Mission: Root Capital invests in the growth of agricultural enterprises so they can transform rural communities. These businesses purchase crops such as coffee, cocoa, or nut ... (More)

Root Capital is a 501(c)(3) organization, with an IRS ruling year of 2001, and donations are tax-deductible.

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Contact Information

  http://www.rootcapital.org/

 245 Main Street
2nd Floor
Cambridge MA 02142 

  617-661-5792


You are viewing this organization's new Charity Navigator profile page. To view the legacy version, click here.

Star Rating System by Charity Navigator


Charity Navigator evaluates a nonprofit organization’s financial health including measures of stability, efficiency and sustainability. We also track accountability and transparency policies to ensure the good governance and integrity of the organization.




Good

This charity's score is 87.03, earning it a 3-Star rating. Donors can "Give with Confidence" to this charity. 

This score is calculated from two sub-scores:

This score represents Form 990 data from 2019, the latest year published by the IRS.

View this organization’s historical ratings.


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Star Rated Report

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Program Expense

Program Expense Ratio

83.6%


The Program Expense Ratio is determined by Program Expenses divided by Total Expense (average of most recent three 990s).


This measure reflects the percent of its total expenses a charity spends on the programs and services it exists to deliver. Dividing a charity's average program expenses by its average total functional expenses yields this percentage. We calculate the charity's average expenses over its three most recent fiscal years.


Source: IRS Form 990

Administrative Expenses

12.5%


As reported by charities on their IRS Form 990, this measure reflects what percent of its total budget a charity spends on overhead, administrative staff and associated costs, and organizational meetings. Dividing a charity's average administrative expenses by its average total functional expenses yields this percentage. We calculate the charity's average expenses over its three most recent fiscal years.


Source: IRS Form 990

Fundraising Expenses

3.7%


This measure reflects what a charity spends to raise money. Fundraising expenses can include campaign printing, publicity, mailing, and staffing and costs incurred in soliciting donations, memberships, and grants. Dividing a charity's average fundraising expenses by its average total functional expenses yields this percentage. We calculate the charity's average expenses over its three most recent fiscal years.


Source: IRS Form 990

Liabilities to Assets Ratio

70.4%


The Liabilities to Assets Ratio is determined by Total Liabilities divided by Total Assets (most recent 990).


Part of our goal in rating the financial performance of charities is to help donors assess the financial capacity and sustainability of a charity. As do organizations in other sectors, charities must be mindful of their management of total liabilites in relation to their total assets. This ratio is an indicator of an organization’s solvency and or long term sustainability. Dividing a charity's total liabilities by its total assets yields this percentage.


Source: IRS Form 990

Fundraising Efficiency

$0.05


The amount spent to raise $1 in charitable contributions. To calculate a charity's fundraising efficiency, we divide its average fundraising expenses by the average total contributions it receives. We calculate the charity's average expenses and average contributions over its three most recent fiscal years.


Source: IRS Form 990

Working Capital Ratio

1.34 years


Determines how long a charity could sustain its level of spending using its net available assets, or working capital, as reported on its most recently filed Form 990. We include in a charity's working capital unrestricted and temporarily restricted net assets, and exclude permanently restricted net assets. Dividing these net available assets in the most recent year by a charity's average total expenses, yields the working capital ratio. We calculate the charity's average total expenses over its three most recent fiscal years.


Source: IRS Form 990

Program Expense Growth

-5.37%


We compute the average annual growth of program expenses using the following formula: [(Yn/Y0)(1/n)]-1, where Y0 is a charity's program expenses in the first year of the interval analyzed, Yn is the charity's program expenses in the most recent year, and n is the interval of years passed between Y0 and Yn.


Source: IRS Form 990

Governance


Charity Navigator looks to confirm on the Form 990 that the organization has these governance practices in place.


