It’s supposed to be an armel raut (arm badge) for the Race and Settlement Amt. It’s a reproduction. Poorly executed embroidery.
Here’s two examples from Angolia’s Cloth insignia of the SS. 2nd Edition, 1989, Page 72. Also a 7th SS Prinz Eugen EM Tab. Cloth Insignia of the SS, same edition, page 329.
"Which organization or branch was in charge of Race and Settlement?"
It was the Allgemeine-SS; SS-Hauptamt. 'In January, 1935, members of the staff of the Race and Settlement Main Office (R.u.S Hauptamt) were authorized to wear the R.u.S-Hauptamt sleeveband'.
Angolia, Cloth Insignia of the SS, 2nd Edition, 1989, Page 65.
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