The Phoenix Fund

The West Bank's Ghosoon Project trains young entrepreneurs how to make and market olive-oil products such as soap.

Across the developing world, communities are emerging from conflict, oppression and natural disasters. One key to successful, lasting recovery is economic development. Small businesses, including farmers, have the quickest recovery potential, but are often not included in initial large agency grants.

The Phoenix Fund gathers private seed capital to start-up projects in some of the world's poorest countries. It is designed to encourage high-risk high-reward ventures in communities recovering from war or social upheaval. Large foundations and government agencies are often less willing to support these kinds of urgent and innovative programs.

Mercy Corps capitalized the Phoenix Fund in 2005 to finance dynamic start-up programs in countries such as Mongolia, Guatemala, Kyrgyzstan and the West Bank. The Fund is capitalized through charitable contributions.

Selecting global projects
Mercy Corps Country Directors manage comprehensive programs in more than 35 countries. These Directors submit proposals to the Phoenix Fund, which are evaluated Mercy Corps staff and advisors with extensive experience in economic development and business. Grant approvals are made promptly to provide timely access to funds. Once approved, Country Directors and their staff implement and manage the project, typically in partnership with local organizations and communities

Successful proposals outline how funds will meet critical needs and achieve enduring change. We look for proposals that include:

• Livelihood creation: creation of a significant number of new jobs
• Income increase: higher earnings by a significant number in the community
• Social contribution: positive impact on conflict resolution, health, education, and community development
• Proof of concept: development of clear metrics to secure follow-on government and foundation funding
• Scalability: project can serve as a model for additional funding and in other countries Measurable outcomes: tracking and reporting of economic and non-economic outputs

The annual budgets of most Phoenix Fund proposals range from $25,000 to $75,000 - a small investment in U.S. terms, but a substantial sum in developing countries. If a project is selected for funding, Mercy Corps ensures sufficient resources for that project to achieve measurable results in 12 to 18 months.

Distinguishing characteristics

• The Phoenix Fund puts venture capital into the hands of our front-line managers to test new ideas that can scale and be sustainable over time.
• As Mercy Corps is operational on the ground, we have direct oversight and accountability on all of the investments made by the Phoenix Fund.
• Good ideas have immediate opportunity for replication through our worldwide network of programs.
• As appropriate to the projects, we encourage our donors to lend skills and expertise to Phoenix Fund grantees.

Current Phoenix Fund projects
To date, the Phoenix Fund has granted nearly $750,000. Currently, seven projects are making a difference in India, Nepal, Colombia, Serbia, China, Guatemala and Kyrgyzstan. A summary of several projects follows.

In Kyrgyzstan, the Fund is helping increase household income by improving land management, mobilizing 1,000 home gardeners to combine selling and marketing efforts, and begin a plastic waste management system to prevent soil contamination. One-third of Gross Domestic Product in Kyryzstan comes from the sale of produce grown in small gardens.

In India, employees of tea estates are making handmade paper for greeting cards, wallpaper, paper bags, lampshades and for packaging tea and other food products. There is high demand for handmade paper in the region, and we expect full-time jobs affecting 1,000 people to be created through this new enterprise. Other tea estates are interested in our outcomes and in replicating the project.

In Nepal, small cardamom farmers need assistance in planting, producing and drying the product. The worldwide demand for cardamom exceeds supply and, by improving agricultural and marketing practices, household income for a few hundred farmers will increase significantly. More than 1,000 families will be positively impacted.

In Colombia, home of the second largest disaplaced population in the world, Afro-Caribbean women are raising tropical aquarium fish in their homes for resale. We expect them to earn nearly $300 a month when the project is complete in late 2007. The income will provide stable housing and schooling for their children.

In Serbia, ethnic artisans have formed a cooperative to pool production and sales facilities, combine marketing expenses and help them register as legal businesses rather than selling on the black or "grey" market. Household income is expected to double within the first year of the project, affecting hundreds of people. The cooperative is also a source of tax revenue, which will help create a stable community and foster a sense of ethnic pride and identity.

In Guatemala, the Fund is establishing pineapple farms as means to pay off loans on
land newly acquired through government land reform. So far, $100,000 has been invested, ten communities affected and income increased 10 percent for 80 percent of families before the first harvest through simple economic improvements such as raising poultry for food and resale.

Participation in the Phoenix Fund
Our mission is to alleviate suffering, poverty and oppression by helping people build secure, productive and just communities. With more than 25 years of experience and $1.3 billion in assistance provided to 14.4 million people in 100 nations, we work to serve the world's poorest and most underserved people.

The Phoenix Fund is dedicated exclusively to start-up projects. We request a minimum charitable donation of $10,000 to build sufficient capital for rapid response and minimum bureaucracy. The Phoenix Fund invites businesses, foundations, entrepreneurs and others to join a new class of strategic philanthropists. For a strong social return, please consider becoming a donor to the Phoenix Fund.

A contribution to the Phoenix Fund is a charitable donation and is tax-deductible. Mercy Corps, a 501c3 charitable organization, will provide a receipt for tax purposes.

For questions about the Phoenix Fund, please contact:
Jean Hart
Director, Phoenix Fund
503.450.1976
jhart@mercycorps.org