Social Impact Investing with David Cooper and Maggie Spicer

Hi, welcome to Essential Ingredients. I'm your host, Justine Reichman. Today, I want to welcome David Cooper, partner, DAF Capital Partners. For those of you watching the video, you probably know that it is D-A-F Capital Partners. For those listening, I just wanted to spell that out for you. And Maggie Spicer, entrepreneur, strategist, fund manager and Impact Advisor. Welcome, Dave. Welcome, Maggie. Thank you so much for joining me.

Great. Thank you.

Hi Justine. Great to be here.

Great to have you. I'm excited to just have this conversation. One thing that I was really excited to just talk about today, because we talked about this all the time, Impact Advising, but I do realize that we talk about it, but a lot of people don't know what it is. So I would love for us to just chat about impact advisory and impact investing. It seems second nature to us. But I know a lot of people are unfamiliar with this term. So can I just get maybe you David or you Maggie to just jump off with your interpretation of what impact investing is?

Sure. I'll give you that classic impact investing, advising framework, which is doing something positive for social and environmental change, investing in corporations or mission and purpose driven entrepreneurship that is focused on systems change, or some other model around a business that gives something back, give something back to humanity, it gives something back to the plant world in terms of regenerative agriculture, organic agriculture, or it gives something back to our systems, our food systems in particular, or our renewable energy systems or what have you. So these are sort of impacts. What they're really meaning is they're non extractive in their mode. In other words, they're trying to invest in models or business models that are really future forward knowing that the existing models tend to be not so applicable in our current environment, in our current business and economic cycles. So the question then becomes impact. Early impact was more philanthropy. It was more sort of give it away, and sort of donate to the cause. About 20 years ago, impact investing became a thing where impact investors, social entrepreneurs and philanthropic investors looked at their portfolios and said: "Well, maybe we can invest in a different way, we can invest for impact, which means that we're going to invest in social and environmental enterprise, and we're going to expect something in return other than just a positive outcome." Meaning, philanthropy that you give something away and expect something back as positive. So we want money back, and we want to basically say that impact means that we can do this, we can get a return and we can compete with the traditional markets. And so their early performance impact was really about doing what was called a double bottom line. Right now, there's a triple bottom line. But it was really this concept that I'm putting my money into something positive, and I'm expecting a return. And that return is going to compete with my traditional portfolios. And fast forward, 20 years, now you have these large institutions saying, yeah, we get it. We're going to be impact investors now, and we have all these acronyms like ESG and so forth. STG impact, ESG impact and all these things where we're comparing our metrics to something positive, and we're comparing our metrics around a financial return. And we've proven as a group that that's possible. This sort of traditional framework of impact and the sum of its early legacy, which is an alternative to philanthropy as an alternative investment. So you hear a lot of angel investors investing in impact and food systems, or environmental systems, renewable energy, water, wind, solar, all these things as a way of providing capital for early entrepreneurship that is really focused on making a difference in a future forward way.

I want to go back to this impact investing because you had touched on philanthropy, and people thinking about philanthropy and impact investing. One of the things that resonated with me with impact investing and the B Corp and all these kinds of things is being able to do something good in the world and make money. And it seemed like the perfect way to do business. It seemed like, why not? Why wouldn't everybody want to?

Well, it's very true, and this is why you have large institutions like BlackRock saying, we're committed to ESG. And you have large private equity groups like TPG putting billions of dollars into The Rise Fund, which is focused on impact. And one of their most recent transactions was to take a large position in Rad Power Bikes. And why? Because Rad Power Bikes is one of the leaders in alternative transportation mechanisms and methodologies. And they're really expanding nationally, if not internationally around an alternative way to move around. So The Rise Fund is taking a position in that particular company to really give them the capital they need to move the needle in terms of alternative forms of transportation, and electric bikes are not a fad. They're here, people are adopting them. COVID has been extremely friendly to the electric bike industry. So now, you have capital moving into it, and that is at the very far end of the spectrum. You have many large institutional investors saying, ESG, we will not put money in your company unless you apply those particular principles about social governance and environment. And that's a metric that they then adhere to. And if there's failures in those metrics, they pull the money. And this is a way to force change. But in our world, which is not like BlackRock, TPG, Rise Fund and all these incredibly sort of magnificent amounts of capital that fly around, we're really dealing with entrepreneurs, we're dealing with startups, and those startups need money. And one of the best ways to do that is not necessarily the venture community, which of course, is really about profit and how much can I get. Nothing against my friends, brothers and venture capital, but it's really the impact investors. When we start thinking about food systems, and we are thinking about small entrepreneurs who are just getting started and have an idea around a mission and purposeful type of allocation of their efforts into some kind of a food system shift, or some sort of supply chain logistics, packaging, and all these systems that are so integral to our feeding ourselves on this planet. How do you do that with angel investors, and how do you do that with philanthropy? How do you do it in an environment where there's investment? In other words, there's something expected in return other than just sort of an outcome. In other words, money. In other words, I want to start with something to get more. And that's really where we have this sort of confluence between philanthropy impact and traditional investing. And this is a very active part of the world right now. And food entrepreneurs, groups like FOOD FUNDED, Slow Money, JATAI, these are organizations that are really trying to hybridize these two concepts around traditional investing in philanthropy.

