Profits and charity are not mutually exclusive

Peter Wuffli and his wife Susanna Wuffli foun­ded elea 16 years ago. The foun­da­tion supports entre­pre­neu­rial ideas and acti­vi­ties as an effec­tive way to combat poverty.

‘We are parti­cu­larly moved by the fact that our work signi­fi­cantly impro­ves the living condi­ti­ons of local people,’ says Peter Wuffli. The former UBS CEO estab­lished the elea foun­da­tion in 2006 toge­ther with his wife Susanna Wuffli. Since then, elea has been fight­ing poverty with entre­pre­neurship. The foun­da­tion wants to give people with a daily income of less than USD 3 access to the oppor­tu­nities offe­red by globa­li­sa­tion. Focu­sing on the topics of agri­cul­ture, retail trade and profes­sio­nal skills, it works in coun­tries such as Kenya, Zimbabwe, South Africa, Peru, Boli­via, India and the Philippines.

«We don’t make an invest­ment deci­sion until a team member has spent several days on site.»

Peter Wuffli

Fight­ing poverty

To illu­strate how it works, Wuffli menti­ons a company in the Peruvian Andes in which elea holds a stake: Inka Moss. This firm sells a kind of moss that grows only at 3,000 metres above sea level and is suita­ble for flori­cul­ture. Inka Moss has succe­e­ded in incre­a­sing the annual income, about USD 150, of many small-scale farmers by 50%. Thanks to this, farming fami­lies can send more child­ren to school. For Wuffli, the projects are not just theo­re­ti­cal project descrip­ti­ons: he knows what they are actually about. ‘I have visi­ted the vast majo­rity of them on site,’ he says. The foun­da­tion has enga­ged with 40 impact ventures since it was estab­lished, with each one care­fully chosen. More than 100 ideas result in a hand­ful of invest­ments each year. ‘We don’t make an invest­ment deci­sion until a team member has spent several days on site,’ says Wuffli. Once the deci­sion has been made, elea gene­rally remains invol­ved as an active inve­stor for five to seven years and usually has a seat on the boards of direc­tors of the part­ner compa­nies. By then, if not before, the company should be genera­ting a profit. elea tries to gene­rate a sustainable impact in the fight against poverty, opting for long-term entre­pre­neu­rial thin­king instead of project work with a limi­ted time hori­zon. ‘In our work, profit and charity are not mutually exclu­sive – quite the oppo­site,’ says Wuffli. Howe­ver, he knows this approach is not right for every issue. ‘Tradi­tio­nal phil­an­thropy retains an important role; for example, in emer­gency assi­stance, cultu­ral matters or scien­ti­fic rese­arch,’ he says.

Susanna und Peter Wuffli mit Alumni des Bagos­phere-Ausbil­dungs­pro­gramms auf den Phil­ip­pi­nen. Das Trai­nings­pro­gramm berei­tet Jugend­li­che ohne Berufs­ab­schluss auf den Arbeits­markt vor. 

Libe­ral ethics

Questi­ons of poverty, ethics and globa­li­sa­tion have been on Wuffli’s mind for a good 40 years. He studied deve­lo­p­ment econo­mics in St. Gallen and wrote his thesis on direct invest­ment in Mexico. A success­ful career took him to the top of UBS at a young age, and he’s aware that this has put him in a posi­tion of great finan­cial privi­lege. ‘As with many in our coun­try, I have bene­fi­ted from being born here and forging my profes­sio­nal career here,’ he says. Conse­quently, he deci­ded to take on the respon­si­bi­lity of supporting those less fortu­n­ate. As a propo­nent of libe­ral ethics, he says that ever­yone should have the free­dom to be able to shape their life. ‘Those who have more free­dom, whether in the form of manage­ment respon­si­bi­lity, exper­tise or assets, should exer­cise a grea­ter amount of respon­si­bi­lity,’ he says. Chri­stian ethics and social issues are also a central concern of Susanne Wuffli, a lawyer. She and her husband have taken on this respon­si­bi­lity, putting a consi­derable chunk of their wealth into the foun­da­tion. Howe­ver, money is just half of what elea uses to have an impact, as Wuffli explains: ‘In order for an impact enter­prise to be success­ful in the long term, it needs both secure funding and expert support.’ This is where he sees the strengths of elea’s approach. The foun­da­tion provi­des finan­cial capi­tal and also inve­sts in entre­pre­neu­rial know­ledge and skills. Both are faci­li­ta­ted by dona­ti­ons from exter­nal phil­an­thro­pic inve­stors. Suppor­ted projects receive assi­stance with stra­tegy deve­lo­p­ment, orga­ni­sa­tio­nal design and also crisis manage­ment. The model is complex, but as a rule of thumb for every franc of venture capi­tal invest­ment, elea also inve­sts a franc for a venture partner’s profes­sio­nal support. As a phil­an­thro­pic impact inve­stor, elea thus func­tions as a chari­ta­ble foun­da­tion. Wuffli hopes his work will fly the flag for entre­pre­neu­rial phil­an­thropy, and he wants to inspire others to play an active role them­sel­ves. Above all, howe­ver, he wants to have an impact with elea hims­elf – in the long term. 

