Revolving Loan Fund

A Revolving Loan Fund (RLF) is a source of money from which loans are made for multiple small
business development projects. Revolving loan funds share many characteristics with microcredit, micro-
enterprise, and village banking, namely providing loans to persons or groups of people that do not qualify
for traditional financial services or are otherwise viewed as being high risk.[1] Borrowers tend to be small
producers of goods and services: typically, they are artisans, farmers, and women with no credit history or
access to other types of loans from financial institutions. Organizations that offer revolving loan fund
lending aim to help new project or business owners become financially independent and eventually to
become eligible for loans from commercial banks.

The fund gets its name from the revolving aspect of loan repayment in which the central fund is replenished
as individual projects pay back their loans, creating the opportunity to issue other loans to new projects.[2]

Contents
Popularity in academia
Green Revolving Fund (GRF)
Sample of Green Revolving Funds
Greening the Bottom Line: the Trend towards Green Revolving Funds on Campus
Sample of GRF-Supported Projects
Types of Green Revolving Funds
Benefits of a Green Revolving Fund
Financial data on Green Revolving Funds
Return on Investment
Payback periods
Sourcing Seed Funding
References
Resources

Popularity in academia

Green Revolving Fund (GRF)

The revolving loan fund is often referred to as a green revolving fund, or GRF, when it is initiated on
college and university campuses. These types of funds target projects that improve campus energy-
efficiency, reduce resource use, and implement other projects and programs that fall under the category of
sustainability. In recent years, GRFs have become increasingly popular on campuses in the United States.
The funds operate and are managed by the university, with loans issued to university departments or
campus groups.
In February 2013, the Association for the Advancement of Sustainability in Higher Education (AASHE)
released a database of campus sustainability revolving loan funds. As of March 2013, there were 84
revolving loan funds at 80 institutions in North America containing $118,737,518.[3]

Sample of Green Revolving Funds

Harvard University (MA) - The Green Loan Fund was created in 2001 and has
$12,000,000.[4]
Western Michigan University (MI) - WMU's Quasi GRF was created in 1980 and has
$365,000.[5]
Oberlin College (OH) - The student-run Green EDGE Fund was created in 2007 and has
$344,000.[6]
Lane Community College (OR) - Lane's Energy Management Fund was initiated in 2006
and has $122,000 available.[7]
Oregon State University (OR) - Oregon State Universities Sustainable Energy Revolving
Loan Fund was initiated in 2010 and has $300,3000.

[8]

Carleton College (MN) - The Sustainability Revolving Fund (SRF) began in 2007 and has
$71,101.[9]
College of Wooster (OH) - The Revolving Environmental Efficiency Fund (REEF) was
developed in 2010 and has $5,000.[10]

Greening the Bottom Line: the Trend towards Green Revolving Funds on Campus

In February 2011 the Sustainable Endowments Institute published the paper "Greening the Bottom Line:
the Trend toward Green Revolving Funds on Campus." The paper researched the 52 active green revolving
funds in the US, with findings based on a series of interviews and surveys with sustainability directors and
administrators involved in green revolving fund development and operation at the college and university
level.

Greening the Bottom Line reports on a green revolving fund's formation, operation, and financial
performance. The report was written with the explicit purpose to provide a baseline for tracking the
continuing emergence of green revolving funds in higher education to act and to act as a resource for
institutions interested in establishing their own.

Greening the Bottom Line found that for those institutions with green revolving funds:

the number of institutions with green revolving funds is growing. Out of the 52 reported active
green revolving funds, 37 funds were created between 2008 and 2011.
an institution does not have to be wealthy to create a green revolving fund: over 32 percent
of funds reported in Greening the Bottom Line are $100,000 or less.
there was a range of college and university endowment size, from $7.6 million (Lane
Community College) to $25 billion (Harvard University).
there was a range of college and university student population, from 1,381 students
(Kalamazoo College) to 42,000 students (the University of Illinois Urbana-Champaign).
schools reported a range on their GRF project portfolio's return on investment from 29
percent (Iowa State University) to 63 percent (the University of Denver).
Sample of GRF-Supported Projects

Green revolving funds can invest in a wide variety of projects and have supported projects that impact a
university's carbon footprint or local environment. Examples of these projects include: installing technology
that conserves water and electricity; improving campus recycling rates; instituting a campus composting
program; increasing campus waste diversion from landfills; replacing a fuel source (e.g. converting campus
plants to burn biomass or biodiesel instead of traditional fuel sources); and introducing behavioral change
programs that raise student awareness of individual resource use.