I love that. Before we go on, I want to talk more about that. I want to hear from Maggie too. You've mentioned this term ESG, which we've talked about a bunch. But for those that are listening that may be unfamiliar with it, can you just spell it out for everyone a little bit?

Yeah. It's a framework around environment, social and governance. So these are three metrics that large corporations basically sign up for. So there's a lot of different acronyms out there. There is B Corp, a public benefit corps and all of these ways with which you say, hey, look at me, I'm trying to do it differently. I'm not an extractive industry, and I'm not going to do harm to the world. And one of the most institutional ways to do that is through this concept of ESG, in which you can get reports from institutional reporting agencies about how Exxon is doing with their ESG commitment. And that's a commitment to environment, social and governance.

Wonderful. Thanks for explaining that. I just like to make sure that since we have founders, and we have startups, we have people at different stages that we're not talking about, we're talking with everybody--

And there are more acronyms, and there are vocabulary words to attach to them. But the biggies are ESG. And some of the other ones like the SDGs. Those are the sustainable development goals that were set by the UN. Many companies fit into that framework and say, I'm going to really focus my business model around SDG 9, or SDG 14, or whatever. And these are just ways to give people frameworks around, if I'm going to pick an investment A versus B, what am I going to tie it too? Am I going to tie it to the SDGs? Am I going to tie it to the ESG? And now, we've got a new one, which is JedAI. And we have BIPOC now, too. So all of these are just ways to sort of calibrate where we're going to focus our money and our attention, and how we're aligning our intention with our investment strategies, and where we're pointing our Northstar.

Great, thank you so much for walking us through that, and for giving everyone a little bit of greater insight into that vernacular too. So Maggie, I want everyone to get to know you a bit too as well. What got you into this industry? What inspired you, and how you're now involved in strategy, advising and in the impact investing world?

Great question. Yes. So my background is as an entrepreneur, and actually Dave and I connected last summer on this shared interest around Donor-Advised funds, and how you can have a huge impact through charitable capital in place of risk capital, which is what he's alluding to earlier. And I've been a longtime supporter of local food systems and the food industry, and effectively started doing some research with Dave, and learning how the animal capital world works. And through that process, and basically put some of these concepts to work back last fall when restaurants were really having a hard time with the pandemic. One thing that we talked about often is how you can actually support entrepreneurs and startups with charitable capital, which is increasingly practiced more and more. And effectively, we put together a 86FUND to make non recoverable grants to barrier restaurants. Really, it was a sort of marriage of interests and curiosities saying like, let's put this philosophy to work in a very practical, local way, and move this capital quickly to get restaurants the emergency aid that they need. So in a nutshell, that's sort of the background of how it got to working together and supporting these initiatives through tradable capital.

That's great. That was inspired by COVID, obviously, right? So what was the impact that you were able to have for those restaurants?

It's been pretty incredible. We've now been through two grant making cycles supporting both newcomers to the scene, effectively restaurants that have been excluded from government or small business aid because they simply didn't exist in 2019. Just because of that, doesn't mean that they haven't been hurting as the newest fledgling citizen. And then also some longer term institutions that are really shaped, not only in Barea dining, but also really made neighborhoods in a lot of cases. So we've been able to get them emergency aid as short as four to six weeks, and they've been able to use it for all the categories that PPP loans would cover. But additionally, if there was something that they needed aid for that a PPP loan wouldn't be forgiven for, if they use it as such, they're able to use the money from us to support those areas of immediate funding needs. And then outside of that, we're actually taking the time and moving forward towards supporting the broader ecosystem that is sustained by keeping restaurants not only alive, but thriving. So looking at farmers, winemakers, beer makers, ranchers, fishermen, women, etc. So the impact we've most recently been able to have with this last round of grants is effectively having each restaurant earmark a producer or two that will directly benefit from them getting this most recent grant. So that's the impact we've had. And then as far as where we're going, it'll have this trickle down effect into these additional layers of the food system.

