Greening Education

Margot Kane is an Investment Officer working on Calvert Foundation’s domestic portfolio, particularly in the areas of small business, social enterprise, and our Green Strategies to Fight Poverty initiative. This is her account of the 1st Annual Green Schools National Conference in Minneapolis she attended in the fall, and what it means for our future as investors and citizens.

Margot Kane

The conference audience was rapt listening to the young leaders of the Youth Summit – “students for green and sustainable schools” on the stage. They were the last plenary speakers that morning (after other impressive and experienced speakers, such as Philippe Cousteau – Jacques’ grandson) and they got a standing ovation to thunderous applause - which is remarkable on the second day of a packed conference at 9 in the morning. Along with the rest of the audience, I was so impressed with how aware these teenagers were of the world around them and their impact upon it, and how excited they were to reach out to other youth across the country and spark what seems almost like a social movement, focusing on people and values, rather than something that lives in the dry realm of carbon emissions and kilowatt hours. 

It seemed to me that these youth, who were addressing nearly 1,000 in the audience at the first Annual Green School National Conference, felt a very immediate need to address climate change and environmental destruction. I wondered if it’s because those dire projections that scientists predict for years not far away – 2020, 2030 – are about ultimately them and their livelihoods. Those are years when they will be graduating from school, building careers, “growing up,” raising families, and more – likely all in the face of rising sea levels, dying species, increasingly violent weather, and battles over resource depletion. This is a very scary future. It reminds me a little bit of growing up with the Cold War/nuclear holocaust bogeyman, except this one is more likely to happen.

I remember walking out of one session of this conference really envious of the integrated curriculum described by a charter school where every section is taught through the lens of caring for the planet, which seems so sane in hindsight (have you seen the South Park “Captain Hindsight” episode? I highly recommend it), and yet so revolutionary, and such a relevant way to connect kids to the point of it all. Instead of making math a line of numbers on a page and formulas to memorize, separate from the beauty of trees and music and ocean waves, it’s all part of the same planet and patterns and purpose, including humans.

The take-away I had for my role at Calvert Foundation was an inspiration to finance green schools! Also, this conference and other experiences have taught me that “green” is not a discrete topic or asset class. It’s part of the form and function of something. Things like building a school with natural light, using non-toxic materials, providing healthy air and water and physical activity for students, are all things that will improve and serve the true purpose of a school, which is above all else the education of the youth attending it. Every school built otherwise has diminished its potential returns vis-à-vis this function at the outset. There is some data emerging from the green schools movement around attendance rates and teacher retention in green schools and other interesting outcomes that measure the health and professional and education success of all those who spend their daylight hours in a school building. I also learned that green building works best when it is part of the comprehensive vision of an institution, after a few baselines (like recycling, turning off machines, energy efficient appliances, using compact fluorescents, etc).

At Calvert Foundation, we are exploring ways we can weave environmental considerations into all of our investing activities but also into our day-to-day office lives (like reminding each other to turn off computer monitors at night and instituting better recycling practices).

On the investment side, I think there is strong support among our investors and our staff that long-term reduction of poverty among communities requires increased environmental efficiency, resource conservation, reduction of our reliance on petroleum, ecosystem and biodiversity protection, water safety, etc. This is because environmental degradation and resource scarcity often have the greatest immediate impact upon impoverished communities, and it can create, exacerbate, and prolong poverty, displacement, and conflict. All those working towards community development and well being can’t afford to ignore the environmental threats and realities facing communities worldwide.

Lastly, I walked away from this conference with the sense that the potential for individual action is huge. If students can start a recycling program, or build a PV panel on the roof of their school, then we can each do little things to set the bar higher. I’m setting up a compost bin this spring, for starters using vermiculture - with worms! It’s one of the best options for a small urban household. I’m just hoping I can handle all that up-close-and-personal worm time.

Industry-wide efforts work to protect investors and microentrepreneurs

Eliza Erikson is the Chief Lending Officer at Calvert Foundation.

Eliza Erikson

I have spent almost 15 years working in emerging markets and inclusive finance, starting right after college when I worked with two microfinance institutions in Guatemala. How the industry has changed from those days when sustainability, much less profitability, was just a glimmer in our eyes! Funding for microfinance increased exponentially after the United Nations deemed 2005 the International Year of Microcredit and Dr. Muhammad Yunus and his Grameen Bank won the Nobel Peace Prize in 2006. With additional funding came exponential growth – and additional challenges.


