EMPOWERING THE BASE OF THE PYRAMID: LESSONS FROM A RURAL COMMUNITY IN NORTHERN GHANA
1) The needs of the base of the pyramid:
The bottom one billion people of the Base of the Pyramid (BoP) lack it all: basic necessities such as sufficient food, clean water, and adequate shelter. Poor health, lack of nutrition, financial vulnerability, limited education, and a dearth of marketable skills shut them out of the organized market economy.
It is crucial for effective non-profit organizations (NPOs) and non-governmental organizations (NGOs) to understand how their help can create a long-term, positive social impact and foster the important roles that these vulnerable people can play for themselves, for example, through value-creation relationships as local producers, co-producers, or groups in a cooperative. The context in which to start varies of course from country to country, but through investment-ready programs or technical know-how transfer farmers at the BoP can upgrade the quality of their output. With a little training, people at the BoP can also take part in basic production and assembly jobs, or in activities within the service sector, transportation, distribution, and retailing, for example—bridging the “last mile” to the local markets and consumers.
2) The needs of a new generation of philanthropists:
A relatively small group of “GenXers” and “Millenials” will inherit over USD 40 trillion in wealth over the next years, much of which is designated to philanthropic giving. Many of those have also created their own wealth, e.g. in Silicon Valley, and understand philanthropy from a strategic angle. These next generation donors desire to be “hands-on philanthropists” in their approach to giving and social investing with key audiences, including grant recipients, their families, peers, NGOs/NPOs, and other funders such as governments. They are more likely to structure their giving from a standpoint of problems to be solved, rather than institutions to be supported. The new, young philanthropists make up a different crowd: they want to get their hands dirty. “Giving while living” is their credo.
3) Leveraged philanthropy:
The needs of both the BoP and the next generation of philanthropists can be leveraged in many ways: the help of technology or the building of local value chains for smallholder farmers are just two examples out of many.
(i) Technology makes philanthropy more effective and transparent
It is hard to underestimate the extent to which technology can improve philanthropy. This is true for the on-site work of foundations, NGOs/NPOs, as well as their daily administrative work. Managing donations or project applications electronically and transparently is just the start. Through crowdsourcing, anyone with access to the internet can contribute ideas. On social media, anyone can launch a global advocacy campaign. Digital data makes it affordable for nonprofits of all sizes to assess social problems and track their progress in terms of solving them. At the other end of the giving chain, donors seek better information regarding the social impact that their charitable giving and social investments have. However, assessing the social and environmental impact is much harder than measuring financial returns.
Technology allows individual givers to pool their resources online in virtual giving circles. Collective giving is born. Take for example the Giving Tuesday, which unites the US philanthropic community for a day of giving at the start of the holiday season. It is likely that this concept will spill over to Europe’s and Asia’s giving landscape as well.
Collective giving became famous in 2010, when Bill and Melinda Gates and Warren Buffet founded the Giving Pledge, an effort to encourage their wealthy peers to donate a significant part of their wealth to charity. The number of philanthropists responding to Bill and Melinda Gates and Warren Buffett’s appeal for increased generosity has been constantly growing over the years and as of January 2015, 128 billionaire or former billionaire individuals and couples have signed the pledge.
A large part of worldwide philanthropic funding still also comes from ordinary people with extraordinary generosity, technology strongly influences philanthropy here as well. To be effective in their giving, these ordinary givers also need access to communities within which they can exchange ideas and sources of innovation. Social networks are beginning to transform the way that individual philanthropists collaborate with one another. The matchmaking power of the Web creates networks of donors who would otherwise have no way of finding one another and sharing opinions.
In any case, be it the very “top of the pyramid” or the “average giver”, a philanthropic dollar can be leveraged in multiple ways beyond classical checkbook charity. Philanthropists today are willing to transfer their skills, networks, know-how, and social services in addition to their money, and in return, expect disclosure of the social impact they create.
(ii) Building value chains for smallholder farmers makes philanthropy more engaged
Smallholder farming accounts for 80% of all the farms and most of the land that is cultivated in Sub-Saharan Africa (SSA). An assessment has been made that growth generated by agriculture in SSA is more effective towards reducing poverty than Gross domestic product (GDP) growth in other sectors. For example, Diao, et al (2012), estimate that the decline in the national poverty rate resulting from agricultural-led growth is up to four times larger than the decline resulting from non-agriculture-led growth.
