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EXPANDING OPPORTUNITY FOR PEOPLE LIVING IN POVERTY

IMPACTIN THIS ISSUE

Indicates that accompanying links may be found in the e-version of IMPACT at www.globalpartnerships.org/newsletter

FEATURE ARTICLEDo Donations Matter in

Impact Investing? (page 1)

PERSPECTIVES Dreams Ignited. Dreams Achieved!

Business of Hope Luncheon speaker Brigida Rodriguez reflects on her

experience in Seattle (page 2)

THE ROUND UPReports, articles, and highlights

on impact investing (page 2)

IMPACT IN ACTIONGreen Technologies Power

Households and Change (page 3)

FROM THE FIELDExploring Green Solutions (page 4)

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DO DONATIONS MATTER IN IMPACT INVESTING? When scientists created a vaccine for polio in the 1950s, the achievement was based on years of research, learning and testing. Those efforts took time and a belief that the initial investments, made by ardent supporters of a tiny nonprofit called March of Dimes, would pay off. Not knowing if a viable solution would result from this work, pioneering supporters took a staggering leap of faith that their donations would have an impact. That initial philanthropic investment in the early, discovery stages made a huge impact and saved countless lives. And we have those pioneering supporters to thank.

Similarly, one way Global Partnerships uses philanthropy is to research, explore and learn more about solutions to pressing challenges. With philanthropic funding, we are able to identify successful solutions around the world, improve upon promising ones and prove that market-sustained solutions have the potential to achieve scale. For GP and other nonprofit impact investors, these early-stage investments in innovative partners are the key to unlocking long-term, sustainable solutions to improve lives.

The need for early, exploratory work has been well documented. The case for philanthropy in impact investing is the central topic in a Monitor Group Report, done in collaboration with the Acumen Fund. The authors point out that in the early years of traditional microfinance, philanthropy played an important role, allowing pioneers like Grameen “to refine the [microfinance] model through many years of trial and error…to help accelerate progress…” and catalyze this new sustainable model for alleviating poverty. Additionally, an article in the Stanford Social Innovation Review points to the gap in funding and argues that “if we wish to build an impact investing industry that successfully delivers on the promise of bringing market-based solutions to disadvantaged populations, our success depends on our support of early stage innovators. It is today’s fledgling innovator who sets the stage for tomorrow’s next great scalable innovation.”

But why do we need philanthropy to fund these exploratory opportunities? With philanthropic support, GP provides the initial capital to make the most enduring impact on populations our partners serve. For example, thanks to the donors who stepped...

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WINTER 2013 | VOLUME 10 ISSUE 2

Aurea Francisca Fuentes Huayhua bought her clean and more efficient oven through our partner FONDESURCO in Peru. Photo c/o FONDENERGÍA.

THE ROUND UP

PERSPECTIVES

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Reports, articles, and highlights on impact investing.

A Survey of Impact Investors

A new report released by JP Morgan and the Global Impact Investing Network (GIIN) provides an update on the impact investment market, based in part on survey responses from 99 impact investors. The survey reveals that the top challenge to market growth is “lack of appropriate capital across the risk/return spectrum.”

Measuring Social Impact

The Global Impact Investing Network (GIIN), a leading nonprofit impact investment resource founded by supporters including the Rockefeller Foundation, Omidyar Network, and US AID, published a white paper on the need for standardizing metrics in impact investing. Publishing consistent data would help mission-driven investors compare investments and hold organizations more accountable. The GIIN also launched a beta version of ImpactBase, an online database of impact investment funds and products designed for investors.

Missing Pieces of the Puzzle

The impact investing market is forecasted to grow to USD $9 billion this year, but most of that money will not be directed to the areas of greatest need—innovation and infrastructure. According to the Stanford Social Innovation Review, more early-stage investors are needed to innovate market-based solutions, while infrastructure (training, legal structures, etc.) is needed to facilitate those solutions.

Pioneering Philanthropists Needed

A key message from last year’s Social Enterprise World Forum was that there is an unmet need for support in early-stage impact investment ventures. Leaders and pioneers in the industry assert that innovation will remain stagnant unless more philanthropists, foundations, and development banks invest in early-stage ventures.

Dreams Ignited. Dreams Achieved!

Brigida Rodriguez, client of Global Partnerships’ (GP) partner Esperanza, shares her reflections on traveling from the Dominican Republic to Seattle to speak at GP’s Business of Hope Luncheon (BOH). Her story about how she became a successful baker and entrepreneur after receiving business training and a loan from Esperanza inspired a packed room of nearly 1000 attendees, who raised over $640,000 in support of GP’s mission.

What was one memorable part of your visit, and if you’d like to say anything to GP’s supporters, what would it be?

When I saw the amount of people that were applauding me at the event, I will never forget that moment ever. [The BOH audience] made me feel that I was important and that they cared for me. I would tell them that there are thousands of women whose lives are changed because of them. Keep on providing hope.

What are some of the things you’ve learned from the business education component of Esperanza’s services, and how have they helped you build/improve your business?

When I started with Esperanza I was bankrupt, but after joining I changed my life from top to bottom. I received business training and learned that if you make something of quality that your customers enjoy, they will demand more!

