2016-09-19T09:05:57-05:00 2015-12-31 GRANT THORNTON LLP 75 STATE STREET BOSTON MA 02109 990 2015-01-01 043478123 Root Capital Inc % PETER BERNARD ROOT 6176615792 130 Bishop Allen Drive 2nd Floor Cambridge MA 021393309 PETER BERNARD COO 6176615792 2016-11-15 true Robert J Butler Jr P00037953 6177237900 2015 2017-02-10 21:41:12Z William F Foote 130 Bishop Allen Drive 2nd Floor Cambridge MA 021393309 19729515 false X www.RootCapital.org X 1999 MA A non-profit organization that helps increase incomes and stability for rural farmers disconnected from the formal economy. 14 12 79 17 0 0 7221264 6528783 11893488 12438190 169098 94009 278620 668533 19562470 19729515 0 0 0 0 9608293 9741013 0 0 698058 13799054 15358651 23407347 25099664 -3844877 -5370149 141261244 130926608 108602390 105114723 32658854 25811885 X ROOT CAPITAL SEEKS TO INCREASE INCOMES AND STABILIZE EMPLOYMENT FOR FARMERS IN AFRICA, South-east ASIA, AND LATIN AMERICA. Root Capital DOES THIS THROUGH A proven channel: SUPPORT FOR AGRICULTURAL BUSINESSES THAT COLLECT AND MARKET THE CROPS OF THOUSANDS OF FARMERS. false false 15206741 12824498 Root Capital provides agricultural businesses with a unique combination of capital, training and access to global markets to help them grow. These core activities comprise a three-prong strategy: Finance, Advise, Catalyze Finance: Root Capital typically provides loans ranging from $50,000 to $3 million to rural small and growing businesses, especially those businesses not currently reached by commercial lenders. 4325632 282225 Advise: Root Capital's Advisory Services program provides targeted training to current and prospective clients. Root Capital's Financial Advisory Services (FAS) are designed to prepare businesses with growth potential to qualify for credit, to shepherd more prospective clients into our portfolio, and to mitigate the risk of lending to these businesses. 2205816 Catalyze: Root Capital seeks to demonstrate and inspire others to practice an approach to rural lending that is grounded in long-term client relationships, a deep understanding of rural business' financing needs, and shared social and environmental values. Root Capital aims to catalyze a new financial market and to set the standard within that market for sustainable social and environmental practices over the long term. 21738189 true true false false false false false false true false true false true false true true false true false true true false false false false false false false false true false false false true false false false false false false false false false true true true false false true 209 0 true 79 true false true KE MX CS SG PE false false false false false false false false X 14 12 true false true false false false false true true false true true true true true true true true true true false AL AK AR CA CO CT DC FL GA IL KS KY ME MD MA MI MN MS NV NH NJ NM NY NC ND OH OK OR PA RI SC TN UT VA WA WV WI X X X PETER BERNARD 6176615792 130 BISHOP ALLEN DRIVE 2ND FLOOR Cambridge MA 021393309 Jeremy Mindich Chair 1.0 0.0 X X 0 0 0 peter bernard vice chair 1.0 0.0 X X 0 0 0 Katherine Borsecnik Vice Chair (thru 2/15) 1.0 0.0 X X 0 0 0 Hank Cauley Asst. Clerk (thru 2/15) 1.0 0.0 X X 0 0 0 Ken Ansin Board Member (thru 2/15) 1.0 0.0 X 0 0 0 Philip Martin Brown Board Member 1.0 0.0 X 0 0 0 Peggy Clark Board Member 1.0 0.0 X 0 0 0 Franz Colloredo-Mansfield Board Member 1.0 0.0 X 0 0 0 Dan Crisafulli Board Member 1.0 0.0 X 0 0 0 Melissa Dann Board Member 1.0 0.0 X 0 0 0 Marcela Escobari Board Member 1.0 0.0 X 0 0 0 Ryan Israel Board Member 1.0 0.0 X 0 0 0 Paul Leander-Engstrom Board Member 1.0 0.0 X 0 0 0 Elizabeth Luckett Board Member 1.0 0.0 X 0 0 0 Funke Oyewole Board Member 1.0 0.0 X 0 0 0 Rick Peyser Board Member 1.0 0.0 X 0 0 0 Simon winter Board Member 1.0 0.0 X 0 0 0 William F Foote CEO & President 40.0 0.0 X 283702 0 27096 Randall Atkin SVP Fin, and Treasurer 40.0 0.0 X 180267 0 30979 Lubna Maria Elia sr dir, GRC & clerk(1/15-2/15) 40.0 0.0 X 121739 0 6711 Karina Chamorro Clerk (2/15-8/15) 40.0 0.0 X 45166 0 12867 Annie Brennan