I’ve just returned from visiting some of our amazing clients in northern Tanzania and southwestern Uganda, and what a fulfilling way to end the year. I traveled with my friend Richard Tugume, our senior loan officer for Uganda, and Nate Schaffran, vice president of Global Programs, Africa. Colleagues from three foundations, Pershing Square, Skoll and The World We Want, also joined us.
The region has seen better times. It was sobering to start our trip near the battleground of a brutal civil conflict that is now ravaging the green hills of eastern Congo. From our vantage point in Uganda and Tanzania, however, things could not have been more different.
Enterprise models that are custom-fit for smallholder farmers are thriving there. The Mayawa Victoria Company, a vanilla farmers’ association in Tanzania, for example, and Ankole Coffee Producers’ Cooperative Union in Uganda, are growing rural prosperity for farmers by providing steady income and connections to international markets. Their internal credit systems are providing farmers with microloans, enabling the farmers to adapt to climate change through on-farm investments, pay school fees, and start side businesses. And their agronomic assistance is helping farmers to grow staple food crops, such as red beans and oyster mushrooms for household consumption and to sell to local markets, thereby addressing food security in sub-Saharan Africa.
We could not begin to work with such inspiring businesses and small-scale farmers without the generous support of the donors and investors who believe in our mission. As the year draws to a close, I would like to sincerely thank each of you for your valuable contributions that bring Root Capital’s vision for a more peaceful and prosperous world to life.
There was never a day on our recent trip that we didn’t reflect on the fighting so nearby. But we were comforted by the hope that one day, when peace finally arrives to the troubled Congo, small and growing rural enterprises can spread their promise across the border and help rebuild that war torn nation.
Furthermore, I had no clue that I would return home to another unspeakable horror. As a father of three precious children, the tragic loss of life at Sandy Hook Elementary School in Connecticut breaks my heart, as it breaks all of our hearts. We must work together as one people to bring an end to senseless violence wherever it strikes. May we all find peace and strength in that worthy endeavor.
With deep appreciation,
William Foote, Founder and CEO
Tackling the World’s Most Pressing Problems
Interview with Edwin Ou, Principal, Skoll Foundation
We spoke with Edwin about his work at Skoll and the foundation’s approach to tackling the world’s most pressing problems.
What is the Skoll Foundation and what do you do there?
Jeff Skoll, eBay’s first president, together with Sally Osberg, our first President and CEO, built the Skoll Foundation to accelerate the application of innovative solutions to the world’s most pressing problems. Simply put, we bet on good people doing good things.
In keeping with that entrepreneurial spirit, I wear multiple hats at the foundation. I lead our efforts to partner with other funders from the philanthropic, impact investing and private or public sectors. I also help coordinate the funder/finance track of the annual Skoll World Forum on Social Entrepreneurship, and invest in and engage with the social entrepreneurs that target their solutions at the biggest opportunities for large-scale change. As with eBay, Skoll believes in the power of community to make things happen, and with open sourcing our efforts, our learnings and our engagement platforms.
What brought you to Skoll?
Once an aspiring biomedical researcher, I’ve spent the last 18 years rededicating myself to the thrill of problem-solving for the purpose of helping as many people as possible. Sure, it took a few interesting turns through investment banking and technology shops to get there. But a stint as a Red Cross disaster volunteer at Ground Zero post-9/11 prompted me to ask a lot of questions, which in turn led me to the burgeoning field of social entrepreneurship.
What fires you up the most about your work?
Nothing stokes me more than getting to work with smart people passionate about pursuing long-term solutions to seemingly intractable problems. I have been most inspired by interactions in which the lines become blurred, like engaging with Root Capital and its vanilla bean client in East Africa where all were giving and all were getting, regardless of whether they were typecast as "farmer" or "social entrepreneur" or "funder." There’s real dignity underpinning such exchanges, as well as a sense of shared ownership.
What is the Skoll Foundation’s approach to philanthropy/investing?
