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Thoughts from the Last Mile Welcome to the VillageReach Blog
09.21 2009

We’re happy to say it’s been a busy month of September here at VR.  While we haven’t had much time to write- others are writing about us!  Over at the Discovery Channel, they cheekily suggest we should get involved in the US healthcare debate (thanks, but no thanks), while the author at the Scientific American blog sees the link between our work and the new Swine Flu vaccine.  Meanwhile, the NextBillion blog covers our panel at the SoCap Conference.

As we move forward into fall, we look forward to even more good news…

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09.03 2009

Greetings from SoCap, the annual gathering of social entrepreneurs and investors here in San Francisco, billed as the largest of its kind in the world.  Yesterday was a flurry of sessions covering topics as varied as India social business developers strengthening remote tribal communities through weaving and arts and craft cooperatives, to new pharmaceutical ventures for low income countries to benefit base of the pyramid communities.

And VillageReach was there too.  Craig Nakagawa, our CFO, and Keely Stevenson, from Bamboo Finance, lead a great session on the just-announced investment in our Mozambique propane business, VidaGas. Titled “Anatomy of a Social Investment,” the session covered the development of the business, its impact on the health system it was created to serve, and Keely and Craig looked at future opportunities for social businesses in Sub Saharan Africa.Helping Hands

A couple of interesting takeaways from the session:

– the need for patient investors in social business ventures is key for both the initial development and long-term sustainability of these businesses.  In our case, VillageReach’s hybrid non-profit/social business model has proven to be very valuable.  Initial investment for VidaGas was supported by donor contributions, that otherwise would have been spent on the purchase of fuel and equipment that VidaGas sells to the market.  We see this approach as a winning formula for donors who are interested in achieving long-term impact for their contributions.

– Keely noted there are few base of the pyramid social ventures operating today.  Some businesses have been created that serve middle-income communities that then attempt to reach out to lower-income consumers, but this can be a challenge where profitability is a requirement.  Keely highlighted VidaGas’ market development approach as ideal, whereby we launched the company with the government health system as our initial anchor client, with some sales to lower-income communities also and then moved up-market to epand sales of the fuel to middle income consumers.

The investment has only just been announced, but we’re looking ahead to the future.  This week we’re meeting with a number of new investors to present a new proposal to broaden our base of household sales.  We’ve put together a comprehensive market development proposal that is intended to add new retailers for propane and stimulate greater interest from communities who have previously had to rely exclusively on charcoal for their cooking requirements.

Onward and upward.

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09.02 2009

After yesterday’s announcement of Oasis Fund’s investment in VidaGas, VillageReach has even more good news to share: VillageReach has been recognized by the 2009 Tech Awards as a Laureate in the Health Awards category!

Each year, the Tech Awards recognizes 15 global innovators who apply technology to the most critical issues affecting the world.  This year, VillageReach was selected from among hundreds of nominations representing 66 countries.  The Laureates are honored at a gala in San Jose in November.

VillageReach’s Management Information System (vrMIS) was recognized because of the significant impact it made in improving information and decision making in VillageReach’s Mozambique program.  Developing countries bear the greatest burden of infectious diseases, but they often have poor infrastructure to support critical public health programs.  VillageReach worked with the government of Mozambique to implement vrMIS which enabled health workers in the field to send and receive data in real time and as a result, empowered health workers to make the best possible decisions based on accurate and timely information.

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09.01 2009

Canister_StacksAs the Social Capital Market Conference (SoCap) begins today in San Francisco, VillageReach is very excited to announce that Oasis Fund, a European investment fund, has committed a $1.375 million investment in VidaGas, the propane energy company owned by VillageReach and the Mozambique Foundation for Community Development (FDC).  SoCap is full of social entrepreneurs, investors and innovators excited about using private money for social good- but thus, far there are few true real-world examples of large scale, social investing.  This investment is a landmark transaction that demonstrates the potential for channeling private investment capital into commercially viable social businesses in developing countries.  Furthermore, the investment affirms the effectiveness of VillageReach’s model for enacting sustainable, systemic change to global health by establishing for-profit businesses to fill gaps in infrastructure.  The investment will enable VillageReach to expand its customer base and energy service offering to impact a greater number of households and businesses in remote areas of northern Mozambique.

VidaGas was started in 2002 to support the health system improvement program developed by VillageReach and FDC.  More than 80% of Mozambique’s population is rural and depends on charcoal and wood for basic cooking and heating.  Safe and reliable propane from VidaGas enables health centers to provide critical health services including vaccinations, equipment sterilization and nighttime birthing.  Additionally, propane from VidaGas is a clean and affordable alternative to charcoal and wood for households, small businesses, and light industry clients.  VidaGas has grown over 500% since 2002 and is now the largest propane distributor in northern Mozambique.

Oasis Fund is a Luxembourg investment fund which finances innovative, growth stage, commercially viable enterprises that deliver basic goods and services that improve the lives of low-income communities.  This investment is the first investment in Africa for the Oasis Fund.  Oasis Fund is advised by Bamboo Finance, a Geneva based investment advisory firm.

VillageReach’s Social Business Director, Craig Nakagawa, will be speaking with Keely Stevenson, of Bamboo Finance, about the investment at SoCap tomorrow.

