Community-Driven Financing
Highlight
Community-Driven Financing
with the Michigan Good Food Fund
Across Michigan
This year we assumed administrative management of the Michigan Good Food Fund, a statewide food financing collaborative designed to support food entrepreneurs sparking positive change in their communities.
This shift came at a significant moment. Partners had collectively infused $17 million in loans and grants and served 300 Michigan-based food businesses since the collaborative’s inception in 2015. Despite this initial success, Michigan Good Food Fund partners recognized the need to anchor its next phase of food investments in community voice and pivot to meet the most pressing needs facing local businesses.
As founding members, we asked ourselves: Are we meeting the needs of those we intend to serve? Are there gaps in our capital product offerings? What is the role of technical assistance? And ultimately, what does success look like for those on the ground leading the charge in their communities?
This reflection set off a year-long journey of listening sessions, working groups, and collaborative co-creation to re-ground this place-based initiative in the vision and priorities of the Michigan entrepreneurs it seeks to support.
As we closed 2021, a new Stakeholder Board was established to define the investment priorities for the Michigan Good Food Fund moving forward. The group sparked thinking about what the future can hold – including ways the collaborative can create greater impact for the state’s mission-led good food businesses with a focus on people who are most often overlooked by traditional investors, particularly people who have been marginalized due to their race, ethnicity and/or gender.
Read on for highlights from a conversation with Jean Chorazyczewski, one of Fair Food Network’s leads on behalf of the Michigan Good Food Fund, who shepherded this work on what we’ve learned, where we’re still learning, and the work ahead.
Why a Stakeholder Board?
JC: The purpose of our Stakeholder Board is to integrate community input and participation in our work. This group ensures our work going forward addresses—and is held accountable to—community-identified needs. The Stakeholder Board’s role is to co-create Michigan Good Food Fund’s vision of success, set investment policies and priorities, inform strategies, and maintain accountability of the collaborative’s partners to impacted beneficiaries. Stakeholder Board members also help connect the collaborative’s partners to community and entrepreneurial networks across Michigan, ensuring investments respond to community-identified needs.
What did you learn in your listening sessions?
JC: After stepping into administrative management of this initiative in early 2021, Fair Food Network started by deep-dive listening sessions with the collaborative’s existing partners. At the same time, our team organized working groups with a broader network of partners, including entrepreneurs. We wanted to learn their perspectives on three specific topics: Mission and metrics, community voice, and capital and technical assistance providers and offerings.
Our extended conversations raised successes and strengths as well as missteps, gaps, and challenges. It also led to some “ah-ha” moments and planted the seed for broader paradigm shifts. Across discussions, common themes included:
- Addressing global issues, such as climate change and growing inequity, through food
- Defining who Michigan Good Food Fund aims to serve and do better in identifying needs in different communities
- Better connecting business assistance to real capital, especially for businesses owned and operated by people of color
- Understanding the role of healthy food and how it’s defined in the collaborative moving forward
- Expanding our reach to food entrepreneurs in every corner of the state
Fair Food Network compiled themes, insights, and recommendations for consideration by an independent Steering Committee. The Steering Committee then nominated candidates for the new Stakeholder Board to take these ideas and chart the course forward for the collaborative.
Who is included in the Stakeholder Board?
JC: Our collective intention was to re-ground this work in community voice by bringing together knowledgeable, representative voices from across Michigan and the food value chain. This meant farmers, local food entrepreneurs, grocers, and community leaders working alongside business assistance and capital providers to chart the work forward and have a shared voice in its work.
What strategic shifts is the Stakeholder Board making?
JC: The Stakeholder Board developed a new mission, investment policies, impact objectives, and portfolio performance targets that ushered in significant shifts.
This included a commitment to more diverse capital products and a shift from independent
business assistance and capital deployment to integrated and sustained investments. In addition, instead of prioritizing loan readiness and healthy food as primary filters, the collaborative recognized that some projects take years to come to fruition. Michigan Good Food Fund wants to partner with entrepreneurs to co-create outcomes and help them reach their future goals rather than invest solely in what’s happening today.
Finally, the Stakeholder Board elevated an “act local, think global” ethos that reframes local food financing as a tool to address some of the most pressing issues we face globally, including climate change and growing inequalities. We’ve continued to discuss its relevance in the collaborative’s work in 2022.
Fair Food Network serves as both an administrator of the initiative as well as a lender with its Fund. What role can a nonprofit Fund play in this network?
JC: As a social impact organization, Fair Food Network can focus on mission-aligned investments. This allows us to be more impact-oriented and less beholden to traditional financing structures.
In practice, this means much more creative and catalytic investments. Fair Food Network’s investment can take early action, providing a signaling investment so others can come behind us. We can take bets on “riskier” entrepreneurs when we feel the potential impact is high. We understand the food financing landscape and when there’s a sticking point, and we can work to unlock others’ capital – financing food businesses that may otherwise be declined. As a private impact fund, we’re also not locked into any single capital product. Our Fund aims to start with the entrepreneur’s needs and craft an integrated financial solution that fits their needs.
While our Fund is still growing, we hope this flexibility allows us to break new ground and be an additive partner to the broader community of food lenders and impact investors.
What’s a lesson learned that you’d like to share with others?
JC: Our team learned about the importance of patience in the process. It takes time to engage stakeholders and bring them up to speed on progress and, ultimately, let them decide where success lies. For a can-do organization like Fair Food Network, it was challenging to pause and spend the time it takes to truly listen and learn.
That said, it was well worth it. There is not only empowerment and enthusiasm in engaging the community, but also incredible ideas offered by those proximate to the problem. Our collaborative remains grateful to our partners, work groups, Steering Committee, and Stakeholder Board who invested their time and shared their knowledge to chart a new path forward for the Michigan Good Food Fund.
What would you elevate for a potential funder or investor?
JC: The Stakeholder Board has defined what success looks like and set our vision. A diverse network of partners, including representatives from across the state and various sectors, are now at the table. In addition, more than a dozen groups providing capital to food entrepreneurs in Michigan have signed onto this community-driven collaborative.
The Michigan Good Food Fund is a unique opportunity for funders and investors looking to deploy values-aligned capital, aligned with community-defined priorities and oversight, at scale.