Giving Compass' Take:

• Foundations can use an impact investing framework to provide capital to food systems that will generate local wealth and advance food-system finance. 

• How is this approach different from traditional food system investments? How will producing local capital help the food system thrive? 

• Read about how to accelerate entrepreneurship in the food system. 

Creating a food system that can feed a growing population in the face of climate change—without replicating the harms of the industrial food system—is one of the great challenges of our time. Worldwide, one in nine people lacks access to nutritious and healthy food, and that crisis will deepen as the global population nears 8 billion and meets further resource constraints. In the United States, 17.6 million people lack access to healthy food.

We hear a lot about agtech (technology focused on growing more food with fewer resources) as a way to solve food supply issues. But tech isn’t the only path to an agricultural sector that can meet our evolving needs. Small farmers and food businesses across the United States are adopting a place- and equity-based approach to the problem. They’re working to strengthen regional food systems in a way that gives communities more say in the allocation of resources while creating quality jobs and stewarding the land.

The investors funding tech solutions are not going to step in and fix this problem; it’s not what they’re set up to do. We need a new approach to food-system finance, one in which foundations—which have the kind of flexible, patient capital these enterprises need—go beyond grantmaking and start investing.

Some foundations are incorporating an impact investing framework that uses public and private investment in food systems to generate local wealth, rather than extract it. They are using MRIs and PRIs to integrate their grant and investment capital, and create new models that move capital to serve smaller enterprises.

Foundations that want to take on the food system challenge will do well to assess internal barriers that may hinder success. Identifying the bottlenecks to investing in long-term, high-impact, and low-return investments is a good place to start (see the Surdna Foundation’s report on its journey to impact investing).

Read the full article about foundations investing in the food system by Meredith Storton & Jennifer Astone at Stanford Social Innovation Review.