What did you think of your visits to local businesses Theo Chocolate, Macrina Bakery and Tutta Bella?

Macrina Bakery is where I absorbed the most knowledge. They make beautiful cakes which have inspired me to expand my merchandise!

Photo by Fernando Concepción/Dominican Republic

See and hear more perspectives by joining us on a

PartnerTrip to Peru in June or Ecuador

in November. Apply at www.

globalpartnerships.org/partnertrip

GET CONNECTED

CONTINUED FROM PAGE 1

IMPACT IN ACTION

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GREEN TECHNOLOGIES POWER HOUSEHOLDS AND CHANGE

Vivian Antonio Rivera owns a small farm in La Dalia, a small, rural town located in central Nicaragua where he cultivates coffee, corn, beans and cacao to support his wife, Maria, and 13-year-old daughter. The landscape is hilly and verdant; a perfect place for growing

coffee and cacao. As a longtime client of Global Partnerships’ (GP) partner Fondo de Desarrollo Local (FDL), Vivian has been able to expand his plot of land and diversify his crops thanks to technical farming assistance and credit from FDL. With hard work and FDL’s support, Vivian has steadily increased his income.

Yet, until recently, Vivian and his family had to spend hard earned money on dim, expensive and potentially dangerous sources of fuel—like kerosene or an open flame— to light their home at night. Without access to the energy grid, they had few other options until Vivian applied for a loan from FDL to purchase a Solar Home System (SHS).

The $500 SHS included a 25-watt solar panel, deep cycle battery, inverter for cell phone charging and four light bulbs. Prior to owning the SHS, Vivian spent $20 per month on kerosene to illuminate his home. Now, he’s paid off his loan and his only expense is buying light bulbs. With a bright, reliable and sustainable source of light from sunset to sunrise, Vivian and his family save money and enjoy more productive hours each day. They also live in a healthier environment because they no longer have to inhale kerosene smoke inside their home.

With savings from using more efficient sources of fuel, Vivian is able to invest more money into his farm and his family. Furthermore, the SHS was made affordable to meet Vivian and his family’s needs because FDL approved a three-year loan that was payable in annual installments during harvest time— when Vivian’s disposable income is highest.

When asked about the greatest benefit of his SHS, Vivian replied, “Yes, I save money, but more importantly my daughter can study at night.” Vivian and his family have been enjoying a better quality of life because of the SHS that they have had for over five years.

Photo: GP staff Sixta García (left) and Danny Stokley (back) with Vivian and his family in their home, which is powered by a Solar Home System. Photo c/o Danny Stokley.

up to fund our pilot with PATH and Pro Mujer in Nicaragua we were able to establish a new and sustainable way of delivering health services to those that are hardest to reach. Similarly, our green technology fund relies heavily on philanthropy to fund research into market demand, best practices, and potential solutions especially around “last mile” distribution* and service challenges that will help improve lives over the long-term. With this knowledge, we can make informed decisions about which solutions and business models to support or refine. Continual learning and knowledge building in these early stages is critical to identifying long-term, sustainable solutions that expand opportunity for families living in poverty. Philanthropy helps us do that.

*Last mile distribution refers to providing access to people living in poverty in the most remote locations where poor infrastructure remains a barrier to access.

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FROM THE FIELD

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IN THIS ISSUE

• Do Donations Matter in Impact Investing?

• Learn about our latest work in Green Technology

• Travel with us to Peru and Ecuador

Exploring Green Solutions By Gerardo Talavera, Portfolio Director and Danny Stokley, Green Technology Fund Officer Light. Many people never consider its origins, its true costs, or our dependence on it. Only in the wake of a natural disaster, such as Hurricane Sandy, do we encounter homes without electricity. However, many families in Latin America and the Caribbean still live outside the energy grid, relying on kerosene lamps and candles for light. Solar power has the potential to electrify these homes immediately. This is why Global Partnerships (GP) invests resources into green technologies and their distribution models to meet the needs of underserved populations. Over the last couple of months, GP staff has spent time in the field gathering valuable insights from three partners that offer various solar products. These insights include:

In Peru, FONDESURCO provides loans for solar water heaters and small ovens. In talking with their clients, we’ve learned that investing in green technologies improves quality of life and generates income. One client in the Peruvian Andes, Ines Panibra, offers her home for lodging to earn income for her family. Since purchasing a solar water heater through a FONDESURCO loan, she’s increased her lodging rate by 20 percent. In Nicaragua, Fondo de Desarrollo Local (FDL) offers clients financing for solar home systems. However, we believe an opportunity exists to offer more affordable and appropriate solar products and are currently funding research to verify market potential. In Haiti, Fonkoze, currently partners with a single solar product distribution company. However, product awareness is low among the rural population. In an effort to increase adoption by off-grid clients, GP plans to invest in an awareness campaign in partnership with Fonkoze and their distributor. As we continue to explore green solutions, we hope to discover new opportunities for entrepreneurs. Pictured: Altagrace Dormeus is a FONKOZE client that has replaced her kerosene-fueled lamps at home with solar-powered lights, which helps her children study at night. Photo by Peter Bladin/Global Partnerships