VillageReachVidaGas

VillageReach Announces Landmark Investment!

becca — Tue, 01 Sep 2009 14:05:16 +0000

As the Social Capital Market Conference (SoCap) begins today in San Francisco, VillageReach is very excited to announce that Oasis Fund, a European investment fund, has committed a $1.375 million investment in VidaGas, the propane energy company owned by VillageReach and the Mozambique Foundation for Community Development (FDC). SoCap is full of social entrepreneurs, investors and innovators excited about using private money for social good- but thus, far there are few true real-world examples of large scale, social investing. This investment is a landmark transaction that demonstrates the potential for channeling private investment capital into commercially viable social businesses in developing countries. Furthermore, the investment affirms the effectiveness of VillageReach’s model for enacting sustainable, systemic change to global health by establishing for-profit businesses to fill gaps in infrastructure. The investment will enable VillageReach to expand its customer base and energy service offering to impact a greater number of households and businesses in remote areas of northern Mozambique.

VidaGas was started in 2002 to support the health system improvement program developed by VillageReach and FDC. More than 80% of Mozambique’s population is rural and depends on charcoal and wood for basic cooking and heating. Safe and reliable propane from VidaGas enables health centers to provide critical health services including vaccinations, equipment sterilization and nighttime birthing. Additionally, propane from VidaGas is a clean and affordable alternative to charcoal and wood for households, small businesses, and light industry clients. VidaGas has grown over 500% since 2002 and is now the largest propane distributor in northern Mozambique.

Oasis Fund is a Luxembourg investment fund which finances innovative, growth stage, commercially viable enterprises that deliver basic goods and services that improve the lives of low-income communities. This investment is the first investment in Africa for the Oasis Fund. Oasis Fund is advised by Bamboo Finance, a Geneva based investment advisory firm.

VillageReach’s Social Business Director, Craig Nakagawa, will be speaking with Keely Stevenson, of Bamboo Finance, about the investment at SoCap tomorrow.

VillageReach’s Craig Nakagawa Featured Speaker at SoCap2009

becca — Wed, 26 Aug 2009 19:30:46 +0000

On Wednesday, September 2^nd, our CFO and Social Business Director, Craig Nakagawa, will present VidaGas: Anatomy of a Social Investment, a presentation featuring VillageReach’s social business VidaGas. At their first annual conference last year, SoCap sold out before the conference even began. This conference is a continuing testament to the excitement surrounding everything social entrepreneur-related. Craig’s presentation will cover VillageReach’s creation of VidaGas as a social enterprise designed to support the health system in northern Mozambique and the development and expansion of the business model. VidaGas has evolved from a small distributor focused on supplying propane to health centers to become the largest propane distributor in Northern Mozambique. In conjunction with the conference, we are also highlighting the Harvard Business School case study on VillageReach which explores some of the successes and challenges of VidaGas. The case study was published in the spring and will be used in Harvard classrooms beginning this fall.

Measuring Impact of Social Investing

astralize — Wed, 17 Jun 2009 13:44:24 +0000

As a recent MBA graduate, I joined VillageReach for the summer tasked with evaluating our models and frameworks to further reach scalability and create sustainable business opportunities.Throughout business school, I was taught the importance of proving that financial profitability and measurable metrics are essential for making business decisions. Shouldn’t this common standard be used to measure socially-focused investing as well?Our philosophy at VillageReach is that there is a place for social investing in which we can create profitable businesses that have the potential to achieve both a financial and social return. We have proven a case in which the combination of non-profit dollars and entrepreneurism can build a sustainable business. Whileventure capitalists seek to create financial returns by investing in new technologies, VillageReach aims to improve established energy and logistics platforms to build base-of-the-pyramid businesses. However, unlike the VC world, there is no standard metric to calculate and measure the value of a social enterprise.Instead, the development community of entrepreneurs, philanthropists, and foundations has the challenge to develop a standard methodology. We’re excited to see the momentum and collective steps that organizations and individuals are collectively taking, especially as the Acumen Fund declared yesterday the WMD (World Metrics Day)!

At VillageReach, we are evaluating different methodologies to formulate our approach to quantify and present the value of a social investment. We are considering two methods: a BACO Calculation (for best available charitable option – created by the Acumen Fund) and an SROI calculation. The BACO model enables us to perform a cost-effective analysis on philanthropic dollars by comparing two options: a charity donation vs. an investment in a business. This analysis provides us with decision-making data to assess and determine the return the greatest social impact at lowest cost. The SROI (“social return on investment”) methodology has been in development for many years, and calculated using a discounted cash flow analysis + projected socio-economic contributions (direct, demonstrable cost savings and revenue contribution that are associated with the social purpose enterprise) into a projected blended business performance. There are distinct challenges with both of these approaches as it is difficult to often find a “comparable” charity donation and quantify the context of social outcomes. However, we strive to build quantifiable metrics that will help continuously evaluate our investments and allow us to communicate our impact to an external audience. Let us know what steps you are taking or thoughts about this process as this is clearly a shared effort.