TAF measures the value of inclusive business
Businesses, donors, development practitioners and developing countries are all excited about the potential that inclusive business interventions can deliver to both drive business value and deliver pro-poor impact. This thinking is the premise behind the Technical Assistance Facility (TAF), a €10m fund that deepens the impact of the African Agriculture Fund (AAF) by increasing tangible benefits to smallholder farmers, farmer business groups and rural communities. TAF is donor- funded, managed by the International Fund for Agricultural Development (IFAD) and implemented by TechnoServe, a US-based not-for-profit organisation focusing on business solutions to poverty.
In addition to bringing impact to business partners, TAF helped generate US$5.7M in new revenues and wages to almost 11,000 smallholder farmers, businesses and employees in 2016. Women accounted for 27 percent of all beneficiaries. The program also facilitated $1.1M in loans that businesses received from formal financial institutions. These results were calculated and reported through TechnoServe’s Corporate Measurement initiative, an organization-wide effort to track and grow impact. At TechnoServe, we value results and are firmly committed to ensuring that we can measure the impact of our work. In undertaking TAF, we committed to measuring the value the fund can bring to smallholder farmers, businesses, and employees in Africa and reporting that value as part of our aggregated annual impact. Our impact measurement reflects three key principles: rigor, comparability, and transparency. The sections below explore how TAF applied these principles in reporting impact.
Rigorous Results
TAF’s funds are used to implement projects with the AAF’s investee companies across Africa. Each project allocates a part of its budget to collecting key data about the low-income men and women the project aims to benefit. For the purposes of impact reporting, projects collect data on the increase in revenue, or the cost savings, facilitated by the project and the men and women who perceived those financial benefits.
In order to perform rigorous measurement, and in order to count the results in TechnoServe’s impact report, a project must report only those results that are attributable to our work. That is, the results should account for any revenues the farmers earned at the start of the project, as well as any change in farmers’ revenues that might have occurred in the absence of our work. In this way, we account for the agency and ingenuity of the people we work with, while also acknowledging the value of the inclusive business investment.
Comparability across the Portfolio
In order to report aggregated impact across a diverse portfolio, TechnoServe applies a consistent set of standards to projects’ impact measurement. That way, the results that each project reports can be compared to other projects’ results.
TAF is unusual in the TechnoServe portfolio, since it implements multiple projects across the region. Program Director Abigail Thomson recognized that impact reporting for TAF would be challenging unless a similar set of measurement standards were applied across all of its projects. By harmonizing the approach to measurement, TAF is able to aggregate and compare the increase in revenues among poultry farmers in Sierra Leone against the gains of soy farmers in Zambia.
A Commitment to Transparency
By reporting its annual impact alongside the rest of TechnoServe’s portfolio, TAF supports a culture of transparency and valuing of results. In 2016, TechnoServe projects generated US$196 million in financial benefits to 596,000 farmers, businesses, and employees around the world. In a portfolio of 80 projects, TAF was the 12th highest generating project for financial benefits, and 19th highest generating for beneficiaries. The ability to sort and rank projects, in addition to deeper analytics performed on the portfolio, increases transparency about what types of projects and interventions bring the highest impact.
You can learn more about TAF’s impact and its contributions to TechnoServe’s global impact by visiting our website, where you can also read our 2016 Impact Report or explore our country and project data portal.
This blog is a part of the June 2017 series on advisory support for inclusive businesses in partnership with USAID and the African Agricultural Fund’s Technical Assistance Facility, both of which deliver advisory support and have new analysis of it just launched (AAF’s TAF) and forthcoming (USAID).
Read the full series for more lessons from seven different providers of advisory support and stories of success from entrepreneurs.