Sources Include: IRS Form 990

Governance:
Independent Voting Board Members  ... (More)
No Material Diversion of Assets ... (More)

A diversion of assets – any unauthorized conversion or use of the organization's assets other than for the organization's authorized purposes, including but not limited to embezzlement or theft – can seriously call into question a charity's financial integrity. We check the charity's last two Forms 990 to see if the charity has reported any diversion of assets. If the charity does report a diversion, then we check to see if it complied with the Form 990 instructions by describing what happened and its corrective action. This metric will be assigned to one of the following categories:

  • Full Credit: There has been no diversion of assets within the last two years.

  • Partial Credit: There has been a diversion of assets within the last two years and the charity has used Schedule O on the Form 990 to explain: the nature of the diversion, the amount of money or property involved and the corrective action taken to address the matter. In this situation, we deduct 7 points from the charity's Accountability and Transparency score.
  • No Credit: There has been a diversion of assets within the last two years and the charity's explanation on Schedule O is either non-existent or not sufficient. In this case, we deduct 15 points from the charity's Accountability and Transparency score.
(Less)
Audited Financials Prepared by Independent Accountant ... (More)

Audited financial statements provide important information about financial accountability and accuracy. They should be prepared by an independent accountant with oversight from an audit committee. (It is not necessary that the audit committee be a separate committee. Often at smaller charities, it falls within the responsibilities of the finance committee or the executive committee.) The committee provides an important oversight layer between the management of the organization, which is responsible for the financial information reported, and the independent accountant, who reviews the financials and issues an opinion based on its findings. We check the charity's Form 990 reporting to see if it meets this criteria.

  • Full Credit: The charity's audited financials were prepared by an independent accountant with an audit oversight committee.

  • Partial Credit: The charity's audited financials were prepared by an independent accountant, but it did not have an audit oversight committee. In this case, we deduct 7 points from the charity's Accountability and Transparency score.
  • No Credit: The charity did not have its audited financials prepared by an independent accountant. In this case, we deduct 15 points from the charity's Accountability and Transparency score.
(Less)
Does Not Provide Loan(s) to or Receive Loan(s) From Related Parties ... (More)
Documents Board Meeting Minutes ... (More)
Distributes 990 to Board Before Filing ... (More)
Compensates Board ... (More)

Policies


Charity Navigator looks to confirm on the Form 990, or for some metrics on the charity's website, that the organization has these policies in place.


Sources Include: IRS Form 990 and organization's website

Policies:
Conflict of Interest  ... (More)
Whistleblower ... (More)
Records Retention and Destruction ... (More)
CEO Compensation Process ... (More)
Donor Privacy ... (More)

Donors have expressed extreme concern about the use of their personal information by charities and the desire to have this information kept confidential. The exchanging and sale of lists for telemarketing and the mass distribution of "junk mail," among other things, can be minimized if the charity assures the privacy of its donors. Privacy policies are assigned to one of the following categories:

  • Yes: This charity has a written donor privacy policy published on its website, which states unambiguously that (1) it will not share or sell a donor's personal information with anyone else, nor send donor mailings on behalf of other organizations or (2) it will only share or sell personal information once the donor has given the charity specific permission to do so.

  • Opt-out: The charity has a written privacy policy published on its website which enables donors to tell the charity to remove their names and contact information from lists the charity shares or sells. How a donor can have themselves removed from a list differs from one charity to the next, but any and all opt-out policies require donors to take specific action to protect their privacy.
  • No: This charity either does not have a written donor privacy policy in place to protect their contributors' personal information, or the existing policy does not meet our criteria.

The privacy policy must be specific to donor information. A general website policy which references "visitor" or "user" personal information will not suffice. A policy that refers to donor information collected on the website is also not sufficient as the policy must be comprehensive and applicable to both online and offline donors. The existence of a privacy policy of any type does not prohibit the charity itself from contacting the donor for informational, educational, or solicitation purposes.

(Less)

Transparency


Charity Navigator looks to confirm on the Form 990, or for some metrics on the charity's website, that the organization makes this information easily accessible.


