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Why We Invest in Village Enterprise: A Journey Towards Transformative Impact

In 2017 we took our kids on a trip to East Africa. We had hoped that they would see their privilege and further understand why their parents care so deeply about being generous. While that did happen, it truly changed all of our perspectives on hope, possibilities and what happens when someone is given an opportunity. We sat with a savings group as they shared what they were saving for and celebrated their neighbors’ businesses and achievements. They sang songs of joy and were proud of the agency they had over their futures. It was “perspective changing” to say the least.


In the world of social impact and philanthropy, Village Enterprise emerges as a beacon of hope and effectiveness. Since 2014, the Delta Fund has closely collaborated with Village Enterprise, and we're continually inspired by their transformative approach to alleviating extreme poverty.

Village Enterprise is an impact-driven organization with a proven poverty graduation model; its evidence-based approach is informed by third party assessments, randomized control trials, and data-driven M&E; it’s a thought leader in the push for results-based financing and is committed to transforming global development itself.


Unprecedented Impact Amidst Global Challenges

The recent achievements of Village Enterprise are nothing short of extraordinary. In the fiscal year 2023, they impacted over 200,000 lives, but this success extends beyond numbers. Their ability to tangibly improve essentials like nutrition, education, and healthcare for families in rural Africa means that those 200,000 lives will be a generational change for whole villages and regions. They achieved these remarkable results despite global challenges, including the COVID-19 pandemic, showcasing their resilience and dedication​​.


A Sustainable Solution in a Time of Rising Poverty

The increase in extreme poverty, exacerbated by climate change, economic shocks, and global unrest leading to increasing amounts of people being displaced from their homes, presents a daunting challenge. Yet, Village Enterprise's approach offers a ray of hope. By empowering the most vulnerable - women, refugees, and youth - with resources to establish climate-smart businesses and savings groups, they've created a sustainable model. This strategy has led to significant improvements in income, savings, and overall livelihood, enabling communities to adapt to and mitigate the impacts of climate change while breaking generational cycles of poverty​​.


Delta Fund’s Partnership with Village Enterprise

In addition to funding the work of Village Enterprise through grants, we participated in an experiment to test if focusing more on impact rather than implementing their program would change the outcomes - for both the organization and their program participants. By investing alongside other investors Village Enterprise was able to adapt to challenges (like a global pandemic!) and develop strategies to recognize more immediately when an entrepreneur needed more guidance or support. Using the human centered design process they developed dashboards for their business mentors to give them insight into the steps an entrepreneur was taking to develop a successful business. By investing in a team to create digital solutions such as this and then equipping their mentors with tablets to have this data at their fingertips, they were able to increase the success of these businesses as well as make them more resilient to shocks and challenges. The investors were then paid back with interest based on these excellent results by the US and British governments as well as another anonymous funder. While there were learnings about how to improve upon the process, the overall theory of paying for impact rather than paying for a program to be implemented (which is how the vast majority of restricted funding in philanthropy is allocated) proved to be a wild success.


Demonstrating Long-Term Impact and Building Resilience

Village Enterprise’s cost-effectiveness is a real selling point, as is its scalable model: in fact, its proven poverty graduation model is being embedded into government social protection programs across East Africa as they partner to scale their ability to end extreme poverty - a true testament to their desire to end extreme poverty.

Village Enterprise's impact extends far beyond short-term aid. Recent studies, including a five-year longitudinal study and an external randomized controlled trial, have confirmed the lasting effect of their model. Entrepreneurs supported by Village Enterprise saw an 83% increase in consumption and an incredible 933% increase in savings over five years. These figures are especially remarkable considering they were achieved amidst the global upheaval caused by the COVID-19 pandemic. This data underscores the resilience and sustainability of the Village Enterprise model in the face of global instabilities​​. 

After 5 years, 70% of their businesses continue to operate (a statistic that would be envied by most developed countries) and a longitudinal study shows the implementation of a powerful adaptive management system, a streamlined and more interactive training curriculum, and the use of digital technologies enables more impact through these efficiencies.

The innovative approach of Village Enterprise has not gone unnoticed. They are the only nonprofit globally to be acknowledged at the highest level by ten respected organizations. This recognition underscores the effectiveness and uniqueness of their work in the sector​​.


Some impact highlights:

 

  • A one-time input of $800 launches a new business for income generation.

  • Return on Investment: every $1 invested generates $5+ in lifetime income.

  • Independently Assessed: randomized control trials show their programs work.

  • Longitudinal study: sustainable impact is achieved through the Village Enteprise program based on this five year study

  • Awards & Ratings: an exceptional NGO with the highest ratings and awards; the only nonprofit to receive top honors from all of the following: The Life You Can Save, Founder’s Pledge, Larsen Lam, Drucker Prize finalist and Impact Matters.

 

Notable Developments in 2023 alone:

 

 

  • Expansion into Ethiopia: They launched operations in Ethiopia, with their DREAMS for Refugees partnership with Mercy Corps that aims to start 1,200 businesses this year and 3,600 businesses overall (funding: IKEA Foundation, Conrad Hilton Foundation).

 

  • Scaling via government partnerships: They are integrating their poverty graduation model into government social protection programs in Kenya and Rwanda.

 

 

 

  • Global recognition: Fast Company awarded their World Changing Ideas Award for the groundbreaking DREAMS for Refugees model they built with Mercy Corps.


Our Vision and Commitment

At the Delta Fund, our commitment to Village Enterprise is rooted in their proven ability to create sustainable and impactful change with a team that is mission driven. We believe wholeheartedly in their mission, methodology, and the measurable outcomes they achieve. Investing in Village Enterprise is an investment in a future where extreme poverty is eliminated.

While on a recent trip to Rwanda I was told about a tree with grass growing beneath it. The villagers were so proud of this tree because in the past it was where the villagers hung out lamenting that they had nothing to do. Now they are all so busy running their enterprises, sending their kids to school and having the mindset of looking for further opportunities that there is grass growing beneath the tree. This was a beautiful picture of hope and life to me.


Join Us in This Mission

We extend an invitation for you to join us in supporting Village Enterprise. Together, we can make a significant impact in the lives of those most in need. With your support, we can move closer to a future where every individual has the opportunity to live a life free from extreme poverty. They are raising for their Catalyst Campaign. You can learn more here but we are also happy to jump on a call to talk more about Village Enterprise. As enthusiastic supporters it’s one of our favorite things to share with other funders!

Poverty is not necessary or just. Together, let's build a world where extreme poverty is a memory, not a reality. 


Additional Background Resources:

 


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