3 Reflections on What Makes Partnerships that Lead to Impact
by Nancy Swanson, executive director, Linked Foundation (a GP investor)
Nancy Swanson is the Executive Director of the Linked Foundation and is responsible for the strategic direction and the management of the portfolio. Linked Foundation is a private foundation that alleviates poverty by promoting and investing in market based solutions that improve the health and economic self-reliance of women in Latin America. Learn more about Nancy here.
I was fortunate to travel to three countries recently with Lara Diaconu, GP’s vice president of the Health Services Fund, to meet with existing partners and explore the potential for new ones. In Honduras, we met with our partner in the Health Services Fund, COMIXMUL and their sister organization FUDEIMFA. It was my first trip to Honduras to meet the staff and four of the community pharmacists or “dispensadoras”—volunteers that are trained to become community pharmacists that bring access to affordable, needed medicines in their communities.
As I reflected on my time in the field, I have been thinking about what makes for a strong, effective partnership and wanted to share three thoughts:
1. Think about what is possible—together
The process GP takes with implementing partners is to imagine a business model that can deliver essential health services at scale and on a sustainable basis. This is often a new way of thinking about health for partners as they are traditionally funded through donations and haven’t had the capacity to consider a different approach. As an example, prior to participating in the health services fund, COMIXMUL was thinking about “sustainability” as continued funding through donations.
Now, in partnership with GP, COMIXMUL has developed and is testing a business model that will demonstrate that the community pharmacy model can reach all of their clients on a sustainable basis. This means that they won’t need donor funding year after year. And guess what? They are 70 percent of the way toward reaching that goal. Impressive. This shift came through several meetings and reviews, co-creating and exploring various models and scenarios together. It was so rewarding to see partners working alongside each other toward a shared aspiration, problem solving and thinking through the issues and solutions together.
2. Learn from all stakeholders
Along with spending time with the COMIXMUL and FUDEIMFA team, we also had the opportunity to visit four of the community pharmacists also known as “dispensadoras.” We were able to listen and learn about the program directly from the women operating the pharmacies. We learned how things were working, what was selling and what other products or services they would like to offer such as nebulization services (e.g. medical inhalers) due to the high number of incidence of respiratory problems, especially in children.
We learned that sales had increased substantially after a summer promotional campaign was conducted at several pharmacies to create awareness within its community. The pharmacists are trusted sources because they provide education and consultations for what medicine is needed for what condition. Ana Joaquina Martinez, one of the community pharmacists we met, said that having the pharmacy has inspired her to pursue a degree in nursing, which she will have completed by this December. I left inspired by each person I met, touched by their personal stories and their unwavering commitment to improve the health in their communities.
3. Build trust
When we arrived in San Pedro Sula, we were greeted by Glenda Ferrera, director for the health program for FUDEIMFA, the nonprofit arm of COMIXMUL. I’ll never forget seeing her smile and the warm embrace she gave to me and to Lara and to hear her say, “Ah…Lara, you’re here.” Glenda’s connection and relationship to Lara was palpable. The hospitality and openness from the staff I met continue and I appreciate being a part of the conversation. The candid discussions on current program issues and the flow of ideas to resolve them generated a real dialog between the two organizations to figure things out and agree on next steps.
There was a sense of transparency and honesty as both parties said what needed to be said so things could be understood and resolved and moved forward. I was so struck by the commitment of the staff to the people they are serving. They travel far and wide to work with the community pharmacists and provide training, help restock the stores and offer ongoing coaching and support.
Our day in the field ended with warm, homemade tortillas, fresh oranges and coffee at Jorge’s home. Jorge is a manager for FUDEIMFA and had been driving us to the pharmacies throughout the day. Jorge is not a coffee drinker, so his neighbor brewed a delicious pot for us to enjoy while we sat on the porch and watched the rain. Hospitality + being with trusted partners = a memorable, meaningful moment.