That's wonderful. So now, as we hope to see some more normalcy and restaurants start to recover, hopefully, as we can open up and people can start to eat, dine again and dine inside and outside, and they can start to recover, how will that impact what you're offering? And how are you helping the restaurants? And what are you offering?

Yeah, that's a great question. I think systemically, I know a lot of chefs, restaurant owners, farmers, and food producers, and systemically, there's been a challenge where the true cost of producing food, particularly on the West Coast, is a lot higher than what the average consumer is wanting to pay. So there's this disconnect, because for years, the United States has placed all these subsidies, particularly around chicken farming and dairy, some of those bigger wheat, some of those bigger industries and monocropping where the true cost of food has really been below, not only market rate, but really where it should be for living wage for a lot of people in those industries. I share that because chefs, we're having these conversations before the pandemic, how are we going to sustain paying a living wage. I mean, the classic adage, sort of between front of house and back of house where if the chef owner moves towards it, shared tip model where it isn't just tips going to the servers, the servers kind of have this cry of outrage because they're used to making a certain sum, but the folks cooking the food and preparing the food are oftentimes paid close to minimum wage because that's all the restaurant can afford from a fixed cost standpoint. I started because when you look at it, even after the pandemic, or even at this late stage of the pandemic, restaurants still need a sizable sum to be profitable. So I think in some cases, we're seeing menu formats change, or we're seeing prices increase a bit to try to offset not only some of the losses from the past year, but also to try to get those numbers closer to where they need to be. So for better or for worse, I think we're going to see more of a hollowing out of the sort of mid tier restaurant, and we'll see more of the fast casual and fine dining which was, again, already happening for the pandemic. So 86FUND comes in or or the the work that we're doing to support local citizens is saying, look, if you're already using your charitable capital to invest in areas that you support, giving money to effectively as close as directly as you can to supporting farmers and restaurants, it's a way to get them additional capital that helps them cover that bottom line and take on some initiatives. Like, for example, a restaurant in San Francisco. They wanted to get a, or they have gotten a tortilla making machine so that they can use their own [inaudible] and make tortillas in house. A lot of the tortillas that you get on the market are made with GMO corn. It's not organic, it's mass produced. So it's a simple example of how a restaurant without some additional aid, a lot of times can't afford to take on the machinery expense to reinvest in supporting the traditional way of making a particular ingredient or stuff.

Both of you, what's your overall mission as it relates to food and impact investing?

Sure. I just to go off that for a moment. I think it circles back to that original concept. So part of the effort when we're seeing this within the concept, the off farm producers that are involved in regenerative ag. So in other words are restaurant chefs that are very committed to their local food system, the farm to fork movement, which we know a few years ago, but really digging deep bad pun in food for this concept of virgin ag. In other words of regenerative model, which means you're putting as much back into the system as you're taking out. So much of impact investing, so much of sort of philanthropic venture investing, and my peers in this space are always sort of cringe at that like philanthropic venture investing, what the heck is that? But it really is philanthropy taking a bet on other types of system change. And whether that be inside of a corporation, which the JeDAI folk which is justice, equality, diversity and inclusion inside natural products and food producers, where you're building a culture around BIPOC or BIPOX, some people say, where you're starting to really advance the blended colors inside the natural products and natural food businesses, which tend to be controlled by a corporation or a corporate infrastructure that can give them the capital to do what they're doing. So now, you're getting chef's, you're getting local community restaurants to build relationships with food producers that are committed to regenerative ag. While virgin ag is an expensive way with which to produce food, it's more expensive than organics. So there's a capital requirement and also a sales flow of that. So how do you start to advance those particular transitions in our food systems? The chef's are on the front line, they're asking these producers to do that. And where 86FUND and other types of organizations that are in support of this particular transition can help is by getting these capital into the hands and promoting sort of six months worth of inventory purchasing or so forth to take a bet on these small producers, and these foreign producers that are providing this type of nutrition to these chefs into these channels and then into the mouths of US consumers. So these are innovative ways to purchase and support these transitional types of processes, and these business models that are taking a risk on a different type of food system in the future.

