Direct Interview with the Donor: STARS Foundation Gives Insights on How to Apply for Impact Awards 2014

-By Development Network-

FundsforNGOs is launching a new series of articles that will provide insight direct from grant-making representatives. This week we spoke to Alessio Kolioulis, Programme Assistant for Africa and Middle East at the STARS Foundation. We got together to discuss the recently announced Impact Awards 2014 designed to reward the best children focused interventions over the past twelve months.

2014 will see the Awards offered in Latin America and the Caribbean for the very first time besides continued funding in other regions. Four Awards of $100,000 each plus additional media support are guaranteed to be released to local NGOs in the region. Don't miss this exciting opportunity to access unrestricted funding to support your NGO.

RT: First off, tell us a little bit about the STARS Foundation and what it hopes to achieve.

AK: The STARS Foundation was established in 2001 by the Al Dabbagh Group as its philanthropic arm. The Foundation works to transform the lives of children globally by partnering with local NGOs who they believe are best placed to respond to the needs of children in their care. The Foundation is going through a tremendously exciting period as we've launched an ambitious plan to scale up in the next years to reach at least 20 million children by 2020.  In 2007 the Foundation launched the first Impact Awards in Africa, expanding to Asia in 2009 and the middle east and pacific regions in 2010. 2014 will see the Awards available in the Caribbean and Latin American for the first time.

RT: The Foundation has recently launched the 2014 Impact Awards. What do they offer to NGOs seeking funding?

AK: The Awards are designed to recognize outstanding organisations working to improve the lives of disadvantaged children in countries with the highest rates of under-five mortality. 24 Awards will be split between the three regions where the Awards are available (Latin America and the Caribbean; Africa and the Middle East; and Asia – Pacific) and the four issue categories of Health, Education, Protection and WASH (Water, Sanitation and Hygiene).

There will be four winners per region that will receive $100,000 of unrestricted funding together with a bespoke package of consultancy, PR support, and media training. Runners Up will receive up to $50,000 of unrestricted funding in addition to consultancy support.

RT: Unlike most funding that is available to NGOs, the Impact Awards provide rewards for past work rather than future projects, why is that?

AK: The Awards are designed to support organisations that have already demonstrated excellence in the delivery of interventions that make a significant impact on the lives of disadvantaged children. This means that we are able to support organisation's to continue their excellent work and help them to reach more young people than before.

RT: Another distinct feature of the Impact Awards is that you offer unrestricted funding, something that is quite rare in grant circles. Why is that.

AK: The STARS Foundation works to recognize excellent organisations that have proven that they are capable of delivering life changing projects. Our rigorous evaluation process ensures that organisations must demonstrate that they have sound management  structures and processes that provide outstanding  Strategy and Leadership, Finance and administration, Innovation and flexibility, Stakeholder investment and accountability and Human resource management.

Therefore we have confidence in the organisations we select to put the Award money to the best use within their NGO. We believe that local NGOs are best placed to decide upon their own needs to support the growth and development of their organisation that will enable them to better support disadvantaged children. Our considerable experience has shown us that restricted funding often hampers NGOs ability to expand or meet critical needs, whilst it is always exciting to us to see NGOs spend the Award money in different ways.

The Award can be put towards any activity, including planning for future sustainability, covering core running costs or delivery of programmes, as long as it ultimately benefits disadvantaged children. In previous years organisations have used this unrestricted funding to build up capacity by making investments in fundraising and communications as well as contributing to core costs and purchasing capital items such as vehicles or new facilities. Ultimately, the STARS Foundation believe in rewarding local NGOs because they respond better to the needs of their beneficiaries.

RT: What should organisations consider before applying to the Impact Awards?

AK: As with any other funding application, it is absolutely crucial that prospective organisations thoroughly check the eligibility criteria before committing to apply. Like many Foundations, we receive applications from organisations that do not meet the eligibility criteria. This represents time that could have been better spent elsewhere and consequently we strongly encourage organisations to double check the Award's eligibility criteria. The most common failure of this type is that NGOs fail to fulfill the minimum annual income requirement of $200,000. The Foundation chose this figure as a threshold as it shows that the applicant has sufficient experience to manage the Award money effectively and reduces the risk that the funding will be used inappropriately.

Another key elements of the Impact Awards eligibility criteria is that projects need to have been in existence for at least two years  meaning that nominated projects should have been operational in 2011. NGOs must be autonomous to be eligible which means that they will have their own constitution and board of directors.

We encourage multinational NGOs to apply but they must be sufficiently devolved on a local level to have their own autonomy to make their own decisions.

RT: The Impact Award winners will also receive a bespoke package of consultancy, PR support, and media training.  What do you hope these additional benefits can help NGOs to achieve?

AK: The STARS Foundation has been operational for over a decade whilst many of our staff have been in the development industry for a substantial amount of time as well. Our shared experience has taught us that many of the local NGOs we work with have under-developed fundraising and communication strategies which limits their ability to develop and become sustainable. This financial allocation has proven to be extremely successful at assisting NGOs to overcome these fundraising and communications challenges that are so common.

We have seen NGOs use the funds and expert resources to innovate the framework of their organisation, develop new communications materials such as websites and develop  business strategies that have enabled them to do more than would be otherwise possible. Many NGOs, understandably, focus on delivering the best possible services to their beneficiaries and spend less time investing in management systems, strategies and communications. The Foundation particularly recognizes the value of NGOs with effective communications as they are better placed to reach different sectors of their community, secure support from local key decision makers, raise more money from local people and generally to raise the profile of their organisation among stakeholders throughout their community. We believe that if we can assist some of the great organisations that we work with to have a higher profile that it will have a significant positive effect in attracting new donors and supporters that will have a long term benefit to the NGO.

RT: Lastly, any tips for applicants when completing their application to the Impact Awards 2014?

AK: As mentioned before, meeting the eligibility criteria is fundamental. We've tried to make our supporting documentation for the fund as accessible as possible with NGOs able to follow a simple ten step eligibility checklist which is available on our website. It is important for applicants to consider how and why they deliver their programs in a particular way, how they have innovated within their local environment and how they have worked to secure the involvement of stakeholders. I would also strongly advise that potential applicants check the official glossary for the Impact Awards that clarifies all of the terminology that the Foundation uses.

