Blended Value Investment

“Value is what gets created when investors invest and organizations act to pursue their mission. Traditionally, we have thought of value as being either economic (and created by for-profit companies) or social (and created by nonprofit or non-governmental organizations). What the Blended Value Proposition states is that all organizations, whether for-profit or not, create value that consists of economic, social and environmental value components—and that investors (whether market-rate, charitable or some mix of the two) simultaneously generate all three forms of value through providing capital to organizations.

The outcome of all this activity is value creation and that value is itself non-divisible and, therefore, a blend of these three elements.” www.blendedvalue.org

Objectives of MFES Blended Value Fund:
· To provide a financial vehicle for individual and institutional gifts and investments, government and foundation grants, and venture capital to incubate the growth of MFES schools and businesses.
· To provide a moderate return to those investors who seek such a return, while enabling any profit apportioned to grants or gifts to be reinvested.
· To enable both local communities and the larger, linked network of MFES partners to invest directly in the economic sustainability of their neighbors - nurturing quality of place, conserving natural resources, and preserving and repurposing cherished community assets such as farms and schools.

Funding Structures

Umbrella Fund: Collects, invests, accounts for funds and distributes returns. Allocates distribution of funds to community and cluster-based funds. Administered by MFES board of directors.
Example: MFES raises $100,000 each from federal economic development grants, corporate donors, and individual investors as seed money during our first year. Five years from now the model is both sustainable and profitable, enabling a 5% return on grant funding to be reinvested, and a modest return for venture and other investors.

Community/Site funds: Collects and invest funds raised for specific sites. Administered by Advisory Board of each local project, in collaboration with MFES board. Seeds individual start-ups, shared assets and infrastructure improvements.
Examples: Site-based co-op uses low-interest loans to pay for equipment such as tractors, trucks, and information technology systems; federal grant combines with local economic development funds to support Green Energy R&D incubator linked to school site; local investors and donors partner with host non-profit farm to retrofit historic farm buildings.

Cluster-based Funds: Collects and invests funds designated for cluster based shared economic development. Incubates links business plans of partner business, enabling multiple existing businesses or investors to invest in joint ventures, start-ups. Administered by Advisory Board of investors in collaboration with MFES board.
Example: Individual and existing farmers and food business are able to pool capital with each other and leverage federal and state nutrition grant programs to capture 20% of school and other institutional food budgets, creating and linking small producers in a reliable network that supports sustainable farmers and healthier food options for children.

For more information on MES Blended Value funds, email John at jdanieri@mainefarmschool.org.