2015-11-09T11:29:24-06:00 2014-12-31 GRANT THORNTON LLP 75 STATE STREET BOSTON MA 02109 990 2014-01-01 043478123 Root Capital Inc % RANDALL ATKIN ROOT 6176615792 130 Bishop Allen Drive 2nd Floor Cambridge MA 021393309 RANDALL ATKIN SVP FIN & TREASURER 6176615792 2015-09-01 true Robert J Butler Jr P00037953 6177237900 2014 2016-04-25 22:37:26Z X William F Foote 130 Bishop Allen Drive 2nd Fl Cambridge MA 02139 28445652 false X www.RootCapital.org X 1999 MA A nonprofit social investment fund that grows rural prosperity in poor, environmentally vulnerable places in Africa and Latin America. 15 14 78 17 0 0 16302985 7221264 8055309 11893488 222179 169098 0 278620 24580473 19562470 1442412 0 0 0 7324298 9608293 0 0 528970 10311809 13799054 19078519 23407347 5501954 -3844877 115526832 141261244 78419626 108602390 37107206 32658854 X ROOT CAPITAL GROWS RURAL PROSPERITY IN POOR, ENVIRONMENTALLY VULNERABLE PLACES IN AFRICA AND LATIN AMERICA BY PROVIDING CAPITAL, DELIVERING FINANCIAL TRAINING, AND STRENGTHENING MARKET CONNECTIONS FOR SMALL AND GROWING AGRICULTURAL BUSINESSES. false false 14077053 12259122 Root Capital's core activities - Lending, providing financial advisory services to current and prospective clients, and the development of innovative approaches to financing rural small and growing businesses - comprise a three-prong strategy: Finance, Advise, Catalyze. Finance: Root Capital typically provides loans ranging from $50,000 to $4 million to rural small and growing businesses, especially those businesses not currently reached by commercial lenders. 4098784 Advise: Root Capital's financial advisory services program (FAS) provides targeted financial management training to current and prospective clients that may not otherwise qualify for a loan. FAS is 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. 2204845 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. 20380682 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 172 0 true 78 true false true KE MX CS SG PE false false false false false false false false X 15 14 true false false 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 HI IL KS KY ME MD MA MI MN MS NH NJ NM NY NC ND OH OK OR PA RI SC TN UT VA WA WV WI X X X RANDALL ATKIN 6172992424 130 BISHOP ALLEN DRIVE 2ND FLOOR Cambridge MA 021393309 Jeremy Mindich Chair 1.0 0.0 X X 0 0 0 Katherine Borsecnik Vice Chair 1.0 0.0 X X 0 0 0 Hank Cauley Asst. Clerk 1.0 0.0 X 0 0 0 Ken Ansin Board Member 1.0 0.0 X 0 0 0 Peter Bernard 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 Simon Winter Board Member 1.0 0.0 X 0 0 0 Philip Martin Brown Board Member 1.0 0.0 X 0 0 0 Rick Peyser Board Member 1.0 0.0 X 0 0 0 Tom Kaneb Board Member (thru 3/14) 1.0 0.0 X 0 0 0 Juan Morillo Board Member (thru 3/14) 1.0 0.0 X 0 0 0 William F Foote CEO & President 40.0 0.0 X 275589 0 29556 Randall Atkin SVP Fin, and Treasurer 40.0 0.0 X 174251 0 30979 Lubna Maria Elia SR Dir of Governance & Clerk 40.0 0.0 X 116439 0 6403 Liam Brody SVP of Comm & Mktg 40.0 0.0 X 169399 0 18445 Catherine Gill SVP of Investor Relations 40.0 0.0 X 165714 0 25682 Brian Milder SVP of Strategy, Adv, & Innov 40.0 0.0 X 168275 0 9889 Nathaniel Schaffran SVP of Lending 40.0 0.0 X 149123 0 7279 Darcy Salinger Chief Credit Officer 40.0 0.0 X 138146 0 7725 Mary Helen Nsangou Senior Director of HR & Admin 40.0 0.0 X 114163 0 9366 Bryan G Woliner Director of Finance 40.0 0.0 X 108850 0 10040 Jeronimo Bollen VP of Latin America 40.0 0.0 X 118640 0 374 1698589 0 155738 16 false true false Stitching Progresso Foundation KEIZERSGRACHT 452 1016 GD AMSTERDAM 0 NL AGRONOMIC COORD 589778 Insource Services Inc 148 Linden Street WELLESLEY MA 02482 IT Services 114650 2 311636 6909628 7221264 LOAN INTEREST 522298 8678848 8678848 LOAN FEES 522298 1570459 1570459 RECOVERED LOANS 522298 1644181 1644181 11893488 152280 152280 0 0 0 0 0 8900000 8883182 16818 16818 16818 0 0 0 CONTRACT REVENUE 900099 258620 258620 OTHER REVENUE 900099 20000 20000 278620 19562470 12172108 169098 X 0 0 0 0 1190621 613729 401736 175156 0 6969575 5815360 978747 175468 117404 