Organically Grown Company’s pioneering transition to steward-ownership

4 min readJun 4, 2019


Produce from Organically Grown Company

From ESOP to steward-ownership: architecting an alternative exit

Organically Grown Company’s (OGC) pioneering transition to steward-ownership marks a new path for independent, mission-driven businesses. This innovative transition to steward-ownership means that the company can never be sold. Instead, OGC will be stewarded by people deeply connected to the company’s mission of advancing organic agriculture in service to healthy people and planet. It also ensures that any profits the company generates will be used as a seed for its future — rather than be extracted by shareholders.

OGC has been a pioneer for over 40 years in sustainable, organic agriculture. In 2017 the company moved more than 100 million pounds of fresh fruit and vegetables across the Pacific Northwest, employing more than 200 people. OGC has been instrumental in building and supporting organic regulation and trade at both the regional and national levels.

OGC understands the impact ownership can have on an organization’s mission and has utilized multiple ownership structures over the course of its existence. It began as a nonprofit set up to help farmers implement organic growing methods; a few years later, however, the founders realized that selling the goods farmers produced would be a more effective way to support both them and the larger movement. The company became a farmers’ cooperative, and later an S-Corp that worked to include employees in its ownership structure. Eventually, OGC created an employee stock ownership plan (ESOP).

Steward-ownership: a long-term solution to mission preservation and independence

A few years ago the company was faced with a common business challenge: How does a mission-based company scale and transition its founders and early employees without selling or going public? Many early founders were looking to retire and need to cash out their stock, but the company struggled to balance its buyback obligations with its purpose. OGC needed a long-term ownership solution that would allow it to remain purpose-driven and independent.

“Unless we found an alternative, we were going to be on a treadmill of buying out stock and creating liquidity, and using our profits for that instead of reinvesting in our suppliers, our workers, and our community,” says Natalie Reitman-White, VP of Organization Vitality, who lead the transition within OGC.

Presented with this challenge, OGC sought a steward-ownership structure in the form of a Perpetual Purpose Trust (PPT), along with financing solutions that would enable the company to responsibly exit owners and employees while preserving its mission. You can learn more about steward-ownership here.

Mission-aligned financing

To transition from the ESOP-S-Corp to the steward-owned Perpetual Purpose Trust, OGC needed mission-aligned financing to buy back stock and transfer ownership from ESOP to the PPT. OGC partnered with Purpose Evergreen Capital and others to finance the transition.

In order to buy out previous shareholders and recapitalize its business, OGC leveraged a combination of debt and equity. The transaction presented a unique challenge: How could OGC provide investors with a reasonable risk-adjusted return on their investments while honoring its commitment to prioritizing purpose over profits? How could it balance the demands of a shared-representation structure with its need to maintain its own independence?

To solve this problem, OGC, Purpose Evergreen Capital, and the other investors collaborated on a deal structure that would balance both profits and governance responsibilities between the company and its stakeholder groups, including investors. In this unique deal structure, investors share in both governance, as one of the five stakeholder groups represented in the Trust Protector Committee, as well as in the business’ economic upside beyond the preferred dividend payment. Investors do not extract an outsized share of profits, however. Should the company produce surplus profits, other stakeholder groups receive 60 percent of additional distributions until investors receive a predefined percent of dividends, and 80 percent of profits thereafter.

“We are proud to have helped supported Organically Grown Company on its path to steward-ownership. A leader in Sustainable Food and Agriculture, OGC’s transition serves as inspiration for other businesses looking for mission-aligned ownership and financing,” explains Armin Steuernagel, Managing Partner of Purpose Evergreen Capital. Purpose Evergreen Capital is an evergreen holding company, dedicated to helping mid-to-large sized businesses transition to steward-ownership.

Since their OGC’s, Purpose has been contacted by dozens of other companies in the organic sector — and beyond — that are searching for steward-ownership solutions. These companies range from small startups wanting to grow without losing control of their mission to mature, profitable privately-owned businesses facing the challenge of succession. These companies want legal and financing solutions that will enshrine the principles of steward-ownership into their legal DNA and enable them to stay mission-driven and to maximize purpose over profit for the long-term.

Long-term mission-protection

OGC’s steward-ownership structure enables the company to remain permanently independent and to continue to deliver on its positive environmental, social, and economic goals without pressure to demonstrate short-term quarterly profits or produce exit-value for shareholders. Furthermore, it enables the stewards of the organization, who represent a broad range of stakeholders — including farmers, employees, customers, investors, and the wider community — to realize the company’s purpose while sharing in its profits.

“This groundbreaking ownership model embeds OGC’s commitment to organic and sustainable agriculture, and corporate, social, and environmental stewardship into our governance and financing structure,” explains Elizabeth Nardi, CEO of OGC. “Placing the company into a Purpose Trust ensures that we stay focused on our mission’s North Star, share real-time rewards with our stakeholders, and have aligned financing to increase our impact.”




Purpose serves a global community of entrepreneurs, investors, and citizens who believe companies should remain independent and purpose-driven.