Foundations for Scale 2018 ANNUAL REPORT

Upendo Malata, Tanzania OPENING LETTER

Greetings from One Acre Fund! I’m happy to share our 2018 annual report, where we take stock of the last year and our impact for hard-working farmers. In 2018, we served more farm families than ever before: over 800,000 farmers and an estimated 3.2 million children. We’re now within striking distance of serving 1 million clients by 2020. We’re also con- tinuing to deliver impact as we grow: clients in almost all countries achieved substantially higher yields than similar farmers not working with One Acre Fund. This year also underscored the challenges of smallholder agriculture, an inherently risky profession. In several countries, our customers faced leaner harvests due to erratic rainfall and pests. In Kenya and Rwanda, where harvests were strong, surplus maize and export restrictions lowered maize prices, and farmer profits. While we cannot control the weather, we can build farmers’ resilience to these shocks. Coming out of this year, we’re deepening our commitment to crop diversification. We’ll continue to invest in maize, as it remains the top crop our customers want. At the same time, we’ll also offer a broader range of crops to help farmers spread their bets. Crop diversification makes both environmental and economic sense. Building farmer resilience to changing weather is just one example of how we’re thinking more broadly about farmer quality of life and prosperity in the long-term. We know that delivering monetary impact—the market value of what a farm produces each season—will remain critical. At the same time, we’re asking how we can equip farmers to accumulate assets like trees and livestock, diversify their families’ diets, and enrich their soil for future generations. This is not the work of one year, but of consistent innovation and quality execution, year after year after year. There is incredible power in taking a long-term view of impact. We have an important responsibility to more than 800,000 families, and we care deeply about their success for multiple decades. In farming, there are always going to be some lean years mixed in with the good ones. But by building for the long term we can eventually help millions of farm families manage risks, plan for the future, and build enduring paths to prosperity.

Together in service,

ANDREW YOUN Executive Director, One Acre Fund

2018 Governing Board Members

Joel Ackerman Matt Forti Fred Ogana Ada Osakwe Chief Financial Officer Managing Director Managing Partner Founder & Chief Executive DaVita Inc. One Acre Fund USA East Africa Market Agrolay Ventures Development Associates Ltd Karl Hofmann James Mwangi Andrew Youn President and CEO Executive Director Rebecca Onie Senior Partner/ Population Services International The Dalberg Group Co-founder and CEO Executive Director/ William Asiko Health Leads Co-founder Executive Director One Acre Fund Grow Africa WHAT WE DO

Founded in 2006, One Acre Fund is a nonprofit social enter- prise that supplies smallholder farmers with the financing and training they need to build permanent pathways to prosperity. Through a complete bundle of services offered on credit, the organization delivers high-quality farm inputs to the remote areas where farmers live, providing them with training on agricultural techniques proven to increase crop yields, and educates them on how to maximize the income from their harvests. We currently serve more than 800,000 smallholder farmers in Kenya, Rwanda, Burundi, Tanzania, Uganda, Malawi, and Zambia.

Donathile Nyirahabiyambere, Rwanda

FERTILIZER

SEED

FINANCING DISTRIBUTION TRAINING MARKET FACILITATION for seed and fertilizer of farm inputs on agricultural techniques to maximize harvest profits

Other Areas of Work

Government Services Partnerships Impact Ventures We’re working with governments We’re building partnerships with We’re experimenting with new, across Eastern and Southern other like-minded organizations to rapidly scalable channels to reach Africa to create impact that increase support for smallholders farmers with impactful products often goes beyond the farmers worldwide. In the microfinance and services, including short-term we serve directly. In Rwanda, for industry, we’re a founding campaigns to adopt trees and instance, we’ve partnered with the member of Propagate, a coalition hybrid seed, and new technologies government to train agricultural that’s encouraging financial such as solar home systems that extension agents who are delivering service providers to offer more use pay-as-you-go technology. services across the country. and better services to farmers. Farmer Group, Tanzania

2018 HIGHLIGHTS In 2018, we expanded our impact through both the reach of new products, and by launching new pilot operations in Nigeria and India.

