Atinga, Inc. 2015 Annual Benefit Report

"Build solutions that start from the perspective of those we are trying to help, rather than what we think that they

might need...Because at the end of the day, dignity is more important to the human spirit, than wealth."

- Jacqueline Novogratz -

Contents Introduction & 2015 Impact Summary ................................................................................................ 1

Wage Comparison Chart – Atinga, Inc. Exploratory Research ............................................................. 2

Chart Conclusions ................................................................................................................................. 2

2015 Dividend for Development Distribution & Annual Impact Findings ........................................... 3

Overview ........................................................................................................................................... 3

2015 Dividend for Development ....................................................................................................... 3

Market Evaluation ............................................................................................................................ 4

Financial (Cash Flow & Savings) ....................................................................................................... 4

Capital, Assets, & Capacity ............................................................................................................... 4

Women’s Basket Group Included in D4D Distribution Introduction ................................................. 5

Financial Position as of 12.31.2015 ..................................................................................................... 5

Benefit Report Narrative ...................................................................................................................... 5

Additional Impact Summary & Concluding Remarks ........................................................................... 6

Appendix A – Pre-Distribution Survey & Notice to Beneficiaries ........................................................ 7

Appendix B – 2015 Evaluation Survey ................................................................................................. 8

Appendix C – B Lab Impact Assessment .............................................................................................. 9

© Atinga, Inc. 2016

This 2015 Report is dedicated to François Rwigenza,

our eldest and most beloved atinga artisan-shoemaker. Turi kumwe!

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Introduction & 2015 Impact Summary They say poverty is generational. We say, so is opportunity. As a Benefit Corporation registered in the State

of New York since August 2014, the close of 2015 marked The Atinga Project’s first full year of operations.

We set out to fulfill our mission:

“To promote Western consumer recognition of and response to the local capabilities of African

communities, supporting their dignity and development through the sale of their recycled taxi-tire sandals.”

Our goal moving forward is to exist sustainably, with little to no further capital investments from the

owners, thereby modeling an approach to socially responsible business and sustainable development for

both the U.S. market and academic community alike. The approach we apply to our work on a daily basis

revolves around the three core elements associated with the meaning of Atinga: dignity, honor, and

humility.

Core to our business model is what refer to as a “Dividend for Development” or D4D, setting us apart from

all others. Furiously generous, this is simply a portion of our company’s overall earnings distributed to our

beneficiaries following our peak season of sales. In late 2014, we committed to giving an unconditional 30%

of our gross profit back to our producers (friends and essential partners) in Rwanda by the end of our 2015

sales season.

This report primarily focuses on the impact created by the D4D model successfully carried out, thanks to

our many customers this past year. In summary, the D4D amounted to a total of $2,100 across our team of

artisan-shoemakers, which was distributed equally at $350 per household. This figure alone is equivalent to

eight months of typical rent on the Rwandan economy.

As detailed below in this report, the D4D impacted the artisan-shoemakers and their families by supporting

their economic position, their children’s educational security, nutrition, and overall well-being. They have

reported and affirmed to us that by making investment decisions on their own, we support their dignity; by

promoting their products in Western markets, we honor them and “give them value”; and by literally

walking a mile in their shoes with humility, they are encouraged that we stand with them in solidarity and

thankful for our authentic approach.

On behalf of our small but close team, thank you for joining with us in our effort to use business as a force

for good by walking a mile in their shoes!

Chris Way Atinga, Inc. Managing Director & President 653 Main St. STE 104 Buffalo, NY 14203 (716) 771 2818

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Wage Comparison Chart – Atinga, Inc. Exploratory Research Summarizing data collected from 2014 to the present, the following chart reveals The Atinga Project’s

actual economic impact. The Atinga Team developed a chart during the 2015 summer sales season in order

to better convey the effects of fair trade to our customers. Replacing the projected figures with actual hard

data at yearend increases the precision of this chart, aiding the analysis of Atinga’s fair wage1 impact.

The Atinga D4D2 as shown above occurred following the AP’s primary season of sales (June – August 2015)

and was distributed equally among all five artisans (and one group of women). Artisan-shoemakers were

sensitized to the D4D during a baseline study in 2014 and with a pre-distribution survey in September 2015.

