Deepening Inclusion Through an Intersectional Lens
Global Partnerships (GP) is an impact-first fund manager dedicated to expanding opportunity for people living in poverty. Since GP’s founding in 1994 and the launch of its first fund in 2005, GP has managed eight debt funds and one early-stage social venture fund, impacting an estimated 25.5 million lives.
Tara Murphy Forde is GP’s Managing Director of Capital and Impact. As part of GenderSmart’s efforts to highlight JEDI investment journeys, Tara shares how Global Partnerships’ mission and impact-first strategy have guided the organisation’s commitment to inclusion; and how their approach has evolved over time to consider not only poverty, but also gender, geography, race, and ethnicity as intersectional drivers of exclusion.
Why impact-first, what does it mean, and how does it shape Global Partnerships’ approach to inclusion?
Impact-first means prioritising the impact you look to enable and designing your investments accordingly. It requires a true valuing of impact, and an understanding that deep and inclusive impact may require below-market rate returns. At Global Partnerships, our funds raise and deploy impact-first capital because we aim to expand opportunity for people living in developing economies. While return-first approaches can be successful in these markets, we find that social enterprises need lower-cost capital to focus on serving and creating value for those marginalised by poverty as well as other aspects of identity.
How has your approach to deepening inclusion evolved over time, and how did you come to incorporate a gender lens into your investment strategy?
Given our mission, poverty was our entry point into thinking about inclusion. We set out to understand the context-specific and multi-dimensional nature of poverty in the countries where we invest, while developing measurement and underwriting practices that enable us to invest in social enterprises that are successfully scaling outreach to those living under the $3.20 and $5.50/person/day/PPP poverty lines. Given correlations between poverty, gender, and geography, we found that many deeply inclusive social enterprises were also intentionally targeting women and rural populations.
“we were gaining a better understanding of what constitutes strong inclusion, but we needed additional data to understand whether and how women truly benefited from the products and services delivered.”
With the learnings from those enterprises, we created women- and rural-centred investment initiatives that crystallised not only the outcomes we look to enable through our investments, but for whom. From there we began gaining pattern recognition on best practices, particularly in terms of gender-informed product and service design. This inspired us to apply a gender lens across our portfolio and systemise our underwriting of gender-informed enterprise practices.
Through these efforts, we were gaining a better understanding of what constitutes strong inclusion, but we needed additional data to understand whether and how women truly benefited from the products and services delivered. This is where our use of 60 Decibels’ mobile-based Lean Data (SM) surveys comes in. Over the past three years we have heard from more than 5,000 clients, and gender-disaggregated data have sharpened our ability to identify and invest in organisations that not only reach but create value for and through women living in poverty.
How did Global Partnerships come to think about race and ethnicity as part of your efforts to deepen inclusion?
The murder of George Floyd and the disproportionate effects of the COVID-19 pandemic on African American, Native and LatinX communities here in the United States served as powerful reminders of the pervasive and deadly effects of systemic racism. Committed to do our part, we identified several immediate areas for action, one of which was to launch research to broaden our investment strategy to deepen inclusion for people marginalised not only by poverty, gender, or geography - but also by race or ethnicity.
In the first phase of the research, we explored the intersection of poverty, race, and ethnicity in each of the more than 20 countries where GP’s funds invest. Taking a country-by-country approach, we investigated the nature and prevalence of key dimensions of racial and ethnic marginalisation in each market and sought to understand how those dynamics intersect with multidimensional poverty. We aimed to anchor findings and resulting actions in country-specific colonial histories and cultural contexts.
Equipped with the research findings and a set of guiding questions, our regional teams began engaging in dialogue with current and prospective partners. As with gender, we found that social enterprise approaches exist on a continuum: from mandated (those that explicitly aim to serve clients marginalised by race or ethnicity), to intentional (those that recognise race or ethnicity as key dimensions of marginalisation for their target segments), to neutral (those that do not articulate race or ethnicity as part of their targeting strategy). Through these conversations we aimed to identify and learn from mandated and intentional enterprises and apply those learnings to our pipeline development and underwriting practices.
What are some of the key learnings that have emerged from your research and dialogues, and how are they informing your investment practices?
Importantly, the research reinforced our understanding of race and ethnicity as constructs with powerful real-world implications. With complex colonial, cultural, and political histories shaping the definition and treatment of different groups, it is critical to enter investment relationships with both awareness and humility, particularly as international fund managers with capital sources highly concentrated in the global North.
“With complex colonial, cultural, and political histories shaping the definition and treatment of different groups, it is critical to enter investment relationships with both awareness and humility, particularly as international fund managers with capital sources highly concentrated in the global North.”
We found that in some countries, such as Guatemala, where indigenous groups make up a large portion of the population and where their rights have been part of the political and social agenda, there is national data on the intersection of poverty and indigeneity. Social enterprises operating in that context are more likely to be mandated and/or intentional about their outreach; however, given enduring discrimination, they still tend to rely on proxy data (such as a client’s geographic location or language) versus asking the client to self-identify. In other countries, such as Rwanda, it is sensitive or even illegal to ask someone’s tribal identity and therefore very few, if any, social enterprises articulate ethnicity as part of their targeting strategy.
In either case, there are challenges to using data on race and ethnicity as an entry point – especially at the end-client level, which is where GP’s mission is focused. As with poverty, gender, and geography, we strive to measure and map progress in reaching and enabling impact for those further marginalised by race and ethnicity - and at this point we see an inquiry-led, intersectional approach as the strongest path to progress.
Can you elaborate on that approach and what role it plays in your investment strategy?
Diagram 1: GP’s Dimensions of Exclusion
Today we approach impact underwriting with a more nuanced and contextual understanding of the multi-faceted drivers of exclusion. We begin with inquiry, asking questions such as “what marginalised communities/groups does your enterprise aim to serve?” and “how do you take the needs, preferences, and behaviours of those marginalised communities/groups into account when designing your products and services?” With poverty outreach as an initial screening criterion, we find that most social enterprises in our portfolio and pipeline articulate a mandate or intentionality on one or more additional dimensions of exclusion (see diagram), and they tend to be stronger on data capture on those dimensions. We take each enterprise’s identified target segment as a starting point for dialogue and data capture, but we don’t stop there. Applying an intersectional lens, we ask about their approach to serving those further marginalised by additional aspects of identity, using country-specific context to guide our inquiry.
“Our aim in this practice is not to ‘penalise’ social enterprises that are not, or are not yet, intentional on the identified aspects of marginalisation, but rather to enable and incentivise deeper inclusion”
For example, a Bolivian microfinance institution in our Women-Centered Finance with Education initiative may articulate a focus on female micro entrepreneurs living below $5.50/person/day/PPP, in which case we would dig deeper to understand their objectives and practices in terms of serving rural communities, and racial/ethnic minorities. Or a Zambian agricultural enterprise in our Smallholder Farmer Market Access initiative may articulate a focus on rural producers living under $3.20/person/day/PPP, in which case we would prompt a conversation to understand their objectives and practices in terms of serving women and ethnic minorities.
Our aim in this practice is not to ‘penalise’ social enterprises that are not, or are not yet, intentional on the identified aspects of marginalisation, but rather to enable and incentivise deeper inclusion by providing lower-cost capital to the enterprises that are successfully reaching and creating value for those experiencing multifaceted exclusion.
Photo Courtesy of Friendship Bridge