That's great. I really appreciate you sharing that because it really clarifies it, and it draws a picture that I can really visualize. So I think that that's really important to share. So thank you for sharing that. And it really goes with another question that I had, which is about regenerative, sustainable and the market. I'm curious about the investors, whether or not, is that spicket? Is it flowing for investment right now? Or are people really excited about investing in that area right now?

So there's two ways to think of it. I'll defer to Maggie on the ground because she works with the chef's, and she works with the restaurants, and we support a rescuer. Through the last round of funding, we supported a restaurant in Sonoma, in the city of Sonoma, which is committed to regenerative biodynamic ingredients, and are sourcing that all the way through the food column whether it be what you drink and what you eat. So they're very focused on a bottle shot model around biodynamics and other types of regenerative mechanisms. And then our food is also being sourced that way, and this is becoming now sort of Organic Phase 2. We all lived through Organic Phase 1 in the late 70's, or maybe not lived through it in the late 70's. But when it started, and those are legacy patrons of organics that started this movement. And now, we're getting into late stage organics where we wonder what organic really means anymore. Regenerative is going through the same type of thing. I mean, obviously, permaculture and these types of food mechanisms have been around for many, many years, but they're becoming mainstream now. Because we're seeing that monolithic sort of monocrop architecture in terms of food production, institutional food production is not serving us, it's actually doing us a disservice. How do you change the dialogue? In regenerative ag is one of these ways. We started the soil and we worked all the way up to what we eat. We do it in a way where we're putting more into the system than we're taking out. And that makes a lot of sense from both systems' approaches, but also makes sense in terms of nutrition. Because if the soil is not healthy, we're not getting any food. So this is kind of the mechanism of modality mechanism, mechanism of madness, so to speak. The institutional world, the General Mills, Danone, the large players understand this. They understand that these crop systems have sort of reached their peak and they're no longer able to squeeze another grain of corn, or another kernel of corn, another grain of something out of wheat so they're thinking about it more in a perennial model. They're looking at these soil conditions, and they're really listening, and they're doing that in major investments. They're doing it, investing it through their philanthropic models. They know that the public is now aware of these types of conditions around food, that maybe our food isn't as healthy as we think. So there is an ear to it, and the money that's flowing tends to be big. There's a fund that I work with by the name of rePlant, and they're working with General Mills, they're working with Danone, and they're working in the soil. They're actually investing in the soil with these regenerative farms. They're working with perennial grains that have a deeper root system. They're really thinking about this from a long term perspective. Now, Maggie works with the farmers, the chefs and all the people that actually do the delivery of these wonderful alternative mechanisms of growing the food in very healthy soil. I'll let her talk about that.

Yeah. I would add that farmers are just starting to see how depleted the soils are and our resources. I mean, as we all know, we're in a drought in California, and it's only getting worse. I think they're already, in many cases, thinking about how we can make this ecosystem work in a way that sustains everyone. And chefs as well are, a lot of them have been sourcing organic, biodynamic for a while. There's still a handful, of course that don't. But more and more, we're seeing how this food system is interrelated. And we see that, of course, with restaurants in terms of, the good example for the pandemic is local restaurants here in Francisco, the chef is saying, I heard from our fish purveyor that he basically can't offer us fresh fish anymore because everyone's been so impacted by the pandemic. Meaning, they're not able to offer fish in restaurants, the fishermen said, we're gonna freeze everything moving forward. So it's one of those things where post pandemic, maybe the system changes that trash fish is no longer even an option for local chefs to get. So there's this acute awareness of how everything is interrelated. And then on the investment side, we're seeing, I'd say, increasingly a fair amount of interest in donors who are wanting to support regenerative age, and not necessarily knowing the right way to plug in. There's also some interest around permaculture and architects who are looking at the land and wanting to support regenerative ag because they're seeing how having that balance, like the home in nature, but nature that supports a home. It's more integrated with the land, really makes that ecosystem work. So there are a lot of different layers to this. I would say that it's definitely become a hot topic in the last six months or so.

You're expecting it to continue to go up?

Definitely.

It's not drying up anytime soon?