Clerk (8/15-present) 40.0 0.0 X 48078 0 8096 Liam Brody SVP of Comm & Mktg 40.0 0.0 X 173214 0 16763 Catherine Gill SVP, Inv. Relations & Ops 40.0 0.0 X 171079 0 23610 Brian Matthew Onie Milder svp of strategy, adv, & innov 40.0 0.0 X 177497 0 8314 Nathaniel Schaffran svp of lending 40.0 0.0 X 152193 0 12365 Darcy Salinger chief credit officer 40.0 0.0 X 147366 0 7249 Bryan G Woliner Director of Finance 40.0 0.0 X 109800 0 22254 Jeronimo Bollen VP Latin America 40.0 0.0 X 118767 0 31271 Mary Helen Nsangou Senior Director of HR & Admin 40.0 0.0 X 119062 0 7356 1847930 0 214931 16 false true false Stitching Progresso Foundation KEIZERSGRACHT 452 1016 GD AMSTERDAM 0 NL AGRONOMIC COORD 631623 Insource Services Inc 148 Linden Street WELLESLEY MA 02482 IT SERVICES 112309 2 939727 5589056 6528783 LOAN INTEREST 522298 9924100 9924100 LOAN FEES 522298 1661422 1661422 RECOVERED LOANS 522298 852668 852668 12438190 94009 94009 0 0 0 0 0 0 0 0 0 CONTRACT REVENUE 900099 663590 663590 OTHER REVENUE 900099 4943 4943 668533 19729515 13106723 94009 0 0 0 0 1335177 637278 487781 210118 0 6915056 5621105 1037258 256693 125778 95487 23202 7089 971487 737525 179205 54757 393515 298745 72590 22180 0 0 158018 158018 0 0 0 2616218 2344724 249976 21518 8927 3927 5000 239191 188680 40142 10369 354897 279952 59560 15385 0 845735 699195 116051 30489 1321631 1152543 118860 50228 0 157474 137327 14162 5985 2550608 2550608 0 88408 66935 18039 3434 55435 41971 11311 2153 ALLOWANCE FOR LOAN LOSS 6694432 6694432 OTHER DIRECT COSTS 177739 119662 53911 4166 MEMBERSHIP & PUBLICATIONS 89938 68093 18351 3494 25099664 21738189 2663417 698058 26071832 24252675 2628162 2537426 8315567 2844964 1016900 959133 0 0 0 0 0 0 0 0 422391 389186 1084619 804009 135583 280610 198006 200720 0 0 100038039 95530590 0 0 2434764 3931304 141261244 130926608 2788034 3720746 0 0 0 0 0 0 1928261 1528569 2050000 2150000 0 0 101803463 97623544 32632 91864 108602390 105114723 X 12269634 9295684 20389220 16516201 0 0 32658854 25811885 141261244 130926608 X -5370149 -417 -1476403 X false true X true true true X 9166388 17970983 16302985 7221264 6528783 57190403 0 0 9166388 17970983 16302985 7221264 6528783 57190403 12292293 44898110 141723 183231 228383 152280 94009 799626 0 0 57990029 47421580 0.77424 0.73368 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED false true X 292343 211940 80403 183811 101731 82080 608465 490338 118127 280610 LOANS RECEIVABLE 95530590 F 95530590 0 DEFERRED RENT ABATEMENT 77240 77240 X 9214188 -417 206533 -10721443 -10515327 19729515 19729515 16061157 206533 206533 15854624 9245040 9245040 25099664 Schedule D, Part IV, Line 2b At times, Root Capital co-lends with other organizations and administers the entire loan. Credit counseling and debt management services are provided by the co-lender. In many locations, Root Capital bears the responsibility to create a triangulated partnership between the co-lender, borrower, and commercial buyer. This creates an added measure of security for Root Capital's clients by ensuring that their products can be sold at a fair price, and helps buyers contribute to the local economies. The escrow funds represent a timing difference between repayments from borrowers and transfer of funds due to co-lending partners. The escrow account is also used when a buyer pays Root Capital the full amount of the money owed to a supplier/borrower. Root capital deducts the principal and interest owed on its loan and forwards the remaining balance to the supplier/borrower. Schedule D, Part X, Line 2 ROOT CAPITAL IS A TAX-EXEMPT ORGANIZATION AS DESCRIBED IN SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE AND IS GENERALLY EXEMPT FROM INCOME TAXES PURSUANT TO SECTION 501(A). ACCDER AND ROOT CAPITAL A.C. ARE ORGANIZED AND OPERATED UNDER THE REGULATIONS OF THEIR RESPECTIVE COUNTRIES, PERU AND MEXICO. ROOT CAPITAL A.C. IS A REGISTERED CHARITABLE ORGANIZATION IN MEXICO. THE INCOME TAX CONSEQUENCES, IF ANY, ARE REFLECTED IN THE FINANCIAL STATEMENTS AND DO NOT HAVE A MATERIAL EFFECT, INDIVIDUALLY OR IN THE AGGREGATE, UPON ROOT