One Acre Fund, a nonprofit that supplies African smallholder farmers with the agricultural tools and knowledge they need to lift themselves out of hunger and poverty, has grown exponentially in less than 10 years — now serving 300,000 farm families from only 120 in 2006. Its operations are 74 percent financially sustainable, which means the organization relies much less on donor dollars and philanthropic contributions than it does on its own steady stream of income.
One Acre Fund’s genesis is similar to those of many other social enterprises. In 2006, Andrew Youn — then an MBA student at Northwestern University’s Kellogg School of Management — founded the organization after visiting rural Kenya and seeing the glaring income gap between farmers who used productive farming techniques and those who did not. Youn then decided to team up with classmate Matthew Forti to devise a business plan that would make agriculture services and products available to the poorest subsistence farmers — without giving them as handouts. And as is the case with most startups, they tapped into their own personal and professional networks to generate the seed capital they needed to launch.
Having started with just $77,000, One Acre Fund is projected to be a $58 million organization by the end of 2015. And while the organization is also backed by some donor funding, especially for its innovation and research work, its scalability and financial sustainability are largely attributed to its unique operating model, which runs more like a private sector company than a traditional nonprofit.
One Acre Fund’s growth story can be traced to its highly standardized and structured model based on easily replicated units, which has helped the social business scale rapidly and expand impact. As market-based approaches to development gain traction, the One Acre Fund model holds several practical lessons for like minded organizations pursuing social impact, scale and financial sustainability.
Liana is a Manila-based reporter at Devex focusing on education, development finance and public-private partnerships and contributing a wide range of content featured in the Development Insider, Money Matters and Doing Good newsletters. She draws from her experience in business reporting and advertising to generate coverage that is engaging, insightful and relevant to the Devex community.
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