They’re active across 23 countries. Working with 369 organizations to reach 3.4 million people. The goal? Creating opportunities for underserved groups to shape their own futures. As Rabo Foundation celebrates it 45 years, here’s what you need to know.
“It’s the best kept secret at Rabobank.” There’s a longstanding joke that Rabo Foundation employees should do their good work in silence. But as they reflect on nearly half a century of supporting farmer cooperatives in developing countries and strengthening financially insecure groups in the Netherlands, it’s time to let the secret out.
Today there are farmers in Kenya who are able to buy better supplies and increase production with the help of a “digital wallet.” There are fishermen in Sumbawa, Indonesia, who not only make higher wages, but also preserve more of their catch and protect local fisheries. There is a chicken feed factory in India run by thousands of women who are bringing their families above the poverty line. In the Netherlands there are young “Sea Rangers” protecting the North Sea who would otherwise have been excluded from the job market.
Look no further than Rabo Foundation to see proof positive of the bank’s “Growing a better world together” mission. But the Foundation is more than Rabobank’s “do-gooder” little brother. “This is not a hobby,” says Alexander Meyer, who has been with the Foundation since 2012 and heads up Rabo Foundation International and the Rabo Rural Fund. “Not many colleagues realize we are actively practicing the history of Rabobank today: providing loans to groups of farmers who do not have access to finance. And with those loans they can grow. Just like the farmers who stood together in the spirit of Raiffeisen at Rabobank’s origin in the 1800s.”
In the Netherlands, Rabo Foundation supports social enterprises that create jobs for those who have trouble entering the labor market.
“This isn’t philanthropy”
So what is Rabo Foundation exactly? There is a common misconception that Rabo Foundation, like many corporate foundations, is a charity. Pim Mol, who joined as Managing Director in 2018 wants to set the record straight: “We should stick to the heart of the bank: and that’s giving credit.” Indeed, the Foundation shares a mission and toolbox – packed with networks, knowledge and financial solutions – with Rabobank. But it is an independent entity with NGO (ANBI) status in the Netherlands and its own Supervisory Board. Funds come from a percentage of Rabobank Group profits, plus donations from employees and clients.
The goal is to create better lives for smallholder farmers abroad and vulnerable populations in the Netherlands by investing in their financial self-reliance. In turn, financial independence can have cascading effects including local economic development, social welfare, and positive environmental outcomes. In emerging markets, Mol explains, small-scale farmers are often considered “unbankable” – that is, they pose too much risk for a traditional bank to take them on as a client. “If we give them a loan, they can become independent over time and eventually become bankable in their own country.” Working with agricultural cooperatives and SMEs, the Foundation reaches 3.3 million smallholder farmers across Africa, Asia, and Latin America annually.
“A stable financial situation has a huge impact on a person’s life”- Roelie van Stempvoort, Rabo Foundation
More than a quarter of Rabo Foundation’s projects are in the Netherlands, where it supports social enterprises and organizations that promote financial literacy and create access to the labor market for underserved communities. “A stable financial situation has a huge impact on a person’s wellbeing and life,” says Program Manager Roelie van Stempvoort. “Financial self-reliance cannot be taken for granted for many Dutch people. We use our network to cooperate with various parties on this subject.”
Today, Rabo Foundation operates with 47 employees and invests over 35 million euro annually. That’s a far cry from the 900,000 guilders and three full-time employees it launched with 45 years ago. The Foundation got its start in 1974 as the Stichting Steun door Rabobanken (SSR), a merger of the Raiffeisen- and Boerenleenbanken development funds, which had both been established in the 1960s. Self-reliance for vulnerable farmers abroad and financial health for insecure groups in the Netherlands were in its DNA from day one.
In its first two decades, the young foundation supported agricultural and credit cooperatives through donations and technical assistance, particularly for banks in developing countries – a role later taken over by Rabo Development (today Rabo Partnerships). A landmark change occurred in 1995 when the Foundation began offering loans. It was time for the bank’s Foundation to act more like, well, a bank. That rationale endures today. Mol: “We provide loans under businesslike, commercial banking terms, based on our conviction that when you appeal to people’s own abilities from the very beginning, there’s a good chance that they will eventually be able to manage without external support.”
That’s when things really took off. In 1999, four full-time employees managed some 300 projects with a 16-million-guilder portfolio. The ensuing decade saw an explosion of staffers, projects, and opportunities. Financing also became more cooperative with the introduction of an Employees Fund, with monthly donations matched by the bank, and a Client Fund for tax-deductible donations from enthusiastic clients. Notably, the Rabo Rural Fund launched in 2011 with the goal of financing the “missing middle”: that is, agribusinesses and cooperatives that have outgrown donations and microcredit but are not yet eligible for standard bank loans. In 2018, the Foundation allocated 33.7 million euro to 369 organizations across the globe. On top of that, the Rural Fund invested $43 million to producer organizations and SMEs.
And what about the name? How did it become “Rabo Foundation”? Early on, Dutch employees realized that partners and clients abroad had trouble pronouncing “Stichting Steun door Rabobanken,” and began informally translating it. The name change became official in 2003.