809,800 Farmers Served 2 New Pilots 190,000 Solar Lights We served more than 800,000 Our Nigeria and India pilots delivered Distributed farmers across seven countries in inputs to clients for the first time. Solar lights bring renewable 2018, and we’re on our way to serving Both countries are home to some energy to our clients’ homes and over 1 million farmers by 2020. of the largest populations of provide a healthy alternative smallholders in the world. to kerosene lamps.

110,000 Chickens Delivered 10,000,000 Trees Planted 300 Tons of Seed We distributed chickens to clients Our clients planted over 10 million With the government of Rwanda, across Kenya and Rwanda, helping surviving trees last year, allowing them we laid the groundwork to boost to boost their incomes (through to invest in their futures while domestic seed production, and plan the sale of eggs and birds) and helping mitigate the effects of to produce at least 300 tons of improve household nutrition. climate change. hybrid maize seed by 2019. SCALE AND SUSTAINABILITY

One Acre Fund continues to grow, taking advantage of economies of scale in order to drive down our operating costs. We’re doubling down on radical growth in Kenya, and we’re maintaining our ambitious scale targets in Rwanda. Together, both countries represent almost 80% of our clients and continue to deliver strong dollar impact to farm families. In our growth countries like Tanzania, Malawi, Uganda, and Zambia, we’re pursuing more modest growth in order to strengthen our impact proposition to farmers in each market. While pursuing our scale targets, we’ve also invested in opportunities to improve our efficiency. We make decisions that maximize our social return on investment (SROI), or dollar impact relative to cost. This helps us select the best products and services to offer our clients while ensuring our organization’s financial health. 809,800 72% 97% Total Farmers Served Financial Sustainability Farmer Repayment

KENYA RWANDA BURUNDI TANZANIA 364,000 275,000 83,000 50,000

56% More Farmers Transformative Scale 83,000 Farmers Served 28% Client Growth We made a big bet on Our core model impacted Delivered inputs despite Doubled down on best radical growth in Kenya— an estimated 13% operational challenges in practices and grew our and it paid off. of Rwandans. the country. client base.

Delivering Nutrition 3 Million Trees 99% Loan Repayment Crop Insurance Delivered nutrition trainings, With help of the Rwandan Clients demonstrated contin- Offered crop insurance key supplements, and government, our clients ued demand for our services to protect farmers from vegetable seeds. planted millions of trees. and strong customer loyalty. weather and disease risks.

MALAWI UGANDA ZAMBIA (pilot) 15,500 10,700 11,600

Reinvested in Impact 150% Yield Improvement $400 Avg. Loan Size Slowed our growth rate One Acre Fund clients Farmers took an average to better tailor operations harvested more than of $400 worth of inputs to existing clients. comparison farmers. each due to their relatively larger land sizes. 199 clients per Field Officer Custom Fertilizer Blends Increased the number of Trialed custom blends to 3.5 Avg. Acres Planted farmers our FOs can each ensure farmers’ fields get The average client planted support by 70% the nutrients needed for more than 3 acres with our strong harvests. product offerings. IMPACT

As an organization, we aim to help our clients achieve big harvests, healthy families, and rich soils. In 2018, our clients continued to grow more food for their families, but had more modest profits from their harvests than in previous years. Our clients were challenged by external factors like erratic rainfall and low maize prices, which affected farmers across all of our operating countries.1 These external challenges underscore the volatility of smallholder farming, and highlight the importance of serving this community in the long term. Moving forward, we’re giving our clients more tools to safeguard their harvests and diversify their incomes, so they’re better protected from future weather and price shocks.

Additional Farmer Profit Growth in Farmer Profit Social Return on Investment

For every +42% $1 invested, the $91 $217 farmer produced $2.77 in extra income Source of Farmer Income 66% 34% Annual Impact Asset Impact Control One Acre Fund (value of crop harvests) (net present value Farmer Farmer of assets like solar and trees)