100722 14803 1879 939692 703605 190880 45207 391001 292285 79860 18856 0 80010 43998 36012 103780 103780 0 0 0 0 221337 36277 185060 0 238773 186347 43588 8838 350685 270733 58467 21485 0 600018 468452 122777 8789 1221178 1097986 94973 28219 0 196267 146715 40087 9465 2056594 2056594 0 99541 65954 27679 5908 64398 48139 13153 3106 ALLOWANCE FOR LOAN LOSS 6291880 6291880 OTHER PROF. PROGRAM SUPPORT 1875132 1857130 18002 OTHER DIRECT COSTS 340502 240702 94051 5749 MEMBERSHIP & PUBS. 58959 44074 12042 2843 23407347 20380682 2497695 528970 20691551 26071832 0 2628162 13090539 8315567 565750 1016900 0 0 0 0 0 0 0 0 300672 422391 850266 714683 208959 135583 9045149 198006 0 0 70224192 100038039 0 0 1400020 2434764 115526832 141261244 2043217 2788034 0 0 0 0 0 0 1331107 1928261 2020111 2050000 72928129 101803463 0 0 97062 32632 78419626 108602390 X 11921431 12269634 25185775 20389220 0 0 37107206 32658854 115526832 141261244 X -3844877 47139 -650614 X false true X true false X 7037823 9166388 17970983 16302985 7221264 57699443 0 0 7037823 9166388 17970983 16302985 7221264 57699443 14742067 42957376 145785 141723 183231 228383 152280 851402 0 0 58550845 38547288 0.73368 0.56800 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED false true X 0 324241 302553 113895 0 526024 412129 21688 135583 LOANS RECEIVABLE 100038039 F 100038039 0 DEFERRED RENT ABATEMENT 32632 32632 X 10909604 47139 270485 -8970490 -8652866 19562470 19562470 15329359 270485 270485 15058874 8348473 8348473 23407347 Escrow and Custodial Arrangements 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. ASC 740 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 Capitals financial statements. Root Capital believes it has taken no uncertain tax positions. Other Revenues not Reported on Form 990 Schedule D, Part XI, Line 2d Allowance for loan loss: $(6,291,880) Foreign currency exchange loss: $(622,016) Interest expense: $(2,056,594) ------------ Total $(8,970,490) Other Expenses not Reported on Financial Statements Schedule D, Part XII, Line 4b Allowance for loan loss: $6,291,879 Interest expense: $2,056,594 ----------- Total $8,348,473 Sub-Saharan Africa 1 22 Program Services LOAN DISBURSEMENTS 54366602 South America 1 18 Program Services LOAN DISBURSEMENTS 53813905 Central America and the Caribbean 1 24 Program Services LOAN DISBURSEMENTS 55486075 North America 1 13 Program Services LOAN DISBURSEMENTS 13635211 East Asia and the Pacific 1 Program Services LOAN DISBURSEMENTS 371008 Sub-Saharan Africa Program Services Lending/Advisory 1647238 South America Program Services Lending/Advisory 1246840 Central America and the Caribbean Program Services Lending/Advisory 2291727 North America Program Services Lending/Advisory 746594 East Asia and the Pacific Program Services Lending/Advisory 22101 4 78 4 78 183627301 183627301 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 275478 0 0 0 111 0 11111 0 18445 0 305145 0 0 0 Randall Atkin SVP Fin, and Treasurer 174251 0 0 0 0 0 7272 0 23707 0 205230 0 0 0 Liam Brody SVP of Comm & Mktg 169288 0 0 0 111 0 0 0 18445 0 187844 0 0 0 Catherine Gill SVP of Investor Relations 165681 0 0 0 33 0 6739 0 18943 0 191396 0 0 0 Brian Milder SVP of Strategy, Adv, & Innov 168242 0 0 0 33 0 6739 0 3150 0 178164 0 0 0 Nathaniel Schaffran SVP of Lending 149123 0 0 0 0 0 5991 0 1288 0 156402 0 0 0 Paul Leander-Engstro Board Member Investment X 2000000 2000000 false true true Randall Atkin Officer Investment X 50000 50000 false true true 2050000 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 and subject to review and approval by the Governance Committee of the Board. The loans are entered into at arm's length and made within the usual parameters offered to all investors. Organization's Mission, Continued Form 990, Part III, Line 1 ROOT CAPITAL CLIENTS ARE ASSOCIATIONS AND PRIVATE BUSINESSES THAT BRING TOGETHER SMALL-SCALE RURAL PRODUCERS. THESE ENTERPRISES HELP BUILD SUSTAINABLE LIVELIHOODS IN SECTORS SUCH AS AGRICULTURE, WILD-HARVESTED FOREST PRODUCTS, AND HANDCRAFTS. ROOT CAPITAL CURRENTLY WORKS IN LATIN