No. In fact, I'd say quite the opposite. There is so much high level thinking around how to move money into regenerative methods. And that regenerative method is really a circular common, a circular economy model where you're putting more into the system that you're taking out, you're sort of closed loop. In other words, you're not sort of creating waste. And there's a recent example of a very well known family that owns a very well known private label, and they are palm oil producers. They started to realize that when they grow cacao with palm, they have a synergistic relationship. Now, they've got two crops, and they're doing more for the soil, they're mitigating the risks around palm oil. And now, they're producing a very high value cacao, and they're going to start bringing that into the United States. This is something that came out of regenerative agricultural principles. They were looking for a synergistic plant system that could regenerate the soil while mitigating the monocrop aspects of palm oil, and they've landed on cacao. Two of those plants work very well together. I can't speak specifically to the mechanisms I don't fully understand and haven't really dug into it, but I think it shows how a major investment into regenerative soil health around the conditions and mitigations of palm oil, which as we all know, can be a very nefarious type of monocrop. So they mitigated it by growing a very high beneficial crop of cacao in addition with the palm oil which creates a much better solution for that whole system. As I referenced earlier, there's a fund out of Colorado that's primarily focused on regenerative agriculture and soil health. They're doing a major project, which is corporate sponsored in California around almond. They're looking at soil conditions, water retention, pollination, and they're looking at a very difficult crop for California because of the intensity of almond farming. And they're looking at it in how do we actually create an industrial system shift around a crop that is beneficial, but how do we make it beneficial? And the money that's coming into these types of organizations is mostly philanthropic venture investment. We went back to that from an earlier term because these are really models that are around return of investment, and they're also the return of investment is capital. You're getting more than you put in, which means, you can do more with it, or the return on investment is for the place we call home, the Spaceship Earth as Buckminster Fuller used to say. While he was alive he said: "This is all we got, so we need to take care of it."

It's true. It's all we got.

I just saw that what's really nice about regenerative ag is it's actually an international concept. I mean, there's their support from so many countries. It's like you're seeing an Oslo based coffee farmer who literally took investment in his own soil. Coffee farmer, coffee roaster to work with some of his coffee farms in Central America and help them transition to regenerative ag processes, and is willing to take that risk of loss himself in terms of teaching them how to do it. And then you're also seeing in Japan, like the equivalent of the food, they're basically supporting, I think it is three years ago, I think it was up to 10% of all of their agriculture production to be regenerative ag, which is huge. If you think about that of a country at a country level.

And I don't know if you know Daniel Baertschi, do you know Daniel Baertschi? He's out of Germany. I've had a variety of conversations with him. He's very big in regenerative agriculture out of Germany. He does a lot of education, and he tries to connect people all over the world to educate them on regenerative agriculture whether it's businesses, whether it's people doing business, building businesses, so he'd be a great person to have a conversation with. I'm happy to connect with you.

Yeah. That would be wonderful. And this model of regeneration is such a wonderful sort of topic. Because when we think about this hybridization between philanthropy impact investing and traditional investing, what we're really saying is that we're cycling the capital, we're cycling it in terms of inputs and outputs. So when we think about 86FUND, we think about the other things that were involved when it comes to food system shift, and transitional food systems, and supporting local farmers, and our producers, and pre paying for six months worth of inventory, or buying tortilla machines for Nopalitos so that they can produce a tortilla out of traditional ingredients that they import versus the institutional or industrial agricultural ingredients. What we're really saying is that we're investing in ourselves. And this is very circular, this is very regenerative. If we're not thinking about capital in terms of what I get versus what we get and we continue to spin the wheel, then we all benefit from that. And so much of the capital systems, the investment model is about, I put something in and I get something more back. But I don't put anything back in again. In other words, it's a one shot. In other words, a lot of venture capital, many typical, I'm going to invest in a granola company, and the granola company is going to go do what it does, and the other company is going to sell because maybe I have to force it to sell to repay myself or my investors. And that's the end of it. When we think about regenerative impact, when we think about regenerative investment in entrepreneurship, we're actually taking strategies where we all win, where we float the entire boat. And that's really a different focus around how this capital flow is structured. Because we're not looking at investing in these organizations for a one return specific type of exit. We're thinking about it in terms of, how do we help each other? How do we help what the entrepreneur needs? How do we help with the capital needs so it can recycle and do more good. And that's where we get this hybridization between traditional philanthropy, which really is in a lot of ways a one shot. We give it away, it goes, does something, and we expect something positive to return, which is an outcome. But when we're thinking about regenerative capital, we're combining the fact that we're doing what philanthropy did, but we're also looking to grow that philanthropic pool so we can go do more. And that's where we start to get into this concept of we're building a better world for us all.

