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Category Archives: Social Enterprise

06.18 2013

Today we’re excited to announce the Bill and Melinda Gates Foundation is awarding VillageReach a grant to improve vaccine delivery in Mozambique. The two-year Final 20 Project targets more than 400 of the Mozambique Ministry of Health’s rural health centers that serve a population of approximately 13 million. See our press release announcement and this blog that is also featured at Impatient Optimists.

Who are the Final 20 and Why do we Need to Reach Them?

Today, more than 80 percent of children around the world receive a complete routine of life-saving vaccines during their first year of life. That is a significant increase from the 17 percent coverage 30 years ago, giving millions of children each year a better chance of seeing their first birthday. This increase in coverage is the result of decades of hard work to establish immunization systems in countries where previously, they simply did not exist.

Despite this huge success, these immunization systems have reached their maximum capacity. A considerable gap remains in reaching the final 20 percent–the children who are the hardest to reach, and the ones currently not served by existing immunization programs.

These children usually live in remote, rural communities, several miles from a health facility with little transport available, in villages that can’t be reached by large delivery vehicles, beyond the reach of cell phones, and where electricity is available only sporadically, if at all. In these communities, vaccine coverage rates are very low and child mortality unacceptably high because weak underlying infrastructure limits the potential of what the health system can deliver.

To reach this final 20 percent–24 million children–with the current group of life-saving vaccines, not to mention the exciting new vaccines that are just being introduced, it’s time to apply new innovative approaches and delivery models.

Increased attention is now being directed to this challenge. As part of a broad strategy by the Bill & Melinda Gates Foundation to improve vaccine supply chains, VillageReach is working to scale new system innovations to improve vaccine distribution across Mozambique.

The Final 20 Project is building a sustainable model of innovative supply chain design, enhanced data collection and reporting, and public-private partnerships to improve the underlying infrastructure the health system requires. Our goal is to provide tools, research and evidence that will benefit Mozambique and other countries as they work to improve their immunization systems to accommodate the new vaccines and improve the health of their children.

The Final 20 Project is an extension of a model we have applied in Mozambique for over ten years, while working with provincial government health departments (DPS) to streamline their logistics system. The ad hoc collection-based approach, where frontline health workers must leave their health posts every month to collect vaccines and related supplies from their district office, was replaced by a dedicated distribution system (Dedicated Logistics System or DLS) with a small number of specialized government workers visiting the health centers monthly to deliver vaccines and supplies, repair equipment, collect data, and provide supportive supervision.

The project incorporates an electronic logistics management information system that enables more practical and reliable data collection. This system allows the DPS to improve the monitoring of commodity availability at the health facility level and delivery components in order to improve the flow of vaccines through the supply chain and reduce shortages of stock even in the hardest to reach areas. With more regular data being reported, administrators are now able to see what is happening and make informed management decisions to improve system performance.

VillageReach also leverages the private sector to supply critical infrastructure services, such as communications, energy and transport, that are critical for both the health system and the private sector.

For example, one of the barriers to a functioning cold chain for vaccine distribution in the remote northern provinces is a lack of fuel to power vaccine refrigerators in regions far from the electrical grid. In response we established an energy services company, VidaGas, in partnership with a local organization, to provide propane gas to the health centers.

Since its establishment in 2002, the company has grown significantly to become the largest independent energy services supplier in northern Mozambique. The revenues VidaGas gains from selling to non-health sectors help sustain the company and support its obligations to the health system. With propane-based refrigeration now being replaced by new, more efficient solar and passive refrigeration technologies, in the Final 20 Project, we will work with the private sector, DPS, and other partners to support this transition, as well as, continue to develop creative private sector-based solutions to fill gaps in infrastructure needed to support vaccine distribution.

These are just a few examples of system innovations to improve vaccine distribution in Mozambique. We are excited to be a part of these and other efforts to extend the availability of life-saving vaccines to all children around the world.

Now is the time to reach that final 20 percent.

Allen Wilcox
President

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04.03 2013

(This blog was originally posted at Next Billion).

One of the harsh realities of the current state of global health is that the quality and supply of life-saving innovations exceeds the capacity of many health systems to deliver them. Exciting new innovations are being developed. But for many low-income countries, gaps in the underlying infrastructure to support their delivery – especially for rural areas – limit the potential of these innovations to improve health care.

In our experience at VillageReach, looking at the problem from the point where health care is delivered to patients ensures that capacity development focuses on the weakest link – the last mile – but also where underlying infrastructure is most limited. We’ve determined that private enterprise has a significant role to play in developing the infrastructure necessary to achieve sustainable improvements in health care.