Sources Include: IRS Form 990 and organization's website

Transparency:
CEO Salary Listed on 990 ... (More)
Board of Directors Listed on Website ... (More)
Key Staff Listed on Website ... (More)
Audited Financial Statements on Website ... (More)
Form 990 Available on Website ... (More)

Additional Information

Unscored

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Total Revenue and Expenses

Total Revenue and Expenses

This chart displays the trend of revenue and expenses over the past several years for this organization, as reported on their IRS Form 990.

Salary of Key Persons

Presented here are this organizations key compensated staff members as identified by our analysts. This compensation data includes salary, cash bonuses and expense accounts and is displayed exactly how it is reported to the IRS. The amounts do not include nontaxable benefits, deferred compensation, or other amounts not reported on W-2. In some cases, these amounts may include compensation from related organizations. Read the IRS policies for compensation reporting



William Foote, President, CEO

$288,272 (1.34% of Total Expenses)


Source: IRS Form 990 (page 7), filing year 2019

Business Master File Data

Below are some key data points from the Exempt Organization IRS Business Master File (BMF) for this organization. Learn more about the BMF on the IRS website


Activities:

Activity data not reported from the IRS


Foundation Status:

Organization which receives a substantial part of its support from a governmental unit or the general public   170(b)(1)(A)(vi) (BMF foundation code: 15)


Affiliation:

Independent - the organization is an independent organization or an independent auxiliary (i.e., not affiliated with a National, Regional, or Geographic grouping of organizations). (BMF affiliation code: 3)

Data Sources: IRS Forms 990

The Form 990 is a document that nonprofit organizations file with the IRS annually. We leverage finance and accountability data from it to form Encompass ratings. Click here to view this organization's Forms 990 on the IRS website (if any are available).

Pandemic Response

Due to the unprecedented nature of the pandemic, we give charities such as this one the opportunity to share the story of COVID's impact on them. Charities may submit their own pandemic responses through their nonprofit portal.


Root Capital reported being impacted by COVID-19 in the following ways:
  • Program Delivery

  • Fundraising Capacity

  • Staffing

  • Administrative Capacity

  • Grants Sent

  • Capacity to execute on existing grants


How COVID-19 impacted the organization's operations financially:

To mitigate the impacts of the pandemic in the communities where we work, Root Capital created a $5 million COVID-19 Rapid Response Fund. These philanthropic funds were used to provide emergency grants, advisory services, and debt relief to ensure rural enterprises could keep farmers and employees safe while continuing to generate vital incomes and services for their communities (more details below). We also worked with donors to adapt existing grants, as travel restrictions and emergent needs impeded the organization's ability to advance certain programming.


How COVID-19 impacted the organization's delivery of programs:

Root Capital enacted a COVID-19 response focused on meeting urgent health and economic needs of rural enterprises, farmers, and employees. With the help of philanthropic partners we deployed $1.7 million in emergency resilience grants so our clients could provide life-saving supplies—including PPE, food, and medicine—to their communities. Due to travel restrictions, Root Capital pivoted from in-person advisory services to fully remote training on topics from crisis management to financial forecasting, helping more than 180 agricultural enterprises develop vital skills. In cases of extreme need, we disrupted our normal lending process to provide debt relief and loan restructuring for impacted clients. In late 2020, we also began conducting remote due diligence, enabling us to expand financing to new clients and unlock their growth in the midst of the pandemic.


How this organization adapted to changing conditions caused by COVID-19:

All Root Capital offices went fully remote in 2020 and most remain so as of 2021, with some locations offering hybrid virtual and in-person options for staff. As noted above, advisory services and loan servicing operations also went remote. As part of this switch, Root Capital’s staff implemented weekly phone calls with our client enterprises to monitor ongoing challenges from the pandemic. This allowed us to preempt issues with loan repayment and connect our clients with the appropriate emergency financial support. Our credit team also extended loan application and monitoring deadlines to give borrowers more time to submit required loan documents.