At Skoll, we focus our attention on promising solutions that can attack problems at the highest levels. In certain instances, the solution can be deployed using a business model that can earn revenues; in such cases, we may consider making an appropriate impact investment to catalyze its uptake or the involvement of other resource providers. In other instances, philanthropic capital may be what’s needed to accelerate the solution’s potential. And sometimes a mix of capital is required.
Where do you see the impact investing space heading?
I see more and different types of players reframing what they do to fit within the scope of social entrepreneurship or impact investing. And this influx of interest is what’s needed, provided these players first pass the tests of intentionality and responsible action. To enable this, several efforts are underway to lend definition and clarity to these spaces. For example, our friends at the Rockefeller Foundation, Omidyar Network, USAID and the Global Impact Investing Network are working to further build out the infrastructural supports for impact investing, including developing baseline standards for transparency and credibility. The Aspen Network of Development Entrepreneurs is another related movement that seeks to harmonize the efforts of a broad base of capital and technical assistance providers that support the work of entrepreneurs in developing countries. Also, our CEO Sally Osberg and Skoll Foundation Board Director Roger Martin are updating their 2007 Stanford Social Innovation Review article, "Social Entrepreneurship: The Case for Definition."
We have invested in Root Capital with a mix of multi-year grants and loans since 2005. Over that timeframe, Root has grown its core program seven-fold, improving the livelihoods of more than 600,000 smallholder farm families (roughly 2.6 million people total) who sustainably manage 1.2 million hectares of land. Over the next five years, it’s poised to triple that program while extending its model to realize new forms of impact through investments into food security and nutrition, post-disaster/post-conflict societies and climate-smart agriculture. We see our investments serving as first-loss coverage, effectively reducing the risk for others to invest their impact-focused capital and/or expertise to drive results.
But wait, there’s more! Coded into Root’s organizational DNA is an open-source mentality, the expression of which is to encourage other investors—including value chain actors and those who finance them—to step up and collectively address more of the overall market demand for smallholder agricultural finance. At this ecosystem level, our investments are intended to support Root and its social lending peers to develop the market infrastructure and also serve as the connective tissue to enable them to coordinate efforts with other impact investors and more commercially-focused institutions.
Farmer members at Ankole Coffee Producers Cooperative Union (ACPCU), a 4,500 member secondary-level coffee cooperative in Uganda and a Root Capital client since 2008. Like many other Root Capital clients, all of ACPCU's member societies are Fair Trade and organic certified, the premiums from which are used to improve access to social services like education, health care and clean drinking water.
Edwin Ou, Amy Herskovitz from the Pershing Square Foundation and Willy Foote at Kaderes Peasant Development (KPD), a coffee enterprise in Uganda. In addition to growing coffee, suppliers to KPD are encouraged to grow seasonal crops like red beans with the help of loans from the enterprise to cover the cost of pre-harvest inputs. Today, KPD farmers supply directly to the UN's World Food Program, which sources food from smallholder farmers through its Purchase for Progress program (P4P) for the purpose of humanitarian aid.
A member of the Ankole cooperative in Uganda; Stéphanie Treschow; Edwin Ou, Skoll Foundation; Jacob Röjdmark and Kirsten Poitras, World We Want Foundation (pictured left to right) examining coffee trees at a producer plot. As part of their implementation of organic farm management practices, Ankole farmers do not use chemicals or artificial fertilizer and they are trained to convert biodegradable solid waste into farmyard manure.
New and Noteworthy
Nate Schaffran, Root Capital’s Vice President of Global Programs in Africa, was a featured guest, along with representatives from USAID, Acumen Fund and Agrilink, on a live Twitter chat on Investing in African Agriculture sponsored by USAID.
The Impact Assessment Senior Associate will support the Impact Assessment Officer in designing and implementing studies, including engaging a local university or research institution as partner; selecting clients; coordinating with clients and Root Capital staff; research design; survey development; managing local surveyors; data cleaning and analysis; and report writing. The results of these studies will help our clients improve their social and environmental impact, inform Root Capital’s strategy and operations and communicate our impact to external audiences.