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NONPROFIT INVESTORI N D E P E N D E N T R E S E A R C H F O R P H I L A N T H R O P YNonprofit Investor Research | nonprof...
Global Partnerships | Nonprofit Investor Research 2OVERVIEW OF GLOBAL PARTNERSHIPS’ ACTIVITIESFounded in 1994, Global Part...
Global Partnerships | Nonprofit Investor Research 3Social Investment Fund 2010 - $25MM Fund Capital (94% Invested)Microfin...
Global Partnerships | Nonprofit Investor Research 4Social Investment Fund 2010Global Partnerships’ Social Investment Fund ...
Global Partnerships | Nonprofit Investor Research 5GP according to the Investment Advisory Services Agreement. GP contribu...
Global Partnerships | Nonprofit Investor Research 6Global Partnerships clearly delineates management compensation in the F...
Global Partnerships | Nonprofit Investor Research 7Detailed Financial Statements (GAAP Basis)Fiscal Year Ended June 30 201...
Global Partnerships | Nonprofit Investor Research 8OTHER THIRD PARTY RATINGSBBB Wise Giving Alliance indicates that a revi...
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NPI Evaluation of Global Partnerships


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NPI Evaluation of Global Partnerships

  1. 1. NONPROFIT INVESTORI N D E P E N D E N T R E S E A R C H F O R P H I L A N T H R O P YNonprofit Investor Research | nonprofitinvestor.orgSUMMARYGlobal Partnerships (“GP”) is a nonprofit impact investor based inSeattle, Washington, and Managua, Nicaragua, which aims to expandopportunities for people living in poverty by investing in exceptionalmicrofinance institutions and cooperatives. GP focuses itsinvestments in organizations that can deliver sustainable programsacross five impact areas, comprising: health care; rural livelihoods;micro-entrepreneurship; green technology; and women’sempowerment.STRENGTHS▲ Low risk organization model. Innovative long-term fundingmodel mitigates operational risk to target organizations.▲ Demonstrated impact. Global Partnerships’ investments havedemonstrably improved the possible outcomes of the constituents itaims to serve through facilitating the deployment of sustainableprograms dedicated to promoting social opportunity.▲ Transparency. The investments and investment partners ofGlobal Partnerships are clearly delineated in organizational materials.Additionally, GP provides detailed analytics and anecdotal evidencesupporting the efficacy of their programs.▲ Operational efficiency. Global Partnerships has managed toincrease the scale of its organization while maintaining superiorfinancial controls. The majority of the organization’s expenses aredirectly related to the management of Investment Funds, whichhas grown modestly despite the tremendous growth in GP’s reach.▲ Attractive economies of scale. The organization benefits from itslocal infrastructure and partnerships to expand the breadth of itsreach and impact.RECOMMENDATION: BUYGlobal Partnerships has created an innovative impact investingmodel that has executed on its aim to provide opportunities forindividuals living in poverty. The organization’s investments haveshown significant impact, are transparent, and benefit fromattractive economies of scale as the organization has expanded. Thisgrowth has all been executed while maintaining superior operationalefficiency.Global PartnershipsNonprofit Investor Rating:BUYMission StatementTo expand opportunity for people living inpovertyFinancial Overview$ in MM, Fiscal Year Ended June 302010 2011 2012Revenue and Support $6.6 $4.8 $5.9Operating Expenses $4.6 $4.8 $4.9% of Total:Program Expenses 80.7% 81.9% 77.9%G&A 4.4% 3.8% 5.7%Fundraising 14.9% 14.3% 16.3%Year Founded: 1994Contact DetailsGlobal Partnerships1932 First Avenue, Suite 400Seattle, WA 98101(206) 652-8773http://www.globalpartnerships.orgEIN: 82-0574491Analyst: Michael D. OjungaPeer Review: Kabeer Aziz, Rainbow WongPublication DateMay 7, 2013
