World of Opportunity — GP’s 13th Annual Luncheon
Almost 700 of our friends and supporters attended World of Opportunity, our 13th annual luncheon on Thursday, October 29, 2015! Thanks to their generosity, we were able to reach our $150,000 matching challenge and raise over $554,000! This will directly support our research into promising new solutions that can change the lives of millions of people living in poverty.
At the luncheon, GP President and CEO Rick Beckett spoke about three promising initiatives that Global Partnerships is currently researching:
- Outgrower business models that provide economic opportunity to tens of thousands of smallholder farmers;
- Efficient charcoal cookstoves that save families money on fuel costs and improve health and safety for women and children; and
- An innovative and affordable sanitation solution that also generates jobs for microentrepreneurs.
Next, Desh Mallik, VP of Business Development at Greenlight Planet, a GP partner, took guests on a journey to a rural, off-grid community with an immersive solar light demonstration. He shared how, with Global Partnerships' support, Greenlight Planet's solar technology is eradicating kerosene usage and transforming people's lives.
Real People, Real Impact:
There were also two video presentations which showed GP's impact in action.
Abner is a 15-year-old who dreams of making his mom proud of him one day. His mother, Ana, is the client of Friendship Bridge, a GP partner in Guatemala. The loans, education and training that Ana received through Friendship Bridge have helped her provide better opportunities for Abner. Her success shows how access to opportunity creates impact for multiple generations.
Maritza, a client of GP partner MiCredito, also shared how her life has changed since purchasing solar lights. She lives in a remote community in Nicaragua, where there is no electricity.
Investors Report for the first quarter of 2015
In the first quarter of 2015, Global Partnerships achieved two exciting "firsts." GP made its first investments in Paraguay, marking our entry into our 13th country. And, GP reached an important milestone of impacting over three million lives. Learn more in Global Partnerships' Investors Report:
- Our Chief Investment and Operating Officer, Mark Coffey, provides an overview of the "outgrower" or contract farming model to deliver credit, technical assistance and market access for thousands of smallholder farmers (read here).
- We introduce BioExport, an outgrower and a new GP partner that sources, processes and exports sesame and chia seeds from smallholder farmers throughout Paraguay (read here).
- We provide updates on our Social Investment Funds' performance (read here).
Investing in women means investing in future generations
by Gail DeGiulio, chief capital resource officer, Global Partnerships
Crowding together, we squeezed inside of Michaela’s stall. Colorful hand-woven purses hung from wall to wall. Michaela, 52, and a mother of eight, beamed with pride as she spoke about the business she built against all odds.
As the oldest of five children, Michaela never attended school. She was responsible for caring for her younger siblings. She also worked at her family’s weaving business. This is a typical childhood for women in rural Guatemala. For Michaela, she was determined as a mother to change that for her children. She wanted to provide them with better opportunities than she had growing up.
Thirteen years ago, Michaela took out her first loan from Friendship Bridge (FB), a Global Partnerships partner in Guatemala. With her loan, she bought materials to start her own textile business. Through FB, Michaela also received education on budgeting, finance, saving, women’s health, and the importance of women’s education. This combination of loans and education empowered Michaela to succeed. Through the years and multiple loan cycles, Michaela has grown her business to include two stores that sell high- quality textiles that appeal to both local customers and tourists visiting Lake Atitlan. Most importantly to Michaela, she has been able to send all of her children to school.
Approximately 60 percent of the clients Global Partnerships’ partners serve are women, and many of them are mothers like Michaela. They are determined to help their families succeed. When you consider the risks, challenges and hardship they must overcome, you realize how this kind of resolve is nothing short of amazing and awe-inspiring. So in honor of Mother’s Day, we applaud mothers like Michaela that are making a difference in their children and their family’s lives. Stories like her's fuel our commitment to investing in partner organizations that empower women and mothers with the resources and education they need to transform generations to come.
True or false? Six things you may not know about coffee
It’s not often that coffee producers, exporters, roasters and baristas find themselves in the same room. But earlier this month, about 10,000 people from throughout the coffee value chain converged in Seattle for the Specialty Coffee Association of America (SCAA) Event and Symposium. This annual event is a major opportunity to network and build relationships, as well as exchange ideas on important issues affecting the coffee industry.
Several Global Partnerships team members attended SCAA’s lectures and events. We also hosted an open house for our coffee cooperative partners that were in town. We value these opportunities to learn from our partners and others in the industry. Many of the things we heard reaffirmed our knowledge, while other things were new to us. Test your own coffee knowledge and see if you can correctly identify what is true or false.