Discover more about the STARS Foundation's Impact Awards and how you can apply by visiting their website here.

FundsforNGOs presents the ultimate fundraising database! Calling all Fundraising Professionals, We are inviting you to be the first to try FundsforNGOs Premium Website which promises to revolutionize how you and your NGO can set about your fundraising. Never before have so many funding opportunities been collected in one place meaning that you can forget about endless hours researching donors. In addition to the world's largest and most up to date donor database, FundsforNGOs Premium offers you access to industry leading guides, expert video tutorials, exclusive webinars, sample proposals and much more. Discover how you can change your fundraising today...[more]

http://landing.fundsforngos.org/become-a-grant-winner/

-For more Articles and Information: http://www.developmentnetwork.co.nr/

Innovative development financing-Eytan Bensoussan, Radha Ruparell and Lynn Taliento

-By Development Network-

Innovative development financing

How can more resources be applied toward development in the world's poorest countries? Recent research has pointed to some promising ideas.

August 2013 | byEytan Bensoussan, Radha Ruparell, and Lynn Taliento
 

Of all the efforts devoted to improving economic and social conditions in developing countries, the most prominent has been the United Nations' Millennium Development Goals (MDGs), which set targets for reducing poverty and improving education, gender equality, health, and sustainability by 2015. As is true with any type of development, meeting these targets depends on resources, and a large part of the resources devoted to the MDGs come from developed countries' pledges for what is called Official Development Assistance (ODA). However, since peaking at $128.7 billion in annual net ODA in 2010, the annual total paid in ODA has declined for two years running, standing at $125.6 billion for 2012.¹

Clearly, more funds will be needed if the development goals are to be met. Moreover, market inefficiencies—such as unnecessary transaction costs, misaligned incentives, and lack of performance measures—often prevent the financial assistance that is available from achieving desired results.

Given the level of need, the uncertainty in the general macroeconomic environment, and the pressures on all government budgets, we looked into potential financing mechanisms and sources to complement traditional ODA.² We assessed a number of innovative ideas that we think merit further investigation and discussion. In this context, "innovative" refers to finance mechanisms that might mobilize, govern, or distribute funds beyond traditional donor-country ODA. Some have already been tried, others have not, and still others may carry new risks. The point of this article is not to recommend any specific solution but to shine some light on a collection of ideas we found particularly exciting as a way to either raise new funds or unlock value as society works to achieve the MDGs. Many of the ideas have the added benefit of creating a much-needed bridge for new actors, such as individuals, corporations, and emerging economies, to deeply integrate themselves into the development community.

In seeking out innovative sources of development financing, we looked across a wide range of potential contributors, including citizens, corporations, governments (of both developed and developing economies), and multilateral institutions. However, the reality is that even when other contributors are involved, most aid still flows through governments because they have the scale and responsibility to execute meaningful development-aid programs. Since we believe innovative financing should complement, rather than substitute for, government funding, our focus in this paper is on solutions in which governments are still a core part of the solution. However, we recognize there are also many good ideas that require minimal or no government involvement, such as citizen-focused fund-raising initiatives like Product RED or business-driven solutions such as bottom-of-the-pyramid ventures. Four ideas rose to the top when we screened our list based on the size of the opportunity (for example, the ability to unlock a meaningful level of additional financing or to meaningfully engage multiple actors), the technical feasibility of implementation within a short- to medium-term time frame, the potential to gain significant political momentum, and the existence of a clear and compelling role for government: unlocking value from diaspora flows, stimulating private-capital flows, encouraging private voluntary contributions through matching funds, and tackling sector-specific inefficiencies.

Unlocking value from diaspora flows

For years, people who have emigrated from developing countries have been sending remittances to support family and friends in their native homelands. Around $325 billion of remittances flow to developing countries every year. There are opportunities to unlock significant additional value from these flows.

First, the use of diaspora bonds could be expanded. The issuance of government bonds specifically targeted at a country's emigrant population is a time-tested but underused way to raise money for development. For instance, the pioneers of diaspora bonds, Israel and India, have leveraged them over time to raise more than $25 billion and $11 billion, respectively.³ For sub-Saharan African countries, the World Bank has estimated that these instruments could raise as much as $5 billion to $10 billion annually, but so far their potential has been almost completely untapped.⁴ One could imagine exciting uses for these bonds, such as the funding of education or infrastructure. To assist this expansion, donor-country governments could give their counterparts in developing countries reliable demographic data that would facilitate the marketing of bonds to diaspora. Customizing the regulatory framework for the creation and sale of bonds in foreign countries at the international level could also help spread their use by lowering the costs of compliance across multiple jurisdictions and speed up the regulatory-approval process.

Second, data collected by the World Bank show that the average cost of sending money to a person's home country is about 9 percent. At their 2009 summit in L'Aquila, the G8 countries made a commitment to cut the global average cost of these transactions down to 5 percent. Given the volume of annual remittance flows, each percentage point of lowered remittance costs could unlock as much as $3.3 billion per year for developing-country recipients. All players could continue efforts toward lowering these costs. For example, governments can eliminate exclusivity clauses with money-transfer providers to encourage competition, while the private sector can continue to launch mobile-phone payment systems, learning from programs in countries such as Kenya and the Philippines.

Stimulating private-capital flows

Private capital is an enormous source of global wealth that has not historically played as significant a role in development as its scale would suggest. This is not for lack of interest. Private capital is constantly seeking investment opportunities.⁵ However, it only commits to those prospects that meet its appetite for risk and reward. Due to a variety of factors, many opportunities in developing countries are often perceived as overly risky or uncertain for the majority of investors. Institutions that offer to guarantee portions of loans made for such investments help investors rebalance their assessments of risk and reward and subsequently unlock considerable capital into developing countries. For example, in the past decade, the World Bank has approved 28 guarantees worth a total of $1.4 billion. These guarantees have stimulated more than five dollars of private capital for every dollar spent by the World Bank.⁶ Yet this type of support remains a very small portion of the bank's approach to financing in developing countries. Since the G20 summit in London in 2009, multilateral development banks have stepped up efforts to do a better job of leveraging private capital. There is an opportunity for the G8, the G20, or individual governments to use their influence and encourage multilateral development banks—and potentially bilateral agencies—to create innovative instruments that stimulate private flows. Since guarantees may be more difficult to get through national budget processes than traditional financing, a starting point could be to work on ways to address these institutional barriers.