BIG HARVESTS This year, our clients generated an average profit boost of $91 per client. While this sum is still enough to reduce household hunger and enable new productive investments, it is still lower than the $140 average profit that we generated in 2017. Low maize prices across the region, mostly caused by government import/export regulations, were the primary reason for this reduction. To put it in perspective, at 2017 prices, our profit boost this year would have been $120 per farmer. Difficult weather events were the secondary reason for lower numbers. In particular, Tanzania, Malawi, Uganda, and Zambia struggled with erratic rainfall and pest issues. Immediately following a particularly profitable season in 2017, we’re taking this decrease in impact very seriously, and making operational changes in response. We’re focusing on offering new crops (including cereals, legumes, and vegetables) and new income sources (like poultry and trees) to make sure clients have diversified ways to support their families. We are also offering crop insurance as part

1 Additionally, new surveys found improvements in control group ownership of solar lights and trees—a net positive for the market which led to lower reported impact for One Acre Fund. of our package in most operating countries, which helps alleviate the 3-Year Rolling Average financial pressures that clients face during difficult seasons. Despite these setbacks, our clients still made meaningful prog- ress this year. Clients in almost all countries achieved substantially higher yields than similar farmers that did not work with One Acre $115 Fund, and incomes on supported activities were 42% higher among Additional Farmer Profit client farmers. Our impact average this year was $91, while modest in comparison to other years, has still allowed many clients to reinvest in their farms, feed their families, and send their children to school. Overall, we’re proud to report that our clients have more profits and 50% more food than they did before they enrolled with us. Growth in Farmer Profit on Supported Activities HEALTHY FAMILIES Beyond farmer profits, we are increasingly focused on promoting nutrition and improving quality of life for our clients. These efforts include: • Hunger reduction: As a direct outcome of our work, clients are growing more food for their families eradicating household hunger. When we compare new One Acre Fund farmers to veteran client farmers, we see a 43 percent change in Kenya and a 30 percent change in Rwanda. • Improved nutrition: One Acre Fund is instituting regular nutrition trainings across our core countries and increasing our crop offerings to focus on nutritious foods like iron-rich beans. In Rwanda, when we compare newly enrolled One Acre Fund farmers to our veteran clients, we see a 6 percent increase in dietary diversity. • Basic quality of life needs: We are also investing in basic quality-of-life products to improve our clients’ daily lives. These include solar lights, sanitary pads, and initial trials for health insurance, along with other products.

RICH SOILS In addition to big harvests and healthy families, we’re also investing in the long-term sustainability of our clients’ farms. Our interventions in this area include: • Crop diversification:We’re also sharing planting recommendations, tailored to different hyper-local contexts, allowing farmers to properly care for their unique soil composition. • Increasing soil nutrients: We’ve undertaken a longitudinal soil study. that’s given us better information on our clients’ diverse soil types, and we’re tailoring our product offerings and trainings accordingly. We’ve started providing agricultural lime, at scale, in our Kenya program, which helps balance the soil pH levels and improves the uptake of key plant nutrients. We’ve also continued offering trees, which help sequester carbon in the soil, and prevent erosion. This year, we supported the planting of over 10 million surviving grevillea trees by more than 1.1 million smallholder farmers. Additional Farmer Profit

“Annual” Impact “Asset” Impact $124

$91 $90 $78

$17 $23 $7 Zambia*

Total Kenya Rwanda Burundi Tanzania Uganda Malawi

-$39 Growth in Farmer Profit

70% 57% 47% 42% 32% 35% 16% Zambia*

Total Kenya Rwanda Burundi Tanzania Uganda Malawi

-13% Figures refer to average farmer profit on supported activities. Burundi program impact was an estimate in 2018 due to operational challenges in the country. We based impact on current prices, average impact over the past 3 years, and an assumed reduction in impact due to reduced delivery of farmer trainings in 2018.

Farmers Reporting Hunger

Newly Enrolled Farmer Veteran Farmer

20% 16% 14% 12% 9% 7% 8% 4% No Significant Change

Kenya Rwanda Uganda Malawi Tanzania Zambia*

Figures refer to the percentage of farmers who reported hunger from not having enough food. Burundi did not collect Quality of Life data this year due to the temporary suspension of the program, and impact was estimated in 2018 due to operational challenges in the country. We based impact on current prices, average impact over the past 3 years, and an assumed reduction in impact due to reduced delivery of farmer trainings in 2018.

