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Fighting East African Poverty with a Profit

On November 2, 2007, Yale and Kellog Alumnus, Andrew Youn, discussed to the Harvard Business School community the founding of his One Acre Fund, a social enterprise founded two years ago that won the 2006 Stanford and Yale Social Business Plan Competitive foundation grants. Holding the humanitarian goal of fighting chronic hunger in Africa at the root of the problem, the non-profit organization works with the poorest of the poor and focuses on the agriculture sector in Africa, providing small investment packages to the farm families in order to permanently enable them to grow out of hunger.

The Primary Health Problem in Africa
According to the World Health Report 2002, “hunger is the number one killer of African children, more than any single disease condition. The simple lack of food, which weakens the immune system, plays a role in more than half of childhood deaths.” Farmers make up the majority of the world’s hungry population. The primary health problem in Africa is due to the lack of food: One in six children dies before the age of five years and nearly half of the remaining children are physically stunted.

A Holistic and Permanent Solution
One Acre Fund’s holistic market bundles provides basic medicines, food security of small amounts of seed and fertilizer on credit, farming education on how to grow four times more food within six months and ten times more food value within three years, and market access to permanently eradicate hunger. Thus, this market bundle contains all the contents required for farmers to plant, grow, and sell new crops in order to multiply the value of their harvest and link them with markets, creating a permanent solution to the primary health problem in Africa.

Components of the Market Bundle that Provides a Permanent Solution
1. Empowerment of local groups: Since the majority of farming in Kenya is carried out by women, One Acre Fund works with existing women’s self-help groups.

2. Farm Education: Provided by a field officer of One Acre Fund, farm education shares advice of professional agronomists to farmers, such as how to grow higher-value crops that hold ten times the profit potential of current crops

3. Capital: Improving on the old food kernels used for seed and the poorly-treated soil that was stripped of nutrients due to decades of poor farming management, capital is provided to farmers in the form of environmentally-sensitive planting materials and fertilizer.

4. Output markets: With the understanding that current members are unable to sell crops surplus, One Acre Fund makes it possible for farmers to secure cash for their crops by acting as a bulk-selling agent.

Milestones
The target goal of One Acre Fund in the next three years is to serve 30,000 farm families, to increase farm income by an average of 100%, and to reach full cost-recovery on field programs. For the foundational first year of involvement, the cost of One Acre Fund’s current investment package is $240 per family of five members. The target goal in three years is to hit $0 per family.

Quality Over Quantity
One Acre Fund consistently measures the quality of its results, and resists simply racking up large client numbers. Since client numbers are easy to measure, too many non-profit organizations simply report the number of clients served, without any idea of the quality of its impact. As a result, the actual impact of these organizations, according to Youn, is dubious. From day one, One Acre Fund has used impact measurement to guide every step of its operations, thus, never losing sight of its mission of ending poverty.

How to Use MBA Skills to Fight Poverty
With style, zeal, and success, Youn is one of the very few MBAs who left the corporate world to dive directly into starting his own social enterprise. He could have naturally applied his Yale degree and Kellog MBA into the corporate world. However, Youn held a more ambitious goal with the founding of his One Acre Fund. Solid business executions are crucial to the recipe of success for humanitarian organizations. Many people and organizations that care about the poor in the world struggle with turning their idealistic ideas into reality. We must think at scale. According to Youn, “There are far too many examples of non-profit organizations that hold admirable goals; however, I wish that these organizations would consider scaling their impact to more people.” There is an ocean of need, and it is impossible to address this need with an eye-dropper. In order to add value to the customers of One Acre Fund, professional management, excellent human resource systems, solid financial systems, marketing and logistics are required. Full-time and summer positions in East Africa are available with One Acre Fund. During the summer 2007, interns from Stanford GSB, Yale SOM, and Kellogg served in Kenya.

Due to its success, One Acre Fund can serve as a model for Harvard Business Schools who aspire to start their own social enterprise organizations. It is an organization that empowers the poor. It does not simply fill the food bowls of the poor for one day. Instead, it invests in poor people to generate permanent changes in their productivity; thus, providing the poor with the tools required to pull themselves out of poverty and providing a far more lasting solution than bombing aid on them.

Further information on One Acre Fund: //www.oneacrefund.org

The One Acre Fund event was hosted by Joel Segre (MBA’09) and the “International Business and Development Club” (IBDC) at the Harvard Business School.

December 10, 2007
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