Payback Cost W/O

School Project Savings
Period Incentives
$49,000
Iowa State
Energy-saving software on 500 computers 23 days $3,039 annually
University
(projected)
University Traded 7,450 incandescent bulbs for
$20,000
of Notre energy-efficient fluorescents in student 1 year $17,600
annually
Dame housing
Oberlin Upgraded 30 showerheads at 2.35 gpm $866
1 year $900
College with low-flow 1.5 gpm annually

Types of Green Revolving Funds

There are three types of green revolving funds that target different institutional priorities.

1. Efficiency funds provide capital to energy and/or water efficiency measures. Their goals are to reduce
resources and save money. Project ideas are initiated and managed by staff from Facilities, Energy
Management and/or Finance Departments. Efficiency funds tend to require a relatively short payback
period and are typically not used to engage the broader campus community.
2. Innovation and engagement funds explicitly seek community engagement in project proposals. The
projects it funds may have short paybacks, long paybacks, or no payback requirements. Innovation funds
often provide loans that require repayment for projects that will result in operational savings, and they use
these returns to subsidize grants for projects that will not result in cost savings. Innovation funds are
generally administered by a committee and often include significant student participation and/or oversight.
3. Hybrid funds target resource reduction and cost saving, but also consider community engagement and
outreach goals. The majority of funds follow this model. They finance efficiency projects in addition to a
wider range of initiatives such as renewable energy development, solid waste diversion, and reducing use
of materials like paper or synthetic lawn chemicals. Hybrid funds often seek to engage and/or educate the
campus community in sustainability efforts. A broad set of campus stakeholder groups tend to provide
oversight to hybrid funds while they are administered by facilities or sustainability staff.

Benefits of a Green Revolving Fund

Green revolving funds can impact many aspects of an institution's daily operations. They can be used to:

Provide up-front capital for energy and/or water efficiency measures.

Reduce a school’s operating budget(s) by decreasing campus electrical and water
consumption.
Reduce a school's carbon footprint and greenhouse gas emissions.
 Record baseline data to compare resource-use consumption over time and/or to promote
increased tracking of energy and water use.
Update aging infrastructure by installing newer energy-efficient technology.
Improve campus building comfort, functionality, and efficiency as well as reduce building
maintenance needs.
Develop renewable energy technology that can be used to further campus research and
offer opportunities for interdisciplinary education and research on sustainability, which can
provide additional resources to supplement the curriculum.
Ensure that a school will have a ready source of capital earmarked explicitly for projects that
have a demonstrated impact on sustainability, operating without the threat of seed money or
cost savings being reabsorbed into a utility or central administrative budget.
Foster collaboration between offices of finance, sustainability, facilities, faculty, and students.
Accrue savings because of a high reported return on investment and a high level of
involvement by the campus community.

Financial data on Green Revolving Funds

Return on Investment

Green revolving funds on the college and university level report a high return on investment. The highest
reported ROI is at the University of Denver with 63 percent ROI for their Energy Reserve Fund's project
portfolio. The minimum reported ROI is from Iowa State University's Live Green Revolving Loan Fund
with a 29 percent ROI.[7]

Payback periods

Schools with green revolving funds report an average project payback periods ranging from 1 year to 10
years, with a median of 4 years.[7]

Sourcing Seed Funding

Colleges and universities seek seed funding from a variety of sources, including:

allocations from the central budget or other administrative sources

the installation of student fees and student government grants
previous efficiency and utility cost savings
Outside donations or other foundation funding
investments from the endowment, or
a combination of two or more of the above sources.[7]

