LEAF prospectus

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LEAF’s mission is to promote human and economic
development by providing financing and development
assistance to community-based and employee-owned
businesses that create and save jobs.
CONTENTS
3
Welcome
4
Food Cooperatives
• Fairbanks Coop Market
6
Affordable Housing
8
Community-owned Businesses & Social Enterprises
• San Francisco Green Cab
9
Persistent Poverty Counties
10
Performance Overview & Impact
11
Contributors & Investors and Board
12
Staff
13
Lending Policies
!2
Welcome
LEAF is a nonprofit 501(c)(3) organization
whose mission is to promote human and
economic development by providing
financing and development assistance to
cooperatives and social
purpose ventures that create
and save jobs for low-income
people. Since its founding over
30 years ago, LEAF has
invested and leveraged over
$91 million, resulting in the
creation or retention of more
than 6,200 jobs.
LEAF is one of only three
Community Development Financial
Institutions (CDFIs) in the country that focus
on cooperatives. We lend nationally to:
community-owned natural food cooperatives
that create high quality jobs and provide
communities with access to healthy food;
manufactured cooperative housing parks
that provide affordable homes in low-income
communities; and worker-owned firms and
community-based businesses and social
enterprises that create good jobs for low
income communities.
LEAF reaches out to prospective borrowers
and provides them with support through
partnerships with a range of sector-specific
organizations, including other CDFIs, The ICA
Group, ROC USA
(cooperatively-owned
manufactured home
parks), the National
Cooperative Grocers
Association, the Food
Co-op Initiative, and
the Alternative
Staffing Alliance, (a
network of staffing
companies that has
placed over 8,000 low-income people with
barriers to employment). These partnerships
allow LEAF to provide exemplary services to
our lenders, helping them to thrive and serve
their communities for years to come.
In 2001, the U.S. Treasury certified LEAF as a
Community Development Financial
Institution (CDFI). This certification assures
investors that capital invested in LEAF helps
the organization carry out its mission of job
creation for the benefit of low and low-tomoderate income people. To learn more
about CDFIs, please visit www.cdfifund.gov.
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Since its founding over 30 years
ago, LEAF has invested and
leveraged over $91 million, resulting
in the creation or retention of more
than 6,200 jobs.
Cooperatively Owned Food Stores
LEAF provides financing nationally to natural
food cooperatives that create jobs and
provide access to healthy food in rural and
urban communities. In addition to
these benefits, food cooperatives
are setting the pace in improving
communities across the country, by
providing:
Supporting the Local Economy: Co-ops lead
the way in supporting local economies and
local farmers by purchasing locally whenever
possible. On average, 22%
of gross sales at co-ops are
locally produced versus 7%
at other grocery stores.
According to the Food Coop Initiative, there are 300
food co-ops across the
country, of which more
than a dozen require
financing for significant
expansion or to relocate to
a larger store each year.
And the sector is growing
rapidly. 63 new coops have
opened since 2006 and 102 new coops are
currently in the development stage. As one
of only three CDFIs in the nation that has
developed expertise in lending to
community-owned natural food stores, LEAF
is able to step in and provide loans to these
valuable community assets.
Living Wage Jobs: Coops pay wages
and benefits that are well above
industry averages and offer a higher
percentage of full-time employment.
Environmental Stewardship: Coops
actively recycle, compost, and
spearhead energy efficiency
initiatives. 75% of the Energy Star
rated grocery stores are food coops.
Healthy Food Education: Coops provide
their members and the community at large
with cooking classes, school programs and
other classes related to healthy eating. For
instance, The Midwest Food Connection, a
non-profit organization providing instruction
in healthy eating habits to school children, is
largely funded by food coops.
Natural Food
Cooperatives pay
living wages to
employees and
provide healthy
food to
communities.
!4
“LEAF’s help in these
loans has been
immeasurable.”
— Rich Seifert,
Coop Treasurer
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Fairbanks Co-op Market Grocery & Deli
In April 2013, Fairbanks Co-op Market
Grocery & Deli, the first community-owned
food co-op in Alaska, opened for business.
Located just a half hour drive from the Arctic
Circle, the 6,000 square-foot store is in a
census tract designated as a food desert – an
urban neighborhood or rural town without
ready access to fresh, healthy and affordable
food – by the USDA. 46% of the residents in
the area are low income and do not have
easy access to a healthy food store. The store
is located just one block from another food
desert tract where 20% of low-income
households also lack access to a vehicle. This
new store serves a community with a high
percentage of Native Alaskan households,
and one where the average income is only
54% of the area median. The Coop is the only
food store in downtown Fairbanks and has
already created 20 new jobs and is likely to
expand in the future, as their biggest
challenge at the moment is too much
customer demand!
