Venture philanthropy model for social enterprise: a story
Insight from Aaron Fishman, a social enterprise founder whose innovation helped transform one Balinese community to live better.

The story of East Bali Cashews (EBC) began with a conversation a young American traveler named Aaron Fishman had with locals harvesting cashews in the Kubu area of East Bali. One of them told him the cashews would be sent to Vietnam for processing. Fishman wondered why they didn’t process the cashews themselves, and later discovered it was due to a shortage of capital, lack of education and no market network.
Fishman, a seasoned adventurer with a longstanding interest in food and culture, and his wife were in Bali after their plans to join the Peace Corps in Botswana went awry. They cashed in their frequent flier miles and found themselves volunteering with an NGO in Bali. Their arrival coincided with cashew season, according to the EBC website, and while Aaron taught public health staff about wound care and nutrition, they taught him about cashews.
Learning that the cashew industry was woefully underdeveloped in Kubu, Fishman was inspired to start working on a project that would have a major impact on the village. His idea was to stop sending the cashews abroad and start processing everything in Bali. A simple idea that resulted in great change for the village.
East Bali is quite different from the traditional tourist-eye image of Bali. The poverty level is still high and the area is very dry, resulting in difficult access to clean water and other health issues. However, in Kubu, cashews grow very well and Fishman saw a great economic opportunity there.
He started raising funds to build a modern cashew processing facility, founding East Bali Cashews in 2012 with $130,000 in funds he had gathered. Motivated to do more, he went in search of further investors, and partnered with Kohlberg Kravis Roberts (KKR), the US private equity firm, which assisted him in developing a business plan and then raised over $2 million in investment.
Currently EBC has 350 employees, 85 percent of them female, and exports its products to eight countries including the US, Japan, Singapore, Hong Kong, Australia, New Zealand and Chile. In recognition of its impact on the local economy, EBC received the 2015 US Secretary of State’s Award for Corporate Excellence (ACE) in Washington, DC.
I met with Aaron Fishman, the CEO of EBC, and Steve R Okun, the Director of Public Affairs Asia Pacific for KKR and had a chance to hear the history of EBC, future plans and their latest project to make a difference to the community — venture philanthropy.
Tell us about your partnership with KKR?
Aaron Fishman: We had raised $130,000 when we started EBC, but we wanted to expand more. We approached a company in Singapore called IIX [Impact Investment Exchange] and they introduced me to KKR, a private equity company from America looking to do a technical assistance program by helping a social enterprise to expand, and build a financial model for that social enterprise. So that’s where I met Steve [Okun].
Steve R. Okun: At that time, KKR was looking for opportunities where we could use our business skill to generate a great social impact. We found there are a lot of entrepreneurs who are looking to make a difference in society from a business perspective — socio-preneurship. We have also seen that there is this group of investors — called impact investors — who are looking to invest in these types of companies where they want to get not only financial return, but also a measurable social impact from their investment.
When we met Aaron he had the business up and running, he hired 100 people, he was generating revenue of about $32,000 a month, but when he was then trying to raise hundreds of thousands of dollars, the investors said, “We’re not going to go without a business plan.” So we came together, our team helped Aaron put the business plan together.
How did the business plan help?
Steve: We started to create the business plan in May 2013 and we finished in September 2013, and just two weeks after that, EBC raised $900,000 dollars. Six months later, Aaron and I ran a panel together talking about EBC and there was a person in the audience who ended up investing another $1.5 million.
It just shows how far a little bit of pro-bono assistance can go when you find a business like Aaron’s. In 2013, EBC’s revenue was about $350,000 a year, and this year it should be $2.5 million. East Bali Cashews is really a model or case study, which is profitable and generates great social return. That’s why the US Secretary of State is honoring EBC.
Tell us about your experience with local workers.
Aaron: All of our staff in the factory are from Kubu. It’s been fantastic, the only reason we have been successful so far is because of the team. All of our products are hand-cooked, hand-peeled, hand-processed and hand-packaged. It takes caring people who want to continue to support the factory.
Steve: What’s remarkable is that before the factory was there women had no employment so they either had to go and live in Denpasar, or work in hotels, so they had to leave their families behind. But now, we have these people coming home. They can make as much money in the village and they can stay with their families so it’s really transforming the lives of the people.
What are you planning next?
Aaron: One of our biggest goals is to move into farmer training and farmer development. We weren’t able to do that to begin with because it’s very expensive and very risky, but now that we know the business we realize that’s the only way to boost agriculture in Indonesia.
Steve: In 2013, we did a financial impact assessment for EBC. We found that for every dollar investors placed in EBC, there is a 54 percent annual return of that profit to society. That’s primarily the women who didn’t have jobs before and now have employment and kids who are going to have an education because the women have jobs. The social impact of EBC is extremely powerful. However, we also found it is extremely localized. You can literally count the people who benefit from EBC — it is around 600 people.
Aaron and I are saying that we are not satisfied with only benefiting 600 people, we want to benefit more; and the only way to do that is to increase farmers’ income, because that’s going to help all families. The question is, how do we do that? We can’t do it with a business model like EBC, so we have to create a different program to raise farmers’ income. To answer that, we are in the process of creating the East Bali Center for Community Development. It is venture philanthropy, it’s an NGO but a profitable NGO, so the way it works is we want to create a business with philanthropic donations, which then generate revenue and can be used to educate farmers to raise their income.
How will this benefit farmers?
Aaron: The farmers have an asset, which is their land. They can do more with that if they have an investment they can make, they can plant different things, they can use different inputs and they can sell the yield. For us, the only way we can improve the livelihood of farmers is by educating them on how to manage the land better, and offer inputs to them such as seedlings. That’s in the early stages for a business that is usually something done by the government, and we need to find a way to finance this better. No investors are going to say: “Here’s a million dollars to improve the lives of farmers.” Investors want 50 percent in return or 20 percent in return. We need to find a way to benefit farmers by funding this educational venture. That’s why we decided to create a farmer education center in East Bali. It will be a place where modern cashew agriculture techniques can be studied, and all inputs can be provided like seedlings, ways to trim the trees, sub-nutrients that are needed and harvesting techniques. It is all stuff that if the farmers learn and use it, they are going to make more money out of their land.
How does the funding work with this initiative?
Aaron: This initiative requires philanthropic money. But the problem with that is that it runs out, there’s no way to grow. If next year I want to work with double the number of farmers, I have to find double the amount of money.
We thought, why don’t we take the approach that we have in East Bali Cashews? We treat this like a business — there should be the potential for revenue. We know that we can sell seedlings — not to make a huge profit on that, but we can certainly reclaim some money, we can make it continue.
Next we plan to connect the cities of Jakarta, Singapore and Hong Kong with this village. We are building an eco-lodge on site that has space for 40 people. They can come — including students — to take some courses, learn about these things, experience the beautiful air and eat organic food. They are going to immerse themselves in these areas and they will pay like 50 bucks per night or 100 bucks per night to stay there, and the money will go into funding this farmer education center.
Steve: So all you need to do is raise the money one time to build the eco-lodge and then you never ever have to raise money again, and you create more jobs in the village because the people have to run the eco-lodge, so the revenue of the eco-lodge will pay for itself, pay for all the operating costs.
Transcript from my interview with Aaron Fishman, the CEO of EBC, and Steve R Okun, the Director of Public Affairs Asia Pacific for KKR on April 16, 2016. First appeared in AmCham Indonesia Newsletter. Above version was edited from the original version.