Innovations the organization intends to continue permanently after the pandemic:

Where possible, Root Capital will continue to offer virtual advisory services to agricultural enterprises, as this proved to be effective for many clients. Additionally, remote service delivery may have increased accessibility for women—women made up a record 35% of workshop participants in 2020, up from 23% in 2018 and 30% in 2019, a milestone in the traditionally male-dominated industries in which we work. Similarly, following the successful implementation of a remote work model across all our global offices, we will continue to offer flexible virtual, in-office, and hybrid working options for staff.


Historical Ratings

Date PublishedForm 990 FYEOverall ScoreOverall Rating
Rating Version: 2.1
7/1/20212019 87.03
5/1/20202018 85.57
12/1/20192017 87.69
7/1/20182016 92.38
6/1/20182016 90.94

This organization received multiple star ratings within this fiscal year, due to an update to it's Accountability and Transparency data and/or the receipt of an amended Form 990.

5/1/20172015 93.98
6/1/20162014 93.89
Rating Version: 2.0
5/1/20152013 96.97
3/1/20142012 94.13
2/1/20142012 92.25
7/1/20132011 94.07
4/1/20122010 94.00
10/1/20112009 93.94
9/20/20112009 92.11
Rating Version: 1.0
4/1/20112009 95.06
4/1/20102008 95.25
7/1/20092007 97.78
3/1/20082006 95.08
2/1/20072005 97.95

...   Impact & Results


This score estimates the actual impact a nonprofit has on the lives of those it serves, and determines whether it is making good use of donor resources to achieve that impact.


Impact & Results Score

Not Currently Scored

Root Capital cannot currently be evaluated by our Encompass Rating Impact & Results methodology because either (A) it is eligible, but we have not yet received data; (B) we have not yet developed an algorithm to estimate its programmatic impact; (C) its programs are not direct services; or (D) it is not heavily reliant on contributions from individual donors.

Note: The absence of a score does not indicate a positive or negative assessment, it only indicates that we have not yet evaluated the organization.

Learn more about Impact & Results.


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Additional Information

Unscored

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Largest Programs

Largest Programs



Root Capital reported its three largest programs on its FY 2019 Form 990 as:


$11,929,348

Spent in most recent FY

68%

Percent of program expenses


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: FINA ... (More)


$4,750,201

Spent in most recent FY

27%

Percent of program expenses


ADVISE: ROOT CAPITAL'S ADVISORY SERVICES PROGRAM PROVIDES TARGETED FINANCIAL TRAINING TO CURRENT AND PROSPECTIVE CLIENTS SO THEY HAVE THE FINANCIAL MANAGEMENT SKILLS THEY NEED TO GROW AND SUSTAIN THEI ... (More)


$758,912

Spent in most recent FY

4%

Percent of program expenses


CATALYZE: ROOT CAPITAL, INC. SEEKS TO CATALYZE A THRIVING FINANCIAL MARKET TO SUPPORT HISTORICALLY UNDERSERVED RURAL SMALL AND GROWING BUSINESSES. THE PROGRAM'S STRATEGY IS TO:- INNOVATE - CONDUCT R&D ... (More)


...   Leadership & Adaptability


This score provides an assessment of the organization's leadership capacity, strategic thinking and planning, and ability to innovate or respond to changes in constituent demand/need or other relevant social and economic conditions to achieve the organization's mission.


Leadership & Adaptability Score

100

out of 100

The score earned by Root Capital is a passing score.

Encompass Rating V4 provides an evaluation of the organization's Leadership & Adaptability through the nonprofit organization submitting a survey response directly to Charity Navigator.


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Leadership & Adaptability Report

100

of 100 points

Mission

The nonprofit organization presents evidence of strategic thinking through articulating the organization’s mission


Root Capital's mission is to grow rural prosperity and build the resilience of farming families around the world. In underserved communities, we provide small and growing agricultural enterprises with much-needed credit and capacity building. With growth, these enterprises become engines of impact that can raise incomes, create jobs for the next generation of leaders, level the playing field for women, and take urgent action against climate change.