  2. 2. Global Partnerships | Nonprofit Investor Research 2OVERVIEW OF GLOBAL PARTNERSHIPS’ ACTIVITIESFounded in 1994, Global Partnerships is a nonprofit social investor whose mission is to expand opportunity for peopleliving in poverty. GP carries out its mission by identifying and investing in microfinance organizations and cooperativeswhich collectively serve individuals in need by providing micro-loans and other life-changing services. The GP platformhas evolved since its inception in 1994, when the organization was founded to support microfinance work in CentralAmerica. GP has since recognized that impoverished people face multiple challenges beyond access to credit and as aresult the organization now prioritizes partners that provide a holistic package of loans and other essential goods andservices.Since 2005, GP has formed investment funds designed to provide low-cost loans to a select group of socially-focusedpartners while providing investors with both financial and social returns. Global Partnerships investor base (provider offund capital) includes foundations, development banks, and accredited individual and institutional investors. In additionto providing investors with a fixed-income financial return, GP’s funds are also structured to deliver positive socialreturns – defined by Global Partnerships as a “positive impact on the lives of people living in poverty.” GlobalPartnerships focuses its investments in cooperatives and microfinance institutions in five designated impact areas,consisting of: health care; rural livelihoods; micro-entrepreneurship; green technology; and women’s empowerment.Global Partnerships has an extensive risk management process, placing particular emphasis on due-diligence, monitoring,innovative fund structuring, and geographic diversification. As a result, according to Global Partnerships, 100 percent ofprincipal and preferred return payments have been made on-time to investors over the life of GP’s funds. GlobalPartnerships was recognized in 2011 by ImpactAssets 50 as a leading private debt manager that delivers social andenvironmental value in addition to financial returns. As of September 30, 2012, Global Partnerships has $42.2 million infund capital deployed in eleven countries with 33 partners, serving approximately 97,527 people.Current Funds OverviewGlobal Partnerships has two active funds investing as of September 30, 2012: Microfinance Fund 2008 and SocialInvestment Fund 2010.Microfinance Fund 2008 - $20MM Fund Capital (103% Invested)Microfinance Fund 2008 was launched on October 31, 2008, with total fund capital of $20,000,000. As of September 30,2012, $20,534,960 is currently invested. The fund is structured to pay interest in the amount of 3.00%, 3.25%, 4.00%,4.69%, and 4.75% per annum over the life of the fund, payable quarterly, and maturing in October of 2014.Percent of Investible Assets (Distribution by Country and Institution)Equador (30%) Nicaragua (15%)FINCA Equador (10%) FDL (10%)FODEMI (10%) Pro Mujer in Nicaragua (5%)Banco D-MIRO (5%) Peru (14%)Fundación Alternativa (3%) Credivision (6%)Fundación Faces (2%) Pro Mujer in Peru (6%)Bolivia (25%) Arariwa (2%)CRECER (10%) El Salvador (5%)Pro Mujer in Bolivia (10%) ENLACE (5%)FONDECO (5%) Guatemala (1%)Mexico (9%) Friendship Bridge (1%)FRAC (2%) Cash (1%)Pro Mujer in Mexico (7%)Bolivia25%Equador30%Cash1%Guatemala1%El Salvador5%Mexico9%Peru14%Nicaragua15%
  3. 3. Global Partnerships | Nonprofit Investor Research 3Social Investment Fund 2010 - $25MM Fund Capital (94% Invested)Microfinance Fund 2008 was launched on October 31, 2010. As of September 30, 2012, $23,444,114 is currentlyinvested out of total fund capital of $25,000,000. The fund is structured to pay interest payable quarterly at ratesranging from 2.715% and 4.59% per annum, maturing in October 2015 and June 2016, respectively. Included in theprovision of the fund, are terms necessitating the payment of interest contingent on surplus cash remaining at the closeof the fund.Percent of Investible Assets (Distribution by Country and Institution)Peru (30%) Colombia (12%)ADRA (4%) Fundación Amanecer (6%)Pro Mujer in Peru (8%) Contactar (6%)Arariwa (3%) Equador (10%)Crediflorida (7%) ESPOIR (4%)Los Andes (2%) Fundación Faces (3%)NORANDINO (3%) Banco D-MIRO (3%)FONDESURCO (2%) Mexico (10%)APROCASSI (1%) FRAC (4%)Bolivia (17%) Pro Mujer in Mexico (2%)CRECER (4%) CONSERVA (4%)Pro Mujer in Bolivia (5%) El Salvador (10%)FONDECO (3%) ENLACE (4%)Sembrar Sartawi (5%) Fundación Campo (6%)Honduras (5%) Cash (3%)COMIXMUL (5%) Dominican Republic (1%)Nicaragua (2%) Esperanza (1%)Pro Mujer in Nicaragua (2%)PROGRAM RESULTS AND EFFECTIVENESSMicrofinance Fund 2008Global Partnerships’ Microfinance Fund 2008 has exhibitedrobust total partner loan portfolio growth over the last fouryears, climbing from less than $200MM to over $400MMduring that time period. Additionally, the fund continues toexpand the amount of borrowers served, as it hasdemonstrated an approximately 20% compounded annualgrowth rate from the beginning of Fiscal Year 2009 topresent. During this time period, the Fund has alsomaintained stringent operational self-sufficiency as totalrevenues / total expenses have consistently exceeded 100%by a healthy margin – four year average of approximately115%. The portfolio quality of the fund’s investment partners is of a high level, as delinquent loans (loans past duegreater than 30 days) represent less than 5% of total loans outstanding and the fund has experienced minimal assetwrite-offs. GP has recently made a new investment in Friendship Bridge, a Guatemalan microfinance institution thatprovides small working capital loans through a group lending methodology to women in mostly rural areas. Theorganization also provides clients with education focuses in health, business, agriculture, and self-esteem.Nicaragua2%DominicanRepublic1%Bolivia17%Peru30%Cash3%Honduras5%El Salvador10%Mexico10% Equador10%Colombia12%17 Number of partners$663 Average loan size82% Percentage of borrowers served who arewomen48% Percentage of borrowers served living inrural areas
  4. 4. Global Partnerships | Nonprofit Investor Research 4Social Investment Fund 2010Global Partnerships’ Social Investment Fund 2010 has grownrapidly in terms of partner loan portfolio over the last twoyears, rising from approximately $100MM to greater than$500MM during that time period. Over that time, theamount of borrowers served has increased commensurately,from approximately 100,000 to over 700,000. During thistime period, the Fund has also maintained stringentoperational self-sufficiency as total revenues / totalexpenses have consistently exceeded 100% by a healthymargin – a two year average exceeding 120%. The portfolioquality of the fund’s investment partners is of a high level, asdelinquent loans (loans past due greater than 30 days) represent less than 3% of total loans outstanding and the fundhas experienced minimal asset write-offs. GP has recently made a new investment in CONsultores de SERvicios VArios(CONSERVA), a microfinance institution (MFI) that utilizes the solidarity group methodology to provide small workingcapital loans and health services to entrepreneurs living in poverty. The organization concentrates its services on thelower segments of the market, serving roughly 100% women in the rural, urban, and peri-urban areas in the southeastregion of the country.TRANSPARENCYGlobal Partnerships’ website provides information about the organization’s programs, leadership and financial situation.Program services expenses are well documented in their audited financial statements. Additionally, Global Partnerships’publishes comprehensive quarterly fund updates in concert with their annual report. These publications delineate theorganization’s program offerings, efficacy, financial performance, operating metrics and often a case study on aparticular partner organization. From a direct impact perspective, GP lists numerous “success stories” on its website,highlighting the individuals that it aims to reach through its various funds.Global Partnerships files its Form 990 with the IRS each year and its financial statements are regularly audited by theaccounting firm Clark Nuber.FINANCIAL