. Poor Southern communities need to own and control our own capital.

3. Your Solution: How are you planning to solve this problem? Share your specific approach.

Reparations is at the heart of SRLF’s mission. We move capital stemming from an economy rooted in extraction, exploitation, and slavery to build enterprises that are owned and democratically controlled by the communities from which the wealth was stolen in the first place. The core values of our work are:
• Radical inclusivity: We focus on communities that have historically been denied access to finance
• Non-extraction: We invest based on the potential of projects, not on borrowers’ existing assets. Repayment begins when a business shows cash flow stemming from our investment.
• Maximizing community benefit: We look not just at a business’ bottom line but also at its community impact.
SRLF is a member of the Financial Cooperative, a national network of non-extractive loan funds. We follow their high-touch technical assistance model to ensure success. So far, SRLF has made loans to 3 projects: a community-owned grocery store in Greensboro NC, a t-shirt business associated with the Florida Dream Defenders, and a Mississippi Black Belt feed coop. In our next phase, we will be fostering place-based loan funds with deep ties to their communities, in order to go to scale, in depth.

4. Example: Please walk us through a specific example of how your solution is working to solve the problem.

SRLF worked with a group of immigrants in NC, who had formed a coop to purchase a mobile home park as safe, affordable housing. They'd saved $45,000 of $150,000 needed. SRLF worked with the coop to get them ready to take a loan of $105,000 for the balance. The real estate deal fell through, but this "non-loan" led to three cool things: 1. The group is encouraged/better organized as they continue to search for another property. They are equipped to act quickly, with SRLF on line as their lender. 2. In this process, SRLF worked with the Financial Cooperative (FC), with whom we share capital, learning, and back-end services. This was the first real estate loan for the FC; it served as a model for the other loan funds, who are now exploring similar deals. 3. A core group of the immigrants has decided they want to launch an affiliate local fund that will join both the SRLF network and the FC!

5a. Too many people in the U.S. have unmet needs for financial products and services. How is your work reaching a population(s) that is currently underserved? If it is not reaching an underserved population yet, how might it in the near future?

The Southern Reparations Loan Fund (SRLF) makes loans to community-based businesses anchored in the most marginalized Southern communities. We focus our lending to start-ups and expansions of democratically-governed enterprises that meet the needs and elevate the quality of life of African Americans, immigrants, poor whites, and others who have been systematically damaged by exploitation and oppression. Our loan portfolio validates this commitment.

5b. Please specify if the population you are reaching is underserved due to any of the following characteristics:

  • geography
  • immigration status
  • work status
  • language
  • race/ethnicity
  • socio-economic class

6. Marketplace: Who else is addressing the same problem? How does the proposed project differ from these approaches?

SRLF developed in parallel with the national Financial Cooperative, which ties together loan funds with similar missions, to leverage the power of aggregation to help us achieve our goals, by sharing: back-end services (bookkeeping, regulatory filings, and the like), capital, and learning. We are not in competition with the other loan funds, we are in cooperation. We also learn from other loan funds, including Shared Capital Cooperative and RSF Social Finance. We've recently started talking to Force for Good, which is joining the Financial Cooperative.

7. Impact: How has your project made a difference so far?

RCC grocery store loan ($253,000): 16 good paying jobs, 8 with health benefits, serving healthy affordable food to more than 1200 customers per week, in a former food desert. SRLF loan helped leverage a $250K grant from City of Greensboro, a $25K grant from the County, and attract more than $500K in additional financing.
Dream Defenders loan ($40,000): Working capital loan for Rebel Threads screen printing business. Shirts have imagery and words tied to Dream Defenders work in Florida. Long-term, the goal is to have Rebel Threads throw off profits to support Dream Defenders resistance and advocacy work.
South Rankin Farmers Association ($5,000 loan): Working capital loan to purchase feed. Supports a 27 member farmer coop to explore getting into a retail feed business.
Las Casitas loan (not closed yet, roughly $100K): see impact in answer to question 4.

8a. Spread Strategies: Moving forward, what are the main strategies for scaling your impact?

SRLF is seeking to build a network of Southern place-based loan funds that are each rooted in their communities. Potential partners in a Southern network include: 1) Charleston, WV-based Coop Central Appalachia, an existing member of the FC; 2) Emerging loan funds in Lexington, KY and Asheville, NC; 3) Other communities where we see a kernel of community-based economic development that might need a local loan fund, e.g., Greensboro & Clarksdale MS. Scaling only works if we have skilled lenders embedded in their communities, and lots more community loan funds in the network. Go wide AND deep.

8b. If applicable, which of the following scaling strategies have you launched?

  • Franchising, Licensing, Accreditation
  • Large Scale Partnerships
  • Organizing Conferences
  • Trainings, Consultation
  • Federations, Associations

9. Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

SRLF, like all the member loan funds of the FC, is striving to pay staff and cover costs through returns on loans. We're probably 10 years from that point, but the FC has showed a growing profit each year of its existence and is on track to achieve sustainability. In the meantime, we participate in group grantseeking with the other FC members. SRLF is subsidized by F4DC now, and is doing its own grantseeking in anticipation of F4DC's sunset, seeking one or more long-term partner funders.

10. Team: What is the current composition of your team (types of roles, qualifications, full-time vs. part-time, board members, etc.), and how do you plan to evolve the team’s composition as the project grows?

Staff: Ed Whitfield and Marnie Thompson - each .25FTE on SRLF. Seeking a .5FTE coordinator. MT & Ed do loans, training, and strategic planning
Board: Jessica Gordon Nembhard (black coop movement scholar), Richard Rice (attorney in Birmingham AL), Brendan Martin (ED of The Working World), Pam Madzima (Federation of Southern Cooperatives), Elandria Williams (Highlander), Brandon King (Coop Jackson), Holly Baker (Climate Justice Alliance and Florida Farmworkers Association), Ed Whitfield (F4DC)

Help Us Support Diversity! Part 1 - Which of the following categories do you identify with? (optional)

  • White (for example: German, Irish, English, Italian, Polish, French)
  • Black or African American (for example: African American, Jamaican, Haitian, Nigerian, Ethiopian, Somalian, etc)

Help Us Support Diversity! Part 2 - Do you identify as part of any of the following underrepresented communities? (optional)

  • Communities of color

How did you hear about this challenge?

  • Email

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