One exciting way for private capital to contribute to development is by fueling the growth of small and medium-size enterprises (SMEs) in developing economies. Such companies are often underfunded in these regions because they typically are too small for commercial lending but too large for microcredit financing. There could be an opportunity for multiple players to collaborate in the creation of a set of financial instruments to serve this segment. Local commercial banks could provide the capital and deliver the funds when sharing some of the risk with large multilateral organizations or major foundations that provide first-loss guarantees. Donors could play a role in funding pilot programs or supporting demand-side capacity-building initiatives such as credit-scoring initiatives or skill building for entrepreneurs. One promising area to test this is the agricultural sector, a driving force of growth in many developing economies.

Two other growing sources of capital that hold many trillions of dollars of capital are sovereign-wealth funds and pension funds. Sovereign-wealth funds typically have longer investment time horizons and often have more flexibility in their investment rules than other types of investors. Although sovereign-wealth funds are not new, some recently have been forming innovative coalitions—bringing together such diverse players as Chinese funds, Middle Eastern funds, multinational corporations, and developing-country governments.

Not all sovereign-wealth funds are created equal; each has its own objectives and rules. One characteristic most of them do share, however, is that, like private investors, their investment decisions are driven by a risk-reward equation. Beyond financial rewards, many funds also seek political-security and industrial-policy dividends for their home countries. But the problem in Africa is that, at least for the time being, available capital may exceed the viable investment opportunities. While some asset classes such as infrastructure are more developed, others are not yet deep enough to attract large pools of capital. Multilateral development banks can potentially play a role by offering risk-sharing vehicles to improve the risk-reward profile and, over the long term, help foster an environment that encourages viable businesses to emerge so that capital can flow accordingly.

A new form of multistakeholder partnership intended to leverage private capital for scaling solutions to social problems is the social-impact bond (SIB). In a SIB, philanthropic funders and impact investors—not governments—take on the financial risk of expanding proven social programs. Nongovernment organizations deliver the social program to more people who need it; the government pays only if the program succeeds.

In the absence of SIBs, philanthropic donors fund pilots that demonstrate the efficacy of preventive programs, but then these programs—even though they work—are not expanded to the entire population that needs them. This is because only government has the reach and the resources to provide the multiyear funding required for scale-up. For their part, governments' existing systems tend to focus on remediation, and fiscal constraints can make it tough for them to introduce alternative approaches. However, SIBs can facilitate the critical handoff from philanthropy—which provides the "risk capital" of social innovation by funding and testing new programs—to government, which has both the capital and policy influence to take programs to scale.

Since SIBs are a very new idea, all the potential applications have not been fully explored. However, SIBs appear best suited for behavior-change programs requiring intense case management and integrated assessment to ensure quality replication. To date, the social-impact bond is being piloted in the United Kingdom in the criminal-justice field. In the United States, New York City and the Commonwealth of Massachusetts recently announced plans to launch SIBs in the area of juvenile justice; Massachusetts also plans to launch an additional SIB to combat homelessness. The Center for Global Development is exploring how SIBs can be applied in international development.⁷

Encouraging private voluntary contributions through matching funds

Governments are in a unique position to encourage large amounts of voluntary contributions from private corporations and citizens by setting up matching programs. They are distinguished in having the credibility to intervene on social issues in a fair and responsible way, as well as the resources to implement matching programs at meaningful scale. For example, in 2010, the Canadian government set up a Pakistan Relief Fund that raised $47 million from individual citizens over a two-month period. This was based on a promise that the Canadian International Development Agency would match all citizen contributions of up to $100,000 each. The resulting total that went to the relief effort ($94 million) was almost five times some of the best-performing corporate matching campaigns. Government matching programs not only mobilize new resources but also, almost more importantly, engage a broader set of players in sharing the responsibility for global development. The GAVI Alliance (formerly the Global Alliance for Vaccines and Immunization) put in place an effort to raise a total of $260 million by 2015, with pledges from the UK government and the Bill & Melinda Gates Foundation to match a total of about $130 million in contributions from private corporations, foundations, and citizens.

Countries could commit to establishing a national-challenge fund that matches commitments from corporations and individuals up to a prespecified limit. Corporations, in addition to contributing their own funds, could employ innovative means to engage and raise funds from their employees and customers. Governments could identify priority development topics and select eligible private-sector recipients for challenge-fund proceeds. The most powerful partnerships would be ones where private-sector players could also contribute their core capabilities beyond straight financing, such as having telecom companies offer solutions based on mobile technology.

Tackling sector-specific inefficiencies

The ideas discussed in this article focus on raising revenues, and most could technically be applied to a variety of purposes (for example, health, water, education). Countries could also find powerful ways to unlock the value of their development dollars by examining particular market inefficiencies of specific sectors that can benefit from development aid. Take health, for example. One market inefficiency is that large private-sector pharmaceutical companies have little incentive to invest in research and development for developing-country health issues. To create these missing incentives, several countries created an "advance market commitment" that provided reassurances in the market for a new pneumococcal vaccine. This was a groundbreaking approach that used dollars donated for vaccine purchase to their maximum effect.

Innovation, which is largely about thoughtful trial and error, is needed to catch up on the world's bold development aspirations. Taking a chance with new finance mechanisms may lead to some failures, but one big success can be a global game changer. Each step along the way can help enrich the global development community by pulling in new resources and helping existing stakeholders work better together.

-For more articles and information:  http://www.developmentnetwork.co.nr/

7 Qualities Of A Truly Loyal Employee

-By Development Network-

First things first: Where employees are concerned, loyalty has nothing to do with blind obedience, or unthinking devotion, or length of tenure.

Surprised? Think of it this way. Which employee displays greater loyalty?

1. The employee who has been with you for ten years and in that time has learned to do just enough to fly, unseen, under the performance issues radar, or

2. The employee who has been with you for 18 months and believes in where you're going, how you want to get there – and proves it every day by her actions

Of course experience is important, but given the choice I'll take the employee behind door #2 every time.