AMERICA, SUB-SAHARAN AFRICA, AND SOUTHEAST ASIA. SINCE 1999, ROOT CAPITAL HAS DISBURSED MORE THAN $887 MILLION IN CREDIT TO MORE THAN 593 ENTERPRISES. ROOT CAPITAL CLIENTS HAVE HELPED IMPROVE LIVELIHOODS FOR MORE THAN 963,000 RURAL HOUSEHOLDS IN AFRICA AND LATIN AMERICA. IN CALENDAR YEAR 2014, ROOT CAPITAL DISBURSED $178 MILLION TO 231 SMALL AND GROWING BUSINESSES (SGBS) WHO REPRESENT MORE THAN 441,000 FARM HOUSEHOLDS IN AFRICA AND LATIN AMERICA. AS A NON-PROFIT COMMITTED TO ALLEVIATING RURAL POVERTY, ROOT CAPITAL SEEKS TO MAXIMIZE THE POSITIVE SOCIAL AND ENVIRONMENTAL IMPACT OF OUR WORK. SOCIAL IMPACT INCLUDES STABILIZING INCOMES IN RURAL COMMUNITIES AND CREATING NEW ECONOMIC OPPORTUNITIES FOR WOMEN, INDIGENOUS PEOPLES, AND OTHER MARGINALIZED GROUPS. ROOT CAPITAL CLIENTS ALSO PROMOTE BETTER ENVIRONMENTAL PRACTICES, SUCH AS IMPROVED SOIL AND WATER MANAGEMENT. Program Service Accomplishments, Continued Finance Form 990, Part III, Line 4a Most Root Capital loans can be categorized as follows: 1) Short-term trade credit loans with terms of up to one year that are generally oriented around a harvest or production cycle. These loans are typically used by borrowers to cover costs during the months between purchasing raw product from their farmer suppliers and receiving payment from their buyers. 2) Long-term fixed-asset loans with terms of up to seven years for investment in processing equipment, infrastructure, and general operations. 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. This long-term approach to client relationships has led to a repayment rate of 95% or better since inception. Advise Form 990, Part III, Line 4b Since its launch in 2006, Root Capital's financial advisory services program has successfully strengthened the financial management capacity of 600 producer associations representing thousands of people. These engagements have confirmed that rural business leaders, when equipped with sound financial management practices and processes, are better positioned to access credit, compete in the marketplace, and grow their businesses. Financial Advisory Services provides training on the following topics: accounting, financial planning, financial risk management, financial statement analysis, loan application preparation, and credit management. Financial Advisory Services products include: - Information seminars that explain Root Capital's credit products, credit requirements, and training services - Diagnostics and workplan workshops that offer comprehensive business process assessment and identify areas for improvement and development - Financial training for potential and current clients that focus on developing and improving financial management systems - Loan application preparation services for potential and current clients. 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. Root Capital works with more than 120 leading buyers of agricultural sustainable products worldwide. Buyers of goods from Root Capital clients include companies such as Equal Exchange, General Mills, Green Mountain coffee, Pier 1 Imports, Starbucks, Taza Chocolate, The Body Shop, and Whole Foods Market. In 2014, Root capital clients spent $842 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 2014, small scale producers who sell to Root Capital clients sustainably managed 672,000 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. 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 Treasurer 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 last reviewed in April 2014. 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: ($622,016) Consolidation of foreign affiliate financials reported on Form 990: ($28,598) ---------- Total ($650,614) 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 Asociacin Capacitadora y Catalizadora Av Camino Real 348 Terre El Pilar Lima PE Prgm Support PE N/A n/a Root Capital false false false false false false false false false false false false false false false false true false false false Root Capital AC P 762554 FMV Asociacin Capacitadora y Catalizadora P 1314831 FMV