1 EXPANDING OPPORTUNITY FOR PEOPLE LIVING IN POVERTY IMPACT IN THIS ISSUE Indicates that accompanying links may be found in the e-version of IMPACT at www.globalpartnerships.org/newsletter FEATURE ARTICLE Reflections on 2013 (page 1) PERSPECTIVES In Pursuit of Results: Three Thoughts on Impact (page 2) THE ROUND UP Reports, Articles, and Highlights on Impact Investing (page 2) IMPACT IN ACTION Entrepreneurial Father Driven to Succeed (page 3) FROM THE FIELD Living in the Gray Space (page 4) GO GREEN Sign up for e-newsletters at www.globalpartnerships.org/signup REFLECTIONS ON 2013 “Follow effective action with quiet reflection. From the quiet reflection will come even more effective action.” —Peter Drucker In looking back at 2013, we asked ourselves, “What has fueled our growth and learning? What changes are we seeing that signal that we’re actually helping families gain access to better opportunities and improve their own lives? And what reasons do we have to celebrate?” GROWTH AND LEARNING For one, we’ve learned more and more about the meaning of true partnerships. Yes, we’re a nonprofit impact investor, but our work is not only focused on the transactional act of moving capital from one entity to another. It’s about rolling up our sleeves and working side by side with our partners to address the challenges, losses and frustrations that inevitably arise out of this difficult work. With COMIXMUL, a partner in our Health Services Fund, we weren’t sure the community pharmacy initiative was going to make it. We planned extensively, revised the business model, examined the data and held regular meetings with COMIXMUL’s leadership. Then we waited patiently for results. COMIXMUL’s team worked hard to implement the initiative to provide better access to essential healthcare products for poor, rural families. Their credit officers bore the brunt of the work and slogged for miles on broken dirt roads to some of the most remote areas in Honduras. Through constant monitoring and communication, we were able to identify room for improvement. We’re now happy to say that the community pharmacy initiative has survived its first 6 months and is (knock on wood) on its way to becoming a sustainable operation. The modest revenues generated by providing low-cost health care supplies to poor, rural families are able to keep the pharmacies in business. This means that families can look forward to having continued access to the medicines and supplies they need to stave off common ailments and lead healthier lives. What fuels our growth and learning? Investing in solutions that make a lasting difference. IMPROVING LIVES If you had been able to attend our Business of Hope Luncheon in October, you would have met Florinda, a client of one of our partners. She’s a mother, an entrepreneur and a solar- light owner. Determined and committed to improve life for their family, she and her husband created a hammock-weaving business. It takes 8 hours to weave a single hammock and the remote region of Honduras where they live lacks access to electricity. So Florinda and her husband took out a loan to purchase a small solar light system. The impact was huge. They no longer have to rely on dim kerosene lanterns that emit cough-inducing clouds of smoke. Continued on page 3. WINTER 2014 | VOL 11 ISSUE 2
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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 ARTICLEReflections on 2013 (page 1)
PERSPECTIVES In Pursuit of Results:
Three Thoughts on Impact (page 2)
THE ROUND UPReports, Articles, and Highlights
on Impact Investing (page 2)
IMPACT IN ACTIONEntrepreneurial Father
Driven to Succeed (page 3)
FROM THE FIELDLiving in the Gray Space (page 4)
GO GREEN Sign up for e-newsletters at www.globalpartnerships.org/signup
REFLECTIONS ON 2013
“Follow effective action with quiet reflection. From the quiet reflection will come even more effective action.” —Peter Drucker
In looking back at 2013, we asked ourselves, “What has fueled our growth and learning? What changes are we seeing that signal that we’re actually helping families gain access to better opportunities and improve their own lives? And what reasons do we have to celebrate?”
GROWTH AND LEARNING For one, we’ve learned more and more about the meaning of true partnerships. Yes, we’re a nonprofit impact investor, but our work is not only focused on the transactional act of moving capital from one entity to another. It’s about rolling up our sleeves and working side by side with our
partners to address the challenges, losses and frustrations that inevitably arise out of this difficult work. With COMIXMUL, a partner in our Health Services Fund, we weren’t sure the community pharmacy initiative was going to make it. We planned extensively, revised the business model, examined the data and held regular meetings with COMIXMUL’s leadership. Then we waited patiently for results.