At HubSpot we're fortunate to have hundreds of extremely loyal employees. We're working hard to create a culture that recognizes and rewards true loyalty. We still have a long ways to go, but you can see our "work in progress" in our Culture Code slide deck.

Truly loyal employees are not just committed to helping their companies succeed; their loyalty is also displayed in other ways, some of them surprising.

1. They display loyalty through integrity.

Many people assume loyalty is proven through obedience: Often unthinking and unquestioning, even when a request or directive falls into a gray area or, worse, is unethical or illegal.

An employee who consistently seeks to do the right thing is not just following a personal credo – she's also looking out for your long-term interests. You may see her as disloyal today… but in time you'll realize that she displayed the highest form of loyalty by helping you avoid missing the "do the right thing" forest for the "do it right now" trees.

2. They generate discussions others will not.

Many employees hesitate to voice their opinions or feelings in a group setting. Some even hesitate to voice their opinions in private.

An employee once asked me a question about a new initiative. After the meeting I pulled him aside and said, "Why did you ask about our new pricing strategy? You know what we're doing – you were part of the planning." He said, "I do, but a lot of other people don't, and they're hesitant to ask since they aren't directly affected. I thought it would help if they could hear what you're thinking and what we're planning."

Loyal employees have a great feel for the issues and concerns of the people around them, and they ask the questions or raise the important issues when others won't. They know, for the company to succeed, that you need to know what employees are thinking… and that employees need to know what you are thinking.

3. They praise their peers.

Truly loyal employees care: About the company, about its customers, about its mission… they feel they're working for something greater than just themselves. So they appreciate when another employee does something great because that means the company is fulfilling its mission.

Employees that praise and recognize others, especially when it's not their job to do so, don't just display great interpersonal skills. (When you do something well, praise from your boss feels great… but it's also, at least generally speaking, expected. At least it should be. Praise from a peer feels awesome, especially when you respect that person.)

By praising others, they show they care.

Caring forms the basis of loyalty.

4. They dissent and disagree

Every great company fosters debate and disagreement. Every great leader wants employees to question, to deliberate, and to push back. Weighing the positives and negatives of a decision, sharing conflicting opinions, playing devil's advocate… disagreement is healthy. It's stimulating. It leads to better decisions.

Loyal employees share their opinions, even when they know you may not initially appreciate those opinions, because they want the company to be better tomorrow than it is today. And they'll occasionally take stands against a point of view or decision.

5. They support in public.

After a decision is made, loyal employees get behind that decision even if they privately disagree. And they don't just pay the decision lip service; they support the decision as if it were their own – because when you're loyal, every decision is, ultimately, your own.

When they disagree, some employees (the not so loyal ones), whether passively or actively, try to show that a decision they disagreed with was in fact wrong.

A truly loyal employee puts aside his feelings and actively tries to make every decision the right decision – instead of willing it to fail so they can prove themselves right.

6. They tell you what you least want to hear.

The Inverse Rule of Candor states that the greater the difference in "rank," the less likely an employee will be to openly take a different position: An entry-level employee is fairly likely to tell his direct supervisor that he disagrees with that supervisor's decision, but he is almost totally unlikely to tell his boss's boss's boss that he disagrees with his decision.

If you're the CEO, that means your direct reports may pull you aside for an open, forthright chat… but few other employees ever will.

Truly loyal employees know that what you least want to hear may be what you – and by extension your company – most need to hear: That an initiative won't work, that a decision-making process is flawed, that a mistake has been made… truly loyal employees realize that while you may not like what you hear, ultimately you want to hear it because what matters most is doing what is best for your employees, your customers, and your company.

Well-intended silence can be a good sign of loyalty; speaking up, especially when it's awkward or even painful to do so, can be the best sign.

7. They leave when they need to leave.

If you can't tell by now, a truly loyal employee is almost always a sensational employee. Often, they're your best employees – so the last thing you want is for them to leave.

Yet sometimes they do: For a different lifestyle, for a better opportunity, for a chance to move to a different industry, or simply to take what they've learned and start their own company.

When it's time, they tell you it's time to leave – and they help you prepare to fill the hole they create.

You? You're disappointed but you wish them well. For a time, even if only for a few years, they put your company's interests ahead of their own…

…and now it's your turn to do the same for them. Of course, you can always make your most convincing arguments to encourage them to stay (hey, you're loyal too!) – but if it doesn't work out, the right thing to do is to return their loyalty, wish them well and help them continue to stay awesome.

-For more Articles and Information :  http://www.developmentnetwork.co.nr/

RURAL ENTERPRISE DEVELOPMENT-Northern Region, Sri Lanka

-By Development Network-

 

 

 

"The success of the holistic framework concept depends on how well local beneficiaries are capable to play the key role among the rest of the stakeholders. They must actively participate in the acceptance, decision, proposition, and funding phase of a development project to approve and to ensure that the chosen project is sustainable and favorable to their social, economics, public, politic, cultural environment".

Objective:

In order to propose a concrete strategy in an innovative & sustainable way through which able to achieve the solid impact on the Enterprise Development-Livelihood project in the Northern Region-Sri Lanka.

Back ground:

Due to the past decades of war in Sri Lanka, the community specially in the North and East regions poorer in terms of income, Livelihoods, infrastructure etc. Apart from the impairment of the local economy, the active human capital has also reached a critical low level etc. Due to the enormous scale of unemployment as well as poor income of the families, the needs of the sustainable livelihood of the people in the regions are very immense. The creation of jobs is vital that people start resettling.

On this moment, the rural enterprises play an important role in generating employment, creating income for a significant number of low-income workers and leveraging the scale filling the domestic demand for low –cost goods and services. So the establishment of enterprises and work for their sustainable growth is seen as one of the best option for rural economy development in the post conflict areas. The bulk of employment creation will expect in the beginning from self employment in agriculture, livestock and fisheries sector based activities. Also believed it will ensure the sustainability of the rural economy.

Further, the vulnerability of the existing micro and small scale businesses is very high and the contribution in the value addition is not much significant.  The poor technology usages also are seen as one of the main reason for their inefficiency.