Was there some moment or something in particular that motivated both you, Maggie and Dave, to get into this specific kind of work?

Definitely.

Would you share?

Yeah. For me, it started in terms of thinking through having been an entrepreneur for most of my adult life. Thinking through all the different challenges that entrepreneurs face and how those that aren't venture backed really have to, I wouldn't say everyone works hard. But effectively, if there are ways to support entrepreneurs with beneficial capital. And I would have worked in this space probably sooner. But learning about it last summer, it's like going back to Dave's model of a granola producer, it's like knowing that I've been a, like a producer could take on risk, or charitable capital to get their return next stage of growth and have much more favorable terms of repayment if repayments required. Give them in some cases a 0% loan, things that they can't even get from the SBA. For me, it's very moving to be able to support entrepreneurs who are really giving back to the environment, the community in a way that gets them capital to do what they need to do. Because so often, fundraising is the hardest part of entrepreneurship. It takes the entrepreneur so much longer to move the needle on X, Y, Z goals. Because if they just have the capital sooner, they would be executing. Because entrepreneurs, by and large, are doers. So for me, it was really inspiring to know that we could mobilize capital to support entrepreneurs, and so that fascination came initially from, how is it possible to transition from the risk capital side to capital side. Me and Dave had those conversations all the time with folks who are used to working in the risk capital space, realizing that they can do all of this other beneficial work on the charitable side. So that's really where the inspiration came from. And I think for me, it feels like we're just getting started, because there's still this big educational component of, really, you can do this. You have folks who've either had a DAF or have been doing charitable investing for years, but have always been working with nonprofits and that sort of thing. So I'll pause there, but that's where the inspiration really started.

How about you, Dave.

So having worked in this sort of venture capital, private equity and institutional capital world for the better part of 20 years, it dawned on me that there's something broken. And that broken is that most of these institutional pools of capital invest in themselves. They're not investing in entrepreneurship. That money never makes it down to a granola producer. The granola producer relies on private capital, not institutional capital to get going and to sort of work through their particular types of needs around delivering their products, building out supply and distribution. Maybe CaPEx and buying equipment, supply chain support, and all their ingredients, that's all private. And so private capital really relies on people. It relies on people that have built small groups, have investment pools, or have coagulated into venture funds which are really supported by limited partners, which are people. So we're not dealing in an institutional setting where there's just these gigantic pools of capital, and they essentially support their own products like a global ETF, 100FUND, for example. And what really came to matter for me is that that global ETF, 100FUND never finds its way to the small granola producer. But within that same gigantic system, there is this model, which is a donor advised fund, and they're managed by these large institutions, and there's almost a trillion dollars sitting in these funds. And most of that money is being invested in global ETF funds or other types of institutional credit facilities. Which means that it doesn't make it to the small granola producer. However, there are ways to do that. These types of structures can invest through these types of models that are available, so that they can really do and make a difference in that granola's producer future. And the question then becomes, how to do that? And so the the shining light moment to me is, we were put into a position about two years ago where I was supporting financially a social enterprise in the food system in Oakland that was doing incredible work with at risk communities, training them so they could go into higher paying jobs in the food system, parolees and other types of really disadvantaged type of members of their community in an area of risk. And this particular social enterprise built a culinary kitchen, and ultimately was servicing catering for large corporations. But it was really a training kitchen. And they started to have some challenges as social enterprises do. COVID was really rough on them. For another topic, they magnificently rose out of COVID like a phoenix because the CEO is incredibly innovative. But where we ended up with that is a social enterprise is not a good investment for most investors. It's very low return, and the prospect of a big liquidity event is probably not going to happen. And so it's a perfect candidate for a philanthropic hybridization of investment because it can pay back its obligations. It just can't pay them back on the big hockey stick that we all think about here in Silicon Valley. So I started looking into that. I'm like, well, wait a minute, there's a lot of money that can support a company like that. But it doesn't know how, it doesn't know how to get in there. A lot of money knows how to get in there, like the Refat, and some of these other Redex, these more philanthropic grant making machines. But the money that's expecting a return on its capital, in a philanthropic tax advantaged way doesn't know how to get there. So it was really a shining light about who else is doing this. And there aren't many people, but there's a trillion dollars sitting in these accounts at Morgan Stanley, Schwab, and Fidelity, community funds and so forth that can be activated to get into these impeccable companies. So really, it's about plumbing the system, it's about showing the way forward, shining the light on it and saying, if this is something of interest, there are ways and it is very available. And it's just about education, rinse and repeat. And we've moved a lot of money out of Donor-Advised Funds into a variety of different types of social enterprises and environmental enterprises over the last two years based on that one factor which is, how do we solve this problem now that isn't being solved around traditional philanthropy?