*We include Zambia in our organization-wide numbers because the pilot has more than 10,000 clients. In 2018, our Zambia operations struggled to generate impact because of extreme maize price fluctuations. Elizabeth Batayitegera and her husband walk uphill to view the damage that a recent landslide caused to their tea fields.

FARMING FOR THE FUTURE Elizabeth Batayitegera is worried. The mother of four is watching her farm in Rwariro, Rwanda, fill up with water, and the rains show no signs of stopping. A landslide has leveled her tea plants. She may save half her maize, but her potatoes have washed down the steep hillsides. Flooded rivers have swept away farm animals, depositing them in nearby villages. Elizabeth has seen swings in weather in her 25 years of farming, but never like this. Farmers like Elizabeth are experiencing the effects of climate change firsthand. In Rwanda, 7 in 10 people earn a living from farming. As the weather grows more erratic, so do their livelihoods. Changing rains, frequent droughts, and unusual pests and diseases are taking their toll on harvests. According to one estimate, global maize production could shrink by 24 percent by 2050 if we don’t adapt. Yet, farmers like Elizabeth are also at the forefront of adopting solutions. At One Acre Fund, we’re equipping our clients with the tools they need to address the changing weather head-on. In the short term, we help farmers protect their fields from the worst shocks. Thanks to trainings from One Acre Fund and the Government of Rwanda, Elizabeth now digs ditches to retain water for her fields, makes terraces to prevent erosion, and plants grevillea trees to absorb runoff. We also offer crop insurance to help farmers bounce back from poor harvests. In the long term, we empower our clients to prevent the progress of climate change. We distribute millions of trees and thousands of solar lights each year, reducing greenhouse gasses. Thanks in part to farmers like Elizabeth, Rwanda is one of the only countries where more trees are planted each year than cut down. With these practices, Elizabeth has become a role model for climate-smart farming that her district named her “Most Exemplary Female Farmer” in 2015. “My field is taken as a case study for others to look at. I support my neighbors in preparing their fields because it is important to share farming tips,” she says. My field is taken as a case study for others to look at. I support my neighbors in preparing their fields because it is important to share farming tips.” Together, Elizabeth and her fellow farmers are leading the way in protecting their land for the next generation. Field Officer, Ponsiano Odinga, shows farmer, Gaudience Oloo, a marketing video about One Acre Fund’s offerings in Kenya.

INVESTING IN TECHNOLOGY Why we’re betting big on technology in 2019, and the years to come.

At One Acre Fund, we dream big. We envision serving millions of farm families over the next decade, and we’re now laying the foundation to make our vision a reality. It’s clear to us that these investments will be a critical driver to help us reach our targets, that’s why we’re making a big bet on technology. We’re investing in hardware, like tablets, which allow us to seamlessly register clients and track their repayment. In Kenya, we’ll place a tablet in the hands of every field officer by the end of 2019, and we plan to start trials in three more countries by 2020. These tablets make the field officer’s job significantly more efficient—our Kenya trials show they reduce the time spent on repayment collection activities by 50%. Field officers can use this additional time to train farmers on best practices, and to enroll new clients. We’re also investing in software, like SMS technology, that allows us to directly communicate with our clients across multiple countries. Our largest source of communication is mobile repayment, where clients can pay back their loans using their cell phones. Mobile repayment allows us to give clients real-time SMS updates on their loans, which increases transparency and improves customer service. These digital payments mean that our field staff no longer need to carry around hard currency, decreasing processing times from 16 days to just two to four days. We are also constantly testing new technologies as they emerge. We trial each solution through a rigorous, multi-phase process. If successful, we can then consider scaling it across our growing client network. Instead of devoting ourselves to specific systems, we’re committed ourselves to the inno- vation process. In the future, technology could help us track delivery of farm inputs as they happen, diagnose crop diseases with mobile phones, or even help clients map out healthy repayment paths. No matter which products we decide to adopt in the future, we’re confident that our big bet on technology is going to pay off, especially for the farmers we serve. ACKNOWLEDGEMENTS 2018 HIGHLIGHTS Special Thanks Thank you to the following people who have graciously given their time to One Acre Fund.