Chart Conclusions

o The average Rwandan makes the USD equivalent of $1,788 annually; an artisan doing business with Atinga, Inc. made the USD equivalent of $2,020 in 2015.

o On average, without the social business of Atinga, artisan-shoemakers make 15% less annual

income than the average Rwandan.3

1 The fair wage is an average based on the total wages distributed among five artisan-shoemakers during the 2015 production

season, May – July. (These fair wages alone constitute 8.9% of the average Rwandan’s annual income). 2 The “Dividend for Development” (D4D) was 30% of Atinga, Inc.’s gross sales over the June – August season in 2015, distributed

equally among all five artisan-shoemakers and one women’s group (four women). 3 Median wage data from the Wage Indicator Foundation. “Wages in Rwanda”. Wage Indicator survey 2012. Amsterdam, Wage Indicator Data Report, March 2013. Retrieved from http://www.wageindicator.org/main/Wageindicatorfoundation/publications/2013/wages-in-rwanda

$-

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

Average Rwandan Artisan Shoemaker

Atinga Inc. D4D Impact(Annual)

$- $510.07

Annual Median Wages $1,787.59 $1,509.48

Monthly Median Wages $148.97 $125.79

Wag

es (

in U

SD)

Median Wage Comparison Chart

Atinga Inc. D4DImpact (Annual)

Annual MedianWages

MonthlyMedian Wages

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o On average, with the social business of Atinga, artisan-shoemakers made 13% more than the

annual income of the average Rwandan in 2015.

o The difference between the annual income of an artisan-shoemaker selling to Atinga vs. that of an artisan-shoemaker without this opportunity: $510.07. This supplementary figure alone makes up 28.5% of the average Rwandan’s annual income. (About three and a half months above the average Rwandan’s income).

Note that this chart reflects an estimate of annual gross income for both the average Rwandan and the average artisan-shoemaker of Kigali, Rwanda. It does not take into account the expenses incurred by artisan-shoemakers’ business activities.

2015 Dividend for Development Distribution & Annual Impact Findings There were numerous empowering outcomes that resulted from 2015’s D4D distribution in October

following our peak sales season. In September, Supply Chain Manager Jean Bosco conducted a small one-

page survey for the sole purpose of (re)sensitizing the artisan-shoemakers to the upcoming D4D and its

impact. In the 2014 Baseline Study, each were briefed on how the D4D was calculated and that it could be

utilized however they determined. For an exhibit on The Atinga Project’s approach to giving with dignity

and the D4D sensitization process, see Appendix A Pre-Distribution Survey & Notice to Beneficiaries below.

Overview Jean surveyed each artisan-shoemaker independently, completing the evaluations in late December 2015.

He shared that Claude and his wife just had a baby, their first healthy one since their previous stillborn. He

reported informally that Claude spent 155,000 of his 255,000 D4D on a new cow out in Gitarama area,

investing the remainder on tools for his business activities. Jean prayed before that interview for Claude to

“be strong, God will make a way.”

Jean also shared that Alexis, our second young artisan-shoemaker, opened his own shop part-time, with

another business partner in Bugesera (30-45min outside of the city). Their business there serves the

recently displaced Burundian population of refugees seeking asylum in Rwanda. He affirmed that there

should still be a profitable customer base there even if the refugee crisis subsides. Jean commented that

Alexis exemplifies all the other artisans in that he is “generally ambitious.” For a closer look at the survey

items included, the majority of which appeared in the 2014 Baseline Study, see Appendix B for the

Evaluation Survey instrument.

2015 Dividend for Development All five Atinga artisan-shoemakers had a financial plan in place prior to receiving their D4D sums. One

bought a cow (mentioned above), which is akin to purchasing a Prius in Western culture. One invested in

property, expanding his family’s land. Two supported their very recently born infants, while another two

chose to pay their rent three to four months in advance. Three of the five reported increasing the quality of

their family’s healthcare and that of their food intake. All artisans reported using their D4D money to

reinvest in their current activities as artisan-shoemakers. One started a new business.