And so what's your ultimate goal? I'm gonna ask both of you for the future of food and for the future of social impact investing over the next three, five, 10 years?

Maggie, you want to lead off with that one?

Yeah. From my perspective on the future of food, it's really supporting these systems at the local level. Knowing that climate change is here and doing what we can with capital to support these changes whether it's regenerative ag, or educating consumers on the true cost of food, or why it costs $25 maybe for our grass fed over here, and $12 here for a non grass fed hamburger. What the difference is what you're really supporting with your money. I mean, those sound really surface level, and it's like we've kind of been skirting around them for the last decade. But really, I think to make any sort of change, you have to get folks to believe that there's a difference that they can make with their funds. And also just looking at the health impact, I think a lot of times, folks don't realize that so often, what you consume really goes directly to impacting your health. I think what's the stat our bodies being 70% water or something like that. So it's like, when you think about it. Anyway, I can wax on about health, I won't, I won't.

It really talks to my mission. I won't go on, but my mission is all about health. And it's about educating the consumers as well as the businesses to build a better food system.

I think your point is like getting folks out onto the land, getting them [inaudible], before 2010 I think, and they're famous for these little white tablecloth, elegant multi course dinners in the middle of the farm, on a beach or vineyard. There's a lot of fun to something like that. But the the reality is when you think about getting people out into the land, getting them to visit a cattle farm or an almond farm, like any sort of local farm have some sort of crop or item that they consume regularly, realizing that even when it takes for a stone fruit farmer to get to collect this, the fruit, that plums, the peaches, apricots, nectarines, you have it. Get to the Farmers Market at the crack of dawn, set up the table, sell the fruit, put a smile on their face, make change, it's a lot of work just to get that one peach to the table. And I think, often, you'll pass a lot of folks to the Farmers Market and like, oh, my gosh, I can't believe this peach cost me $1.50, for one peach. So my point is, I think getting folks onto the land is a way of moving forward to really help generate that system and encourage them to want to get. It's kind of the same thing when you go get a benefit gala, the donor is able to see the true impact of like, think of like homeless prenatal in this example. And then in terms of impact investing, Dave's already touched on it. But I think hitting on those goals around the 17 SDGs and ways in which we can really have an impact with charitable capital to support the environment, especially that's an area that I think will be even more focused on the RDS. I mean, the three of us live in Northern California, and if the question is sort of like, well, when is the fire season going to start this year? We didn't have a fire season prior to 2016 to speak up. I think in terms of the next three to five years, that's going to be the focus.

We had a fire here in San Rafael just the other day.

Red Flag last week.

I just wanted to touch on the whole point of the farmland. It's so important because we learn about food loss there instead of food waste, because there is a differentiation. And we learn about the work that the farmers do and everything that goes into it. And I think that gets lost, it gets lost in the story, and people don't understand. So when you are talking about education, it really resonates with me because I don't think it's nobody's fault. We don't think about it all the time. We don't think about what goes into it. But one of the things when you're talking about it, you're talking about education, and I'm shaking my head because I'm like, there's so much education that needs to be done. Because people just don't know, consumers don't know, even businesses don't know as they're putting it together. They're getting the education as they're building their business, new entrepreneurs. It's so important. And I think it's amazing work that you're doing, and I'm starting to try to work on it. And then just think we're starting to scratch the surface. And I just think there's so much to be done. And as people get more educated, I hope that we'll be able to see people that will people really buy into it, and understand that it's not just not a fad, this is here to stay. It's for their health, it's for their families, it's for the future generations, it's for the planet. And in order to build a better world, we need to start here. I'm sorry, David.

