calvert foundation overview

Calvert Foundation OverviewInvesting for Social and Financial Return

Photo © Jamie Rose for Calvert Foundation |

What is Impact Investing?

• Investment that delivers a social AND financial return:– Burgeoning new industry with lots of potential for growth – Drives dollars to low-income communities often neglected by

traditional financial institutions

• The ultimate goal of this type of investing is not to maximize profit, but to be part of a sustainable solution to pressing social challenges by empowering people left out of the financial mainstream.


About Calvert Foundation

• For 15 years, Calvert Foundation and its subsidiaries have been pioneers in offering investment that delivers a financial and social return. – Over $500 million under management– More than 8,000 investors– Investment in more than 250 organizations around the world– No investor has ever lost money– Portfolio losses of just over 1%

19,910 homes built/rehabilitated7,300 small businesses funded

34,100 JOBS CREATED IN THE U.S.304,000 microenterprises launched


Here’s How It Works

Investors Organizations in our portfolio

People left behind by mainstream finance

1. INVEST

5. INVESTORS RECEIVE BACK PRINCIPAL AND INTEREST

2. WE MAKE AFFORDABLE, FLEXIBLE LOANS USING INVESTOR DOLLARS

3. ORGANIZATIONS FINANCE HOMES AND BUSINESSES, EDUCATION, AND MORE FOR THE UNDERSERVED

4. EMPOWERED COMMUNITIES PAY BACK THEIR LOANS


Portfolio

Borrower Detail• $193 million portfolio• 250 Borrowers• 63% Domestic, 37% International• Average Loan Size: $900,000• Average Term: 3 years• Loan must be <5% of CF portfolio and <10% of borrower’s total assets


Investment Approach

100% repayment on investor principal and interest through:

Diversified Portfolio: – 250+ nonprofits and social enterprises with strong management,

operations, financials, and capitalization

Professional Management: – Industry-leading due diligence and monitoring– 99% portfolio repayment rate

Security Enhancements: – Over $30 million in sub debt, loss reserves, and net assets


Investment Process

Initial Vetting

Pre- Clearance

Memo

Term Sheet

Due Diligence

Disburse -ment

Investment Committee

LegalDoc

Negotiation

Organization is evaluated

against Minimum Social and Financial

Investment Criteria. Possible

investment is analyzed and greatest risks and mitigants

described

Terms and conditions including

financial and social

covenants are agreed upon by potential

borrower and Calvert

Foundation. The term sheet is non-binding.

Organization’s financials,

management, products and

social performance

analyzed, political and

economic environment described, investment

recommendation made in 20pg

report

Comprehensive loan

agreement that includes limits on loan sizes MFIs can

extend to clients,

reporting requirements

on target clients and in some cases

social covenants


Client Protection Principles

1) Appropriate Product Design2) Transparency3) Responsible Pricing4) Responsible Treatment of

Clients5) Effective Complaint Resolution6) Privacy of Client Data

In 2008, a group of microfinance thought leaders determined there was a need for an industry-wide code of conduct and a proactive assertion of microfinance as a double bottom line industry. After gathering further input from an array of industry participants, the Smart Campaign was launched with 6 Principles of Client Protection:


• Is the MFI in compliance with it’s mission?• Have you signed on to the Smart Campaign?• Does your organization have a written Code of Ethics?• Has your organization had a social rating in the last 3 years?• What is the MFI’s Client Retention Rate?• How does the MFI avoid client overindebtedness?• How does the MFI ensure transparent communication on

product offerings?• What interest rate methodology is used (flat/declining

balance)?• What is the staff turnover rate?• Does the MFI offer any social performance training for staff?

Key Questions for MFI Impact


Impact: Microfinance

• Small loans to the working poor help them create income-generating opportunities.

• Increased income to mostly women borrowers, helps create stronger families, communities, & local economies.

Real-Life Story:Mary Wanjiru Njaga is a founding member of the Bidii Women Group, the 16th savings and credit group registered with Kenya Women Finance Trust (KWFT) in the Mount Kenya Region. The group was started in 1993, at which time Mary only had a small business. However, with the help of loans from KWFT, Mary now runs her own bookshop called “Market Bookshop.” Mary’s business is flourishing and she can now meet all of her expenses.


Learn More

For more information about how Calvert Foundation:

www.calvertfoundation.org

Phone: 800.248.0337

[email protected]

calvert foundation overview

Devices & Hardware

financial return

social return

financial mainstream

portfolio people

investors organizations

investors investment

social challenges

portfolio borrower