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Market Evaluation Simply doing business, no matter how carefully, with Rwandan entrepreneurs at the local level can have

seriously disruptive effects on the local market, upon which they are fully dependent. This was realized at

the initial stages of the Project, thanks to Atinga Inc.’s extensive prior and ongoing research. We have since

discovered that Atinga’s inclusive, direct relational approach to development has only served to build trust,

transparency, and oneness between beneficiary and benefactor, having little or no negative effect on the

local market. Therefore, to date, we continue to monitor, evaluate, and annually measure any unintended

consequences of our activities at the local level. Even the surprisingly good unintended consequences.

This year, all artisans reported an increase in local sales, with three out of five crediting this to Atinga’s

quality standards. Because Atinga, Inc. mandated higher uniformity and product improvements for

footwear to be purchased and sold in the U.S., this positively influenced the quality of footwear crafted and

sold to their local customer base as well, generating referrals and consequently more business.

When asked whether they have diminished the quantity sold locally in order to produce more pairs to sell

to Atinga, this too looked less like a concern and more like a well-balanced business strategy. All reported a

desire to sell to Atinga more than the local customer if/when possible; however, this was marginal, as two

of five artisans tended to maintain an equitable balance between local sales and Atinga sales during the

first year of operations. This affirms that, rather than detracting from the local market, Atinga’s presence

and social business supports these households and families like a supplementary puzzle piece.

Financial (Cash Flow & Savings) With regards to cash flow and savings, the average amount saved among these artisan-shoemakers is 9,000

francs ($12 USD) per month. (This figure appears to be increasing since Atinga’s partnership). This indicates,

however, an inability to save long-term and is descriptive of an entirely subsistent lifestyle. The artisans

report poor cash flow, similar to 2014’s baseline, all citing in 2015 that there is a lack of consistent

customers in general. On a scale attempting to hone-in on this predictability, all artisans reported that

income fluctuates “only a little” 3.6 days out of 6 work days. Thus, income is unpredictable about 40% of

the time.

In terms of immediate expenses incurred following a short period of sales, the top three things reported

were as follows: 1) paying rent, 2) buying materials/tools, 3) spending on food and healthcare for family.

Capital, Assets, & Capacity We know that due to the nature of The Atinga Project’s partnership, two of the five artisans invested in

land in 2015. Two also reported that though they have other economic opportunities available to them in

their respective communities (one with carpentry skills, another with key-making) they choose the greater

opportunity available to them through Atinga.

The end of the 2015 evaluation also included a supply section similar to the 2014 baseline study’s detailed

assessment of common tools, regular inputs needed, raw material costs, and local supply logistics in

general. This 2015 section revealed changes in market prices, verified independently between each artisan-

shoemaker, regarding all general supplies necessary for quality construction of atinga footwear.

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Remarkably, all artisan-shoemakers reported separately the same increase (by 1,600 francs) since last

year’s production agreements. This information assists Atinga, Inc. to better understand and anticipate the

fluctuation of the fair trade prices determined for purchasing, and wholly informs 2016’s production

agreements.

Concerning their business activities, the total worth of all artisan-shoemakers’ tools and material assets

combined amounts to 400,000 francs ($518 USD), an average of 80,000 francs ($104 USD) per artisan.

Women’s Basket Group Included in D4D Distribution Introduction A decision was made to divide the D4D ($2,100 USD) by six instead of five, in order to include a group of artisans who unexpectedly but notably contributed to Atinga’s success in 2015. The women of Gikondo Sector hand-craft baskets from recycled shipping straps. They purchase these straps in bulk from suppliers in a nearby market, then hand-weave the baskets to sell in their villages and surrounding communities. Jean Bosco (supply chain manager) identified that these baskets would serve as exceptional containers in which to pack and stage atinga footwear prior to shipping internationally. After shipping the first 2015 shipment to the U.S. in a parcel comprised of these durable baskets, the Atinga staff recognized how helpful the baskets were for easily transporting, counting, and organizing atinga footwear. Quickly they realized that the baskets could be resold as well. And so, these items, hand-woven by the women of Gashyekero, became a valuable contribution to Atinga, Inc. operations overall – a contribution not only limited to improving efficiency and storage of footwear, but to increasing profits and product diversity as well.

