Two Grand Rapids organizations have successfully used Green Revolving Funds to invest in sustainability initiatives that otherwise wouldn’t have been funded through annual budgets.

A Green Revolving Fund is a self-sustaining, internal fund that provides money for sustainability projects within an organization. The fund is started with seed money and then, once a project has been completed, savings from the project are tracked and the money saved is funneled back into the fund for more projects.

Calvin College implemented a Green Revolving Fund in 2008, which is still active today, and Spectrum Health used a Green Revolving Fund to complete 42 projects in less than three years.

“In the fall of 2008, I did a feasibility project with one of my fourth-year mechanical engineering classes,” said Matthew Heun, a Calvin College engineering professor. “I asked them what would it take to implement a Green Revolving Fund at Calvin College?”

Heun said his students identified nine potential energy-efficiency projects that could be undertaken with the support of a GRF. The students also developed a set of policies to guide the use of the fund and projected the fund balance forward through time.

Following the class project, Heun said his students put pressure on Calvin administrators to implement a GRF. In 2010, Calvin agreed and supported the fund with $50,000 in seed funding.

Heun said the fund was used for two projects, initially.

“The first was a project to automatically turn off all the computers in our laboratories around campus — the student workstation labs. That involved software installation,” he said.

“The second project was to replace lights in some bathrooms in the science building with energy-efficient lamps and occupancy sensors for the bathrooms.”

Heun said after a project is completed, it is monitored for a full year to determine cost savings.

“At the end of the year, we add up all the savings from our projects and we write a check to ourselves, essentially from our utility account,” he explained. “Instead of paying the utility the saved energy amount, we pay ourselves.”

Heun said in less than four years Calvin has saved $71,000, and in 2015 it will have saved its one-millionth kilowatt hour.

The Green Revolving Fund also has allowed Calvin to complete lighting projects in four buildings and install low-flow showerheads in dormitories.

“We have two more lighting projects that will be implemented this coming spring,” Heun said.

Spectrum Health decided to try a GRF in 2011, after determining that a major barrier to sustainability and energy-efficiency projects within the organization was a lack of capital funding. The health system’s finance department supplied $1 million in seed money to launch the sustainability fund.

Sarah Chartier, sustainability coordinator at Spectrum, said the fund was established to focus on projects with an investment value of $5,000 to $150,000 and a short return-on-investment timeframe.

During the time the fund was available, Chartier said Spectrum completed 42 projects, received $99,000 in utility rebates, established $410,000 in energy savings, and supplied $971,000 for energy and sustainability projects.

“The average return on investment for all projects within the sustainability fund was 2.5 years,” she added.

Completed projects at Spectrum include several lighting upgrades, the purchase of recycling compactors, and installing energy-efficient dishwashers in one of its facilities.

Chartier noted the fund is not currently in use because the hospital is now focusing on larger projects.

“The project was successful while we were utilizing it, but there were also some areas where we weren’t able to use the fund, so we’ve shifted gears and are focusing on non-capital projects, like re-commissioning, for example,” she said.

Chartier said businesses interested in trying a Green Revolving Fund should look for smaller scale investments with a short ROI timeframe.

“Making sure you have quick return on investment projects available so you can quickly start putting more money into your GRF to get some larger projects initiated — that is very important,” she said.

It is also important to develop strong guidelines and policies for utilizing the fund.

Heun said he’s learned several things he thinks are important to the success of a GRF including making sure the right people are supporting the project. He said a successful GRF needs “doers,” which means people who will go out and do the work of identifying worthy projects with a good ROI.

Also, a GRF needs to have proper oversight in place. At Calvin, the Environmental Stewardship Committee oversees the GRF and makes final decisions on the projects that will be initiated, ensuring they fit financially and with the development plans of the college.

Finally, Heun said integrity and fortitude are essential to ensure the success of a GRF.

“Integrity is incredibly important,” he said. “Your savings calculations must be well documented and unquestionable. Without that integrity, the whole thing falls apart.

“The last thing is fortitude, which might seem like an odd thing to include, but it takes a little bit of courage to write a check at the end of the year to your GRF. The question we always ask ourselves is would we rather have written that check to the utility? When you frame it that way, I think it makes a lot of sense to write the check to the GRF.”

Heun and Chartier will speak Jan. 12 at the West Michigan Sustainability Forum’s monthly luncheon, which is being held from noon to 2 p.m. at the Prince Conference Center at Calvin College. The cost to attend is $20 for members and $25 for non-members. Registration is required: wmsbf.org/january.