An Open Letter to Our Partners: Gracias (Thank You)
by Ricardo Visbal, vice president, Portfolio Management, Global Partnerships
In my role at Global Partnerships (GP), I am privileged to observe firsthand the incredible work each and every one of our partners does. Helen Keller once said, "Alone we can do so little. Together we can do so much." I couldn't agree more; we wouldn't be able to expand opportunity for people living in poverty without our partners. So, as the holiday season kicks into full swing, I'd like to take a moment to thank them for their hard work and dedication:
Talking with your clients and learning about how their lives have been transformed is the key to understanding the importance of your work. Your clients' amazing stories are examples of how small changes can produce great impact.
Some of you offer preventive health services that have enabled women to detect cancer just in time to save their lives.
Over and over again, we see how training from you helps microentrepreneurs improve their businesses, enabling them to achieve dreams like sending their children to college.
Thanks to you, families also now have the option to study and work after sunset using solar-powered lights that are cleaner, brighter and cheaper than antiquated kerosene lamps.
And with your help, small agricultural producers have access to technical assistance and markets where better prices are paid for their crops.
These are but a few of the ways that you impact thousands of lives. Thank you all for making us part of the positive change you are bringing to your clients. On behalf of Global Partnerships, I wish all of you, happy holidays and a wonderful new year. May you, your families and your clients be blessed with good health, success and happiness.
Mi trabajo en Global Partnerships me da el privilegio de observar directamente la increíble labor que cada uno de nuestros socios efectúa. Helen Keller una vez dijo, “Solos podemos hacer muy poco, juntos podemos hacer mucho.” Yo no podría estar más de acuerdo con este pensamiento; nosotros no podríamos expandir oportunidades para personas que viven en la pobreza sin nuestros socios. Con la llegada de las festividades navideñas y de fin de año, deseo tomar esta oportunidad para agradecerles su arduo trabajo y dedicación.
El conversar con sus clientes y ver como sus vidas han sido transformadas es la clave para percibir la importancia de la labor que realizan. Las asombrosas historias de sus clientes son ejemplos de cómo con pequeños cambios se logran grandes impactos.
Muchas mujeres, que a través de los servicios preventivos básicos en salud que ustedes ofrecen, detectaron a tiempo enfermedades y salvaron sus vidas.
Una y otra vez, hemos visto que la capacitación técnica no solo ha ayudado a pequeños microempresarios a incrementar la productividad de sus negocios, sino que también les ha permitido pagar la educación de sus hijos quienes ahora son universitarios.
Gracias a ustedes, muchas familias tienen ahora la oportunidad de trabajar y estudiar durante la noche porque cuentan con luces solares que ofrecen una mejor calidad de luz y de aire al reemplazar los candiles de kerozene.
Adicionalmente, pequeños productores tienen acceso a asistencia técnica y a mercados donde sus cosechas son vendidas a mejores precios.
Estas son solo algunas de los cientos de miles de vidas que ustedes por medio de sus esfuerzos/labor han tocado. Gracias por permitirnos aportar un pequeño grano de arena y hacernos partícipes de ese proceso de cambio positivo que llevan sus clientes. En Global Partnerships les deseamos unas felices fiestas, un próspero año nuevo lleno de salud, para todos ustedes, sus familias y cada uno de sus clientes.
No Strangers to Failure: 3 Lessons Learned
by Mark Coffey, chief investment and operating officer, Global Partnerships
The topic of failure is not a popular subject for conversation. Yet, more and more organizations are encouraged to talk about it because it is in those failed efforts that we learn how to improve our practices and create more impact. Recent examples of organizations that have shared what they’ve learned from failing include “FAILFaire Nairobi: Mishaps. Mistakes. Migraines,” which gathered social enterprises from around the world to talk about lessons learned from projects and initiatives that have failed. More recently, a SOCAP 2013 panel included the topic of failure as part of its discussion on the “Doing Well by Doing Good” panel (video segment starts at 27:41). It’s clear that reflecting on the failures as well as the successes of our work is important and needed to create long-lasting impact.