Source: Nonprofit submitted responses

Vision

The nonprofit organization presents evidence of strategic thinking through articulating the organization’s vision.


We envision a thriving agricultural sector that enables rural communities around the world to become more prosperous, inclusive, and resilient.


Source: Nonprofit submitted responses

Strategic Goals

The nonprofit organization presents evidence of strategic thinking and goal setting through sharing their most important strategic goals.


Goal One: Grow our credit and capacity building services to serve at least 425 enterprises and one million farmers per year.

Goal Type: Grow, expand, scale or increase access to the existing programs and services.


Goal Two: Equip enterprises in vulnerable communities to help farmers adapt to climate change and invest in climate adaptation solutions.

Goal Type: Grow, expand, scale or increase access to the existing programs and services.


Goal Three: Increase the flow of global capital and training to gender-inclusive and women-led agricultural enterprises.

Goal Type: Grow, expand, scale or increase access to the existing programs and services.


Source: Nonprofit submitted responses

Leadership Development

The nonprofit provides evidence of investment in leadership development


Describe an investment in leadership

We are currently developing a comprehensive leadership training and management skills program for 100% of managers. This program enables them to effectively identify the progression of their direct reports and determine a clear focus for professional development. We also invest in department-specific training that further develops the skills of our employees. For example, employees can work with their department managers to approve and fund course work relevant to their responsibilities and career goals.

Source: Nonprofit submitted responses

Mobilizing for Mission

The nonprofit provides evidence of leadership through focusing externally and mobilizing resources for the mission.


This organization mobilizes for mission in the following ways:
  • Strategic Partnerships

  • Networks of Collective Impact Efforts

  • Thought Leadership

  • Raising Awareness

What are this organization’s external mobilizaton efforts?

Root Capital leverages its 20 years of experience to influence and collaborate with partners across the public, private, and nonprofit spheres. We have launched a number of sector-leading networks, including the Council for Smallholder Agricultural Finance. At the height of the COVID-19 pandemic, Root Capital joined the World Economic Forum's COVID Response Alliance for Social Entrepreneurs – a collaboration of more than 80 leaders in social entrepreneurship – through which we shared lessons learned and opportunities for collaboration in real time. Root Capital staff have shared insights, including results of our impact studies, via various high-level conferences such as Skoll World Forum, SOCAP, and the Gender Smart Investing Summit. Leadership has also published op-eds and think pieces in external media, such as Forbes, The New York Times, and Stanford Social Innovation Review.

Source: Nonprofit submitted responses

Story of Adaptability

The nonprofit has an opportunity to tell the story of how the organization adapted to tremendous external changes in the last year.


In an April survey, 42% of Root Capital’s client businesses reported problems in transporting their harvest for export. Two-thirds said they had to suspend or dial back their services for farmers. And 75% predicted ongoing setbacks and delays in their harvest and sales process. Beyond these operational challenges, businesses reported panic and uncertainty in their communities. Farming families were in need of critical goods and services, and agricultural enterprises were positioned to be first responders. But they needed the tools and resources to stay afloat, meet new challenges, and continue supporting their farmers and employees. Taking our cues from the agricultural enterprises we’ve worked with for over two decades, Root Capital quickly pivoted to meet their most pressing needs. As a first step, we surveyed 130+ agricultural businesses to understand how the pandemic was impacting them and their communities. With this knowledge, we could direct our response to where it was most needed, supporting locally-led solutions. The most immediate challenge was to ensure that businesses could continue operating while keeping farmers and employees safe. To that end, we: 1) Disbursed $1.7M in emergency resilience grants so businesses could meet urgent health and economic needs. With these grants, our clients provided life-saving soap, masks, and other hygienic supplies to thousands of families; made their offices and warehouses safer for employees; and even planted gardens to ensure access to food during a prolonged crisis. 2) Trained 184 businesses in crisis management skills, such as financial forecasting and safe harvesting and processing practices. For the first time, our advisors delivered this vital business training 100% online. 3) Provided loan restructuring and debt relief to clients experiencing significant market shocks or cancellation of contracts.

