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Dear Investor, In Global Partnerships’ seven years as a fund manager, our team has screened hundreds of potential investees, conducted countless due diligence visits, and closed and funded over 100 loans to high-impact partners. Over this period we have learned a great deal about the key ingredients necessary for successful global development.

One such lesson is that people living in poverty need more than access to capital. Our learning suggests that non-financial services such as technical assistance for farmers and preventive health education can lead to significant social impact, especially when combined with affordable and well-tailored credit. A second lesson concerns the value of maintaining a more steady funding presence in the region to meet the financing requirements of our partners. And a third lesson notes the value of having continuous investment opportunities to benefit the growing interest among impact investors.

Our experience and lessons learned have always informed the structuring of GP’s social investment funds. Our funds have aimed at driving capital to mission-aligned organizations in Latin America and the Caribbean that are working to increase incomes and improve the lives of individuals at the bottom of the economic pyramid. Our work currently is focused primarily on GP’s four impact areas: health services, rural livelihoods, micro-entrepreneurship education and green technology. All of our investees integrate credit with one or more of these critical complementary services because we are convinced that both financial and non-financial services and products are critical in improving lives.

We believe that we need to provide our partners with a range of affordable and flexible financing options, including short to medium term products and local currency loans. We reward social performance by offering favorable loan terms to organizations with a combination of strong social performance and good risk management practices. Lower financing costs for partners can lead to more resources dedicated to non-financial services highly valued by clients, resulting in increased client loyalty and better repayment rates.

A vast amount of capital seeking market-rate, risk-adjusted returns is currently stacking up in the impact investment space. But there is a growing imbalance between the return expectations of the capital available and the type of capital needed to catalyze successful global development. As we build our plans for our next social investment fund, we are mapping out approaches to solve this imbalance by driving more affordable capital to partners displaying the highest levels of social performance, and to provide investors with a fixed income return with well-managed risk. We very much appreciate your past support in helping us achieve these objectives.

Mark Coffey, Chief Investment Officer

Social Investment FundsInvestors Report

Second Quarter 2012

Global PartnershiPs by the numbers As of June 30, 2012

for more information

ContaCt: Jason Henning Director of Investor Relations jhenning@globalpartnerships.org 206.456.7832

71,562Number of people served by Global Partnerships through our partners

$40.2 MillionFund capital at work

464,369Number of microloans funded since 2004

Number of partner organizations

31

Number of countries where Global Partnerships works

10

August 15, 2012

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www.globalpartnerships.org

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Microfinance Fund

2008 Global Partnerships | Second Quarter 2012 | As of June 30, 2012

fund manaGer’s Comments Fund performance remains strong and all partners in the Fund continue to make principal and interest payments in a timely manner. Generally speak-ing, partners have shown responsible growth, improved balance sheet strength and strong portfolio quality. The Fund’s loan to Apoyo Integral and two loans to Fubode matured during the second quarter. The former was repaid in full, while one of the Fubode loans was repaid, and the other was renewed for three months while GP considers a longer-term loan. Shortly after the close of the quarter GP deployed this capital along with cash built up in the Fund to two exist-ing partners in Mexico and El Salvador and one new partner in Guatemala. With several more loans scheduled to mature during the fourth quarter of 2012, the Social Investment Team remains busy at work identifying candidates to absorb the capital freed-up by anticipated repayments. In turn, GP continues to conduct rigorous due diligence on both the financial and social performance of current and potential partners.

While GP makes every effort to ensure that data are accurate, 2012 numbers are currently unaudited. Impact measures are based on the best available data.

GroWth

Portfolio Quality

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fund faCts

Fund manager: Global Partnerships

Inception date: October 31, 2008

Investment currency: US$ and fully hedged local currency

Total fund capital: $20,000,000

Capital invested as of 06/30/12: $17,634,960

Type of fund: Debt

soCial imPaCt

Outstanding number of partners: 14

Average loan size: $693

Percentage of borrowers served who are women: 80%

Percentage of borrowers served living in rural areas: 45%

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Outstanding positions, please see page 4.

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fund manaGer’s Comments It has been another busy quarter of due diligence and disbursements as all partners in the Fund continue to make principal and interest payments in a timely manner. As of June 30, the Fund’s outstanding loan balance was $22.3 million deployed to 23 mission-aligned organizations in nine countries across Latin America and the Caribbean. The Fund continues to have investment opportunities as a result of regularly scheduled amortizations and repayments. During the second quarter the Fund disbursed a combined $1 million to two existing partners and made a new local currency loan of $750,000 to NORANDINO, a rural savings and credit cooperative in Peru that was established in 2005 to meet the financing needs of its member producers. While the majority of NORANDINO’s portfolio is concentrated in coffee, the cooperative is also active in sugar cane, cacao, bananas and mangos. Through its alliances with affiliated cooperatives, NORANDINO provides tailored financial products and technical assistance coupled with certification, commercialization and access to specialty markets. GP is excited to support innovative business models like NORANDINO’s that show high potential for impact within the rural livelihoods impact area.