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08.26 2009

On Wednesday, September 2nd, our CFO and Social Business Director, Craig Nakagawa, will present VidaGas: Anatomy of a Social Investment, a presentation featuring VillageReach’s social business VidaGas.  At their first annual conference last year, SoCap sold out before the conference even began.  This conference is a continuing testament to the excitement surrounding everything social entrepreneur-related.  Craig’s presentation will cover VillageReach’s creation of VidaGas as a social enterprise designed to support the health system in northern Mozambique and the development and expansion of the business model.  VidaGas has evolved from a small distributor focused on supplying propane to health centers to become the largest propane distributor in Northern Mozambique.  In conjunction with the conference, we are also highlighting the Harvard Business School case study on VillageReach which explores some of the successes and challenges of VidaGas.  The case study was published in the spring and will be used in Harvard classrooms beginning this fall.

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08.13 2009

The Rockefeller Foundation and Results for Development Institute just released their report that offers a landscape view of successful global healthcare financing and delivery models involving the private sector.  VillageReach’s model is recognized as an innovative model in supply chain management.    While the identified models span a wide variety of services and strategies, it is exciting to see a growing embrace of the role of the private sector in improving public health.  When VillageReach began in 2001, it often felt like there was mutual distrust between the public health and development professionals and the private sector entrepreneurs.  Reports like this are a nice reminder of how much and how quickly things have changed.

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08.06 2009

Over at the GiveWell blog, they’ve been asking some difficult but incredibly important questions about international aid projects.  Back in July, they explored the goal of sustainability.  Like GiveWell, we’ve noticed that sustainability is more and more often included as a requirement from funders yet it often remains vaguely defined and difficult to quantify.  VillageReach decided to establish businesses precisely because we believe that for many infrastructure gaps in the health system, they are the only truly sustainable way to address the problem.  And our social business VidaGas is a self sustaining organization, but as GiveWell notes, it has been a larger challenge achieving sustainability on the program side.  Even though we attempted to plan for long-term sustainability from day one in our Mozambique program, it has been challenging to convince the government to maintain the system even when we can show evidence of significant success.  The inertia of the status quo is a powerful obstacle to sustainable change.

So, this begs the question- how do you define and measure sustainability and how important should it be as a goal of a program?  This is especially important when you consider that sustainability often ends up being a trade-off with other qualities- for example, in order to make our program as sustainable as possible, we try to only include elements that we know the government is capable of carrying on after we leave- this can mean sacrificing impactful elements  because they are too expensive, too labor intensive or just too unprecedented for the government to assume control of.   GiveWell concludes that sustainability should be considered “a desirable goal, but not a reasonable requirement.”  The goal of sustainability is fundamental to VillageReach but a more candid conversation about what this truly means could be of enormous benefit to funders and implementers alike, both of whom tend to through the word around without really questioning its value.  On a similar theme- Phillip LaRocco has a humorous note to the “development posse” about lightening up- admitting when things are difficult and cutting through the clichés (of which sustainability certainly must be one of the most ubiquitous!) to truly impact the communities we serve.

GiveWell also explores investing in a small charity.  They note that “giving to VillageReach is a high-risk, high-upside proposition” and honestly, we couldn’t agree more.  VillageReach is proud of its dynamic and innovative approach- our President Allen is fond of saying that our theory of change boils down to “we see, we do, they see, they do.”  Basically, we recognize the problem and because we are small and agile we can create a customized model to address it and then advocate for both the recognition of the problem and the adoption of our model to others.  GiveWell was impressed by our rigorous monitoring and evaluation of our program, an expensive proposition that many small non-profits forgo because they view it as a luxury.  We, however, see quantitative evidence of impact a fundamental necessity in order to convince others of the value of our model.   But it is true that the same things that make us high-impact and allow for change on a scale disproportionate to our size also mean that we don’t have the security of a large, highly diversified non-profit working in a well understood area.  We rely on donors to recognize both the problem of last mile health system strengthening and the value of our solution.  We are thrilled to have GiveWell endorse our approach and we hope to report more success in the future.

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07.14 2009

Back in February, VillageReach purchased bicycle ambulances for a number of communities in rural Malawi.  Before they had these bicycles, community members would often resort to making homemade stretchers to carry their loved ones to the nearest health facility.  Needless to say, the communities are very excited to have the new bicycle ambulances.  In June, I was able to go back to Malawi and visit three of the communities with the new ambulances.

bicycle-ambulance

Welcomed by song and dance, I was incredibly excited to learn that the communities had formed committees to maintain the bicycleambulances and regulate their usage.  The committees each had an appointed treasurer who gathered and secured funds to ensure that thebicycle ambulances would be well kept as a community resource.  Of the three communities I visited, one community had used their bicycleambulance twice, another once, and the third had still not used theirs.  While at first this seems like the bicycle ambulances are being underutilized, to me it reflected a real valuing of the bicycle ambulances;the communities were not allowing them to be abused and were reserving them for truly grave emergencies.   This was a perfect (and heartening) example of real community buy-in, which at the end of the day is one of the few variables that can really support true sustainability.

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07.01 2009

We are excited to annouce that VillageReach has been rated as a top charity by GiveWell. GiveWell is an independent, nonprofit charity evaluator- founded by two ex-hedge-fund analysts, GiveWell brings a metrics-based business mentality to the table with their rigorous and thorough analysis of charities.

givewell-logo

It is incredibly refreshing to be asked about more than just our overhead to program ratio- as Anne mentioned in a prior post, we’re always thinking about what metrics we should be measuring our work by and how best to share our successes with our supporters.  We’ve been working back and forth with the guys from GiveWell for the past couple of months and been thoroughly impressed with the amount of work they put into each analysis they do.  We are incredibly proud to have passed their high standards!

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06.19 2009

Interesting article today in the Seattle Times! Even in the eight years since VillageReach was established, it’s been amazing to see how global health funding has fundamentally changed- we blogged before about GAVI and The Optimize Project, two enormous initiatives that would never have happened without the “balance of power shift” mentioned in this article…

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