While we’ve been fortunate to have a long and successful track record, we are not strangers to failure and we’d like to share some of the lessons we’ve learned. In thinking about our work, I wanted to highlight 3 things we’ve learned over the years with the hopes that this might help others in the sector that are committed to improving lives for people living in poverty.
- Be cautious of “industry darlings” such as organizations with rapid growth and charismatic leadership.
- At the first sign of things not going as planned, over-communicate with your clients and other knowledgeable industry participants, and dig deep until you understand the underlying causes.
- Don’t accept anything less than complete and transparent answers from your investees/borrowers.
1. Beware Industry Darlings
These are the organizations that attract the most attention at conferences. They need a lot of funding because of their high growth, and investors fall in love with them because they assume that the growth is a reflection of a smart business model or superior execution. They also tend to have high profile or charismatic leadership that knows how to impress investors. The one loan that we did need to restructure was one of our earliest loans and the borrower had both these characteristics. We learned that the way to see beneath the appeal of charismatic leadership is to question middle and senior managers, clients, and everyday staffers, to see if what they are actually doing is what top management is touting.
We also learned that the cost of high growth can be a lack of attention to details, which is critical in sound lending. Interestingly, in 2012 none of the 20 most profitable MFI’s were in our portfolio, but 10 of the top 20 in lowest delinquency rates were in our portfolio. There is something to be said for those organizations that pay attention to their customers, but only in terms of offering valued services and in ensuring that customers know and follow through on their obligations.
2. Over-Communicate and Dig Deep
Long before a payment is missed, there are normally early warning signs of trouble. In agricultural lending (coffee cooperatives for example) this may surface in terms of delays in harvest, processing, or product shipments. Tracking progress at all steps along the way is important in knowing what to expect next, and evaluating changes in risk levels and potential mitigation. In one case in our portfolio, a second tier fair trade cooperative didn’t monitor the compliance with certification requirements of some of its first tier cooperative members. As a result, the second tier cooperative was unable to fulfill contracts for organic and fair trade certified product, and had to sell product outside of the higher-priced specialty markets. Communication with the fair trade importer or buyers is essential in addition to regular communication with the direct borrower. We learned that our initial communications did not reveal the entire story of what might be causing delays, and that digging into each step of the process from farm to buyer is critical.
3. Demand Complete and Transparent Answers
One lesson I learned during my commercial banking career was to never “fall in love” with a borrower. In other words, always keep in mind that even great stories can lead to bad outcomes. In one case, we had a partner in our portfolio that was very focused on social performance, had an outstanding programs director, and had a long history of successfully serving clients at the base of the economic pyramid with integrated services. However, when the organization’s financial performance began to suffer, three of us paid an in-person visit to understand if there was a turnaround plan. Our questions were not directly answered, but management kept turning the subject to some of the interesting things they were working on, rather than how they would fix the problems they already had. When we began to ask the tough questions, the answers we did get didn’t add up. We asked them to pay off their loan, which they did, and subsequently the organization has virtually disappeared.
Customer Intimacy At All Costs
A lot of things can go wrong on the way to financial support of organizations doing great work. The most important thing a fund manager or lender can do is to be close to the customer, but not too close to “fall in love,” thinking that nothing will ever go wrong. Communicate, dig deep, and expect clear answers. Our work at GP would be much easier, if we focused just on the well-funded, lowest risk, and most profitable organizations. But our social mission requires that we accept risk and then manage it well, so that we support, sustain, and catalyze the organizations having the greatest social impact.
GP’s CEO Speaks on Panel: Microfinance Institutions can do More to Empower the Poor
“Financial inclusion is one important aspect of empowering people living in poverty, but we all know there are other facets to it,” said Rick Beckett, Global Partnerships’ (GP) president and CEO. In November, Rick spoke on a panel entitled “Spurring Development through Microfinance,” which was sponsored by the Overseas Private Investment Corporation (OPIC) and Habitat for Humanity.