Industry Leadership in Driving Ethical Microfinance Practices

Impact investors like Calvert Foundation face specific challenges when deciding which microfinance institutions meet our social criteria for investment. With an emphasis on ensuring that borrowers in our portfolio are practicing responsible microfinance, we must rely on various sources of information including our own data collection. In recent years funders and borrowers alike have joined to set out common principles for what constitutes ethical and responsible operations in the microfinance sector. The United Nations Principles for Responsible Investment (UNPRI) initiative has more directly targeted the microfinance sector with its recent unveiling of the Principles for Investors in Inclusive Finance (PIIF) initiative. Calvert Foundation is thrilled to announce that we are one of the 40 initial signatories to the PIIF initiative. We encourage you to review the principles more closely, which can be found here.

In addition, Calvert Foundation had an early role in supporting the principles behind the SMART Campaign, another funder coalition which aims to keep clients first in microfinance. By focusing on key issues like overindebtedness of clients, transparency in pricing, and appropriate collection practices, the SMART Campaign has laid the foundation for defining ethical business practices among microfinance institutions. We are honored to have had the opportunity to work alongside our partners on these various initiatives in responsible investment.

Going the Extra Mile – Local Currency Lending

We are also working hard to protect micro-entrepreneurs against currency risk. Until fairly recently, investors were only providing hard currency, in the form of dollars or Euros, to microfinance institutions. The majority of MFIs were turning around and lending that capital either in U.S. dollars or local currency, and absorbing the devaluation risk themselves or pushing it down to the weakest link in the chain, to the microentrepreneurs who were responsible for paying much more in local currency terms when the currency devalued. Not only was this a serious credit risk for investors, but also seemed to me a moral dilemma that social investors should help resolve. Indeed, some of us deemed it microfinance's “original sin.”

Last November, Calvert Foundation closed its first deal with Microfinance FX Solutions, or MFX Solutions, to provide a loan in Kenyan shillings to Kenyan Women’s Finance Trust (KWFT). The loan was fully hedged to the U.S. Dollar, protecting Calvert Foundation and its more than 7,500 investors from the risk that the Kenyan shilling would devalue against the dollar and KWFT would be unable to repay the loan. The loan was denominated in local currency, so that neither KWFT nor its clients would assume that same devaluation risk. It was the quintessential win-win.

In the more developed currency markets of the U.S. and Western Europe, hedging foreign exchange risk is common, widely available, and relatively cheap. Many banks are in the business. The same is not true of less liquid, developing country markets where hedging is prohibitively expensive or just plain unavailable. A group of us came together to try and help address the problem – Calvert Foundation, Calmeadow, ACCION International, Microrate, and Global Partnerships. It didn't stop us that we had little background in traditional foreign exchange derivatives. We did some research, consulted with experts, and wrote a business plan for MFX Solutions, a new social enterprise that would offer modern currency risk management to the microfinance industry. We knocked on a lot of investor doors, most of whom were challenged by the novelty of our model. Omidyar Network was brave enough to step up as a generous anchor investor, along with Triodos Bank and Incofin, two leading impact investors that were interested in using MFX's services for to hedge their own investments. I am thrilled that MFX Solutions is now a reality and has closed more than $50 million in business, helping to fund more entrepreneurs more safely in developing countries around the world.

Looking Ahead to Finance Future Innovation

As an investor, there is often a tension in wanting to support an organization that has an executing business model and is making an important impact, but that has not yet reached a sustainable financial stage; often, in support of those emerging innovators, we will invest a small amount at an earlier stage to catalyze growth and encourage additional investment. Through our Mission Plus portfolio we ensure that up to 3 percent goes to organizations like this. We think it’s our responsibility to finance not just the organizations that are the current leaders of the inclusive finance movement but the future sources of innovation that will push the industry to greater heights.

Holiday shopping? Skip long lines and stress, and purchase a Gift of Compassion instead!

With the holiday season upon us, the search for the perfect gift is on. If you haven’t found it yet, do not panic! ABC Home & Planet Foundation offers a unique holiday gift that provides the opportunity to share joy and gratitude with your loved ones.

ABC Home & Planet Foundation offers “Gifts of Compassion,” which allows you to make a fully tax deductible gift in honor of your loved one. Each Gift of Compassion is a donation to a visionary non-profit organization providing critical services to underserved communities. Each organization has been carefully chosen and screened for its transformative impact by the ABC Home & Planet Foundation. Calvert Foundation is one of those organizations, and is again participating in the Gift of Compassion Program this year.