CAPITAL'S FINANCIAL STATEMENTS. Schedule D, Part XI, Line 2d Other revenues not reported on Form 990 Provision for Loan Loss: ($6,694,432) Foreign currency exchange loss: ($1,476,403) Interest expense: ($2,550,608) TOTAL: ($10,721,443) Schedule D, Part XII, Line 4b Other expenses not reported on financials statements Interest expense: $2,550,608 provision for loan loss: $6,694,432 TOTAL: $9,245,040 Sub-Saharan Africa 1 24 Program Services Loan Disbursements 47292432 South America 1 16 Program Services Loan Disbursements 46647909 Central America and the Caribbean 2 24 Program Services Loan Disbursements 46882649 North America 1 13 Program Services Loan Disbursements 8532989 East Asia and the Pacific 1 Program Services Loan Disbursements 4515616 Sub-Saharan Africa Program Services Lending/Advisory 1646136 South America Program Services Lending/Advisory 1772968 Central America and the Caribbean Program Services Lending/Advisory 2223812 North America Program Services Lending/Advisory 653684 5 78 5 78 160168195 160168195 false false true false false false X X X X X false false false false false false false false false William F Foote CEO & President 283702 0 0 0 0 0 10600 0 16496 0 310798 0 0 0 Randall Atkin SVP Fin, and Treasurer 180267 0 0 0 0 0 9727 0 21252 0 211246 0 0 0 Liam Brody SVP of Comm & Mktg 173214 0 0 0 0 0 0 0 16763 0 189977 0 0 0 Catherine Gill SVP, Inv. Relations & Ops 171079 0 0 0 0 0 6941 0 16669 0 194689 0 0 0 Brian Matthew Onie Milder svp of strategy, adv, & innov 173523 0 0 0 3974 0 6941 0 1373 0 185811 0 0 0 Nathaniel Schaffran svp of lending 152193 0 0 0 0 0 6119 0 6246 0 164558 0 0 0 Darcy Salinger chief credit officer 146898 0 0 0 468 0 5876 0 1373 0 154615 0 0 0 Jeronimo Bollen VP Latin America 118767 0 0 0 0 0 3563 0 27708 0 150038 0 0 0 PAUL LEANDER-ENGSTROM board member INVESTMENT X 2000000 2000000 false false true RANDALL ATKIN officer INVESTMENT X 50000 50000 false false true FRANZ COLLOREDO-MANSfi board member INVESTMENT X 100000 100000 false false true 2150000 Paul Leander-Engstrom Board Member Investment false Randall Atkin Officer Investment false Loans to Root Capital, Inc. Schedule L, Part II Loans to Root Capital, Inc. are documented in a written agreement between the organization and the related party. The loans are entered into at arms length, independently and removed from the persons roles at Root Capital, and made within the usual parameters offered to all investors. Root Capital takes measures to ensure that its investors are accredited investors. organization's mission, continued Form 990, Part III, Line 1 THROUGH A UNIQUE COMBINATION OF CAPITAL, TRAINING, AND ACCESS TO GLOBAL MARKETS, ROOT CAPITAL HELPS AGRICULTURAL BUSINESSES INCREASE FARMER INCOMES, WHICH IN TURN IMPROVES FOOD SECURITY, EMPOWERS WOMEN, CONSERVES ECOSYSTEMS, AND ENCOURAGES THE NEXT GENERATION OF FARMERS. SINCE 1999, ROOT CAPITAL HAS DISBURSED MORE THAN $945 MILLION IN CREDIT TO MORE THAN 620 ENTERPRISES. COLLECTIVELY, THESE ENTERPRISES HAVE GENERATED $7 BILLION IN REVENUE, MORE THAN 80 PERCENT OF WHICH HAS BEEN PAID DIRECTLY TO FARMERS. IN CALENDAR YEAR 2015, ROOT CAPITAL DISBURSED $154 MILLION TO 277 SMALL AND GROWING BUSINESSES (SGBS) WHO REPRESENT MORE THAN 550,000 FARM HOUSEHOLDS IN AFRICA, South-east ASIA, AND LATIN AMERICA. PRogram service accomplishments, continued Finance Form 990, Part III, Line 4a Most Root Capital loans can be categorized as follows: 1) Lines of credit, which are used by borrowers to cover costs of purchasing raw product from their farmer suppliers. These lines of credit have terms of up to one year and are generally oriented around a harvest or production cycle. 2) Fixed-asset loans with terms of up to seven years for investment in equipment and infrastructure. 