The Co-op emphasizes local products,
providing a retail outlet for small farmers,
ranchers, fishers, and producers in the region
to sell to their own community. For example,
to the delight of the members, the Co-op
offers milk and ice cream products produced
by a local company, Northern Lights Dairy,
which were recently dropped by
conventional supermarkets in town.
The Co-op Market has over 1,500 memberowners, demonstrating the incredible
support of the local community who put
together $860,000 in financing for the
project through memberships, fundraising
events, a USDA grant, and conventional
loans. LEAF was the only lender outside of
Alaska involved in this project and our
participation totaled $200,000.
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Affordable Housing
Manufactured home communities commonly
referred to as “trailer parks,” provide housing
and a form of home ownership to some of
the lower-income residents of our society.
However it is a highly precarious living
situation and the reality is that these
residents live on a knife edge and can lose
their homes at any moment.
In 2009, LEAF began providing loans to
cooperatives created by the low-income
residents of manufactured home
communities to enable them to buy the land
under their communities, stabilize their living
situation and ensure the future of this lower
cost living option. After the cooperative is
formed, residents no longer have the
While residents own their
“Before the creation of the co-op I knew only five or
manufactured homes they
six families near my home. Now, since we have
are on land rented from an
investor who can arbitrarily monthly meeting as a co-op, everyone knows
raise the land rent, and
everyone.” — Resident
must agree to any area
improvement the residents
constant fear of being displaced and can
wish to make. These parks are frequently
decide as a community on the type of
located close to urban centers, and as towns
facilities they want for their park.
expand and land prices rise, the owners of
In making these loans, LEAF works with the
the land may well decide to sell out to an
nonprofit ROC USA who pioneered this
investor. This forces the residents to find a
approach. They assist the residents of a
new location and move a frequently-aging
community who want to pursue this option to
trailer that has sat in one place for many
form a cooperative and negotiate the
years to a new site close to their place of
purchase of the land. Then LEAF, in
work – a virtual impossibility for most owners.
conjunction with other CDFIs, provides
Homelessness becomes a real possibility!
funding to enable the cooperative to
purchase the land on which the members’
homes sit.
Manufactured
homes are a
growing form
of affordable
housing in the
U.S.
The need is enormous. Manufactured homes
This is a need that the resources and
are the largest source of unsubsidized
technical expertise of LEAF and other CDFI’s
affordable housing in the US, accounting for
are filling. The loans we provide are of critical
more than sixty percent of the housing stock
importance to these low-income owners who
in some counties. HUD estimates that
want to control their land rents, improve their
nationally there are more than 50,000
neighborhoods, and build secure home
manufactured home communities
ownership assets. In addition, the creation of
representing 3.5 million families, the
a co-op creates a real sense of community. A
overwhelming majority of whom are lowresident in a community financed by LEAF
income. These
residents have few
HUD estimates there are more the 50,000 manufactured home
protections and live communities in the U.S. representing 3.5 million families, the
in constant fear of
overwhelming majority of whom are low-income.
their rents being
raised substantially
observed that “Before the creation of the coor their park being sold for other uses.
op I knew only five or six families near my
home. Now, since we have monthly meetings
as a co-op, everyone knows everyone.”
A Carsey Institute study found that homes in
resident-owned communities sell more
quickly and by 12% more per square-foot
than those in privately-owned parks. Despite
this and other convincing evidence of the
multiple benefits of resident-owned
manufactured home parks, and the strong
history of loan repayment, many
conventional lenders will not lend to this
market because they are unfamiliar with
cooperative structures and the residents are
low-income.
The loan we made to the residents of a
manufactured home park in Pasadena, TX not
only helped stabilize 95 units of affordable
housing for exceedingly low-income people,
the majority of whom are Hispanic, but did so
in an area where median incomes are only
70% of the average. A recent loan to a park in
Plymouth, MA, served a community where
67% of the residents are very low-income.
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Homes in resident-owned
communities sell more
quickly and by 12% more
per square foot than
those in privately-owned
parks.
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Cooperatively-owned Businesses & Social Enterprises
LEAF focuses its lending to cooperativelyowned businesses and social enterprises
on organizations that help create living
wage jobs for low income individuals and
communities. For example, our loan to
Navasew, LLC, a worker-owned cooperative
in Montezuma Creek, UT, is in a Persistent
Poverty County and allowed the company
to expand from 14 to 82 owner-members.
In many community-owned and social
enterprises, hard assets that can serve as
collateral are often minimal, making them
too risky for most traditional lenders. These
enterprises require a lender like LEAF who
can focus on the cash flow generated by
the business and is willing to accommodate
the specific needs of each organization.