COMIXMUL’s team worked hard to implement the initiative to provide better access to essential healthcare products for poor, rural families. Their credit officers bore the brunt of the work and slogged for miles on broken dirt roads to some of the most remote areas in Honduras. Through constant monitoring and communication, we were able to identify room for improvement. We’re now happy to say that the community pharmacy initiative has survived its first 6 months and is (knock on wood) on its way to becoming a sustainable operation.
The modest revenues generated by providing low-cost health care supplies to poor, rural families are able to keep the pharmacies in business. This means that families can look forward to having continued access to the medicines and supplies they need to stave off common ailments and lead healthier lives. What fuels our growth and learning? Investing in solutions that make a lasting difference.
IMPROVING LIVES If you had been able to attend our Business of Hope Luncheon in October, you would have met Florinda, a client of one of our partners. She’s a mother, an entrepreneur and a solar-light owner. Determined and committed to improve life for their family, she and her husband created a hammock-weaving business. It takes 8 hours to weave a single hammock and the remote region of Honduras where they live lacks access to electricity. So Florinda and her husband took out a loan to purchase a small solar light system. The impact was huge. They no longer have to rely on dim kerosene
lanterns that emit cough-inducing clouds of smoke. Continued on page 3.
Reports, articles and highlights on impact investing.
Impact Measurement: Where are the Faultlines?
Huffington Post Impact highlights three current discussions around impact measurement that arose from the Global Social Business Forum in November 2013. The discussions are centered around: (1) Will focusing too much on impact measurement detract from nonprofits’ mission-oriented work? (2) How much and what qualitative v. quantitative data is meaningful? (3) Are for-profit methods of reporting financial information valuable in the nonprofit space?
Seven Sins of Impact Evaluation
The Stanford Social Innovation Review explores 7 mistakes that nonprofits often commit when it comes to impact evaluation. They range from attempting to measure impact prematurely to not establishing the questions they’d like to answer with the evaluation’s results to not asking why interventions failed or succeeded.
Next Generation Evaluation
FSG, a nonprofit consulting firm, published a learning brief on what the next generation of impact evaulation might look like. They argue that evaluation needs to evolve because the social sector is rapidly changing to include new approaches and actors that cannot be measured by existing evaluation methods and do not fit into existing frameworks. The brief also summarizes how leading social sector organizations are thinking about the future of evaluation, and highlights three innovative approaches.
IN PURSUIT OF RESULTS:THREE THOUGHTS ON IMPACT
Every week, we publish a new post on our blog, News & Insights. Here we’ve gathered three of our recent blog posts that focus on our approach to creating impact. A synopsis of each blog post is below; please click on the underlined titles to read the original posts.
Within the impact investing industry, there continues to be a debate about whether an “impact first” or
“return first” approach should be used. The former argument holds that below-market rates are required to truly achieve high social impact in poor, underserved markets. The other argument is based on the belief that market rates of return are necessary to attract large pools of capital into the field. However, the problem with this debate is that it holds the investor as the central actor in the story. GP’s commitment to mission means that we place clients—people living in poverty—first.
STRONG PARTNERSHIPS3 Reflections on Partnerships that Lead to Impactby Nancy Swanson, Executive Director, Linked Foundation (a Global Partnerships investor)
After traveling to three countries in 30 days to visit existing and potential GP partners, Nancy blogged about the collaboration, learning and trust she witnessed and experienced between GP’s team and its partners.
IMPACT EVALUATION: VERSION 2.06 Reflections on Impact Evaluationby Tara Murphy Forde, Director, Fund Performance
How do we as impact investors improve the way we evaluate our impact? What are others in the social
sector doing? Tara talks about three game-changing approaches to impact evaluation, and also offers insight into what the future of impact evaluation might look like for GP.