There is another significant factor is the women in the rural area are seen to be more active in  the participation of income generation activities.

Rationale:

The people in the post conflict region are facing lot of unresolved issues which are keeping them in the most vulnerable state. Those are and not limited to:

·         Lack of income/ employment opportunities

·         Lack of capital/ assets to carry out sustainable livelihoods

·         Lack of infrastructure facilities

·         Lack of active human capital

·         Vulnerability due to economy fluctuations

·         Vulnerability due to market fluctuations

·         Vulnerability due to seasonal disaster [ Dry season/ flood]

·         Vulnerability due to sickness, disability, old age and death

·         Lack of capacity of the Community Building Organizations (CBOs)

Project goals:

·         Creating the employment by means of establishing growing concern rural level enterprises, as well as developing the capacity of the existing sustainable enterprises

·         Developing the capacity of  local Business  Development Service (BDS) Providers

·         Developing the capacity of relevant CBOs to lobbing for sustainable rural economy

·         Developing the sustainable marketing network for rural level enterprises

·         Establishing the stakeholder forums to address the rural enterprise related issues in the district level [if required  address the issue in the national level]

·         Improving the entrepreneurship knowledge capacity to manage the businesses effectively, sustainably, competitively and productively

·         Cutting down the inefficiency and stimulate the growth of the enterprises.

Strategic approach

        I.            Business Process

Along the chain, the ownership is changing as well as the value also increasing of the product. The role of the support services in making the chain work. Services are normally provided by players who do not own the product. So, who invest high is getting lower share of the profit.

 

      II.            Value Chain

A string of players are working together to satisfy market demands for a particular product. Value chains can be used to analyze the total social benefit from products and services, and to clarify and refine the relationships between and among links in the chain.

 

Example:

The farmer receives seeds, fertilizer, pesticides, water, etc. from other entities; the product of the farm is further increased in value by many other entities

 

    III.            Value chain analysis (VCA)

The process of learning about the market chain is called Value Chain Analysis (VCA). Market development approaches are based on a comprehensive understanding of the market. Before any interventions are designed or actions taken we need to understand both the market chain and the poor and marginalized people potentially associated with it.

a) Deciding

• Deciding which market to work with

•  Deciding on how to collect data

• Deciding on solutions that remove constraints on market participation for small businesses and farmers and include win–win outcomes for all chain actors.

b) Data collection and research

• The value chain analysis team collects data and information on the market chain from primary and secondary sources using a range of tools including semi-structured

Interviews.

c) Value chain mapping

• Helps to organize the data collected

• Facilitates a shared understanding of the chain (participant/actors, their functions, links and end markets)

• Helps to identify opportunities and constraints.

d) Analysis of opportunities and constraints

• Data is analyzed using the market map to reveal:

– Constraints within the chain that limit potential in the market, particularly those that contribute to exclusion of poor/disadvantaged market actors

– Opportunities for improving the chain, particularly those that could reduce exclusion of poor/disadvantaged actors.

e) Validation of findings with stakeholders and development of future actions

• The resulting analysis of opportunities and constraints should be validated with

Stakeholders

• Action and interventions developed through a participatory multi-stakeholder process.

 

 

 

   IV.            Important issues to concern when discussing these models:

The arrow between deciding and validation/action indicates the importance of validating decisions with stakeholders as the analysis proceeds to ensure accuracy of the analysis and enhance potential ownership of any future interventions by stakeholders. The whole process can be carried out together with stakeholders (this is a participatory value chain approach) or the process can be carried out by a research team with stakeholders engaged in the process of validation and strategy development

•          Involving stakeholders in the research process is more participatory, but it can raise expectations among stakeholders. There needs to show the commitment with the process right through to implementation.

•      Market mapping (the visualization of the market chain) and analysis of constraints and opportunities are closely linked, both being analysis activities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     V.            Principles of Enterprise Development for poor

1. Mix Grant AND Investment

·         Utilize and Blend both Grant and Investment Capital

[Grant Capital for purchasing machineries & equipments, relevant training and Self generated capital for covering the start-up costs [Cash/ In kind] like Land & Building acquisition, for working capital including Labour (In kind)]

2. Engage the CBOs & BDS Providers commercially

·         Engage them not only in Philanthropy but also as social enterprise making interventions in commercial base

3. Think beyond Credit and utilize the Three Pillars of Enterprise, which are:

·         Access to Capital;

·         Business Development Services and

·         An Enabling Environment

4. Aggregate Supply and Demand

·         Aggregate supply to leverage the benefits of economies-of-scale for poor communities and small and micro entrepreneurs

·         Aggregate demand to create economies of scale thereby providing substantial buying and consumption power for the low income earners

5. Formalize Ownership

·         Formal recognition of the assets & equity through legal registration

·         Legally recognized documents are transferable and can be used to secure credit lines [e.g. land title, etc].

6. Start with the Market and work backwards

·         Use a demand-driven approach versus supply-led, and work backwards from the market demands in order to identify points of leverage for opportunities

7. Adhere to Business Basics…

·         People respond to incentives, so Integrate management and business skills training

·         Develop a business plan and use standards business benchmarks and financial statements to measure profitability

·         Eventually localize for success ………

 

   VI.            Guiding Principles in Enterprise Selection

 

ü  Systematic   : Provides a methodical approach in the processes of enterprise selection

ü  Focused        : Clear goals and objectives on what to be attained

ü  Cost-effective: Conscious of time, costs etc in relation to the needs and demands of the process

ü  Consistent    : Consistent in application across different situations and programs while being sensitive of different contexts.

ü  Objective     : Capable of demonstrating relevance in serving the needs for which it is used and applied

ü  Accountable: Prove of relevance and value in its use & application

 

 VII.            General Enterprise Development Design Considerations [Holistic approach]

 

Ø  Groups vs. Individuals: Pros and Cons

Ø  Encouraging Women / Youth participation in Enterprise

Ø  Is everybody an entrepreneur? [Refer: Personnel Entrepreneurial Competencies (PEC) Analysis]

Ø  Perish ability of commodity and infrastructure constraints

Ø  Will the poor really pay a fee for service?