GOVERNING BOARD Paul Wormley Evariste Rugigana Derek and Diana Lidow Joel Ackerman Desire Rusatira Life You Can Save Matt Forti CHICAGO GALA Steven Ruzibiza MercyCorps James Mwangi HOST COMMITTEE MP Gabriel Semasaka Carol Oken Fred Ogana Carol Anderson Overseas Private Rebecca Onie Bill Bennett SPECIAL Investment Ada Osakwe The Combe Family ACKNOWLEDGEMENTS Corporation (OPIC) Andrew Youn Roxanne Hori A to Z Foundation Bill Quinn Karl Hofmann Barry Merkin Dean Sally Blount and the Joel Segre William Asiko Ben Olds Kellogg Community President Morty Calvert Impact Capital Schapiro and the North- NETHERLANDS BOARD PEOPLE ADVISORY Candide Group western Community Robert Amelung COMMITTEE Greg Casagrande Sidley Austin LLP (One Cor Oudes Kristin Brennan Casten Family Acre Fund’s 2018 Service Femke Rotteveel Alison Lawrence Ceniarth Partner of the Year) Monica Marcel Citibank Skoll Foundation UK BOARD Barry Marshall Chris and Christina Sunu Capital Sonny Bardhan Danit Schleman Combe Chuck Slaughter Suveer Kothari Randall Stieghorst Echoing Green Ryah Whalen Pooja Mall Vaishnavi Tekumalla The ELMA Growth Steve and Sue Wilson Steve Wiggins Foundation Jeanne Wussler RWANDA Energising Development Joseph, Paul and ADVISORY BOARD ADVISORY BOARD Willy Foote Teresa Youn Chris Addy Serge Kamuhinda Sarah, Emily and Ben Forti David Cohen Faustin Mbundu Kananura Global Health Corps Martin Fisher Amb. Gideon Kayinamura Margaux Hall Nicole Gardner Dr. Athanase Mukuralinda Mahri Holt Karl Hofmann James Munanura MCE Social Capital Tony Kalm Dr. Charles Murekezi Netri Foundation Richard Passov Jean Claude Musabyimana I Do Foundation James Wesner Patience Mutesi Impact Assets Telesphore Ndabamenye Kiva CHICAGO GALA George Ngarambe Melih and Zeynep PLANNING Yves Bernard Ningabire Keyman COMMITTEE Robert Nyamvumba Becky and Lester Knight Susan Diamond Lt. Col. Emmanuel Harry and Julie Kraemer Dev Patel Nzamurambaho Carol and Larry Levy James Wesner (Gala Phillip Nzayire Family Chairman) Angelline Rudakubana Libra Foundation ACKNOWLEDGEMENTS2018 HIGHLIGHTS

Key Supporters

FELLOW FARMERS BlackRock, Inc.* Ken and Cheryl Branson ($500,000 AND UP) CF Industries Casten Family Foundation Anonymous (6) Chandler Foundation Keech and Akshay Combe Shetty Bill & Melinda Gates Foundation David Weekley Family Fund Deloitte Cartier Philanthropy Digital Green Digital Green Caterpillar Foundation Energizing Development Jeremy Dion Children’s Investment Fund Foundation Foundation to Promote Open Society Enhancing Livelihoods Fund The Combe Family Four Acre Trust David and Joanne Fischer Dutch Ministry for Foreign Affairs, Reed Hastings and Patty Quillin Grace and Emilio Foundation Department for International Horace W. Goldsmith Foundation MaiTri Foundation Cooperation Jackson Kemper Foundation Morris Family Foundation Federal Republic of Germany Jasmine Charitable Trust Northwestern University through KfW Development Bank Sarah Jeon and Charles McGarraugh Open Road Alliance Focusing Philanthropy Vinod and Neeru Khosla Partners for Equity Global Innovation Fund Dr. Lisa Minsky-Primus and Rock Paper Scissors Foundation IKEA Foundation Dr. Yaron Minsky Ryan Cooper Family Foundation Karla Jurvetson Montpelier Foundation Satter Foundation Steve Jurvetson Mulago Foundation Barbara and Walter Scott Knight Family Foundation Open Value Foundation Stichting AKBHHH LDS Charities The Peery Fund Timothy and Susanne Sullivan The Levy Family Sall Family Foundation Stephen and Rebecca Waddell Clifford Frey and May Lim Stichting af Jochnick The Wasily Family Foundation The Page Family Foundation Swedish PostCode Foundation Paul and Rosemary Wormley Kristov Paulus Syngenta Foundation for The Zall Family Fund Silicon Valley Community Foundation Sustainable Agriculture Skoll Foundation TED LEADERSHIP CIRCLE USAID Whole Planet Foundation, a Whole ($10,000–$24,999) The Valhalla Charitable Foundation Foods Market Foundation ABC Supply Co., Inc Virgin Unite World We Want Foundation Agricultural Transformation Agency Stephen and Susan Wilson Ainsworth Pet Nutrition HONORARY ADVISORY BOARD The Andersons Inc. Charitable PARTNERS ($25,000–$99,999) Foundation ($100,000–$499,000) Ackerman Foundation, Inc. Aon Achmea Foundation Mike and Carol Anderson The Appletree Fund Joel Ackerman Anonymous (2) Axum Farm Service Centre Anonymous (5) Archer Daniels Midland Company Tom and Analisa Barrett Bayer The Berkshire Foundation William Bennett Bergerson Family Foundation Bohemian Foundation Rick and Diane Betts