San Francisco Green Cab
San Francisco Green Cab, a worker-owned,
all-hybrid taxi service was started in 2007 by
eight drivers with a
single Toyota Prius.
When the start-up
needed additional
capital to expand,
LEAF provided eight
successive loans
amounting to a total of $248,600 that has
allowed the cooperative to grow its fleet to
19 cars and create 60 new jobs. Green Cab is
located in an area of town designated by the
US Treasury as a Low-income Investment
Area and where incomes are 47% of the
regional median. The vast majority of its
drivers were very low-income at the time of
hire. Over 50% of the driver-owners are
immigrants and all participate in profit
sharing and ownership of the cooperative.
Work place democracy was important to
Green Cab’s member-founders and LEAF’s
experience with cooperatively-owned
businesses made it a perfect match. “LEAF
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was there for us,” says Joe Mirabile, a Green
Cab co-founder. “They’re true to their
principles of funding local, progressive
organizations.” Green Cab’s progressivism is
evident not only in their ownership structure,
but also in their environmental commitment.
All Green Cab taxis are low-emission hybrid
vehicles and the company purchases carbon
offsets, making it a zero carbon footprint
company. The offset funds go toward a
conservation program in Brazil’s Amazon
Rainforest.
Green Cab’s Mission Statement embodies
the community-owned business ethos LEAF
seeks to promote: “To provide safe,
courteous, efficient and reliable taxi service,
in an environmentally responsible manner,
“By
pursuing
ourcompany,
mission we are
through
a worker-run
democratically
organized and and
operated on
creating
opportunities
the principle of equitably shared rights,
transforming
lives. This would not
rewards and responsibilities, in a safe
have
been
without
theand
industry
havenpossible
where workers
can speak
act in their own behalf without fear of
support
of LEAF.” —Beverly
retaliation or punishment.”
Vaughan, First Source Staffing
“LEAF was very supportive from the beginning.....As our
company grows we look to LEAF not only as a financing
source but as a partner.” —Joe Mirabile, SF Green Cab
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Sources: US Census Bureau: 1980-­‐2000, ACS 2005-­‐2009
Persistent Poverty Counties
LEAF has made a number of loans to
cooperatives based in Persistent Poverty
Counties (PPCs) and is actively seeking to
deploy more funds to cooperatives in our
areas of expertise - natural food
cooperatives, worker-owned enterprises and
cooperatively owned manufactured home
parks – located in these geographic areas.
located in rural areas, with significant
clusters in Appalachia, the US-Mexico
border region, and the Mississippi Delta.
African-Americans, Latinos, and Native
Americans are disproportionately
represented among those living in PPCs.
An example of our work in a PPC is a
loan we made to Navasew, LLC, which
allowed this worker-owned clothing
company based in Montezuma Creek,
UT to expand from 14 to 82 ownerworkers, 71% of whom are Navajo.
A PPC is defined by the CDFI Fund “as any
county that has had 20 percent or more of
its population living in poverty over the past
30 years.” The majority of the 384 PPCs are
!9
Performance Overview & Impacts
Since its founding over 30 years ago, LEAF has invested and leveraged over $91 million, resulting
in the creation or retention of more than 6,600 jobs. Since 2009, we have measured the following
impacts:
Job Creation for people in low-income communities:
- 706 jobs in 12 consumer food coops
- 69 job in employee owned businesses
- 190 employees transitioned from parttime to full-time in food coops
People served by Alternative Staffing Agencies
financed by LEAF:
- 1,440 people with “barriers to
employment” placed into positions
- 3,260 low-income individuals benefited from
placement, career counseling and retention
services that one of our employee-owned
cooperative businesses provide to entrylevel workers
23%
35%
42%
Community-owned Food Cooperatives
Low Income Housing
Worker and community-owned Enterprises
Other Beneficiaries:
- 54,000 families have gained access to quality food through 9 coops
- Purchases from the cooperatives we financed support 1,800 small family farms and 2,640
small businesses
Through strategic
partnerships, LEAF
is able to lend
nationally and
address the needs
of communities
that lack sufficient
community
financing services.
Loan Fund Contributors and Investors
Adrian Dominican Sisters
Amy Domini’s The Sustainability Group
Province of St. Mary of the Capuchin Order
CDFI Fund of The U.S. Treasury
Cooperative Charitable Trust
Individual Donors
Individual Investors
Mercy Investment Services, Inc.
National Cooperative Bank
People’s Food Cooperatives, Inc.