3) General working capital loans with terms from one to seven years. Root capital assesses prospective clients and evaluates them on a series of financial, social, and environmental criteria. Social criteria include prices paid to suppliers, employee wages, and working conditions, and company support for social programs such as training and medical care. Environmental criteria include soil and water management, the impact of the business on the surrounding community, and standards for product handling and processing. Root Capital's lending supports sustainable environmental practices that protect rural ecosystems. Crops processed and marketed by Root Capital clients include wild-harvested products such as nuts and native plants for oils, agro-forestry crops such as shade-grown coffee and cocoa, and farm-grown fruits and vegetables. Lending officers stay engaged with clients throughout the term of each loan, and Root Capital's financial advisory services program provides training as needed. advise Form 990, Part III, Line 4b Though financial management training is the core offering of the organization's Advisory program, Root Capital also provides complimentary non-financial services, such as partnership-based training in agronomy. In 2015, Root Capital trainers provided 2,500 days of training to our clients on financial management, agronomic planning and monitoring, loan application support, financial institution (FI) advisory and mobile technology. Since its launch in 2006, Root Capital's Advisory services program has successfully trained 811 producer organizations representing thousands of people. catalyze Form 990, Part III, Line 4c Through industry associations such as the Aspen Network of Development Entrepreneurs and The Global impact Investment Network, Root Capital plays a leadership role in building the enabling environment for rural small and growing business finance. As a non-profit committed to alleviating rural poverty, Root Capital seeks to maximize the positive social and environmental impact of our work. Economic, community, and environmental sustainability are all part of our core values. Economic sustainability - Root Capital clients link small-scale farmers to markets that can offer higher and more stable prices than they have historically received. Root Capital clients also generate employment including managers, accountants, agricultural extension staff, drivers, and workers at processing plants. Since 1999, Root Capital has worked with 525 unique buyers of agricultural and other sustainable products worldwide. In 2015, Root Capital worked with 180 unique buyers, including companies such as Cooperative Coffees, Andean Naturals, GEPA, Starbucks, Keurig Green Mountain, and Equal Exchange. In 2015, Root capital clients spent $980 million to purchase the products of small-scale farmers and artisans. Community Sustainability - Farmer Associations encourage participatory decision-making and are a source of community ownership and pride. They also stem migration to urban areas by making traditional agricultural activities more viable. Social impact includes stabilizing incomes in rural communities and creating new economic opportunities for women, indigenous peoples and other marginalized groups. Environmental sustainability - Root Capital clients typically provide farmers with training in sustainable production to avoid deforestation, reduce chemical use, improve water and soil management, and otherwise protect the health of rural ecosystems. In 2015, small scale producers who sold to Root Capital clients sustainably managed 624,000 hectares of land in Africa and Latin America. business relationships Form 990, Part VI, Line 2 Board members Elizabeth Luckett and Jeremy Mindich have a business relationship. Updates to by-laws Form 990, Part VI, Line 4 The by-laws were amended and restated on May 14, 2015. Significant changes include: 1) remove the limitation on the number of years a Board Chair may serve; 2) increase the number of terms a director may serve from two to three; 3) update the Committee descriptions to reflect current Board Committees. form 990 review process Form 990, Part VI, Line 11b The Form 990 was prepared by an independent public accounting firm with information provided by management. The Form 990 is reviewed by the President and Curent COO and presented to the Audit Committee for