Gift recipients receive a printed 100% post consumer recycled paper card about the gift in a one-of-a-kind silk sari pouch made in India, which can double as a lovely tree ornament or sachet for jewelry.

What greater gift can be given to a loved one than offering a safe haven for an orphaned child? A birth kit for a rural mother in Nepal? Malaria nets for pregnant women in Africa? New sheets for the formerly homeless in New York? Literacy lessons for an Afghan girl? Make this holiday season memorable by inspiring meaningful change in the world. Gifts of Compassion are available for purchase at abchomeandplanet.org.

Sister Corinne Florek - a True Leader of the Impact Investment Industry

Carrie Hutchison McGarry manages marketing and communications for Calvert Foundation.

Earlier this month, I had the luck and privilege to meet Sister Corinne Florek at Opportunity Finance Network’s annual conference, where she was honored as the recipient of the 2010 Ned Gramlich Lifetime Achievement Award. Sister Corinne is whip smart and lots of fun, though her gentle brown eyes, calm demeanor, and hint of a soft Midwestern accent from her days in Michigan will initially fool you.

In the world of investing, Sister Corinne is a maverick.

In the 1960s, a time when women – both in their faith and in their day-to-day lives – were exploring new roles and seeking new freedoms and opportunities, Sister Corinne and her fellow sisters were facing a dilemma. They saw a real need to put money toward the care of their elder sisters, who were retired and in need of support. Yet, as nuns, many of them felt that their vow to poverty required them to give their money away to those in their community who were suffering. Sister Corinne saw a third option, which is how her journey began, a journey – as she said at the conference – that will continue on long after she does. 

Sister Corinne at the OFN conference

Sister Corinne saw that she and her fellow sisters could pool their money and use it to invest – but not in companies. Instead, they invested their money in community organizations and other non-profits that were helping low-income families and fighting poverty every day, but that could also pay back inexpensive loans with interest. Sometimes there was no interest payment. And sometimes the principal didn’t come back. But on average, this experiment paid off, leaving money to care for the retired nuns in need of assistance, and – while invested – providing much-needed support for people living in underserved communities.


Sister Corinne went on to bring in other groups and other investors, in order to create a network that had a more powerful voice as an investor. She involved the Women Religious, which is comprised of Catholic women from congregations around the United States, as well as many other partners along the way.

Since the conference was hosted this year in lovely (I did leave my heart there) San Francisco, Sister Corinne was able to reach out to the many women in that area that had been part of the investment work she does. Many came, and during her acceptance speech, she called them up on the stage so that they might look out into the audience and see the people who did the work they supported through their investments. She asked organizations who received investment from organizations she works with – or any faith-based investor – to stand up. I was very proud to do so on behalf of Calvert Foundation, which has worked with faith-based investors of multiple denominations for many years.

Many, even in our small (yet growing) impact investment industry, know little of this story. And many more – even those at the organizations receiving investment dollars from groups run and advised by Sister Corinne – fail to understand that these investments are funded solely by the nuns (not the church), and come out of their modest pay, as well as bake sales and other fundraisers.

At Calvert Foundation, we often talk about how innovative we were by starting the work that we do – bringing the opportunity for everyday investors to help low-income communities through investment – over 15 years ago now. But it became clear to me in meeting Sister Corinne and hearing her story that there were inklings of this idea long before Calvert Foundation was even on the radar.

I was truly touched by Corinne’s work, but even more so by her energy and her spirit. Having been raised in the Christian church, I have always found great comfort in the quiet strength that emanates from the women of a congregation. Sister Corinne is someone guided by faith, but driven by her own amazing gifts – which, as evidenced by her success, she so freely shares with those around her. OFN honored her at the conference, but I hope to share her story here so that others know about her work.

Congratulations – and thank you – Sister Corinne!

A View of Post-quake Haiti

A few months ago, Calvert Foundation Sr. Associate Patrick Davis took a trip to Haiti to volunteer for a friend's nonprofit, United Schools of Haiti. Aside from visiting Calvert Foundation borrower Fonkoze in Port-au-Prince, Patrick spent most of his time in Haiti helping to build a school in the countryside town of Fond des Blancs. Take a view into a post-quake Haiti through his eyes in his post on our blog. Patrick also made a video slideshow of the photos he took on his trip that we've posted to our YouTube site.