OVERVIEWSTRUCTUREThe consolidated financial statements of Global Partnerships and subsidiaries include the activities of GlobalPartnerships and its subsidiaries, Global Partnerships Microfinance Fund 2006, LLC (“MFF2006”); Global PartnershipsMicrofinance Fund 2008, LLC (“MFF2008”); Global Partnerships Social Investment Fund 2010, LLC (“SIF2010”); and GPFund Management, LLC. Investment funds MFF2006, MFF2008, and SIF2010 (collectively, the “Funds”) were formed inMarch 2007, October 2008, and August 2010, respectively, to serve as investment vehicles to make unsecured termloans to qualified partner institutions in Latin America and the Caribbean. Investors in the Funds have purchased notespayable from the Funds or made loans to the Funds. The Funds’ investor base includes accredited private investors,development banks, and institutions. At the time of formation, GP contributed $255,000 in cash to MFF2006, $1,500,000in cash to MFF2008 and $1,500,000 in cash to SIF2010, as capital contributions.GP Fund Management, LLC (the “Fund Management”) was formed in June 2005 to provide investment fundmanagement services. Wholly owned by GP, the management responsibilities for the Fund Management are assigned to25 Number of partners$735 Average loan size81% Percentage of borrowers served who arewomen48% Percentage of borrowers served living inrural areas
  5. 5. Global Partnerships | Nonprofit Investor Research 5GP according to the Investment Advisory Services Agreement. GP contributed $100 in capital contributions at theformation.REVENUES AND OTHER SUPPORTGlobal Partnerships’ main source of revenue has fluctuated over time, however, Earned Income has generallycontributed to a significant portion of the organizations funding. GP derives Earned Income from the creation andmanagement of its investment funds. Fund management fees are earned based on the outstanding loan balances ineach fund for which GP provides servicing and monitoring. Additionally, fund closing fees are earned upon each close ofa new fund. GP also receives loan and commitment fees from partner organizations which are recognized at the time ofloan commitment. In the 2012 Fiscal Year, 55% of GP’s total consolidated revenue was generated through EarnedIncome.Net Assets Released from Restrictions, which have historically comprised a considerable amount of GP’s totalconsolidated revenue, represent reclassifications between the applicable classes of net assets (e.g. restricted assetsversus unrestricted assets). These reclassifications take place due to the expiration of temporary restrictions on assets,generally due to donor-stipulated purposes being fulfilled or the stipulated time period lapsing.In the 2009 Fiscal Year, Global Partnerships recognized approximately $2.2MM in Recoverable Grant Income, whichcontributed to such a large percentage of total revenues being attributed to Other Income.Global Partnerships’ total consolidated revenue has maintained relatively stable over the past four years, with 2011being an outlier primarily due to a structural decrease in assets released from restrictions. However, 2011 was also theonly year during the period in which contributions decreased. Despite the softness in 2011 revenue, Global Partnershipshas managed to grow Earned Income each year throughout the four year period.Revenue Mix Over Time 2012 Revenue Mix$ in MMEXPENSESGlobal Partnerships has spent an average of 4% of operating expenses through administrative costs over the past fouryears. While approximately 12% of operating expenses have been spent on Fundraising over the same period of time,the organization has maintained effective cost controls and operating efficiency to allow for an 84% four year average ofexpenditures allocated towards Program Costs. As a manager of impact investment funds, GP’s Program Expensesgenerally encompass compensation and operational expenses relating to the management of the organization’s funds.$0.0$1.0$2.0$3.0$4.0$5.0$6.0$7.02009 2010 2011 2012Earned Income In-kind ContributionsContributions Other IncomeNet Assets Released from Restrictions$6.6$4.8$5.9$6.055%23%14%7%1%Earned IncomeNet Assets Released fromRestrictionsContributionsIn-kind ContributionsOther Income
