Social Investment Funds

INVESTORS REPORTFourth Quarter 2012www.globalpartnerships.org

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For more information, contact:

Jason Henning, Director of Investor Relations

jhenning@globalpartnerships.org | 206.456.7832

Photo c/o Friendship Bridge

| Letter from the CIOO |

11 COUNTRIESwhere Global Partnerships works

35 PARTNERSwith whom Global Partnerships works

105,944 PEOPLEserved by Global Partnerships through our partners

$44.4 MILLIONfund capital at work

Global Partnerships | Q4 2012 | As of December 31, 2012 | Page 2

BY THE NUMBERS

February 15, 2013

Following the recent global economic crisis, “people over profits” became a catchphrase among financial institutions seeking to attract customers disillusioned with the banking sector. Much effort and many resources were spent promoting the community connections and values of banks. In truth, a blueprint for relationship banking already existed among the many microfinance and cooperative partners Global Partnerships (GP) supports.

Within the global development sector, much capital has flowed to commercially-driven microfinance institutions (MFIs) extending a range of financial services for the poor. While profitable, this myopic approach does not consider ways to improve the life of the borrower beyond access to financial products.

Since its inception, GP has made impact investments in over 60 partners, and among its key insights is that most high-performing institutions demonstrate a strong commitment to

client satisfaction. Often times this takes the form of market-responsive education, such as the approach Friendship Bridge is taking in Guatemala (see Partner Profile, page 6). They and other organizations focused on client satisfaction regularly receive feedback from current and former clients to help improve their services.

Our agricultural cooperative partners, which are collectively owned by individual farmers, employ a democratic decision making process that addresses the needs and concerns of each member. Because the owners have many needs, such as access to specialty markets, crop optimization education, access to affordable credit, and access to affordable healthcare, these cooperatives are typically designed to deliver multiple services across a common distribution network. As a result, their membership tends to be much more stable than institutions that only deliver financial services.

From our experience, high levels of customer satisfaction lead to good business, including higher client retention and better loan repayment. Recently the leader of an MFI asked me to consider funding his organization. When I emphasized that our funds seek high impact and client satisfaction through integrated services, he said that this would be too expensive for his organization to implement.

While providing integrated services in a financially sustainable and competitive manner can be costly, there are numerous examples of successful models. GP’s Health Services Fund, for example, is focused on assisting organizations in building financially sustainable and high impact business models. Likewise GP’s Green Technology Fund is now beginning to assist organizations in finding market-based solutions to the household energy needs of their clients.

Lastly, macro tools like Client Protection Principles/Smart Campaign and the Social Performance Task Force must be combined with micro-analysis: due diligence by the investor to support the organizations that put clients’ needs first. This is exactly what Global Partnerships does, on your behalf as an impact investor, and on behalf of the millions of people in our impact areas seeking greater opportunity and a better life.

Thank you for your ongoing interest and support,

Mark Coffey Chief Investment and Operating Officer Global Partnerships

| Microfinance Fund 2008 |

Global Partnerships | Q4 2012 | As of December 31, 2012 | Page 3

Fund Manager’s Comments

Partner performance remains strong and all partners in the Fund continue to make principal and interest payments in a timely manner. Generally speaking partners have shown responsible growth, consistent balance sheet strength, and strong portfolio quality. The fund’s portfolio in Nicaragua continues to show improved credit quality as partners have overcome challenges related to the non-payment movement in that country. With just under two years until the Fund matures GP remains hard at work identifying and maintaining mission-aligned partners.

October 31, 2008Inception Date

$20,534,960Capital Invested

$20,000,000Total Fund Capital

17 $716 81% 49%

Fund Manager Global Partnerships

Investment CurrencyUS$ and fully hedged local currency

Type of FundDebt

Fund Facts

Social Impact

GROWTH

PARTNER PORTFOLIO QUALITY

Outstanding number of partners

Average loan size

Percentage of borrowers served who are women

Percentage of borrowers served living in rural areas

TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions

FY09 FY10 FY11 FY12100

200

300

400

500

600

TOTAL BORROWERS SERVEDIn thousands

FY09 FY10 FY11 FY12300

400

500

600

700

800

AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %

FY09 FY10 FY11 FY12

90

120

150

AVERAGE PAR > 30Loans past due greater than 30 days as a %

FY09 FY10 FY11 FY1202468

10

AVERAGE WRITEOFFSAsset amount charged to loss as a %

FY09 FY10 FY11 FY120

1

2

3

4

| Social Investment Fund 2010 |

Global Partnerships | Q4 2012 | As of December 31, 2012 | Page 4

Fund Manager’s Comments

Global Partnerships (GP) has remained active with due diligence and new disbursements with SIF 2010 during the fourth quarter of 2012. All partners continue to make principal and interest payments in a timely manner. Fund performance continues to be strong, with a diverse portfolio of well performing partners. As of December 31, the Fund’s outstanding loan balance was $23.6 million deployed to twenty eight mission-aligned organizations in nine countries across Latin America and the Caribbean. The Fund continues to have investment opportunities as a result of regularly scheduled amortizations and repayments. During the fourth quarter the Fund disbursed approximately $1.6 million to two new partners, IDEPRO in Bolivia and Aldea Global in Nicaragua. Both of these partners reflect the innovative and diverse nature of approaches within GP’s Rural Livelihoods impact area.