In the Indian state of Madhya Pradesh, cooperatives representing 6,000 women poultry farmers were able to open their own chicken feed factory in 2018.
Connecting the dots
Looking to the future, employees see two major drivers of change. The first is the “Growing a better world together” mission. It’s a broad and ambitious goal – and one that can only be achieved by working together.
In the food chain, the mission is all about helping the world sustainably produce enough healthy food to feed a growing population. “Previously all the parts of Rabo were working on different parts of the value chain, independently of each other,” reflects Mol. “The starting point was us, the Foundation, because that’s where the farmers are. How can we make Rabo entities work together on the value chain so it adds up?”
The first steps are already being taken. The Foundation has long tapped into its Rabobank network to help smallholder cooperatives get market access or local financing. And with loans between $300,000 and $3 million, the Rabo Rural Fund is bridging the gap between the needs of cooperatives and those of large wholesale clients. Earlier this year, Rabobank’s Trade & Commodity Finance division signed Colombian coffee exporter Caravela, which had a fifteen-year relationship with Rabo Foundation – its first financier – and later with the Rural Fund as the company’s needs developed. Caravela’s journey is emblematic of how Rabo Foundation helps businesses to grow.
In 2018, 128,740 people in the Netherlands were educated about how to lead a financially healthy life thanks to the Foundation’s support.
In the Netherlands, the mission inspires two key focus areas moving forward: stimulating financial self-reliance and supporting social entrepreneurship. The Foundation finances social enterprises like the Sea Rangers and wood design company Binthout, which generate jobs for those who have trouble accessing the labor market. These companies also create positive environmental impacts by protecting the North Sea from polluters and using wood that would otherwise be shredded – thus storing CO2.
Fostering financial health is another track. Geldfit.nl, for example, is a collaborative platform featuring tools and tips for Dutch people who need help with their finances. Here, too, creating partnerships and connecting the Foundation’s activities with the bank’s operations is part of the goal. “These programs are a logical fit for the bank and its expertise,” says Van Stempvoort. “The aim is that these programs will be more integrated into the business in the coming years.”
“Doubling impact is possible with new technologies”- Albert Boogaard, Rabo Foundation
Innovation scales impact
The future of Rabo Foundation is not only about taking a value chain approach. It is also about innovation. “Doubling impact is possible with new technologies and especially new concepts built on those technologies,” says Head of Innovation Albert Boogaard, who has been with the Foundation for twelve years.
Productivity remains a key challenge for the farmers Rabo Foundation works with, Boogaard explains. “It’s just 20 percent of what it could be. It’s also the value chain after food is produced – 40 percent of food gets lost. And it’s access to finance. Investments are just 10 to 15 percent of what is needed.” Within those gaps there are tremendous opportunities: “Doubling productivity is something that is genuinely possible for the average Rabo Foundation client, if you have knowledge, the right farm inputs, a market that pays you for your efforts, and access to finance.”
The SoilCares scanner helped farmers in Kenya dramatically increase their production.
In Nicaragua, farmer association Aldea Global was able to digitize the loan application process for growers seeking microcredit. Credit agents can now serve more smallholders in less time. In Kenya, a scanning device helped farmers analyze their soil and increase productivity two- or even threefold. The data collected through these technologies also makes farmers a safer prospect for banks – creating a virtuous cycle of increased productivity and access to finance.
As the tools and products of 21st century banking become increasingly digitized, could the rest of Rabobank learn from Rabo Foundation? “Absolutely,” says Senior Investment Manager Michaël de Groot. “Rabo Foundation is a frontrunner in innovation because we are allowed to take risks and try new tech. But it works both ways. We also make use of knowledge and skills within Rabobank. We learn from each other.”
“Rabobank and Rabo Foundation learn from each other. It works both ways”- Michaël de Groot, Rabo Foundation
Don’t keep it a secret
It’s been nearly half a century. To date, Rabo Foundation has invested 353 million euro into more than 3,400 projects and organizations around the globe. But the story is about much more than numbers. It’s about the people and communities who were able to live better lives because of an inclusive vision of finance.
“It’s barefoot banking,” says De Groot, who has been with the Foundation since 1995. “We’re working directly with farmers. Really, it’s about the food on the table. And if we do something right, even twenty years later we can still see the results.”
Van Stempvoort, the Foundation’s longest-standing employee, gets the final word: “I started at Rabo Foundation in 1985. We had just 2.5 full-time employees and we did everything together. It is so special that I have been able to see with my own eyes the journey we have made.
“When I describe my work at a birthday party, people are always surprised and impressed. I wish my colleagues the same experience. I want them to know the story of Rabo Foundation and also feel proud of it. Because it is really special what Rabo Foundation gives back to society.”
On November 21, 2019, Rabo Foundation celebrated its 45th anniversary at Pakhuis de Zwijger in Amsterdam. The event included inspiring keynotes from an international line-up and an immersive video experience highlighting stories from Foundation clients.