1. Coffee prices reflect coffee production costs.
False. There is no direct correlation between coffee production costs and coffee prices. Furthermore, most farmers face substantial risk and volatility that is not priced into cost. The poor correlation threatens the livelihood of smallholder farmers. This can be addressed by guiding producer organizations to understand the gap between trading relationships and farming practices.
2. Coffee producers need higher coffee prices in order to improve their incomes.
True, but coffee price is not the only factor that matters. Inefficient or non-existent value chains (the linkages between coffee farmers/producers, processors, exporters, buyers, etc.) contribute to increased costs of production and delayed payments, both of which impact farmers’ incomes.
3. Coffee production costs are pretty stable and consistent from country to country.
False. For example, the infrastructure for coffee production in Latin America is much more developed than in Africa. Yet, Fair Trade pricing provides a flat minimum price for coffee throughout the world. Although Fair Trade does promote more sustainable farming practices and helps farmers earn higher incomes, there are still many disparities in coffee farmers’ profits.
4. Diversifying the kinds of products produced on coffee farms can help improve coffee yields.
True. Several co-ops told us that they would like to start beekeeping on their farms. This is because bees pollinate coffee crops, strengthening the quality of coffee yields. In turn, the bees also produce a high-quality coffee-infused honey that provides farmers with a new revenue stream. Diversification enables farmers to build resiliency against fluctuations in the coffee market.
5. Financing is the only thing coffee farmers need to run their businesses.
False. Coffee farmers need financing to pay for many inputs and other costs, such as fertilizer, coffee plants and labor. But technical assistance and access to markets are just as important as financing. For example, many farmers need technical assistance to learn how to calculate their cost of production or improve their farming techniques. And with access to specialty markets, farmers can sell their coffee for higher prices. GP invests in cooperatives that provide loans alongside technical assistance and access to markets.
6. Impact investors, like Global Partnerships, can play an important role in helping coffee producers improve their livelihoods
True. Impact investors like Global Partnerships can provide cooperatives with much needed working capital. Working capital is vital for cooperatives because it enables them to provide their members with access to financing, technical assistance and markets. GP invests in co-ops that go beyond providing financing to farmers. Impact investors can also better serve cooperatives by staying abreast of changing financing needs (such as longer-term loans for replanting coffee trees or new financial products that facilitate crop/product diversification).
Spring 2015 IMPACT Newsletter
Have you ever wondered how Global Partnerships uses philanthropic gifts to create impact? Would you like to understand how research funded by philanthropy helps establish strategic partnerships that expand opportunity for people living in poverty? Learn all this and more in the Spring issue of IMPACT >
YOUR GIFTS CREATE IMPACT
How does philanthropy help Global Partnerships create impact? GP’s Chief Capital Resource Officer Gail DeGiulio explains. Read more >
PHILANTHROPY FUNDS INNOVATION
What is an "outgrower"? Learn how research funded by philanthropy helped us identify and invest in a new type of social enterprise that helps farmers earn better and more stable incomes. Read more >
IMPACT IN ACTION
Impact in action: How solar lights brighten homes & futures
Francisco Sambrana, 34, lives with his wife and two young children in Las Conchas, Nicaragua. He is a primary school teacher, and when he’s not in the classroom he’s often helping his kids with their homework or preparing lessons. He used to depend on candles, kerosene lamps, and flashlights to illuminate his work after sunset.
However, after purchasing a solar-powered Barefoot Connect 600 plug-and-play system, he has a “brighter and clearer light” that is also significantly more economical. He only uses two of the four lights that came with the system, saving the other two for emergencies. But the lights are bright enough that he can put one in the kitchen and keep one light over the threshold of his living room and bedroom, effectively using two lights to illuminate three rooms.
The system also has USB ports through which he can charge cell phones or power a portable DVD player. Now that he no longer has to buy candles and batteries, or travel to the nearest town to pay to charge his phone, he saves several hours and about 565 cordobas ($22) each month. His solar system allows him to cut down on costs, cut down on contamination from kerosene smoke, and even provide phone charging services to his extended family.
The positive impact of his solar-powered system was so great that Francisco decided to take out a loan from FUNDENUSE, a GP partner, to purchase five SunKing Mobiles, which are solar lights with cell phone charging capability, and sell them in his community. He knew from his own experience that “these lights are a great benefit,” and his conviction makes him a natural salesman. Francisco's customers now benefit from reduced energy costs and cleaner air by no longer being dependent on kerosene lamps, and Francisco has been able to supplement his income with a 20 percent commission on sale of the solar lights.
By investing in social enterprises that provide access to solar products, GP helps connect individuals like Francisco with clean, affordable solar solutions. In turn, individuals like Francisco also receive the opportunity to supplement their incomes by reselling solar lights.
Learn more about our solar investments by watching this video explanation about why solar lights are important in developing countries.
