Beneficial Returns: Expanding Opportunities for Social Enterprises Worldwide
Photo courtesy of Beneficial Returns’ LinkedIn: “Congratulations to Beneficial Returns borrower Nazava Water Filters. With a recent investment from Danone Communities, they are accelerating their work bringing affordable water filters to Indonesian households. Their goal: 2 million more customers by 2024.”
Editor’s Note: Skees Family Foundation began its partnership with Beneficial Returns in 2017 when we took a portion of our corpus and made an investment in the newly formed impact investment fund, led by Ted Levinson. Beneficial Returns supports the growth of leading social enterprises that alleviate poverty and protect the natural environment in Latin America and Southeast Asia. We truly believe so much potential lies in using a foundation’s corpus for direct impact investments, putting the other 95% of a funder’s endowment to work on the organization’s mission. Read on to find out how BR has grown.
How do you overcome the challenges of raising children alone (one quarter of all households in Mexico are headed by women) in a country where childcare is difficult to find, and jobs can be far away? Enter Altitud, a social enterprise that helps low-income women in Monterrey, Mexico launch home-based sewing businesses. Thus far, Altitud has given small loans to more than one thousand women to purchase sewing machines. In addition, Altitud provides free training in sewing and basic business practices, and connects these women with large commercial sewing contracts. Altitud beneficiaries now earn a higher income and can be at home with their children. Beneficial Returns provided a $50,000 loan to Altitud so that they could launch new microenterprises in Nueva Laredo State, Mexico.
“After five years of working long days at a shirt factory for minimum wage, Maria de Jesus is relieved to be in business for herself. In General Zuazua, Nuevo León, México, Maria’s commute now takes less than one minute. After breakfast she heads to the next room where her prized possession, a Singer Model 20U sewing machine, is ready for the day’s work. Maria earns much more than she used to make at the maquiladora, and she can now be home when her children return from school each day.”
Beneficial Returns Quarterly Report March 2022
Beneficial Returns works with social enterprises that are in that not-so-sweet spot of being too large for micro loans, but too small for loans from development finance Institutions or too risky for traditional banks. Beneficial Returns’ investors participate in the fund via a recoverable grant which enables BR to offer attractive terms to its borrowers, all of whom are using market-based approaches to reducing poverty and improving the environment.
By the Numbers
First Time Investor Trip
Beneficial Returns hosted their first investor trip to Mexico in February. We were unfortunately unable to attend but it sounds like it was a well-planned and successful trip. You can see a little of the trip below.
Three Distinct Pools of Capital
Since its start, Beneficial Returns has grown to include two more fund pools. Beneficial Returns manages these three pools of capital with distinct mandates, underwriting criteria, and credit committees. These three funds include:
Beneficial Returns Fund: This fund provides capital asset financing to leading social enterprises that eliminate poverty and protect the natural environment in Latin America and Southeast Asia. Beneficial Returns provides loans between $50,000 and $500,000 to enable emerging social enterprises to purchase equipment to increase the scale and pace of their operations.
One of their borrowers is Ilumexico, which designs, assembles, and sells solar home systems to remote Mexican communities, allowing families to avoid the health and safety risks as well as the high costs of diesel or kerosene energy. Beneficial Returns provided a $50,000 loan for the acquisition of fifteen solar refrigerators which were then leased to women-owned grocery stores.
The Reciprocity Fund: This fund supports social enterprises that promote prosperity for indigenous communities in Latin America and Southeast Asia. Indigenous communities disproportionately experience disenfranchisement, economic isolation, and exploitation. The Reciprocity Fund provides capital to social enterprises to create sustainable livelihoods and environmental health of indigenous populations.
One of their borrowers is Xaxeni which promotes the ecological and economic value of Mexican native plants. These native plants are used in landscaping, biotechnology, and in consumer goods. Xaxeni contracts with Indigenous cooperatives to grow these plants throughout Mexico.
The Truss Fund: This fund supports social enterprises who are graduates of the Miller Center for Social Entrepreneurship’s GSBI. The Truss Fund was established soon after the onset of Covid-19 and was designed to help enterprises that were particularly impacted by the pandemic. This fund is exclusively for graduates of the Miller Center’s accelerator programs.
One of the Truss Fund borrowers is Deevabits, a social enterprise in Kenya that increases energy access for remote households by selling solar lamps through Village Solar Enterprises, women and youth distributors who live in rural areas. Deevabits prioritizes last mile distribution and the promotion of women entrepreneurs.
We at Skees Family Foundation have watched this for-profit organization use its expertise, its financial resources, and its understanding of what social enterprises can do to help social enterprises get to the next level. We hope other funders and foundations will consider organizations like Beneficial Returns as a viable place to invest.
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