Last year – before the massive earthquake in Port-au-Prince put Haiti in the forefront of everyone’s minds – I began doing some volunteer work with a friend’s nonprofit organization, United Schools of Haiti. His group was planning a trip to Haiti in the summer of 2010 to do some construction work on a school and to network with local officials to explore new opportunities. When he asked me if I’d like to join them on the trip, I was thrilled. I truly enjoy the opportunity to have an impact in the work that I do at Calvert Foundation, but as an intermediary, it’s rare that I get the chance to see the fruits of my labor in a very direct way. As a result, this trip to Haiti was very appealing to me. Service has always been an important component in my life, and this would be an ideal way to get my hands dirty and experience a new culture.

Patrick Davis (pictured upper right) in Haiti.

Then came January 12th, 2010. The earthquake. This erased any uncertainty about my decision to go to Haiti. I had to go. After seeing the news reports and reading the stories, I felt compelled to see firsthand the state of things in a country that had dealt with a chronic history of suffering – be it a result of natural or political disaster. I hoped to accomplish a few things on my trip. First, I hoped to be a passionate and energetic representative of my country. Many times in my travels in the developing world, I’ve noticed that being from the United States isn’t exactly an asset. This has always been a chip on my shoulder in a way, and compelled me to work harder, be more compassionate, and dig deeper when I’ve been witness to the need in the developing world. Second, I hoped to be able to get some work done. Through United Schools of Haiti, we were supporting the construction of an elementary school in Fond des Blancs, and I wanted to develop some connections more broadly that could benefit the Haitian school community. Third, I hoped to reinvigorate my own sense of commitment to serving humanity. Though I’ve listed it last, this was probably the most important reason for my trip. I believe it’s important for all of us who live a life of relative privilege to seize opportunities that force us to confront that state of privilege. It’s not always easy to remember that the majority of the world lives without clean water, electricity, and food security. I hoped to be able to come home from my journey and share meaningful stories, pictures, and experiences with friends and family. Reflecting on these experiences would undoubtedly lead to discussions about what we can do. And there is so much we can do.

In August, I went to Haiti. During my time there, I found myself constantly vacillating between poignant moments of hope and despair. Arriving in Port-au-Prince, I was struck by the lack of progress with the cleanup. Entire city blocks were still nothing more than rubble. I saw countless families living in tents on top of – or outside of – what was left of their homes. The majority of the population that had not left Port-au-Prince was crammed into tiny shacks with blue USAID tarps to keep the rain out. We visited our guide’s house in the countryside just outside of Port-au-Prince, which was reduced to rubble as a result of the after shocks. He had lost his home and his sister in the quake. The lead architect for our school project lost his wife. Children in our school community lost their parents. Nearly every adult and child that I interviewed had lost a family member. Of the estimated three million people living in Port-au-Prince at the time of the quake, 300,000 died. This was made evident in the storefronts of funeral homes – sadly some of the only thriving businesses in the capital city. The scale of the disaster was almost incomprehensible, but at the same time, completely visible. During my entire stay in Port-au-Prince, I saw just one government bulldozer removing rubble. In contrast, I saw many people with sticks and shovels, digging through the rubble to find anything of value that they might be able to sell for a little income. It’s still unclear to me how the population that remains in Port-au-Prince is able to survive, but this speaks to the incredible resilience of the people and the human spirit.

During my stay I began to understand a little bit more about how necessity breeds innovation and entrepreneurism. Everyone, everywhere seemed to be selling something. When our group badly blew out a tire in the Champs-de-Mars district, we were greeted at the side of the road by a few men who repaired the tire in a matter of minutes. They used a simple heating mechanism that I hadn’t seen before to rework the rubber in the tire. I laughed to myself thinking about a recent experience back home when I had a miniscule gash in a tire, and of course, it was “too large to repair” so I was forced to buy a completely new one. No chance our friends in Haiti would have discarded my tire. At the same tire fix-it stand, I noticed a few men getting haircuts. In the time it took for a tire repair the men at the stand realized they could offer haircuts as well – truly an entrepreneurial vibe.

In the countryside near our school project, I noticed the same resourcefulness and creative thinking. Of course there was no public water system, and for that matter, no infrastructure whatsoever – only dirt roads and houses built by hand-mixed concrete. Nearly all of the houses I visited in the community had their own rainwater harvesting systems. Gutter systems led from the roof to a large, dug out cistern, which collected water each time it rained. This water was used for cooking, drinking, and washing, among other things. Due to the absence of industry and the pollution that comes with it, the pure rainwater was a valuable asset that the community had learned to harness over time. Many households had saved up to buy one solar panel, which they used to light their houses at night. In fact, besides the few motorbikes and the intermittent production of charcoal, I would guess that the countryside community was almost completely carbon neutral.