References
1. "Archived copy" (https://web.archive.org/web/20160310165103/https://docs.google.com/vie
wer?a=v&q=cache%3AF58RzxQe0h4J%3Awww.rotary.org%2FRIdocuments%2Fen_pdf%2
Fhg_revloan_faq.pdf+revolving+loan+fund+rotary+international&hl=en&gl=us&pid=bl&srcid
=ADGEEShfT9ui5_jwZONrCtHaxhVrz3otnSHVio5w_m1ORSgAwGrXwSPfBwK0zgbhuXB
d18eg-3tGyMg_FY44F2ZEu4RDlgr-3h8Ate95Kw6eKSSdqpjPz-JDEHfsyDY0n6hOll6ftu7F
&sig=AHIEtbTReWV20bx1aV0UOgFElBrTgf6Wlw). Archived from the original (https://docs.
 google.com/viewer?a=v&q=cache%3AF58RzxQe0h4J%3Awww.rotary.org%2FRIdocument
s%2Fen_pdf%2Fhg_revloan_faq.pdf+revolving+loan+fund+rotary+international&hl=en&gl=
us&pid=bl&srcid=ADGEEShfT9ui5_jwZONrCtHaxhVrz3otnSHVio5w_m1ORSgAwGrXwSP
fBwK0zgbhuXBd18eg-3tGyMg_FY44F2ZEu4RDlgr-3h8Ate95Kw6eKSSdqpjPz-JDEHfsyD
Y0n6hOll6ftu7F&sig=AHIEtbTReWV20bx1aV0UOgFElBrTgf6Wlw) on 2016-03-10.
Retrieved 2019-04-15.
2. "Archived copy" (https://web.archive.org/web/20110912005402/http://www.cdfa.net/cdfa/cdfa
web.nsf/pages/rlffactsheet.html). Archived from the original (http://www.cdfa.net/cdfa/cdfawe
b.nsf/pages/rlffactsheet.html) on 2011-09-12. Retrieved 2011-06-24.
3. "AASHE Campus Sustainability Hub" (https://hub.aashe.org/). Hub.aashe.org. Retrieved
3 March 2019.
4. "Archived copy" (https://web.archive.org/web/20100923172116/http://green.harvard.edu/ofs/
history). Archived from the original (http://green.harvard.edu/ofs/history) on 2010-09-23.
Retrieved 2010-11-19.
5. "Archived copy" (https://web.archive.org/web/20110725133110/http://www.campusinpower.o
rg/Campus_INpower/REVOLVING_FUNDS_files/CIP_RLF_OVERVIEW.pdf) (PDF).
Archived from the original (http://www.campusinpower.org/Campus_INpower/REVOLVING_
FUNDS_files/CIP_RLF_OVERVIEW.pdf) (PDF) on 2011-07-25. Retrieved 2009-05-25.
6. "Oberlin College Green EDGE Fund" (https://sites.google.com/a/oberlin.edu/edgefund/).
Sites.google.com. Retrieved 3 March 2019.
7. "1&1 IONOS Hosting" (http://greeningthebottomline.org/defaultsite).
Greeningthebottomline.org. Retrieved 3 March 2019.
8. "Archived copy" (https://web.archive.org/web/20121210163427/http://oregonstate.edu/ssi/fu
nding/serlf). Archived from the original (http://oregonstate.edu/ssi/funding/serlf) on 2012-12-
10. Retrieved 2012-03-06.
9. "Our Campus - Sustainability - Carleton College" (https://apps.carleton.edu/sustainability/ca
mpus/). Apps.carleton.edu. Retrieved 3 March 2019.
10. "Home - REEF - Confluence at The College of Wooster" (https://wiki.wooster.edu/display/ree
f/Home). Wiki.wooster.edu. Retrieved 3 March 2019.

Resources
Dieboldt, A., Den Herder-Thomas, T., "Creating a Campus Sustainability Revolving Loan Fund" (http://w
ww.aashe.org/documents/resources/pdf/CERF.pdf), Association for the Advancement of Sustainability in
Higher Education; April 2007.

Weisbord, D., Dautremont-Smith, J., Orlowski, M. "Greening the Bottom Line: the Trend toward Green
Revolving Funds on Campus" (http://greeningthebottomline.org/), the Sustainable Endowments Institute;
February 2011.

Flynn, E., Orlowski, M., Weisbord, D. "Greening the Bottom Line 2012" (http://greeningthebottomline.or
g/#reports/), the Sustainable Endowments Institute; October 2012.

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