Spilling the Beans on the Microfinance and Impact Investing Initiative

Spilling the Beans on the Microfinance and Impact Investing Initiative

Caffeine lovers around campus may have noticed purple banners advertising the availability of direct-trade, farmer-focused Vega Coffee at the Coop and the new Library Café, but might not know that the Haverford Microfinance and Impact Investing Initiative (Mi3) helped bring Vega Coffee products to the coffee-fueled college population.

Mi3 supports a regularly offered economics course,“Impact Investing,” taught by Visiting Assistant Professor of Economics Shannon Mudd, who also acts as the director of Microfinance, Impact Investing, and Social Entrepreneurial Programs. Supported by Overseas Resources Foundation Limited (ORFL), a private charitable foundation in Hong Kong, the class gives students a chance to invest up to $50,000 per year. Every iteration of the course involves students breaking up into teams to do “due diligence” and to conduct extensive research on a social venture,  presenting their work to an investment advisory council (IAC) of staff and alums, and deliberating with the IAC over dinner to decide where to allocate their investment dollars. 

In last fall, Shivani Dixit ’20, Diane Moore ’20, and Brette Stockmaster ’20 researched Vega Coffee, a firm that departed from the more technologically oriented start-ups that Mi3 had previously funded. 

“We faced a bit of an uphill battle [in convincing the class to invest in Vega], since most of the investments in our portfolio are tech companies, which are generally more scalable and more likely to produce outsized return than firms in the food industry,” said Moore. 

“We kept in mind the idea of a double-bottom line, financial and social return,” said Stockmaster. “The intention of the class is to invest in a firm that has social impact as well as financial return. With Vega specifically, the reason we were passionate about it was the level of social return.”

Vega is a single-origin, small-batch coffee delivery service in which the beans are grown, roasted, and packaged by the farmers themselves. This empowers their farmers in Nicaragua and Colombia to earn more income for their product and helps shape a more equitable coffee trade, which is often cluttered with distinct importers, roasters, and exporters who capture more of the value, leaving less for the farmers. 

From meeting with the founders of Vega Coffee to presenting their case for investing to last year’s IAC (featuring Brad Aronson ’93, Seth Maerowitz ’79, and Dorrit Lowsen ’97), the students received invaluable advice and hands-on experience as investors.

“It’s an extremely unique opportunity because the foundation associated with [Mi3] accepts our recommendations, which is kind of crazy,” said Moore, referring to ORFL. “That doesn’t really happen at other schools.” 

Once the investment was made, there was a separate process to begin serving Vega Coffee at Haverford. While the students were very clear that bringing Vega Coffee to campus was not a part of their deliberations or plans, it is exciting to have a reminder of their investment around Haverford. 

“All we did was make the introduction,” said Mudd. “Vega made the sale.” 

Students from different sections of the “Impact Investing” course, including Moore, Stockmaster, Adam Branovan ’20, Allyson Lynch ’21, and Lyncy Nyandoche BMC ’21 continue to meet with Mudd on a weekly basis to monitor their investments in Vega and other ventures. The money earned from these projects goes back to Mi3 to support future iterations of the class.

“The idea of the program is that it’s sustainable and the returns on this investment will fund future investments in the program,” said Mudd. 

With investment in Vega Coffee still in the early stages, the students are excited for the exposure that having the products around campus will bring.

“We want to help the company as much as possible, so being a good campus ambassador is important in order to demonstrate to other schools that it works well,” said Lynch. 

Haverford students getting their caffeine fix from direct-trade, ethically sourced coffee while supporting experiential learning in impact investing? Sounds like a pretty delicious deal. 

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