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Jinotega, Nicaragua—Entrepreneur Santos Augostino is driven to succeed. His goal? To build a thriving business that his children can inherit. He says, “I hope to give my children a better future.”
Santos started out with just under two acres of land that he inherited from his own parents. On it, he cultivated vegetables while also working as a temporary day laborer and baker. But he knew that wouldn’t be enough.
Eager to grow his business, Santos took out a loan from our partner Aldea Global to purchase 8.5 more acres of land. Then, with Aldea Global’s technical assistance, Santos replaced his small vegetable farm with a new, larger coffee farm.
Aldea Global also helped him obtain Rainforest Alliance certification, enabling Santos to sell his eco-friendly coffee for more money in specialized markets. Of course, by implementing sustainable farming practices, Santos is also protecting the biodiversity of the lush, mountainous area where he lives.
The profits Santos earns are reinvested into his farm. Now, with a burgeoning coffee business under his belt, Santos is able to say, “My children will inherit this land, the crops and all the machines necessary to have a secure livelihood.”
Instead, they now enjoy clean air and light. They can extend their day and study longer and work more, if they want to. Florinda’s dream is to create better opportunities for her children so they have other options for their future. Reflecting on stories like Florinda’s is our inspiration and keeps us focused on what matters most: improving lives.
REASONS TO CELEBRATE It’s been a productive year and there’s a lot to celebrate. We have
generous supporters who continue to encourage us along the way. We have hardworking, dedicated partners whose commitment humbles us. We get to see the smiles of pride as we listen to mothers and fathers tell us about growing their businesses so they can leave a legacy for their children. We learn about dreams coming true as sons and daughters attend university, the first in their families to do so. We listen as Ligia, a mother, business woman and client of our partner Espoir in Ecuador, tells us about how she’s expanded her sewing business to employ six people. Several years ago, Ligia started the business on her own with a modest dream: to take care of her family. She has gone far beyond by growing her business. We’re honored to meet these families and watch them succeed beyond their wildest imagination.
Lastly, we celebrate all that we’ve learned, the experiences that have humbled us and the opportunities generated through our partnerships. We look forward to another year of improving lives, fueling growth and creating reasons to celebrate. Here’s wishing all of you a joyous New Year.
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IN THIS ISSUE
LIVING IN THE GRAY SPACEBy Ricardo Visbal, VP, Portfolio Management Do you remember what your grade school report card looked like? There were two
sections: one for a grade and another for the teacher’s handwritten comments. The grades were derived from assignment scores while the comments placed those scores in context. For example, what were the strengths and weaknesses of your work and where were the opportunities for improvement? Were you showing the capability and commitment to improve? These insights reflected your teacher’s intimate understanding of your progress and helped guide your efforts moving forward.
Similarly, to evaluate our partners’ results, we look at both quantitative and qualitative aspects of their performance. For example, to know if our partners are operating sustainably, we look at indicators like operational self sufficiency. To tell if they are scaling their programs, we look at the number of people served. However in order to understand the current
and potential impact of their programs, we have to evaluate strengths, weaknesses and opportunities for improvement—all while encouraging partners to capture data about how their clients’ lives are improving. Capturing this type of data, however, is expensive, time consuming and often inconclusive. Not surprisingly, a lot of organizations lack the capacity to conduct deep impact evaluation.
One exception is Idepro, one of our Bolivian partners. For three years, they have been monitoring assets, income, equity and employment levels for a sample of their clients who are receiving technical assistance in addition to financial services. Then, using a statistical model, they compare progress in these indicators against a control sample of clients not receiving technical assistance. This way, they can establish if their technical assistance has a statistically significant impact on their clients’ quality of life. That said, there could be factors like bad weather or sickness that affect a client’s ability to grow his or her assets.
Thus, similar to evaluating student performance, social impact is not always easy to measure. Many variables affect outcomes, the process is not an exact science and the results are not always black and white. To do this work, we have to be comfortable living in the gray space.
Reflections on 2013
Santos Augostino: Entrepreneurial Father Driven to Succeed
In Pursuit of Results
Photo: José Morales, CEO of Idepro, explains how Idepro measures results.