The discussion examined how microfinance institutions (MFIs) can assist clients with basic needs beyond access to financial services. For example, Rick spoke about how GP’s MFI partners COMIXMUL and Pro Mujer in Nicaragua grant their members and clients with access to affordable medications and health screenings.
Other panelists included Patrick Kelley (Habitat for Humanity’s senior director of housing finance), Isabelle Barres (Smart Campaign’s director), and Loren Rodwin (OPIC’s managing director of micro, small and medium enterprise financing).
Watch the video of the panel, "Spurring Development through Microfinance":
If you enjoyed reading this post, you may also like:
- Going Beyond Microfinance: what makes GP different from a microfinance institution?
3 Things We Are Thankful For
This Thanksgiving, we’d like to extend our gratitude to our supporters, partners and team whose intelligence, bravery, generosity and compassion make our work possible. Without you all, there would be no “Global Partnerships.”
To our supporters
- Thank you for being big dreamers that share our vision of a world where everyone has an equal chance at success and prosperity.
- Thank you for being brave and intelligent. It takes guts and smarts to support our work because what we do is complex to accomplish. It is just as difficult to understand and articulate. Yet despite this, there you are, right by our side. You learn with us and generously support us with your gifts, investments, time and skills.
- Thank you for believing in us. We know there are many worthy causes competing for your attention. Yet, you choose us. Your faith in our mission and our ability to achieve that mission is priceless. We will continue to work hard, improve ourselves and innovate to accomplish our mission.
To our partners
- Thank you for your relentless dedication to empowering poor families. Few people understand the lengths you go to in order to reach the underserved. It’s hard for many people to imagine the long roads you travel to serve families living in poverty. Some of you travel for hours on motorbikes across broken roads and wade through overflowing rivers to provide families with access to life-altering opportunities. For the personal sacrifices and the commitments you make every day, we thank you.
- Thank you for your expertise. We rely on each and every one of you to help us navigate through the challenges of our work.
- Thank you for being open-minded to new and different approaches. Together, we are tackling huge challenges that require outside-the-box thinking.
To our colleagues
- Thank you for your commitment to our mission and excellence in our work. Our team, collectively, has traveled over 200,000 miles in the past year to meet with new partners, conduct monitoring assessments, and connect with others in the impact investing space. We know the personal sacrifices you make to do your work and we are grateful.
- Thank you for your intellectual curiosity and your desire to learn. Whether it’s getting your MBA while working full time or refining business models in health services or launching a new initiative in green tech or improving our operations, your thoughtfulness and insights help make us the organization we are today.
- Thank you for being bold enough to aspire to achieve great things and dedicate yourselves to achieving them.
We extend our deepest gratitude to you all. Please let us know what you are grateful for this Thanksgiving.
6 Reflections on Impact Evaluation
by Tara Murphy Forde, director of fund performance
What does “better evaluation” mean to an impact investor like Global Partnerships? Last week, I attended the Next Generation Evaluation Conference to explore this very question. Conference hosts Stanford Social Innovation Review and FSG convened impact evaluation thought leaders, nonprofits, government entities, funders, corporations and academics to engage in cross sector dialogue. While there weren’t many impact investors in the room, there was a shared understanding that growth, experimentation and innovation within the social sector require new frameworks for how we think about evaluation.
We discussed three game-changing approaches that are shaping the future of impact evaluation:
- Developmental evaluation: a real-time, learning oriented, feedback-based, and insight- driven evaluation approach used to inform program design and implementation;
- Shared measurement: when groups of organizations come together to co-determine outcomes and indicators, share data and learn from each other; and
- Big data: a term coined by experts to explain the volume, variety, and velocity of the data becoming available through the explosion of digital infrastructure.