I'm gonna say exactly what you just sort of a parrot, right? Because really, the next five years or the next 10 years, we've got an opportunity to really commit to a better, more integrated agro ecology, sustainable, I don't even like the word anymore. I think we're past sustainable, I think we're overused. We're in an era now where we need food security, and we see these environmental systems breaking down all over the world. We know that there's water shortage, we know that there's drought, we know that we have profound impacts from climate change that we don't have any concept of how that's going to really affect our food systems. So how to invest? What Do you think about agro ecology? How to think about bio dynamics? How to think about ecosystems in terms of supportive ecosystems that are healthy ecosystems that rely on themselves and can function on their own without chemical inputs, or other types of machine inputs and so forth. It's very well understood that a healthy and dynamic ecosystem is a very self-sustaining and nutrient loaded type of ecosystem, which we benefit from. And I think we've kind of lost our way with the Green Revolution in terms of augmenting nature as if we can do better. And in many ways, one can argue that all of the investment that went into the industrialization of food saved a lot of people from starvation. I think that's a very, very gallant type of an exercise in terms of what the Rockefeller's did and what the Green Revolution did. However, at what cost? That's a really tough one, because the environmental cost of the Green Revolution is extraordinary. And the industrialization of our food system has been at what cost? Diabetes, Alzheimer's, dementia, chemical poisoning. I mean, we can go on and on. And so the question then becomes investment like General Mills and Danone. Danone was one of the profound B Corporations on the planet in the last bunch of years, because they committed to regenerative ag. They said, as a producer of dairy, which is one of the perceivably most impactful industrial food systems on the planet, how do we think about it differently? How do we think about it as a company differently? How do we do it in a regenerative way so that it's actually much better? And what they found is they were much more profitable based on their regenerative models. There was capital investment, but at the end of the day, they were able to come up with this cost plus approach. And a cost plus approach means that your farmers who are producing the milk basically get a cost plus a profit. And they're able to do that, because they've invested in the type of regenerative models where there's price management. And so they don't have to go to the spot market. And what we know about spot markets is what the market will pay. And usually, it's a producer that loses. So this is a totally top down approach to how we can think about our food systems differently where everybody wins. The farms win, there's higher animal welfare, there's better environmental management of those effluents that come out of that farm. There's better price management around the cost plus approach and a corporation that's committed to supporting that particular activity is a corporation that we haven't really seen before. So other corporations are beginning to see this way too, because they're really betting on their future, and their future is not particularly bright. I mean, when you have MANA Crops that are failing due to different types of fungal disease that you no longer have chemicals that will treat it, or we have these sort of really wacky things around committed membership to Monsanto, where you can't grow anything or you're sued by Monsanto because you've deviated from their particular agenda. So these are all systems approaches that we're starting to unravel a little bit. And it can happen from the top with Danone of the world, the General Mills of the world and so forth. Or it can happen with us, and we can force that change with our own money. And we can do it in a way that makes sense through our philanthropy and through our sort of venture philanthropic investing and so forth in these entrepreneurial models that are trying to make a difference. The small farm producers that are committed to regenerative ag, they're taking on the Rodale Method mechanisms of permaculture. And they're starting to think about agro ecology differently in terms of how they're producing and so forth. And there are so many examples of committed entrepreneurship in this particular type of realm that are doing things different. For this group who's, there's a wonderful one, I'm not promoting this at all. Imlak'esh is a great example of a commitment to regenerative ag. They produced wonderful products, and they're in community in these foreign countries, and they're planting the products that are native to these particular regions, and they're producing food for us that is impeccable in its characteristics, honors the community and the culture from which it was developed, and then provides a fair working wage to all in its supply chain.

For those that are watching the video or even listening, can you just spell that for them?

Imlak'esh. I think it's I-M-L-A-K-E-S-H.

Okay. Look that up in the show notes. But I want to thank you Maggie, thank you Dave for joining me today on Essential Ingredients. And if our folks wanted to get in touch with you, what's the best way for them to reach out?

info@86fund.org.

Wonderful. Well, I want to thank everyone for tuning in today to Essential Ingredients. If you like this episode, you can follow us on Instagram, you can follow us on iTunes, you can download us on iHeartRadio. We're on all the regular channels. We're here every Tuesday with a new episode so we look forward to seeing you again soon. Thank you guys for joining me. It was so fun.

I-M-L-A-K-E-S-H Organics.

Okay, wonderful. Okay, great. We'll make sure to add that.