Source: Nonprofit submitted responses

...   Culture & Community


This score provides an assessment of the organization's engagement with the constituents it serves, a practice we term Constituent Feedback. When organizations listen to constituents, they are able to better deliver on programs and meet the needs of stakeholders. A future version of this Beacon will also assess an organization's people operations and its Diversity, Equity and Inclusion (DEI) metrics.


Culture & Community Score

Not Currently Scored

Root Capital is currently not eligible for a Culture & Community score because we have not received its Constituent Feedback data. Nonprofit organizations are encouraged to fill out the How We Listen section of their Candid profile. This data will provide the basis for the initial evaluation of Culture & Community.

Note: The absence of a score does not indicate a positive or negative assessment, it only indicates that we have not yet evaluated the organization.


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Culture & Community Report

Unscored

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Constituent Feedback

Constituent Feedback

Not Scored


This organization reported that it is collecting feedback.


Here's how this organization is listening and learning from the people they serve:


How is your organization collecting feedback from the people you serve?

Electronic surveys (by email, tablet, etc.), Focus groups or interviews (by phone or in person), Case management notes


How is your organization using feedback from the people you serve?

To identify and remedy poor client service experiences, To identify bright spots and enhance positive service experiences, To make fundamental changes to our programs and/or operations, To inform the development of new programs/projects, To identify where we are less inclusive or equitable across demographic groups


With whom does your organization share the feedback you got from the people you serve?

The people we serve, Our staff, Our funders, Our community partners


What challenges does your organization face in collecting feedback from the people you serve?

It is difficult to get the people we serve to respond to requests for feedback, We don't have the right technology to collect and aggregate feedback efficiently, The people we serve tell us they find data collection burdensome, Staff find it hard to prioritize feedback collection and review due to lack of time


Briefly describe a recent change that your organization made in response to feedback from the people you serve.

In April and June 2020, we conducted two surveys of 130+ of our client agricultural enterprises to understand their challenges and needs in the face of COVID-19. With this knowledge, we were able to direct our response to where it was most needed and ensure that businesses could continue operating while keeping farmers and employees safe. Using the findings from our surveys, we disbursed emergency resilience grants to help businesses meet urgent health and economic needs (e.g., PPE, handwashing stations, food kits). We also adapted our advisory services to be 100% virtual and trained businesses in new skills, such as financial forecasting and safe harvesting/processing practices. Finally, we provided debt relief and loan restructuring to clients experiencing severe market shocks.



Methodology


Charity Navigator believes nonprofit organizations that engage in inclusive practices, such as collecting feedback from the people and communities they serve, may be more effective. We've partnered with GuideStar by Candid to survey organizations about their feedback practices. Nonprofit organizations can fill out the How We Listen section of their Candid profile to receive a rating.


Charity Navigator awards full credit for this Beacon to every nonprofit that is eligible for an Encompass Rating that completes the survey, in recognition of their willingness to publicly share this information with the nonprofit and philanthropic communities. This data is not evaluated for quality at this time. Validation will be added in future iterations of this Beacon.

Analysis and Research


Like the overall Encompass Rating System, the Culture & Community Beacon is designed to evolve as metrics are developed and ready for integration. Our partnership with Feedback Labs and Guidestar by Candid, and other partners including Fund for Shared Insight, GlobalGiving, and Keystone Accountability, enables us to launch the first version of this beacon with Constituent Feedback information collected on Candid's site.


Feedback practices have been shown to support better Diversity, Equity, and Inclusion outcomes, an essential area of assessment that we intend to further expand and develop in the future. Feedback Labs has documented several studies which indicate that beyond achieving organizational goals, nonprofits that are attentive and responsive to concerns and ideas raised by beneficiaries establish stronger relationships with the people they serve, promote greater equity, and empower constituents in ways that can help to ensure better long-term outcomes. You can find resources to help nonprofits improve their feedback practices here.

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