The globalislocal Fund: A Hands-On Approach to Impact Philanthropy

The globalislocal Fund

Two completely complementary conditions exist in the world today:

• More than 2.5 billion people live on less than $2.50 a day (The United Nations n.d.);
• Many people want to help but may not know how or where to begin.

It is understandable that people may feel overwhelmed by the scope and scale of global issues and that philanthropists, regardless of size or sophistication, may feel insignificant relative to the challenges of poverty, and lack confidence that their funds will make a difference. Unfortunately, if donors remain fixed in that view, they will not experience the dramatic impact they can have on the issues they care about most. This impact is magnified by the fact that relatively small sums can achieve disproportionately large results in the developing world.

Focusing on both the challenge and the opportunity presented by these circumstances, Elizabeth Wallace Ellers has created an uncommon opportunity for philanthropists to ‘go global’ with confidence. Building on nearly two decades of on-the-ground learning about global development issues and investing in leading-edge innovators, Wallace Ellers founded The globalislocal Fund in Philadelphia in 2005, driven by a profound belief that individuals don't just matter, they are essential to the advancement of a more prosperous and secure world. Others in the field concur. In the words of Bill Drayton, founder of Ashoka, “The most important contribution any of us can make now is [to] increase the proportion of humans who know that they can cause change” (Ashoka n.d.).

The globalislocal Fund is a collaborative funding partnership of individuals and family foundations investing philanthropic capital in solutions to the root causes of poverty for those living at the base of the economic pyramid in Africa, Asia and Latin America (Financial Times Lexicon n.d.).

globalislocal is highly effective because it is both an educational and funding vehicle that convenes and introduces philanthropists directly to social entrepreneurs in order to aggregate and deploy informed capital to leverage greater impact. The educational component also enables individuals to be more strategic and effective in their own philanthropy.

Each year several pre-vetted, prospective investees meet with Partners to discuss their work and how it advances security and prosperity. At globalislocal’s year-end annual Impact and Investment Meeting, Partners analyze and assess current proposals and review Impact Reports (case-specific measurement criteria required of all investees) on the prior year’s investments. Partners, who pool their philanthropic capital, collectively decide to make investments (grants, loans or grants reinvested as equity) in organizations whose work is scalable and whose impact is measurable and sustainable.

The globalislocal Fund’s investment decisions are made using a criteria lens, which favors scalable, high-impact NGOs and social enterprises addressing root causes of poverty. The globalislocal Fund portfolio reflects a preference for:

• Market-based strategies (as appropriate) with a path to financial sustainability; 
• Scalability—the potential to reach millions of people; and 
• Opportunities with a high social return on investment.

Historically, globalislocal has partnered with foundations, joined public-private partnerships, and collaborated with philanthropists in other countries. This is all to leverage the impact of its individual investors’ dollars to accelerate its investees’ impact. Since inception, globalislocal has directly invested and been the catalyst for nearly $1.7 million. Partnership is available by tax-deductible subscription. In addition to active Partners in globalislocal’s flagship partnership, others from across the country have partnered as co-investors in The globalislocal Fund’s portfolio.

Portfolio Approach

Because poverty is complex and involves multiple and interconnected issues, globalislocal employs a multi-issue portfolio approach to accurately reflect and address the real-time, on-the-ground realities of the poor and of global development.

The essentials, what globalislocal refers to as ‘building blocks for a productive life,’ include: access to economic opportunity, education and healthcare, as well as water and energy sources; more broadly and equally important, priorities also include gender equity, environmental stability, and civil society and the rule of law.

globalislocal’s portfolio is also informed by site visits to prospective and current investees in the field. Partners spend days with potential investees and their clients to deepen their understanding of the organizations, communities and, critically, local contexts. Stepping into the real-world realities from these multiple perspectives, Partners are immersed in the cultural, socio-economic and political landscape.

Achieving Impact

Regardless of issue or region and whether capital is deployed as grant, debt or equity, The globalislocal Fund’s goal is to allocate funds to achieve the greatest impact. For example, because most of the rural poor depend on agriculture for their income and because growing the agricultural sector is twice as effective in reducing global poverty than growth in any other sector, globalislocal has allocated funds to increase farmer productivity and profitability (The World Bank 2008).

Root Capital and One Acre Fund illustrate innovative, effective organizations and investments meeting globalislocal’s criteria.