Rural farm holders often lack the capacity to store or properly transport their commodities. Lacking the infrastructure for roads, irrigation systems and water access, and markets, etc., are further typical constraints. The situation is exacerbated by their lack of information on prices, rendering them vulnerable to intermediaries as there is usually only a minimal or no flow of information. This makes it easy for intermediaries to take advantage of rural producers. Sensitization of smallholder farmers, and building local value chains through producer organizations and their participation, are powerful tools for improving rural farm holders’positions.
The involvement of the private as well as the public sector can be very fruitful in that regard. For example, agreements between companies, government agencies, and philanthropic foundations or NPOs can result in funding streams that reduce market risks and free up the business sector to unleash its unique innovative capacities. A new innovative vehicle in that context of cross-sectoral collaboration is the public-private partnership (PPP). Such a partnering between the private and the public sector can take a variety of forms, from direct equity investments by philanthropists to volume guarantees that give companies the assurance of sufficient market demand to investment funds with different risk-return classes. For instance, the Africa Agricultural and Trade Investment Fund (AATIF), which is set up in the form of a PPP, finances local projects and companies along the agricultural value chain and develops financial markets across Sub-Saharan Africa.
4) What are the lessons in the context of a small, remote little village in the most northern part of Ghana – where I am personally the co-founder and president of an international NGO undertaking re-integration and community development work?
As we started our project works in fall 2008, our utmost goal was to initiate a project that enabled the Guabuliga community to help themselves in the long run and to involve the community as closely as possible (through a rigorous bottom-up approach) from the beginning. This sounds nice in theory but was challenged massively in practice. The pitfalls were, just to name a few: cultural barriers (How do we gain the trust of the Chief and the Village elders? How do we manage not to be seen as “the white cash-cow”?), linguistic barriers (How do we effectively communicate with the community, which primarily only speaks the local language, “Mampruli”), technological barriers (In 2008, Guabuliga was located in a kind of “black hole” where cell phones usually only worked on a random basis and where power was and still can be lacking for days), infrastructural barriers (In the rainy season, the 15km- long sand road connecting Guabuliga and the main road through Northern Ghana is often impassable because of the bad conditions: parts of the road are washed away)—all of these made it difficult for us to get started with our endeavors. But probably the most challenging venture on site in the beginning was finding a trustworthy person who shared our long-term project vision. We were still naïve idealist full of ideas--and we got screwed. But we learned throughout the process, and immediately started to share our experience with others.
Today, more than five years later, Guabuliga and BRAVEAURORA are partners based on trust and share a common vision: to act as a role-model project in North Ghana that spread the word on reintegration and family reunification, and actively campaigned against “fake orphanages” (and the related business with young, unexperienced foreign volunteers) that just pop out of the sand like the little plants after the rain in Northern Ghana. As partners that see eye to eye, the Guabuliga community and BRAVEAURORA collaborate and share ideas such as a newly developed training center, a teachers’ incentive program, a village microcredit program, a newly installed water board with a money-collecting system, a Young Ambassador Program for re-integration and advocacy, a greenbelt project, a sustainable waste and upcycling project, etc. A results-measurement framework helps us to measure the social impact for our donors. External partners and experts (like nav_s baerbel mueller and [a]FA, or local cooperation partners and the Ghanaian Department of Social Welfare (DSW), were closely involved as sparring partners since the very beginning.
So what are our key lessons?
A high-impact non-profit organization (NPO) or non-governmental organization (NGO) should:
- work at least as much outside of its four walls as it does managing internal strategies and operations
- collaborate as closely as is simply possible with - and involve - the local community
- create positive change by leveraging government support and making them accountable whenever possible
- enable and empower communities in order to help them to become self-sufficient, by giving them tools at hand that they have suggested and really need
- make markets work and develop, with the local community, income chains and new income ventures
- remain flexible, learn from pitfalls, and adapt to change and local needs
- share their know-how with other NGOs/NPOs, collaborate on a cross-sectoral basis and nurture nonprofit networks
- hand over projects to the local community as early as it possibly makes sense
- offer new forms of philanthropic engagement for the next younger and more “hands-on” generation of donors
- build strong communities of honorary supporters/donors/experts and involve them as closely as possible
- measure the social impact of their on-site work for their donors
- have a clear exit plan
Dr. CHRISTIN TER BRAAK-FORSTINGER is a financial lawyer and the founder of PVA Advisory, an independent philanthropic advisory firm in Zurich. She is the co-founder and president of an Austrian, Swiss, and Ghana-based NGO that supports vulnerable children in Africa.