AMDP Rough Draft: Watts of Love

 

AMDP MEMORANDUM

 

To:                  Professor Clark Hansen, CEO, Anima Mundi Development Partners (AMDP)

From:             Zoë Mele

Date:              03/02/2022

Subject:        Investment Proposal: Watts of Love

 

After a thorough overview of potential investments to consider this week, I propose that AMDP make an investment in Watts of Love. I will provide information on Watts of Love’s work, mission, and financials. Watts of Love also complies with AMDP’s standards for investment, which I want to reiterate. Furthermore, I will provide a final recommendation for the non-profit organization.

 

 

AMDP Investment Standards

 

Triple Bottom Line

AMDP ensures that its investments follow the triple bottom line—a business concept where firms commit to measuring social and environmental impact. Rather than only focusing on profit, the triple bottom line is broken down into three “Ps” (Business Insights Blog ,2020):

·      Profit- financial performance of the company. You want to reduce costs and risk

·      People- societal impact. You want to create value for all stakeholders in a company. This includes, those being served, employees, and the community with which the company exists in

·      Planet- driving positive change on the planet

 

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is when a company has a responsibility to environmentally, ethically, philanthropically, and economically do good. This means that a business is reflecting efforts beyond what is required by owner, law, or shareholders. The business wants to be more sustainable and equitable to all who is involved. CSR promotes satisfaction (Pacific Oaks College, 2021).

 

Social Enterprise

A social enterprise is a business that has the goals to generate profit and have particular social, cultural, and economic outcomes aligned with the company mission. The business uses a commercial structure to function, meaning it partners with companies that have similar values (CFI Education, n.d.).

 

Carbon Footprint

A carbon footprint is the impact that we can make as individuals on the environment. It is measured in carbon dioxide units and is determined on the greenhouse gases we generate. Carbon footprint is important for businesses because it ensures they promote sustainability and reduce energy (Endesa, n.d.).

 

 

Watts of Love History

Watts of Love was founded in 2012 by Nancy Economou. Her vision for the non-profit began on a trip to the Philippines. She volunteered at a feeding program that visited rural communities with no access to electricity and encountered children with severe burns from kerosene lamps. Children were also left unattended while their parents worked in the complete darkness of the night.

 

Nancy developed a user-friendly solar powered light and distributes these lights to communities living below the ultra-poverty line and do not have access to electricity. Today, Watts of Love has helped 51 countries, nearly 400,000 lives, and raised household income by 30% (Economou, 2021).

 

 

Watts of Love Mission and Impact

Watts of Love seeks to give people the power to raise themselves out of poverty through the use of solar lighting. Company UL provides pro bono solar lighting for the nonprofit. The founder, William Henry Merrill Jr. said about Watts of Love, “It is not that we are doing something for manufacturers, or suppliers or architects; we are doing something for humanity.” (UL, 2021).

 

Kerosene lamps emit 230 million tons of carbon dioxide into the air each year. The open flame also causes severe burns and fires. Beyond Watts of Love’s goal to reduce harmful toxins being emitted into the atmosphere and risking the lives of the humans, the nonprofit also wants to provide empowerment and more income to impoverished families. Solar lamps elongate a work day and eliminate the need for families to purchase kerosene.  With this extension of the workday, Watts of Love aims to educate women on financial literacy. 63% of the world’s 750 million illiterate adults are women (Economou, 2021).

 

·      Watts of Love was also granted the GuideStar Platinum Seal of Transparency- focuses on measuring progress and showing improvement/ results

·      Evaluated by Charity Navigator and received 100 out of 100 on the Encompass Rating System- analyzes nonprofit performance and operational excellence

 

 

Lighthouse Model

 

Vice President of Corporate Sustainability, Barbara Guthrie, stated, “It’s a win-win across the board when you consider what Watts of Love is doing for people.” Watts of Love’s Lighthouse model emulates AMDP’s investment standards. Partnering with locals in a community, Watts of Love trains the locals on how the solar lights are best used and how the community can increase their incomes. The Lighthouse Model takes three years as it is a long term investment in the community and focuses on large-scale distribution of the lights. Teaching locals about financial literacy is also a process and Watts of Love caters how they teach directly to the community’s needs. (UL, 2021).

 

 

Watts of Love: Financial Track Record

 

Watts of Love is a 501(c)(3) organization (nonprofit) that is tax-exempt and tax-deductible. According to its latest financial report, the total expense to run the non-profit was $766,985 in 2020. This is a significant decrease from nearly $1 million in 2019. Its total revenue in 2020 was $1,211,274 received primarily from donations and program service revenue.

·      According to Watts of Love’s website, “Every $1 donated to Watts of Love returns $31 in current and future cost-savings to local communities.”

Watts of Love’s revenue has substantially increased since its conception, with a loss of only $400,000 during the COVID-19 pandemic. We can only expect its revenue to continue to rise as the world adjusts to its new normal (Open990, 2021).

 

 

Final Recommendation

 

I recommend AMDP to invest in Watts of Love because it embodies everything AMDP values and is financially sound. The non-profit is successful in adhering to

·      Reducing the carbon footprint

·      Following the triple bottom line

·      Emulating corporate social responsibility

 

Watts of Love’s main focus is to empower people to raise themselves out of poverty and to flourish on their own accord. It not only provides a service, but teaches people to be successful on their own accord. Not only would Anima Mundi be investing in an organization that has an immediate positive impact on the world, but continues their impact for years into the future.

 

Once again, I strongly encourage AMDP to contribute to this impactful and inspiring organization, and to take part in a win-win situation for humanity.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SOURCES

 

CFI Education. “Social Enterprise.” Corporate Finance Institute, 30 Jan. 2021, https://corporatefinanceinstitute.com/resources/knowledge/other/social-enterprise/.

Economou, Nancy. Watts of Love, 2021, https://www.wattsoflove.org/.  

Pacific Oaks College Business September 23. “Breaking down the 4 Types of Corporate Social Responsibility: Pacific Oaks College.” Voices Digital, 13 Dec. 2021, https://www.pacificoaks.edu/voices/business/breaking-down-the-4-types-of-corporate-social-responsibility/.

“The Triple Bottom Line: What It Is & Why It's Important.” Business Insights Blog, 8 Dec. 2020, https://online.hbs.edu/blog/post/what-is-the-triple-bottom-line.

“UL Certifies Solar Lighting Product for Nonprofit Watts of Love.” UL, 26 Mar. 2021, https://www.ul.com/news/ul-certifies-solar-lighting-product-nonprofit-watts-love.

“Watts of Love.” Open990, 2021, https://www.open990.org/org/455404420/watts-of-love/.

“What Is a Business's Carbon Footprint and How Can It Be Reduced?” Endesa, https://www.endesa.com/en/blogs/endesa-s-blog/business/business-carbon-footprint#:~:text=The%20carbon%20footprint%20is%20the,the%20greenhouse%20gases%20we%20generate.&text=The%20world%20of%20business%20has,reduce%20the%20energy%20they%20use.

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