*BlackRock’s support is being made via grants recommended to and paid by the BlackRock Charitable Trust, a donor-advised fund. ACKNOWLEDGEMENTS

Key Supporters

Beyond Our Borders Jon and Beverly Warner James Klosty The Bill Nygren Foundation James Wesner and Steve Alessandro KP Foundation BluSky Restoration David Windmueller Kutchins, Robbins & Diamond, Ltd. Sean and Sandra Bogda James and Cheryl Wormley Mr. Miles H. Lasater and Boise Cascade Company Mike and Robin Zafirovski Dr. G. Elizabeth Lasater Rita Bustamante Richard and Susan Lenny Doug and Leigh Conant MAJOR SUPPORTERS The LeRoy Thom, Jean Thom and Crowe Horwath LLP ($5,000–$9,999) TL Foundation Inc. Dave and Jodi Dent Family Fund of ABS Investment Management Liben Farmers Cooperative Union The Minneapolis Foundation Erik Arvidsson Linda C March DaVita Total Renal Care Inc. Mike Balkin Amy Markham Epstein Becker & Green John and Laura Bilson Matthew McCall First Dollar Foundation Nancy Binder Guy McPhail Steven Florsheim William Blair The Michelson Family Fund Dmitry Gorenburg and Ida Gorenburg John W. Bloom Raj Midha Hadley Capital Hal and Kimberly Burch David and Joanne Mullen Harvey Family Foundation Elizabeth Chamberlin Nuveen Heidrick & Struggles Cheryl L. Choy Hugh O’Connor Gordon Hilbun CliftonLarsonAllen LLP Caroline Orlowski Roxanne Hori and Robert Felsenthal David Cole Samuel F. Page The Hultquist Foundation Community Connections Christopher Painter Jazi Foundation, Inc Massimiliano Poletto and Kaufman Family Foundation Kent and Elizabeth Dauten Kara O’Keefe Kathy Lewis Susan and David Diamond Bill Quinn and Kimi Quinn JJ and Ephrat Livne Ofer Jeffrey Dow Roger and Susan Stone Family Love Meyer Family Foundation Duncan Family Fund Foundation Marquette Associates Ferrara Candy Company Matthew Runkle Metals Service Center Institute Ryan Fiftal Alex and Polly Ryerson Steven and Maureen Meyer Finnegan Family Foundation Schaffer Business Solutions, LLC John and Anita Mitchell Kimberly and Leo Flynn Emily and Ryan Stoner Michael Mulhern Jerry Folz and Stacie Boney Alyssa Szeto Netri Foundation Ellen Goldberg and Barnaby Grist Bart Thomsen and Deborah A. Ben and Kim Olds Mark Heising and Elizabeth Simons Thomsen Tim Patru Hoban Family Charitable Foundation Kyle Wood The Sachs Charitable Foundation John Wiley & Sons, Inc. Evan Schwartz Joseph Barnett Paul Charitable Leo Sheridan Organization Inc Small Foundation Kennedy Family Foundation