Religious Communities Investment Fund
Seward Co-Op Grocery & Deli
Sisters of Charity - Seaton Enablement Fund
Sisters of St. Francis of Philadelphia
Twin Pines Cooperative Foundation
Unitarian Universalist Congregation at Shelter Rock
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LEAF Board of Directors
LEAF has a nine member board of directors who all have substantial experience in cooperatives,
community development and finance. They include an Eastern Bank Vice President who served
as a member of the community development advisory council for the Federal Reserve Bank of
Boston, and the President of the Massachusetts Association of Community Development
Corporations.
Pedro Arce, Eastern Bank
Chris Clamp, Southern New Hampshire
University
Joe Kriesberg, Massachusetts Association of
Community Development Corporations
Alex Pyle, Sheehan, Phinney, Baas & Green, P.A.
Gerardo Espinoza, LEAF
Janet Van Liere, The ICA Group
David Hammer, The ICA Group
Rand Wilson, Service Employees International
Union
Melissa Hoover, U.S. Federation of Worker
Cooperatives
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LEAF Staff
Gerardo Espinoza, Executive Director
Gerardo has served as Executive Director of
LEAF for the last five years, spearheading the
Fund’s move into retail food co-ops and
healthy food financing. He joined LEAF after
spending many years in the commercial
banking and investment management field.
His background includes ten years as a Vice
President at First National Bank of Chicago,
and 15 years in investment management in
the positions of Portfolio Manager and Senior
Vice President with Baring Asset
Management and John Hancock funds. He
has a master’s degree in Economics from
Stanford University and an MBA from the
Harvard Business School.
James Louney, Controller
James has experience in the accounting field,
holding CFO-level positions in a variety of
private and publicly traded companies, as
well as working as a CPA for Deloitte &
Touche.
Jennifer Schuberth, Director Special Projects
Jennifer is a senior business strategist at
LEAF’s affiliate technical assistance arm, The
ICA Group, and assists LEAF with grant
applications, funding requests, and special
projects. She has over ten years of research
experience in the non-profit and education
sectors, as well as a finance background that
includes work with start-ups and community
loan funds. Jennifer holds a BA in English and
Finance from Washington University, and a
doctorate from The University of Chicago.
Juan Leyton, Director, Strategy & Development
Mr. Leyton is the former Executive Director of
Neighbor to Neighbor Massachusetts and
City Life Vida Urban, and has served as
Program Officer for the Solidago Foundation.
He holds master’s degrees in Community
Economic Development from Southern New
Hampshire University and in Public Policy
from Tufts University.
Margaret Lund, Consultant
Margaret brings over 15 years of experience
in healthy foods retail lending gained in her
previous position as Executive Director of the
Northcountry Cooperative Development
Fund (NCDF), a 30 year-old CDFI which
focuses on financing cooperative enterprises.
More recently, Ms. Lund has served as a
trainer and consultant for a number of CDFIs
through the Opportunity Finance Network’s
healthy food lending program. She holds a
master’s degree in industrial and labor
relations from Cornell University.
Nathan Hixson, Loan and Investment Manager
Nathan performs financial analysis for LEAF
and identifies new sources of funding to
support our work. Prior to joining LEAF,
Nathan served as an AmeriCorps New Sector
Fellow at Aspire Institute. He also performed
underwriting at RSF Social Finance, cofounded the BYU Social Innovation
Leadership Council, and served a two-year
mission in Albania. Nathan graduated with a
B.S. in Finance and International
Development from Brigham Young
University.
Jim Megson, Consultant
Jim is the former Executive Director of LEAF,
and now a consultant to the fund. Mr.
Megson also spent twenty years as Executive
Director of LEAF’s affiliate technical
assistance arm, The ICA Group, for
community and worker-owned enterprises.
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LEAF Lending Policies
LEAF’s Executive Director and board assess each loan on the basis of the “fit” with LEAF’s social
mission, the number of low-income individuals served compared to the size of the investment,
the visibility of the project, and the available collateral. The Executive Director completes a
written credit memorandum for the board at least five business days before the Board meeting.
The credit memo addresses the structure of the transaction including: rate, term, collateral and
other key features; the history and operations of the company; resumes of key individuals;
information on the community partners; due diligence on suppliers; key customers; historical
financial statements; and financial projections for the life of the credit facility.
The LEAF Board votes on all credit and investment decisions. Only non-staff board members
are eligible to vote. If the board deems it necessary, it may direct the Executive Director to
conduct additional due diligence before approving the loan or, as frequently happens, make the
loan conditional on certain requirements or lender actions.
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T 617 232-1551
F 617 232-9545
E leaf@leaffund.org
leaffund.org
1330 Beacon Street, Suite 355
Brookline, MA 02446