approval. Upon approval by the Audit Committee, the complete Form 990 is provided to all voting members of the board of directors with opportunity for questions, comments, or edits. Prior to filing with the Internal Revenue Service, Director comments are incorporated as appropriate and the final version of the 990, as it will ultimately be filed, is provided to each voting member. conflict of interest policy Form 990, Part VI, Line 12c All Root Capital Board members and employees participate in an annual training on Root Capital's Code of Ethics, which includes a Conflict of Interest policy. Directors and Officers complete a Conflict of Interest disclosure form each year, which is reviewed by Root Capital's Governance, Risk Management & Compliance (GRC) team, and vetted with legal counsel if needed. If it is necessary to review or clear a conflict related to the current work or activity of Root Capital, that conflict is brought before the Governance Committee of the Board. If the Director with the conflict serves on the Governance Committee, s/he is recused from the conversation. The Governance Committee ensures that any business decision that could be affected by the particular conflict is considered objectively by the Root Capital team and is in the best interest of the organization. The Governance Committee's conversation and decision with respect to the conflict is recorded in the minutes of the meeting and shared with the whole Board in the subsequent quarterly Board Book. Lending personnel at Root Capital are trained on Root's Conflict of Interest policy in the course of its annual Code of Ethics (COE) workshops. Before these workshops, all of Root Capital's internal policies are shared with the participants and, after the training, participants are asked to sign an acknowledgement form attesting that they have read the policies and completed the training. To ensure that lending personnel are clear regarding what constitutes a conflict of interest, it is always the case that one of the COE vignettes used in the training focuses on a conflict of interest situation involving a credit decision. Those who do not attend the training in person are required to submit a written response to the COE vignettes by year end. compensation review process Form 990, Part VI, Line 15 PER DELEGATION OF THE FULL BOARD OF DIRECTORS EACH YEAR, THE ROOT CAPITAL BOARD OF DIRECTORS' GOVERNANCE COMMITTEE REVIEWS THE CEO'S PERFORMANCE AND COMPENSATION ANNUALLY AND RECOMMENDS A SALARY FOR APPROVAL BY THE EXECUTIVE COMMITTEE OF THE BOARD. THIS POWER IS DELEGATED TO THE EXECUTIVE COMMITTEE BY THE BOARD SINCE THE FIRST QUARTER BOARD MEETING OCCURS PRIOR TO SALARY ADJUSTMENTS EACH YEAR. THE CEO'S SALARY RECOMMENDATION IS SUPPORTED BY A COMPENSATION STUDY PERFORMED BY AN OUTSIDE COMPENSATION EXPERT EVERY TWO YEARS. DOCUMENTATION OF THE DELIBERATION AND DECISION IS FILED IN THE CEO'S PERSONNEL FOLDER. Compensation of other officers and key employees is determined by the CEO of the organization using the results of a compensation survey conducted on an annual basis. Salaries for all staff, including the CEO, were reviewed in the last quarter of 2015 and first quarter of 2016. public disclosure Form 990, Part VI, Line 19 The Organization's audited financials are available on its website. Governing documents and the conflict of interest policy are available upon request. Other Changes in Net Assets Form 990, Part XI, Line 9 Foreign Currency Exchange Loss: ($1,476,403) FORM 990 PART IX LINE 11G DESCRIPTION:PROFESSIONAL PROGRAM SUPPORT TOTAL FEES:2616218 Root Capital AC Ma Adelina Flores No 20 Colonia C Chiapa San Cristobal de MX PRGM SUPPORT MX N/A N/A Root Capital true asociacion accder av camino real 348 terre el p lima PE prgm support PE n/a n/a N/A false Root capital AC 22 avenida 3-87 zona 3 edificio eu quetzaltenango GT prgm support GT n/a n/a Root Capital true false false false false false false false false false false false false false false false true false false false ROOT CAPITAL AC - Mexico p 685627 FMV ASOCIACION accder p 1407216 FMV