Return on investment: a cause worth celebrating
11 Jul 2018
Karandire Women's Self-Help Group | Embu County, Kenya
Speed, scale, efficiency – Hand in Hand’s businesslike approach to development goes into everything we do. Until now, however, that same approach hasn’t always come out in the way we report our progress to donors.
That’s why we recently undertook a major multi-country audit to improve our reporting and establish our return on investment (ROI): the amount our members earn per year for every dollar donated. Conducted on a project-by-project basis across some of our biggest completed programmes to date, the exercise, which we plan to refine during 2018-’19, turned up some promising results.
Kenya
Project: Enterprise Development for Rural Families in Kenya, funded by Sida
US $2.3 million
Total project expenditure
US $2.78 million
Total annual income generated by enterprises
21 percent
Return on investment
Afghanistan
Projects: Sustainable Livelihoods Programme, funded by Hand in Hand International | Supporting Rural Entrepreneurship Through Women’s Socio-economic Empowerment, funded by the European Union
US $2.14 million
Total project expenditure
US $3.12 million
Total annual income generated by enterprises
46 percent
Return on investment
To put those figures in context, consider that the S&P 500 has generated annualised returns of 9.7 percent, including dividends, since 1965. Or, to pick a more ambitious comparison, that Berkshire Hathaway’s average annual stock price gain under Warren Buffet, the world’s most successful investor, is circa 20 percent.
With an ROI of 21 percent to 46 percent, depending on location, Hand in Hand’s grassroots entrepreneurs beat them all. Not bad for some of the poorest, least educated women on Earth.
