Impact Fund

beneficio-de-cardamomo-2.png CHOICE Humanitarian believes that a critical element of the elimination of poverty is economic development. To this end, CHOICE has created a donor-advised investment fund to generate capital for entrepreneurs and co-ops to develop their own businesses in developing villages in Nepal, Kenya, Bolivia, Peru, Ecuador, Guatemala and Mexico.

All of our investments require social and financial returns to be tracked and measured so CHOICE can provide training and mentoring for the entrepreneurs during the investment period as a means to ensure self development and self reliance.

The CHOICE Impact Fund’s purpose is to utilize impact investments to create economic opportunity for those in poverty. The Fund’s mission is to invest in small business opportunities that will create access to new markets and fair prices in the business’s community. Through these investments the Fund will stimulate an environment of entrepreneurship in high poverty communities.

To be considered for CHOICE Impact Fund investment business proposals must meet three primary criteria: sector level impact, profitability, and self-reliance.

  • Sector impact: Businesses must have the potential for social impact beyond their immediate owners. Applicant businesses must have the ability to bring economic opportunities to their larger community as part of their development.
  • Sustainability: As part of the investment qualification process, business acumen of the applicant will be assessed. During the investment period, CHOICE Impact Fund staff will provide as-needed training and mentoring for the entrepreneurs. The emphasis will be placed on business fundamentals, having their sustainability and self-reliance plans outlined as part of the business goals. 
  • Self-reliance: Entrepreneurs must contribute either with labor or other resources for the realization of the project. The Impact Fund will contribute up to 70% of the seed capital based on business proposal and grant qualifications for the project. However, a minimum of 30% of the start of capital must be provided by the entrepreneurs – which can be provided through labor, raw materials, or other non-capital means.

 

Investment Criteria

Beyond profitability, the CHOICE Impact Fund will only consider investing on projects whose impact is measured and reflected in direct and local poverty alleviation. Projects have to present a strong potential for positive and social impact returns together with potential for scalability and locally driven sustainability.

Investments will focus on generating social impact at a larger sector level using scalable business structures such as, but not limited to, small scale agriculture, educational development, water treatment and infrastructure, and renewable energy development.

Geographically, the Impact Fund will focus on areas where it is currently working through CHOICE Humanitarian development projects, since there is a need of trained in-country staff overseeing the projects. However, the fund may consider investments in projects outside these regions as long as they meet all other investment criteria and have qualified local staff to oversee the project. 

CHOICE Impact Fund will seek to achieve its goal by leveraging the management skills of in country staff and the experience and knowledge of senior leadership and board members of CHOICE Economic Development Committee whenever possible, but is open to partnerships with local, third parties for project management.

 

IMG_4021.pngSocial Impact Criteria

The CHOICE Impact fund was created with the purpose of utilizing impact investment vehicles to alleviate poverty through sustainable enterprise development. Through these investments nurturing entrepreneurship and creating a fertile environment for economic development.

The Social Impact of each investment will be tracked and measured using established international metrics including the Progress out of Poverty Index and General Global Impact Investing Network standards.

To ensure sustainability of the project and likelihood of Social Impact, the Fund will be  evaluating proposed beneficiaries based on 5 core principles.

  • Competence: Established business acumen and history of partnership with CHOICE or other local NGOs.
  • Creativity: Ability to respond to unexpected business challenges and overcome unexpected obstacles in the business implementation.
  • Commitment: Beneficiary’s level of commitment to the invested project, including finances, labor, materials and other criteria.
  • Character: The beneficiary’s role in the community and established history with CHOICE Humanitarian or CHOICE Impact Fund. Is the applicant in good standing with their community and reputable among their peers?
  • Compassion: The project must serve a social need and enhance the hosting community in a meaningful way – enabling simple economic growth is insufficient grounds for funding.

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