Whereas the chaos and enormity of Port-au-Prince made thinking about opportunities for development quite overwhelming, it was easy to see how some simple training and technical assistance could go a long way in the countryside. I hope that Haiti continues to deurbanize as a result of the earthquake. I believe there is a great possibility for strong, sustainable, self-reliant communities to emerge and prosper outside of the over-burdened capital. This phenomenon is happening as we speak – and it may very well be the most direct path to better outcomes in the future for Haiti’s people.

Since I’ve returned home from my trip, I’m wrestling with ideas about how I can be of service to Fond des Blancs and the countryside community that welcomed me with such open arms. In the short term, I’m helping to sponsor a scholarship for a student who will be attending school in the fall. I’m also continuing to work with a talented Haitian entrepreneur who has dreams of creating a public health radio station for the community, opening up an English-training center, and organizing classes to teach Haitians about rainwater drip irrigation and micro-farming.

If you’re interested in hearing more about my experience in Haiti, please check back on our blog in the coming weeks, where I’ll share more stories and anecdotes about the challenges and opportunities I observed on my trip.

Calvert Foundation Receives Top Honor for “Innovative Social Impact Investing"

While impact investing may often be looked at as direct means to an end, the Calvert Foundation has re-routed the investment approach by effectively promoting innovative social impact investing tools to disadvantaged communities.

On Tuesday, October 26th, Calvert Foundation received Top Honor for “Innovative Social Impact Investing." This award was an amazing accomplishment for us, as our fantastic microfinance borrowers have provided hand ups, not hand outs, and our investors have received a return upon doing so. This award was part of the Investment & Innovation in Microfinance conference, which continued through Wednesday, October 27th.
 
Art Stevens, Vice President of Sales and Marketing, accepted the award on behalf of Calvert Foundation with an acknowledgement of the growth of retail investors in this sector and a nod to the wonderful microfinance institutions we work with, some of which were in the room when we accepted the award.

Interim President and CEO, Lisa Hall was pleased to receive this award: "We are thrilled to be recognized our work in this area. Fifteen years ago, we became pioneers in bringing everyday people the opportunity to invest in microfinance. Now we see many others adopting this model, and more and more investors coming into the space. However, we certainly wouldn’t be where we are today without the fantastic microfinance borrowers in our portfolio doing meaningful, impactful work."

The panel of judges was composed of experienced microfinance experts, including, Monica Brand, Principal Director, Frontier Investments, ACCION International; Daniel Dax, General Manager, LuxFlag; George Conard, Executive Director, Technology for Microfinance Grameen Foundation; Marten Leijon, Executive Director, The MIX; David Satterthwaite, Senior Global MicroInsurance Officer, Oxfam America; and Joan Trant, Executive Director, IAMFI.

With such an esteemed set of industry leaders and microfinance experts choosing us for this award, it was a true honor to be the recognized for our innovative social impact investing efforts.

Mile High Actualizes Goals at Great Lengths

Sales Manager, Justin Conway, just recently visited Calvert Foundation borrower Mile High Community Loan Fund. What Justin saw in the communities of Colorado was an illustration of Calvert Foundation borrowers putting investors' capital to work to achieve their mission. Mile High’s current efforts have alleviated the many obstacles that low income communities often face by providing affordable housing and facilities.



Credit: Justin Conway

 I was in Colorado last week for some meetings and stopped in to see how Calvert Foundation borrower Mile High Community Loan Fund is putting our investors' capital to work. Mile High focuses on providing affordable housing and facilities for low-income communities in Colorado, and is headed by community development expert (and excellent tour guide) Jeff Seifried.

We recently highlighted Mile High's work with Church in the City in our Annual Report, and I have seen the renovation of the Church's historic building over the past year, as the good friends I stay with when I'm in Denver live right across the street. It was great to now meet the folks behind the doors of this economically and ethnically diverse congregation, and to see firsthand all of the critical services they provide to homeless and youth populations.

In addition to visiting some of their affordable housing projects, other highlights of my visit included CHARG Resource Center and Sisters of Color United for Education. CHARG Resource Center is a mental health clinic with a unique model for empowering adults with mental disabilities. Sisters of Color United for Education is a nonprofit facility providing community health services to Colorado's Latino population.

Calvert Foundation is proud to support Mile High's work in Colorado.

Best,

Justin Conway

This is just one example of the many successes that occur daily all due to the unwavering dedication and hard work of Calvert Foundation's borrowers.