October 21, 2010Inception Date

$23,627,938Capital Invested

$25,000,000Total Fund Capital

28 $836

78%

50%

Fund Manager Global Partnerships

Investment CurrencyUS$ and fully hedged local currency

Type of FundDebt

Fund Facts

GROWTH

PARTNER PORTFOLIO QUALITY

TOTAL PARTNER LOAN PORTFOLIOUS dollars in millions

TOTAL BORROWERS SERVEDIn thousands

AVERAGE OPERATIONAL SELF SUFFICIENCYTotal revenues/total expenses as a %

AVERAGE PAR > 30Loans past due greater than 30 days as a %

AVERAGE WRITEOFFSAsset amount charged to loss as a %

Outstanding number of partners

Average loan size

Percentage of borrowers served who are women

Percentage of borrowers served living in rural areas

Social Impact

FY11 FY120

200

400

600

800

FY11 FY12

0

200

400

600

800

1000

FY11 FY1290

120

150

FY11 FY12

0

1

2

3

4

FY11 FY120

1

2

3

4

Outstanding PositionsDistribution by Institution and Country

Global Partnerships | Q4 2012 | As of December 31, 2012 | Page 5

| |

BOLIVIA (25%)CRECER (10%)Pro Mujer in Bolivia (10%)FONDECO (5%)

ECUADOR (30%)FINCA Ecuador (10%)FODEMI (10%)Banco D-MIRO (5%)Fundación Alternativa (3%)Fundación Faces (2%)

EL SALVADOR (5%)ENLACE (5%)

GUATEMALA (1%)Friendship Bridge (1%)

BOLIVIA (20%)Pro Mujer in Bolivia (3%)Sembrar Sartawi (5%)IDEPRO (6%) NewCRECER (3%)FONDECO (3%)

COLOMBIA (9%)Fundación Amanecer (6%)Contactar (3%)

DOMINICAN REPUBLIC (1%)Esperanza (1%)

ECUADOR (10%)ESPOIR (4%)Banco D-MIRO (3%)Fundación Faces (3%)

EL SALVADOR (8%)Fundación Campo (5%)ENLACE (3%)

Microfinance Fund 2008Percent of investable assets

Note: All percentages have been rounded to the nearest whole number.

HONDURAS (4%)COMIXMUL (4%)

MEXICO (10%)CONSERVA (4%)FRAC (4%)Pro Mujer in Mexico (2%)

NICARAGUA (5%)Aldea Global (1%) NewFDL (2%)Pro Mujer in Nicaragua (2%)

PERU (29%)ADRA (4%) Pro Mujer in Peru (7%)Crediflorida (5%)Los Andes (3%)NORANDINO (6%)Arariwa (3%)FONDESURCO (1%)APROCASSI (0%)

CASH (3%)

MEXICO (9%)FRAC (2%)Pro Mujer in Mexico (7%)

NICARAGUA (15%)FDL (10%)Pro Mujer in Nicaragua (5%)

PERU (14%)Credivisión (6%)Pro Mujer in Peru (6%)Arariwa (2%)

CASH (1%)

Social Investment Fund 2010Percent of investable assets

5% El Salvador

1% Cash

1% Guatemala

25% Bolivia

30% Ecuador

9% Mexico

15% Nicaragua

14% Peru

4% Honduras

5% Nicaragua

3% Cash

1% DominicanRepublic

20%

Bolivia

9% Colombia

10% Ecuador8%

El Salvador

10% Mexico

29% Peru

| Partner Organization Profile: Friendship Bridge |

Opportunities for women are scarce in Guatemala, where approximately 30 percent of girls are not in primary school and less than 50 percent attend secondary school1. But Global Partnerships’ (GP) partner Friendship Bridge, a microfinance institution (MFI) that serves women in mostly rural areas of the country, is working to empower its clients through access to credit and education.

Friendship Bridge is a Colorado-based not-for-profit with field operations in the rural highlands of Guatemala. The organization utilizes the village bank lending methodology to provide impoverished women with credit integrated with education. The education curriculum focuses on three major themes: health, business and self-esteem, all presented monthly by credit officers. Delivered in Spanish or, in many cases, the local Mayan language, specific topics include business and credit, client service, reproductive health, and nutrition.

What sets Friendship Bridge apart from many of its competitors is the organization’s emphasis on client satisfaction. Friendship Bridge has continually surveyed its clients through focus groups intended to evaluate client satisfaction, define priority topics and identify areas for improvement. These studies have revealed the value clients place on education and their desire for more advanced curriculum. Based on survey results the MFI has redesigned their education curriculum to provide more advanced training to clients who have already received the basics, including agricultural training workshops covering topics such as crop rotation, composting and natural fertilizers.

Another sign of Friendship Bridge’s emphasis on the welfare of the client is their staffing of client advocates. These employees extend support and individual attention to clients and serve as liaisons between clients and the MFI. Through one-on-one meetings, client advocates learn more about the clients and their businesses, the needs of their families, and what is needed to help a client discover a pathway out of poverty. Ensuring a feedback loop, advocates will also play a role in Friendship Bridge’s ongoing program evaluation strategies.

Global Partnerships is proud to include Friendship Bridge in its portfolio of partners that are using sustainable solutions, such as credit combined with education, to help impoverished people earn a living and improve their lives.

1Friendship Bridge

http://www.friendshipbridge.org/images/success story tomasa.pdf

GuatemalaCountry

1990Year founded

91Number of

employees

15,730Active borrowers

$3,427,788Outstanding gross loan portfolio

$350Average loan size

100%Percent women

80%Percent rural

Global Partnerships | Q4 2012 | As of December 31, 2012 | Page 6

Friendship Bridge clients receive a lesson on breast cancer detection during a village bank meeting. Photo c/o Friendship Bridge.