Root Capital

Root Capital (Root), a nonprofit social investment fund, invests in small and growing agricultural businesses that are too big for micro lenders and too small for traditional commercial banks. Providing loans, financial training and market connections, Root works with farmer associations that aggregate thousands of rural producers in Africa and Latin America, enabling individual farmers to build sustainable livelihoods.

Recognizing the importance of Root’s mission and their track record, globalislocal made an initial grant to Root for an early-stage market analysis on how they could increase the impact of their work by supporting businesses that provide economic opportunities to women as well as men. globalislocal then quickly became a lead investor in this “gender lens” lending, providing a multi-year loan. As the fund proved successful, globalislocal made a follow-on grant which supported the roll-out of what is now called The Women in Agricultural Initiative, the goals of which are to raise $45 million by 2016, finance 200 gender-inclusive businesses and reach 200,000 female producers.

One Acre Fund

One Acre Fund (OAF) empowers one acre subsistence farmers in Sub-Saharan Africa to grow their way out of poverty by providing access to the tools they need to increase their farm productivity and income. Its market system (financing, education, agricultural inputs, flexible payments, market access) enables OAF farmer clients to increase their farm income per acre by 100 percent.

globalislocal invested in OAF’s innovation trials, which tested specific combinations of seed, soil and inputs within the cultural context to maximize yield. This laid the foundation for expansion to new regions in Rwanda. These trials led directly to a $500,000 investment from the Whole Planet Foundation for OAF expansion in southern Rwanda, which would not have been possible without the information obtained during the globalislocal funded trial.  globalislocal has also invested in coffee trials, enabling OAF to develop a new product with great income impact for farmers.

Most recently, globalislocal made a grant, in the form of permanent loan capital, for OAF’s Seed and Fertilizer Permanent Fund (which makes loans to farm families). Over 10 years globalislocal’s grant-turned-loan will impact 20,000 farm families and 100,000 family members. This impact will continue in perpetuity.

These catalytic investments demonstrate globalislocal’s agility and flexibility—with both ideas and capital (especially in early or critical stages)—which are as valuable to the social enterprise as they are to the funder, to advance missions most effectively. This approach can be indispensable to social entrepreneurs who cannot always rely on traditional sources to provide such funding due to risk tolerance and/or investment constraints.

Closing

The globalislocal Fund has recognized unmet demand and created an innovative vehicle for individuals and family foundations to participate in solutions to otherwise seemingly overwhelming global challenges. globalislocal aggregates commitment and capital, makes educated decisions and strategic investment allocations in organizations and social entrepreneurs advancing security and prosperity. At the same time, globalislocal educates its Partners about both global issues and how to be more strategic in their own individual philanthropy. Partners have experienced that they do make a difference, how they make a difference and that relatively small investments can be leveraged to achieve large results. 

Ultimately, globalislocal’s goal is to dramatically increase the number of investors and volume of investments actively engaging these issues. To this end, globalislocal is exploring expanding its proven model through strategic partnerships in the United States and abroad. To learn more, contact The globalislocal Fund at This email address is being protected from spambots. You need JavaScript enabled to view it..

Elizabeth Wallace Ellers Combining her long-standing interest in economic development with the financial discipline acquired from her years as a Wall Street investment banker, Liz created and is Managing Partner of The globalislocal Fund. Liz was born and raised in Southern California, has lived in Brazil and Mexico, traveled extensively in the developing world and currently resides in the Greater Philadelphia Area. She holds a BA in International Relations from UCLA and an MBA from Columbia University.

Jane H. Firth is an expert in the field of Executive Coaching and Leadership Development. She is a co-founding partner of The globalislocal Fund and a founder of Beyond Our Differences Foundation. Jane was a strategic advisor in the creation of the award-winning documentary film of the same name, which premiered on PBS on Bill Moyers Journal.

References

The United Nations. (n.d.). The United Nations Website. Available at
http://www.un.org/works/sub2.asp?lang=en&s=17.

Ashoka. (n.d.). Ashoka Website. Available at  http://www.ashoka.org/about.

Financial Times. (n.d.). Financial Times Lexicon. Available at  http://lexicon.ft.com/Term?term=base-of-the-pyramid. 

The World Bank. (2008). Agriculture for Development Policy Brief: Agriculture and Poverty Reduction. Available at  http://siteresources.worldbank.org/SOUTHASIAEXT/Resources/223546-1171488994713/3455847-1192738003272/Brief_AgPovRedctn_web.pdf