Ø  Explaining record keeping and business basics

Ø  Forward Contracts: Securing a Market

Ø  Encouraging private sector [Specially CBOs & BDS Providers] participation and building partnerships

Ø  Negotiating with buyers and getting the best price

Ø  The power of Aggregation

Ø  The importance of Quality Control

Ø  Honoring commercial obligations and commitments: Side-selling and low-balling

Ø  Convergence of interests and creating 'win-win-win' solutions with other stakeholders

Ø  Risk Mitigation

Ø  Project exit and longer-term sustainability

 

 

 

VIII.            Enterprise development Opportunities by broad sector classification [Examples]

Sub-Sector	Activities and Type
1. Agriculture Based	1)      Horticultural Production & Marketing 2)      Post harvesting process [Milling & Grinding] 3)      Seeds Packing & Marketing 4)      Seed links & Nursery Plants Marketing 5)      Processing Industry [Pickle etc]
2. Livestock Based	1)   Poultry farm Management 2)   Cattle milk marketing 3)   Milk based food items preparation (Yogurt) 4)   Meat Processing (Licensed)
3. Fishery Based	1)   Dry Fish Industry 2)   Fish based food items
4. Forest and Natural Resource Based	1) Beekeeping 2) Handicrafts making 3) Medical/ Aurvedic Plants gardening
5. Leather Based	1) Hides & Skins Marketing 2) Leather Tanning and Production
6. Construction & Light Engineering Based	1) Brick making 2) Black-smiths 3) Lime Production 4) Masonry and other construction
7. Other Service Based	1) Restaurant Management 2) Eco Tourism 3) Traditional culture 4) Service Centre/ Mechanic shops

 

 

 

 

 

    IX.            Basic information required for an enterprise [Example]

1) Enterprise type – Milk marketing within the region/district

2) Activity description by function & marketing chain

·   Initial milk sold in rural villages

·   Milk supplied in the containers to collection centres, hotels, schools & hospitals etc.

·   Milk transported by trucks to urban centres

·   Processed milk sold directly to individual buyers

3) Market demand and enterprise data

·   Consumption and /Demand for Milk within the Region/Area

·   Volume of Milk Traded monthly per year and by season (Dry/Rainy)

·   Number of suppliers/traders and the quantities supplied at each stage by seasons (Dry/Rainy)

·   Quality of the milk and other quality control issues

·   Prices earned from sell of milk by different participants at different stages

·   Capital or resource requirements at each stage

·   Estimated demand for milk in the region, and the percentage supply met

·   Constraints analysis of milk marketing - Market access, product knowledge/level of technology, financing needs/sources, and skills levels etc

·   A map of the milk marketing chain within the region

·   Other sub-sector linkages and information – Other industry stakeholders companies/suppliers, market size, source, product type, etc

 

 

 

 

 

 

 

    X.        Four key perspectives for assessing possible enterprise opportunities

1. DEVELOPMENT AND COMMUNITY PERSPECTIVE	2. CONSERVATION PERSPECTIVE
o  Number of Beneficiaries o  Gender o  Vulnerable / Marginalized Groups o  Total Income /(Net) Income per capital o  Cohesion and group skills + Individual skills development o  Equity/ Sustainability o  Process, involvement, engagement, participation o  Timeframe to benefits o  Location o  Conflict-sensitive	o  Do no Harm o  Decoupling (e.g. enterprise with similar product traders) o  Coupling (e.g. Ecotourism) o  Goodwill / trust / confidence towards conservation through enterprise o  Alleviate acute vulnerability
3. BUSINESS PERSPECTIVE	4. PROJECT REALITIES
o  Start-up and /or going concern o  Demonstrated market o  Market Characteristics: Growing (size, volumes, price) & Stable o  Capital Requirement: Investment & smart grants levels o  Recognize Business Development Services (BDS) and Technical Assistance(TA) requirements – now and in the future o  Time to Break Even; Profitability o  Ensure business plan elements are incorporated o  Regional opportunities / dimensions o  Encourage and promote linkages / partnerships with private sector and others o  Availability / stability of human capital, raw materials, processing equipment, packaging, etc o  Diversification	Some things to think about …. o  Can it be done within project timeframe? o  Timeframe to visible / tangible benefits? Quick wins? o  Project impact zone considerations o  Can it be done within the allocated resources? o  Do we have the internal capacity? o  Will it be time / labour intensive? o  Leveraging the donors areas of expertise and previous experience and current capacity o  Previous interventions in the sector / area o  Mindful of the TA and BDS limitations later on

 

 

    XI.            Enterprise Selection

IMPLEMENTATION PROCESS/ACTION PLAN

Possible Selection Process	Mechanism/Tools	No of Enterprises	Time Frame
Opportunity Identification	·      Using Guiding Principles ·      Brainstorming with community mobilizers	12	2 Months
Select Enterprises/ Sector for Pre-Feasibility Selection	Sectors for Pre-Feasibility Selection (Field Visits)	08	1 Month
Select Enterprises/ Sub sector analysis	Feasibility Study (Limited Pilot Study)	04	1 Month
Decide on Enterprise	·   Focus group discussion with Stakeholders [Refer stakeholder selection Criteria] ·   Using Enterprise Selection & Ranking Criteria Matrix [PRA with stakeholders]	2-3	2 Months
Development of Concept note / Simple Investment Profile/ Business Plan	·      Market Study ·      Personnel Entrepreneurial Competencies (PECs) Analysis ·      Analysis of self generated capital (Equity/ Share Capital)	1-2	3 Months
Proceed to 'Scale' if results are positive	Feedback & Modification	1	3 Months

 

 

 

  XII.            Selecting a market for the practical research

MAIN FEATURES

Two important clarifications:

·         'A holistic view…'

Emphasise the 'whole-chain approach'. Deeply held assumptions about markets (such as those explored in the yes/no activity), personal preferences, organizational priorities, donor requirements, greed, corruption, culture and many other influences on a market can make it difficult to maintain a holistic view. But without the holistic understanding, any intervention we make is at risk of failure.

·         'The enabling environment…'

ü  This is the environment in which market activity operates

ü  Rules and regulations (which may be formal or official but, if absent or weak, may include informal, unofficial and perhaps even illegal realities in which market activity takes place  such as corruption)

ü   Services are activities that support interactions and processes within the chain but that are not within the chain itself (they don't involve ownership of the product).