How to meet the solar needs of the rural poor — 3 lessons learned
by Agnes Cho, program associate, Global Partnerships
Recently, Global Partnerships and Solubrite, a solar distribution company in Nicaragua, worked together to organize a one-day workshop in Ocotal, a city in northern Nicaragua and home to GP’s partner, FUNDENUSE. I attended the training to share with FUNDENUSE’s credit officers what we at Global Partnerships have learned during our two years of experience of working in the off-grid lighting space in Latin America.
The purpose of the workshop was to train FUNDENUSE's credit officers in the technical aspects of solar products and share with them effective sales strategies to use when pitching them to their clients. Small solar lights and plug-and-play home systems are relatively new products to enter the market in Latin America. For the most part, they remain an unfamiliar technology to both the people living in off-grid communities as well as the credit officers that work with them. Facilitating this knowledge transfer and familiarizing the buyers and sellers of these solar products is integral to the development of this new sector in Latin America.
Observations from the training session
During the workshop, I led an exercise and had each credit officer in attendance write down several reasons why their clients do and do not want to buy a solar product.
Examples of reasons for solar
- To attain a higher standard of living
- Less harmful to your health
- To charge other electronics, such as a cell phone
- To save money
- Easy and practical to install and use
- To be able to work and study at night
Examples of reasons against solar
- Lack of ability to pay
- Limited capacity
- Lack of trust in quality and durability
Just from these several hours, we learned a few things about what drives demand for solar lights amongst poor, rural communities in Nicaragua.
1. Solar distributors should offer a range of products, from simple solar lamps to aspirational products like TVs.
- The first thing that rural customers want is a better light, and a solar lamp is as a cleaner and safer alternative to kerosene and candles. This is why we are supporting small light distribution, to build the early rungs of the energy ladder that enable rural families to begin climbing. And once they start climbing, people are interested in a solar product with additional functionality.
- Our experiences with Franco, one of FUNDENUSE’s solar clients, clearly illustrates this point. In his home, he has a Barefoot Connect 600, a small plug-and-play home system, which he uses to light up his house and charge his cell phone and portable DVD player. But not many people in his town in the mountains of northern Nicaragua can afford such a system. Understanding this constraint and yet wanting to spread solar technology in his community, Franco took out a loan to buy and resell five Sun King Mobiles, a solar lamp with phone charging capacity, to his friends and neighbors. Although his customers eventually want more lights and more solar power in their home, they all started with a smaller lamp. Solar distributors should be aware of this range of demand and capacity to pay and have the appropriate products available to offer their rural customers.
2. Poor customers want high-quality products
- Anecdotally, I’ve heard about how in Latin America, some people have had the misfortune of spending a lot to buy cheap products that broke down soon after. Whether this is true or not, people are wary of spending a lot of money on items that are “Made in China”. In fact, I wish I had a cordoba for each time I heard during the workshop, “It’s not a Chinese product.”
- To address this, the Solubrite trainer emphasized a clear distinction between generic, poorly-designed products made in China and high-quality products designed by international companies that are manufactured in China. Solubrite also spent considerable time convincing the credit officers of the durability and quality of these lights. This goes to show how rural Nicaraguans are looking for the highest quality product that will not break down and those who sell solar lamps to the BOP must be conscientious of the low confidence in the technology. Because even more so than the rest of us, the rural BOP cannot afford to purchase a cheap, flimsy product.
3. Seeing is believing
- During the workshop, credit officers explained that their job of promoting the solar lamps would be a lot easier if they could travel to the field with the lights and show, on the spot, the technology and product to their clients. This has to do with the relative novelty of solar lights. Credit officers want to give their clients the opportunity to see the light with their own eyes and feel it in their own hands. By doing so, they find that it is easier to interest and convince people of the benefits of solar energy.
Central to GP’s thesis of investing in last-mile partners is their access to rural, off-grid communities. By contributing to the training of FUNDENUSE’s credit officers, we ensure that the very people who are reaching these last-mile households are well educated about solar technology. It is also a great opportunity for us to learn from our partners’ challenges and collective experiences to further the goal of expanding solar energy in Nicaragua.
Investors Report for fourth quarter of 2014
In our Investors Report for the fourth quarter of 2014:
- Our Chief Investment and Operating Officer, Mark Coffey, highlights Global Partnerships’ work in rural livelihoods, the challenges in serving small-lot farmers, and promising new channels to deliver credit, technical assistance and market access. (read here).
- We take a deeper look at APROCASSI, a Peruvian agricultural cooperative that serves small-scale coffee farmers in the northern region of that country. (read here).
- We provide updates on our Social Investment Funds' performance (read here).