One Acre Fund on Balancing Philanthropic Capital with Earned IncomeFebruary 15, 2013 by Sally Farhat Kassab
Today, we’re sharing a One Acre Fund Harvard Business Review blog about balancing philanthropic capital with earned income, and pressures from the impact investing community. The article shows the power of the One Acre Fund model, while making a strong point about the importance of both philanthropic money and earned income when serving the poorest clients.
An excerpt: “The recent explosion of interest in impact investing has generated much talk about breaking the shackles of the traditional philanthropic model. The concept seems appealing — incremental investment enters the ‘social impact’ market in the form of below-market loans or equity, incentivizing mission-driven organizations to become self-sustaining. But is that realistic when you’re serving the poorest of the poor?
One Acre Fund (a nonprofit where Matthew is on the board and Stephanie on the staff) serves 135,000 of the poorest smallholder farmers in East Africa, on average doubling the profits they generate from farming. We care deeply about the bottom line, and earned income from our farmers is our primary funding source. At the same time, grant support enables us to innovate, grow faster, and stay focused on the bottom of the pyramid. Both are critical.
Why do we care so deeply about the bottom line? Simply put — because it is part of our mission.’”