 

XIII.            A common aim of market development interventions is to improve incomes through:

o    More or better access to a market

o    Alternative opportunities for making a living.

o    'Bottom-up' – when working with communities, especially in reaction to market failures such as excessive power of one actor, lack of information, lack of property rights, high transaction costs, etc

o    'Middle-out' – from other actors in, or associated with, the chain.

o    Sometimes the choice of market (or sub-sector) is already made (for example, where farmers/ businesses want low-risk strategies to focus on improving what they are already doing). This might make sense as a first step. However, even in this situation there may be a choice to be made about which market segment to aim for (for example, local or export, processed or fresh)

o    For higher-risk strategies (such as considering new products or crops) there may be a long list of potential markets – clear process is needed for deciding which market/s to research in depth.

o    Choosing between markets requires research about the potential markets and also about the target group.

o    Whoever or whatever is driving change, if it is to be sustainable all market actors involved must ultimately 'own' the process and intervention and take responsibility for making it work.

 

A development agency working on enterprise development in rural areas, the organization's strategic focus is on economic development and the issues of rural poverty .The following selection criteria were identified and prioritized:

 

1. Unmet market demand - Extremely important

2. Potential increase in rural incomes- Very important

3. Potential for employment generation- Important

4. Existing socio-economic support programmes-Slightly important

 

XIV.            Strengths and weaknesses of INGOs/ NGOs  involvement in market development

SWOT ANALYSIS [INGOs/ NGOs   point of view]

Strengths	Weaknesses
• Organization which is giving a voice to marginalized people • Having a bigger picture view • More powerful to influence than individuals • Typically good at facilitating change and participation • Having connections with government and service providers.	·  Lack for-profit experience and skills • Advocating for support to for-profit activity may be a new experience • Own profit-making activity may be undermined.
Opportunities	Threats
·   Experience of working with poor and marginalized people, their activities are more likely be appropriate to beneficiary realities • Sustainability of efficient for-profit activity • Potential for identifying very specific interventions.	·   Competition between other INGOs and the private sector • Challenging the existing market situation • Lack of donor support • Conflict between INGOs with different approaches • Lack of mutual understanding between INGOs and private sector.

 

 

 XV.            Monitoring the Enterprise Development Programme

When tracking enterprises or businesses, combine the development (social & environmental) measures with aspects from the financial performance of a business  .The goal of the enterprise is to generate value and hence M&E should focus on what is relevant to the businesses – Profitability, Services delivery, Customers and markets, etc. Hence try to balance the information need for project purpose and that which an enterprise can reasonably provide.

·            Identify 3-4 key indicators that will measure what is relevant to the enterprise, and agree jointly with enterprise on which kind of indicators can be measured, and explain the reasons and information required.

·            Also agree on the frequency, documentation, external / third party verification

·            Finally determine how M&E will help both the enterprise and the development organization?

 

XVI.            Measuring Impact: Developing Triple Bottom Line (Social, Economic, Environmental)

Ø  Expected Outcomes Indicators of Enterprises

i)   Δ /Increase in per capita income

ii)  Δ  /No of beneficiaries who accessing employment opportunities

iii)  Δ /Growth in enabling environment (BDS) for enterprise growth

iv) Δ / Knowledge development in the community to manage enterprises

Ø  Objectives to measure from a development organization's perspective

i. Impact

ii. Outreach

iii. Sustainability

iv. Cost-effectiveness

Ø  Objectives to measure from an enterprise perspective

i. Profitability

ii. Increased market access and growth

iii. Increased knowledge and skills business and management

iv. Enabling business environment and services

 

 

XVII.            Expecting impact on the community via this project

·            Increased opportunities for growth and Income

·            Greater Self-Confidence

·            More assertive role in domestic sphere

·            Greater respect within family

·            More assertive role in children's health and education

·            Reduction in domestic violence

·            More active participation in community affairs

·            Increased awareness, self confidence to improve family and community lives

·            Gained new skills

·            Better buying and selling skills

·            Better prices for products

·            Independent marketing

·            Better agricultural, livestock, livestock and other sector practices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annexure: 01

Enterprise Selection & Ranking Criteria Matrix (Weighting Methodology)

SELECTION CRITERIA

A.       Market demand and linkage  

·      Local Market Demand                                                                                       = (Score)

·      Domestic Market Demand                                                                               = (Score)

·      International Export Market Demand                                                            = (Score)

·      Proximity to the Market                                                                                   = (Score)

·      Competitive Advantage                                                                                    = (Score)

·      Market Classification                                                                                         = (Score)

·       Market Linkages [Forward & Backward economic activity links]              = (Score)

Bench Mark Indicator                                                                = (Total Score)

 

B.      Availability of raw materials

o  Abundance of raw material supply                                                                 = (Score)

o  Seasonality of raw material supply                                                                 = (Score)

o  Quality of raw material                                                                                     = (Score)

o  Organizational capacity to procure raw material supply                            = (Score)

o  Comparative advantage of location                                                                = (Score)

o  Comparative advantage of RM/Process/Service over

competeting products/services                                                                      = (Score)

o  Perish ability of raw material of product from value added process       = (Score)

Bench Mark Indicator                                                                = (Total Score)

 

By adding the both total scores, the possible enterprises will be listed in descending order. And again they will be filtered by means of Ranking Criteria.