Over the course of the day, it became increasingly clear to me that we as impact investors need to find our seat at the table. As participants in an emergent market looking to harness the positive power of enterprise, it is crucial that we reach across sectors to discuss what we mean by “impact”. As an industry we talk a lot about impact measurement. However we need to be better prepared to ask and answer why, how, for whom, and under what conditions specific interventions might really work. Quantitative data will undoubtedly play an important role in informing our investment decisions, but that data cannot be consumed in isolation.
With this in mind I walked away from the conference with the following reflections on what the “next generation of impact evaluation” might look like for Global Partnerships and the impact investing industry as a whole:
- Expected outcomes will be rooted in a clearly articulated theory of why and how we think an intervention will yield a certain level of impact.
- Measurements will be simplified, clearly defined, and analyzed in context.
- Data collection will be feasible, cost effective and scalable.
- Technology will be harnessed to increase real-time visibility and decrease reporting burdens.
- Evaluation cycles will be shorter, involve key constituents, and will be oriented towards improvement.
- Evaluation results will provide stakeholders with the information and confidence they need to make timely decisions.
I think the impact investing industry can build on learning from other social sector actors while bringing a fresh perspective and set of demands to the table. In doing so I am hopeful that we can collectively rise to meet the challenges of the rapidly changing, increasingly complex and highly interconnected nature of the problems we look to address.
Learn more about impact evaluation:
1. FSG published a learning brief featuring a dozen interviews with foundation leaders and many others. The brief starts a conversation around the next generation's impact evaluation characteristics and approaches. Read it here.
2. Is focusing too much on impact measurement detracting nonprofits from their mission-oriented work? A Huffington Post Impact article explores this and two other debates around impact measurement that arose from the Global Social Business Summit held in Kuala Lumpur, Malaysia on November 8, 2013. Read it here.
3. The Stanford Social Innovation Review explores the Seven Deadly Sins of Impact Evaluation. Read it here.
4. Global Partnerships' view on why measuring impact is so complex. Read it here.
Innovations That Allow our Social Investment Funds to Catalyze More Impact
Since the launch of Global Partnerships’ (GP) first social investment fund in 2005, we have provided debt financing to social enterprises with the objective of expanding already-proven solutions that help people living in poverty increase their incomes and improve their lives. Two examples of this approach are scaling access to microcredit for underserved entrepreneurs and pre-harvest finance for smallholder farmers.
Yet, our team is increasingly discovering business models that have potential to create significant impact in the lives of the poor, but have not reached sustainability, or represent levels of risk our social investment funds aren’t designed to absorb.
However, as a mission-led nonprofit impact investor, we are working hard to be catalytic with all of our capital. This means becoming creative with credit enhancement as well as building our capacity to deploy all types of capital to meet our partners’ needs.
In our latest Investors Report:
- Our Chief Investment and Operating Officer, Mark Coffey, highlights specific capital enhancements, and different types of capital, that we're using to catalyze impact (read here).
- We introduce MiCrédito, a new partner in Nicaragua with whom we're working to connect rural families to solar lights (read here).
- We provide updates on our social investment funds' performance (read here).
Global Partnerships’ Annual Progress Report 2013: Milestones, Case Studies, Stories of Impact, and More
We are pleased to share our annual progress report for fiscal year 2013. We have had an incredible year, achieved through our partners and team's hard work, and through our donors and investors' generous support of and belief in us.
Since our beginning, we've deployed $98.2 million to our partners, who are providing essential goods and services to poor families, helping them lift themselves out of poverty.
Here are just a few of the highlights from the report:
- Rick Beckett, president and CEO, shares an overview of our past year in his CEO Letter,
- Check out this timeline to see major milestones from the past year.
- Learn, through impact investing case studies and inspirational stories, about the challenges, approaches and successes we're seeing, implementing and achieving in each of our four impact areas:
As always, we welcome your feedback. Please leave a comment below or send us an email at firstname.lastname@example.org.