CELEBRATING 30 YEARS OF GLOBAL PARTNERSHIPS

The Next Chapter of Impact: Reflections on Impact-First Investing

By Mike Galgon, CEO of Global Partnerships

As Global Partnerships marks 30 years, I’m inspired by the ingenuity and determination of the people who continue to shape our mission and redefine what’s possible for their families and communities.

On a recent visit to Ecuador, I met some of these clients. Women’s credit groups along the coast gathered to discuss their group loans and learn about topics like diabetes prevention and water conservation. A shop owner proudly showed me the small store she runs from her front room to supplement her family’s fishing income. In the mountains, a cacao farmer explained how she’s reinvesting record profits to expand her small farm, preparing for the day when cacao prices drop.

These encounters reflect the creativity and resilience that drive our work. And they remind me why access to opportunity matters so deeply. We invest in social enterprises as one of the best and most efficient ways of reaching people in poverty with basic necessities that help them meet their needs today and plan for a better tomorrow.

Over time, our approach has evolved into an impact-first model that works to expand opportunity for people in poverty. As the impact-first ecosystem continues to grow, what’s needed now is greater participation from philanthropists and investors committed to this approach.

Proof Points for Impact-First Investing

With the creation of our first investment fund in 2005, Global Partnerships shifted from grantmaking to impact-first investing in social enterprises that serve people in poverty.

The decade that followed enabled us to test our hypothesis: that providing affordable working capital paired with training and support, especially for women entrepreneurs, is a powerful way to expand opportunity.

It also deepened our understanding of the multidimensional nature of poverty, strengthened our relationships with social enterprises, and sharpened the tools we use to assess the impact of our work.

All this led to the launch of the Global Partnerships Social Investment Fund 6.0, LLC, in 2015. This ambitious 10-year fund broke new ground for us by creating a large pool of low-cost capital invested over a long period of time through social enterprise partners who deliver products and services that meet the needs of people living on dollars a day. It also marked our expansion into Sub-Saharan Africa.

SIF 6.0 successfully matured this September. By recycling and reinvesting impact capital over the life of this fund, SIF 6.0 ultimately lent out $280 million. Nearly 16 million people gained access to products and services that met their needs—from off-grid solar energy to clean water and financial tools tailored for women microentrepreneurs.

Meaningful Impact for People Living on Dollars a Day

These results are impressive, but what makes them transformational is how they translate to real improvements in people’s daily lives. Ninety-one percent of the over 13,000 clients surveyed reported that their quality of life improved thanks to their involvement with a SIF 6.0 investee. Nearly two-thirds said they were able to provide more nutritious food for their families. And more than half spent more money to send their children to school.

Most meaningful, though, are the stories of women using opportunity to create a better future. Women like Esther Ukoh, a client of Grooming Centre, a Global Partnerships’ microfinance partner in Nigeria. Esther started a small business selling eggrolls, meat pies, sausages with a loan worth the equivalent of less than $15. Through her hard work and a series of ever-larger microloans, she now operates a catering business and a baking supply shop, and she can now afford to send her daughter to school.

Photos of Esther Ukoh (left) and María Us Imul (right).

And women like María Us Imul in Guatemala. For years she made traditional dresses to sell at the local market. About nine years ago, she used a microloan from our partner Friendship Bridge to open a small store. Thanks to the financial support and training in business management and entrepreneurship she received, she now also operates a convenience store and a food cart. Together these businesses provide a steady income that has enabled her to send her seven children to school.

Investing in Women, Transforming Communities

Whether you measure success in impact on the lives of individual woman and their families, the growth of social enterprises, or the recycling of capital to multiply impact, SIF 6.0 offers clear and compelling proof that impact-first investing can expand opportunity for some of the world’s poorest people.

This progress is all the more remarkable given the challenges of the past decade, which included COVID-19; localized disruptions in the countries where Global Partnerships operates, including political unrest in Nicaragua, an earthquake in Ecuador, drought in Zambia, and a coup in Mali; and now, the dramatic shift away from government support for global development.

I am proud of what we have achieved through SIF 6.0 and excited for what it suggests about the future of impact-first investing as a critical part of the answer to what can be done to address global poverty in a scalable and sustainable way, even during difficult times.

But I believe the success of SIF 6.0 ultimately has less to do with us and more to do with the perseverance, talent, and hard work of the millions of people who have created thriving small businesses under the most challenging circumstances. There is no higher-leverage way to address poverty than through them, especially women, because improving their lives inevitably improves their children’s lives and transforms their communities.

At Global Partnerships, we see huge opportunities to make meaningful progress in addressing global poverty through an ecosystem of investors, lenders, and service providers built to serve the needs of people in poverty.

But this ecosystem is still in its infancy. What is needed now is an even deeper commitment to investment strategies that value impact enough to be content with seeking capital recovery and minimal financial return: low-cost impact capital helps enable social enterprises to scale without leaving clients in poverty behind. This is a moment to build on early successes in impact-first strategies and look to the future.

If you share our vision of a world where opportunity is within everyone’s reach, there is no better place to start than with women like Esther Ukoh and María Us Imul. Their success shows what’s possible, and it’s why we believe the next 30 years hold even greater promise. Together, we can help build a system of capital and services that honors their potential and provides the tools they need to build resilience and opportunity for decades to come.

This is the final article in our 30th anniversary series, where we have been sharing reflections that guide our work today and inform the path ahead. Read more of the series here.