RANKING CRITERIA

a.        Market linkage  [ Benchmark Indicator: Average annual local production growth/ Average annual importation growth]

b.       Raw material availability for value added process [Benchmark Indicator:  % of Raw Material Locally Available = Cost of locally available material/  Cost of all material (Include imported material)]

c.        Environmental Impact [Benchmark Indicator: Environmental Impacts  =Soil+ Water+ Air+ Noise (Range of Impacts)]

d.      Costal Resource Management Impacts [Benchmark Indicator: CRM Impacts =Coral reef+ Mangrove+ Fishing Intensity+ Resource Pollution(Range of Impacts)]

e.      Labour Intensity [Benchmark Indicator: Labour Intensity= Total number of workers (Full/Part Time) / Est. Investment Cost (in LKR. Million)]

f.        Power Intensity [Benchmark Indicator :Power Intensity=Energy cost as per percentage of total unit production cost (Direct labour+ Direct material+ Overhead+ Energy Cost)]

g.      Appropriate Technology [Benchmark Indicator : Appropriate Technology=  Technology+ Training Materials and/or Capacity+ Previous Technology+ Equipment (Score)]

h.      Industrial Linkages  [Benchmark Indicator : Number of forward and backward linkages]

Annexure: 02

PERSONAL ENTREPRENEURIAL COMPETENCIES (PECs) ANALYSIS

SELF-RATING QUESTIONNAIRE                                                                                

    

Scoring System: [ Always  = 5 Points, Usually = 4 Points, Sometimes  = 3 Points, Rarely = 2 Points  & Never  = 1 Point]     

                                                                       

1.     I look for things that need to be done.                                                 

2 .   When faced with a difficult problem I spend a lot of time trying to find a solution.                                            

3 .   I complete my work on time.                                                                                              

4.    It bothers me when things are not done very well.                                              

5.     I prefer situations in which I can control the outcomes as much as possible.                                                          

6.     I like to think about the future.                                                                                         

7.   When starting a new task or project, I gather a great deal of information before going ahead 

8.     I plan a large project by breaking it down into smaller tasks.                       

9.     I get others to support my recommendations.                                

10.  I feel confident that I will succeed at whatever I try to do.    

11.  No matter whom I'm talking to, I'm a good listener.                                           

12.  I do things that need to be done before being asked to do so by other

13.  I try several times to get people to do what I would like them to do

14.  I keep the promise I make.                                                                             

15.  My own work is better than that of other people I work with.                   

16.  I don't try something new without making sure I will succeed.                 

17.  It's a waste of time to worry about what to do with your life.                    

18.  I seek the advice of people who know a lot about the tasks I'm working on.                                                           

19.  I think about the advantages and disadvantages or different ways of accomplishing things.  

20.  I do not spend much time thinking about how to influence other          

21.  I change my mind if others disagree strongly with me.                                     

22.  I feel resentful when I don't get my way.                                                                   

23.  I like challenges and new opportunities.                                                                     

24.  When someone gets in the way of what I'm trying to do, I keep on trying to accomplish, what I want                                                                       

25. I am happy to do someone else's work if necessary to get the job done on time.                         

26. It bothers me when my time is wasted.                                                

27. I weigh my chances of succeeding or failing before I decide to do something.                                                        

28. The more specific I can be about what I want out of life, the more chance I have to succeed.                   

29. I take action without wasting time gathering information.      

30. I try to think of all the problems I may  encounter and plan what to do if each problem occur                  

31. I get important people to help me accomplish my goals.         

32. When trying something difficult or challenging, I feel confident that I will succeed.                                          

33. In the past I have had failures.                                                                                              

34. I prefer activities that I know well and with which I am comfortable

35. When faced with major difficulties, I quickly go on to other things          

36. When I'm doing a job for someone, I make a special effort to make sure that, the person is happy with my work                                                                       

37. I'm never entirely happy with the way in which things are done, I always think, there must be a better way                                                         

38. I do things that are risky.                                                                                  

39. I have a very clear plan for my life.                                                           

40. When working for a project for someone, I ask many questions to be sure I understand what the person wants                                                  

41. I deal with problems as they arise rather than spend time to anticipate them.                                                      

42. In order to reach my goals, I think of solutions that benefit everyone involved in the problem                 

43. I do very good work.                                                                                                                    

44. There have been occasions when I have taken advantage of someone.

45. I try things that are very new and different from what I have done before.                                                               

46. I try several ways to overcome things that get in the way of reaching my goals.                             

47. My family and personal life are more important to me than work deadlines I set for myself. 

48. I do not find ways to complete tasks faster at work and at home.              

49. I go things that others consider risky.                                                      

50. I am as concerned about meeting my weekly goals as I am for my yearly goals.                                                      

51. I go to several different sources to get information to help with tasks or projects.                                              

52. If one approach to a problem does not work, I think of another approach.                                                                

53. I am able to get people who have strong opinions to change their minds.

54. I stick with my decisions even if others disagree strongly with me.          

55. When I don't know something, I don't mind admitting it.   

           

Rating of Statements [PEC] Categorized under the following ·   Opportunity Seeking ·   Persistence ·   Commitment to work contract ·   Demand for Quality and Efficiency ·   Risk Taking ·   Goal Setting ·   Information Seeking ·   Systematic Planning & Monitoring ·   Persuasion and Networking ·   Self Confidence

Annexure: 03

STAKEHOLDER SELECTION CRITERIA           

Stakeholder analysis:

 It can be used in different ways at different stages of a project, but as a research tool it is most appropriate in identifying and increasing understanding of stakeholders.

Stakeholder	Interest in the value chain (description)	Influence over the value chain (-5 to +5)	Importance to the development of the value chain (0-5)

 

·      Interest – what actors stand to gain/lose through the development of the value chain

·      Influence – of the actor over the existing chain (both positive and negative) in terms of impact on our target group.

·      Importance – of the actor's role in development of a value chain that brings a positive outcome for our target group.

 

Stakeholder Matrix:

 

   

 

·         It identifies possible allies and potential partners, as well as potential constraints and risks to the process

•         It indicates potential conflicts that may arise during the meeting and the need for preparatory one-to-one meetings to reduce this risk

•         If stakeholders themselves use this tool, judgments about their relative importance and influence may need to be managed in a sensitive way

•         A neutral facilitator who is not a stakeholder is better for this activity

•         The importance of remaining objective and backing up judgments with evidence.

 

 

 

 

Annexure: 04

DIFFERENT APPROACHES IN MARKET DEVELOPMENT/ANALYSIS

Approach- I	Approach -II	Approach- III
·  Establish a selected production project • Identify possible markets • Organize stakeholder meetings • Finalize project	·  Identify market of interest with partners • Develop and complete market assessment research in three locations • Develop concept note • Develop terms of reference for enumerators to lead the research • Step-down training with identified partners on market development	·  Review programme area plan for secure livelihoods • Develop terms of reference for market research volunteers • Identify which partners to work with on market development