Organizational Structure: The Sustainable Development Fund of Southeastern Pennsylvania

The Sustainable Development Fund (SDF) is a modest-sized fund operating in Pennsylvania with a mission to promote:

1. the use of renewable energy and advanced clean energy technologies;
2. the use of energy conservation and energy efficiency; and
3. the start-up, attraction, expansion, and retention of sustainable energy businesses.

SDF is known for its effective fund management and its innovative renewable energy program designs. A prerequisite to the development of innovative and effective programs is the creation of a strong organizational structure. This case focuses on three elements of the SDF's organizational structure that have been critical to its success.

Innovative Features

The three main organizational strengths of the SDF structure are:

• SDF's market-driven investment approach,
• SDF's ability to avoid the politicization of funding decisions, and
• SDF's capacity to raise additional capital.

Two limitations, narrow geographic focus and modest initial funding, are also discussed.

Results

• As of May 2002, SDF had approved fifteen investments (primarily loans) totaling $7.3 million.
• A small grant budget is also available for business planning, green building design assistance, start-up activities, and other special work; 22 grants totaling $448,000 have been approved by SDF as of May 2002.
• SDF has successfully managed a production incentive auction for new wind power, has developed a buy-down program for solar photovoltaics that incorporates performance features, has managed an innovative offering of subordinated debt to a 9 MW wind project, and currently manages a $500,000 per year program to enhance green power awareness in the state.
• SDF's strong organizational structure has been critical to these successes.