Therefore, inclusion of the women’s group (comprised of four women) in the D4D calculation was only

natural. If the gross sales figure had been divided exclusively among the Atinga artisan-shoemakers, their

individual D4D total would have been $60 USD greater ($410 USD).

Financial Position as of 12.31.2015 Though Atinga, Inc.’s business activities stimulated much opportunity during and prior to the 2015 peak

season of sales, whether it will become sustainably profitable remains to be seen.

Majority shareholders owning 5% or more of the company: Christopher W. Way (sole U.S. Director)

Compensation to directors to U.S. Directors to date: $0 (Christopher W. Way)

Although there is no balance sheet or profit and loss statement attached herein, these documents can be

furnished upon request.

Benefit Report Narrative At Atinga, Inc. our general public benefit is the same as our primary Project's mission, which was carried

out with success in 2015. The Atinga Project's mission is to promote Western consumer recognition of and

response to the local capabilities of African communities, supporting their dignity and development

through the sale of their recycled taxi-tire sandals. Because we sold over 250 pairs of recycled-tire footwear

in 2015, we were able to sustain our business operations leading into 2016. There were no circumstances

hindering our company from fulfilling our specific or general public benefits. The pursuit of this general

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public benefit included educating customers on best practices for international development action and the

effects of charity versus business in contexts such as a developing country.

Atinga, Inc.'s articles of incorporation state that the entity exists to create a specific public benefit through

environmental and social impact in the form of 1) promoting and supporting the re-purposing, recycling,

and reuse of discarded tires to combat the harmful effects of inaction and 2) redirecting revenue from our

business activity (selling of African-made recycled-tire footwear) to our suppliers in the form of a dividend

based on our overall annual revenue. B Lab's impact assessment and their tools have been the best suited

and most affordable to use as a third-party standard at this time.

Additional Impact Summary & Concluding Remarks There were numerous outcomes resulting from the first year (and part of 2014) of The Atinga Project’s

initial operational development and activities. These outcomes were overwhelmingly positive, and many of

them unexpected. This is a testament to the authentic impact that cross-cultural small-scale enterprise can

have when approached with a methodology akin to that of the “Atinga” spirit of learning and collaboration.

- Formal Business Development in Rwanda

o Jean Bosco majority owner in training of Atinga Ltd. and former orphan of Rwandan

Genocide – supported by income generated

o Market Linkage success – supply chain achieved, ending in two different Western markets

o Professionalism across immediate Rwanda team and leadership (Jean Bosco continues to

apply coursework of management degree and engage in opportunities, taking

entrepreneurial initiative).

- Sustained Economic Development at the Local Level o Due to intensive quality assurance meetings and collaboration for production cycles to

supply Atinga USA with the best footwear possible, two unintended outcomes resulted:

Improved organization and methods for purchasing raw materials in bulk, negotiating prices for supplies, and stockpiling/sourcing greater input quantities of higher quality.

Increased volume of local customers following improved organizational and manufacture processes, primarily that of product quality and best practices.

As a result of the training and organizational improvements, the artisan-shoemakers altogether witnessed a

much higher return in terms of market success locally – more customers, higher sales, improved products

necessitating higher sale prices, and therefore, increased income at the local level.

- Continued results in the following key areas will remain a core focus of Atinga, Inc.’s social benefit:

o Education (children focus)

o Economic Development (local business architecture, design, and reinforcement)

o Sustainable livelihoods

Housing (ensuring ownership of property, supporting traditional land tenure rights,

supporting opportunities to leave cycle of rent).

Nutrition (supporting food security and quality)

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Atinga, Inc.’s approach does not “micro-manage” or dictate how income generated through the AP is spent

or allocated by our beneficiaries – rather, via our research and ongoing evaluation practices we observe

that resource allocation is balanced and decision-making supported. As a team we strive to relationally care

for stakeholders through direct and compassionate communication, providing support that results in

informed and unified decision-making.

Appendix A – Pre-Distribution Survey & Notice to Beneficiaries The following PDFs exemplify our Dividend for Development model, pre-distribution sensitization efforts,

and Atinga Inc.’s overall approach to effective social business.

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Appendix B – 2015 Evaluation Survey To view each artisan-shoemaker’s individual assessment for the year 2015, visit this online folder.

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Appendix C – B Lab Impact Assessment