«We main­tain a circle of phil­an­thro­pic inve­stors, curr­ently numbe­ring 40 indi­vi­du­als, foun­da­ti­ons and companies.»

Peter Wuffli

Strong network

The foun­da­tion expands its network conti­nuously to incre­ase its impact. ‘We main­tain a circle of phil­an­thro­pic inve­stors, curr­ently numbe­ring 40 indi­vi­du­als, foun­da­ti­ons and compa­nies, that we expand on an ongo­ing basis in order to take advan­tage of growth oppor­tu­nities and secure our sustaina­bi­lity as a foun­da­tion,’ says Wuffli. Several foun­da­ti­ons have already entru­sted their capi­tal to elea, but money is only one part of this. ‘We appre­ciate the meaning­ful dialo­gue,’ says Wuffli. Along­side foun­da­ti­ons, elea has also had the support of compa­nies such as Accen­ture Switz­er­land and Julius Bär for many years. ‘We build brid­ges between the world of inter­na­tio­nal compa­nies and impact enter­pri­ses in deve­lo­ping coun­tries, and we offer a plat­form for inno­va­tive stra­te­gic part­nerships and a credi­ble, effec­tive percep­tion of corpo­rate social respon­si­bi­lity.’ These brid­ges are built not only for finan­cial purpo­ses: Accen­ture staff use their specia­list exper­tise on the ground during second­ments at part­ner compa­nies – a commit­ment from which both parties bene­fit. The foun­da­tion has set up the elea Entre­pre­neurs’ Commu­nity to ensure know­ledge can also be shared among its entre­pre­neurs. This offers a frame­work where elea entre­pre­neurs can inter­act, discuss their ideas, offer support to each other and deve­lop their skills.

Peter Wuffli besucht einen loka­len Fran­chi­se­part­ner von Copia, einem Impact-Unter­neh­men im elea-Port­fo­lio, im länd­li­chen Kenia.

«We always want to stay one step ahead.»

Peter Wuffli

Measu­ring impact

The foun­da­tion is a pioneer in its field and if Peter Wuffli has his way that will remain the case. ‘We always want to stay one step ahead,’ he says. In order to live up to this aspi­ra­tion, elea is open to other inve­stors and part­nerships. Large inter­na­tio­nal conglo­me­ra­tes could help gene­rate a systemic effect, and Wuffli sees tech­no­logy as offe­ring an oppor­tu­nity for the future. ‘Block­chain tech­no­logy could play a key role in demo­cra­ti­sing access to impact invest­ment,’ he says. Finally, he sees the need for stan­dards in impact measu­re­ment, which could help impact ventures to achieve a higher ranking. He belie­ves this could mobi­lise more capi­tal for projects. The most recent acti­vity, an invest­ment in Atec, demon­stra­tes what the foun­da­tion stri­ves to achieve with this money. The Austra­lian company is active in Cambo­dia and Bangla­desh. ‘Atec sells elec­tric cookers via a digi­tal inst­alm­ent system, meaning that even low-income house­holds can afford them,’ says Wuffli. The repla­ce­ment of coal and wood makes cooking chea­per and safer, and also contri­bu­tes to the fight against global warming. ‘Over time, precise data collec­tion will enable income to be gene­ra­ted through sale of CO2 certi­fi­ca­tes,’ he says, explai­ning the busi­ness model. What happens when a project turns out to be a success? This is illu­stra­ted by India-based Dharma Life, in which elea inve­sted back in 2014. Today, the impact company provi­des 13 million people in 40,000 villa­ges with vital goods and services, plus useful infor­ma­tion. In order to conti­nue to imple­ment effec­tive projects against poverty, Wuffli and his family support the foun­da­tion with commit­ment and enthu­si­asm. And Susanna Wuffli also plays an active role in the foun­da­tion, as Peter Wuffli says: ‘My wife sits on the Board of Trus­tees, which means she’s invol­ved in all the important deci­si­ons and shares respon­si­bi­lity for them.’

Book recom­men­da­tion

From prac­tice to teaching 

The elea Chair for Social Inno­va­tion was crea­ted at IMD Busi­ness School in Lausanne in order to give elea’s prac­ti­cal work a suita­ble acade­mic frame­work for reflec­tion and deve­lo­p­ment. This profes­sor­ship, the first of its kind in Switz­er­land, focu­ses on the effects of entre­pre­neu­rial acti­vity and market-based mecha­nisms to solve social problems, in line with elea’s work. Profes­sor Vanina Farber, holder of the elea Chair for Social Inno­va­tion at IMD in Lausanne, and Peter Wuffli, have co-writ­ten a book where they call for a closer alli­ance between capi­tal and entre­pre­neurship in the fight against abso­lute poverty.

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