  6. 6. Global Partnerships | Nonprofit Investor Research 6Global Partnerships clearly delineates management compensation in the Form 990, and it is consistent with theindividuals’ respective experience level and industry practices.Expense Breakdown Total Impact Investments Growth$ in MMMISCELLANEOUSGlobal Partnerships maintains a healthy balance sheet with over $7MM in Net Assets partly driven by successfullymanaging its liabilities (GP has returned all principal and preferred return payments to its Fund investors since inception).In addition, Global Partnerships has been able to consistently grow the amount of dollars allocated towards total impactinvestments since 2006. In Fiscal Year 2012, 94% of Global Partnership’s total cash outflows went to support and expandGlobal Partnership’s impact investments.KEY PERSONNEL BIOSRick Beckett – President and Chief Executive OfficerRick is the president and CEO of Global Partnerships and has led the organizations strategic expansion as a socialinvestor since 2006. Prior to joining Global Partnerships, Rick was managing director of a $112 million private equityfund investing in middle-market companies and early stage ventures. Rick spent 10 years at McKinsey & Company wherehe served financial institution and healthcare clients on strategy and performance. He specialized in helping not-for-profit organizations achieve superior results in competitive markets. Rick has served on the boards of directors ofnumerous privately held portfolio companies and not-for-profit organizations, including Direct Relief International andThe Initiative for Global Development. He holds a B.A. with distinction in economics from Stanford University, and anM.B.A. as an Arjay Miller Scholar from the Stanford Graduate School of Business.Mark Coffey – Chief Investment and Operating OfficerMark oversees Global Partnerships social investment funds, directing both the capitalization of GP investment fundsand the lending of capital to GPs microfinance and cooperative partners. Prior to his work at Global Partnerships, heserved as President of ShoreBank Pacific, the first commercial bank in the United States with a focus on environmentallysustainable community development. Mark has more than 25 years experience in banking and lending, including servingin executive roles at Homestead Capital, Bank of the Northwest, First Interstate Securities and First Interstate Bank ofTexas. Mark has served as a member of the Board of Directors of BRAC Bank, a development bank known for its workwith small business lending in Bangladesh, as a representative to the Board of BRAC Bank Afghanistan, and on the Boardof Directors of XacBank, a microfinance bank in Mongolia.83.7%85.7%85.1%$0.0$1.0$2.0$3.0$4.0$5.0$6.02010 2011 20120%10%20%30%40%50%60%70%80%90%Program Services Management and GeneralFundraising Program Expense % of Total$4.8 $4.9$4.6$3.9$8.6$12.1$22.5$32.3$48.8$69.6$0.0$10.0$20.0$30.0$40.0$50.0$60.0$70.0$80.02006 2007 2008 2009 2010 2011 2012
  7. 7. Global Partnerships | Nonprofit Investor Research 7Detailed Financial Statements (GAAP Basis)Fiscal Year Ended June 30 2010 2011 2012Consolidated Revenue and Expenses (GAAP Accounting Basis)Operating Revenue:Contributions $1,017,263 $723,127 $820,654In-kind Contributions 379,786 445,724 410,923Earned Income 2,203,425 2,456,101 3,264,727Other Income 48,112 86,822 77,990Net Assets Released from Restrictions 2,933,631 1,124,435 1,369,989Total Unrestricted Revenue and Other Support $6,582,217 $4,836,209 $5,944,283% Growth 10.6% (26.5%) 22.9%Expenses:Program Services $3,711,598 $3,927,786 $3,824,651Supporting Services:Management and General 200,700 182,103 281,232Fundraising 684,588 686,941 801,319Total Expenses: $4,596,886 $4,796,830 $4,907,202% of Revenue 69.8% 99.2% 82.6%Change in Unrestricted Net Assets $1,985,331 $39,379 $1,037,081Changes in Temporarily Restricted Net AssetsContributions $766,180 $830,953 $2,491,860Net Assets Released from Restrictions (2,933,631) (1,124,435) (1,369,989)Changes in Temporarily Restricted Net Assets ($2,167,451) ($293,482) $1,121,871Change in Net Assets ($182,120) ($254,103) $2,158,952KEY BALANCE SHEET INFORMATIONCash and Cash Equivalents $5,039,544 $13,933,537 $8,602,554Pledges Receivable, Current 555,346 261,844 886,703Social Investment Loans Receivable, Current Portion 5,383,896 15,762,993 17,992,058Other 90,941 240,286 370,005Total Current Assets $11,069,727 $30,198,660 $27,851,320Pledges Receivable $171,265 $193,786 $739,546Social Investment Loans Receivable, Long-Term Portion 19,067,847 19,386,350 21,275,859Investments 50,000 63,634 63,759Property, Plant and Equipment 43,299 166,944 155,068Total Assets $30,402,138 $50,009,374 $50,085,552Accounts Payable $52,032 $51,285 $93,229Long-Term Debt, Current Portion 3,521,771 2,472,803 -Accrued Liabilities 129,563 234,452 288,068Total Current Liabilities $3,703,366 $2,758,540 $381,297Deferred Rent Liability $0 $60,219 $79,688Long-Term Debt 20,914,337 41,660,283 41,935,283Total Liabilities $24,617,703 $44,479,042 $42,396,268Accumulated Deficit ($983,534) ($1,233,107) ($358,924)Unrestricted Net Assets 5,576,607 5,865,559 6,028,457Temporarily Restricted Net Assets 1,191,362 897,880 2,019,751Total Net Assets $5,784,435 $5,530,332 $7,689,284Program Costs as a % of Total Expenses 80.7% 81.9% 77.9%G&A as a % of Total Expenses 4.4% 3.8% 5.7%Fundraising as a % of Total Expenses 14.9% 14.3% 16.3%Source: Audited Financial Statements (GAAP Acccounting Basis)
  8. 8. Global Partnerships | Nonprofit Investor Research 8OTHER THIRD PARTY RATINGSBBB Wise Giving Alliance indicates that a review of Global Partnerships is in progress.Global Partnerships is not currently covered by Charity Navigator, GreatNonprofits, Philanthropedia, or GiveWell.GET INVOLVEDGlobal Partnerships Involvement OpportunitiesMake a financial donation Join the teamDonate EmploymentCome to an Event Purchase Opportunity Blend CoffeeAttend DrinkPartner trips Corporate PartnershipsTravel PartnerSupport the Development team Mailing ListVolunteer ConnectDISCLOSURESMichael D. Ojunga certifies that he does not have any affiliation with Global Partnerships and has never made a donation to theorganization. Additionally, Michael D. Ojunga has not supported directly competing organizations in a greater capacity than anominal donation. NPI analysts and NPI as an organization do not receive any form of compensation from reviewed charities.This report is for informational purposes only and does not constitute a solicitation for donations. While the reliability of informationcontained in this report has been assessed by NPI, NPI makes no representation as to its accuracy or completeness, except withrespect to the Disclosure Section of the report. Any opinions expressed herein reflect our judgment as of the date of the materialsand are subject to change without notice. NPI has no obligation to update, modify or amend any report or to otherwise notify areader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changesor subsequently becomes inaccurate, or if research on the subject organization is withdrawn.Opinions and recommendations in our reports do not take into account specific reader circumstances, objectives, or needs. Therecipients of our reports must make their own independent decisions regarding any organization mentioned by NPI.ABOUT NONPROFIT INVESTORNonprofit Investor is a nonprofit organization with the mission of improving philanthropic capital allocation and nonprofiteffectiveness through research and analysis. NPI brings together volunteers with professional due diligence skills to produceindependent, in‐depth evaluations of nonprofits. NPI research is available for free, public downloadhere: To suggest a charity for NPI to review or to apply as a volunteer, please contactus: NPI is a tax‐exempt charity under section 501(c)(3) of the Internal Revenue Code (EIN:45‐3627609). Follow Nonprofit Investor on Twitter: @nonprofitinvest