Social Investment Fund

2010 Global Partnerships | Second Quarter 2012 | As of June 30, 2012

GroWth

Portfolio Quality

While GP makes every effort to ensure that data are accurate, 2012 numbers are currently unaudited. Impact measures are based on the best available data.

fund faCts

Fund manager: Global Partnerships

Inception date: October 21, 2010

Investment currency: US$ and fully hedged local currency

Total fund capital: $25,000,000

Capital Invested as of 06/30/12: $22,337,303

Type of fund: Debt

soCial imPaCt

Outstanding number of partners: 23

Average loan size: $727

Percentage of borrowers served who are women: 81%

Percentage of borrowers served living in rural areas: 48%

Outstanding positions, please see page 4.

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Outstanding Positions

Global Partnerships | Second Quarter 2012 | As of June 30, 2012

miCrofinanCe fund 2008% of investable assets

Distribution by Institution and Country

% of investable assetssoCial inVestment fund 2010

Each dot represents one percent.

Percentages have been rounded to the nearest whole number.

bolivia (20)Pro Mujer in Bolivia (6)Sembrar Sartawi (6)CRECER (4)FONDECO (4)

Colombia (13)Fundación Amanecer (6)Contactar (6)

dominican rep. (1)Esperanza (1)

ecuador (10)ESPOIR (4)Banco D-MIRO (3)Fundación Faces (3)

el salvador (10)Fundación Campo (6)ENLACE (4)

bolivia (24)CRECER (10)Pro Mujer in Bolivia (10)FUBODE (4)

ecuador (30)FINCA Ecuador (10)FODEMI (10)Banco D-MIRO (5)Fundación Alternativa (3)Fundación Faces (2)

mexico (2)FRAC (2)

nicaragua (15)FDL (10)Pro Mujer in Nicaragua (5)

Peru (15)Credivisión (6)Pro Mujer in Peru (6)Arariwa (2)

Cash (14)

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Partner Organization Profile:

ESPOIRESPOIR is an Ecuadorian nonprofit originally formed to deliver health and education to women in underserved communities in the country. A credit program was later added, and today the organization delivers credit linked with basic health education and financial literacy for over 70,000 clients, 84% of whom are women. ESPOIR’s work aligns with two of GP’s impact areas: health services and micro-entrepreneurship education.

Since its founding, the organization has shown a commitment to the delivery of integrated services, and reinvests its profits in support of its social mission. ESPOIR reaches mostly impoverished women primarily through its village bank lending approach with a variety of credit products, including micro-enterprise loans and credit to cover health emergencies and school costs.

ESPOIR bundles its credit offerings with education curriculum focused on topics that include preventive health, financial/business education, human development, risk management, and the organization’s credit policies. These integrated services are valued by clients and create a stronger bond between microfinance institution (MFI) and customer, which can ultimately lead to higher repayment rates. Most education modules are delivered by credit officers, and the program is economically sustained by fees charged to clients.

In addition to health education, ESPOIR provides access to basic consultations and diagnostic exams in one of its six branches and via preventive health campaigns that take place every three months at selected branches. These campaigns are implemented in alliance with specialized organizations and are sponsored by public entities; the program is covered mostly by client fees. Additionally, a new partnership with a public hospital at its Cuenca branch ensures that its clients get fast, affordable access to health services.

Finally, to complement the expansion of the individual credit product, ESPOIR is planning to offer outsourced health care services to clients by way of micro-insurance. ESPOIR is currently negotiating a health care package with an insurance company that they are hoping will include medical consultations, pharmacy discounts and lab discounts as well as dental care.

An interest rate cap in Ecuador and other regulations have led many MFIs in the country to serve larger and more profitable clients, yet ESPOIR has remained committed to integrated service provision to clients most in need. Global Partnerships is proud to partner with ESPOIR in helping their clients increase their incomes and improve their lives.

In an ongoing effort to share with our investors the methods and impact of GP’s Social Investment Funds, we highlight one partner from our family of funds each quarter.

1992Year founded

EcuadorCountry

418 Number of employees

$606 Average loan size

73,500 Activeborrowers

$44,534,607Outstanding gross loan portfolio

Key fiGures As of June 30, 2012

84% Percentwomen

72% Percentrural

"The minute ESPOIR gives us credit, they also educate us about savings and health...they teach us to take care of our health and business," says Rosa Etelvina Zhingri Pintado, a young entrepreneur who lives in a small two room home with her four children in the suburbs of Cuenca, Ecuador. With her growing poultry business, she dreams of providing better educational opportunities for her children.

Photo by Patrick Bennett/Seattle.