Vaccine development – arguably global health’s greatest innovation – is a case in point. With billions invested, the aggressive introduction of vaccines has saved millions of lives. But subsequent gains have been more elusive: Many low-income countries have seen immunization rates essentially stuck at 80 percent. GAVI Alliance CEO Seth Berkley estimates that today as many as 22 million children are unable to access vaccines. More than two million die from vaccine-preventable diseases every year.

Efforts to reach the remaining 20 percent – the Final 20 – have been insufficient, largely because much of this neglected population is rural and remote. For many of these communities, long travel distances, minimal transportation services and high poverty rates prevent mothers from making their kids available for immunization and other basic health care measures, raising the cost of health services. Families with sick children find it more difficult to exit poverty, and their communities have fewer opportunities to advance.

Investing in Community Infrastructure
With so much investment and innovation in vaccine development, we should be looking to where leverage can be applied to fulfill that promised value. Much of VillageReach’s work has focused on improving vaccine delivery by increasing frontline health worker productivity and capacity, and making information technology more useful and practical in the field in order to improve data reporting and performance measurement. Our model also leverages private enterprise to develop common infrastructure that both health systems and the communities require.

In creating opportunities for investment in infrastructure, we look at gaps in key community services – transport, communications and energy supply, for example – that limit health care delivery. The intent is to address the health access and capacity problem by creating enterprises that also serve commercial customers in order to achieve financial sustainability.

This focus on infrastructure isn’t only to provide single solutions for common problems. The economic multiplier is higher for investments in infrastructure than in other sectors, since the construction of roads, bridges, communications, and energy supply networks employ workers and enable commerce. World Bank President Jim Yong Kim acknowledged the importance of this link recently, noting that investment in Africa’s infrastructure increased from 16 percent to 22 percent of GDP over the past decade. Africa’s 5 percent annual GDP growth during the period is greater than for any other region worldwide.

Supplying Energy for Mozambique’s Health System – VidaGas
Mozambique and its health system have faced many of the same challenges of other countries in sub-Saharan Africa. Much of the population lives in remote communities that are difficult to reach. Less than 35 percent of the country has access to the electrical grid – access is much lower for rural communities. Health services are also impacted: The supply of vaccines to rural health centers is irregular due to the great travel distances involved, and limited refrigeration results in wasted vaccine stock. This lack of reliable energy also impacts health center performance well beyond vaccine delivery, making it difficult to sterilize medical equipment and provide the necessary lighting for procedures conducted after dark.

We set a goal of improving the capacity and reducing the cost of health care delivery in Mozambique. It was clear that a solution was required that would address the critical gap in energy supply affecting the performance and economics of the cold chain for the health system. It was also clear that the solution must be sustainable by attracting broader demand for the service.

In 2002, we established an energy services company, VidaGas, in partnership with Fundação para o Desenvolvimento da Comunidade (Foundation for Community Development). When VidaGas was created, the initial network of rural health centers comprised 100 percent of gas shipments. Today, that percentage is 17 percent. The majority of VidaGas’ service is now directed at enterprise customers – restaurants, hotels, small factories, and a growing retail network that enables households to replace traditional wood and charcoal that produce harmful indoor pollutants. The message is that without revenues from the private sector, the company wouldn’t have the resources to support its obligations to the health system.

The company’s growth – in excess of 35 percent annually since 2010 – has accelerated with additional capital investment from Bamboo Finance/Oasis Fund. Today, VidaGas is expanding its operations into new geographies and market segments. The company is now the largest independent energy services provider in northern Mozambique, with three large-tonnage storage and filling facilities across the region serving five provinces and more than 50 percent of the country’s rural health centers.

We anticipate similar growth in the future, as the business expands its base of enterprise customers, builds a larger retail network to reach more households, and expands operations into new provinces in order to supply more rural health centers.

John Beale
Group Lead, Social Business

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07.19 2012

We recently sent out this latest update … here’s our news in case you missed it …

Malawi

  • update on our work to improve maternal and newborn health in Kwitanda
  • the latest on our Chipatala Cha Pa Foni (health center by phone) program, part of the Innovations for Maternal, Newborn and Child Health initiative
  • Mozambique

  • new update to our Mozambique Dedicated Logistics System (DLS) program
  • collaboration with the William Davidson Institute (University of Michigan) Supply chain & logistics study: new research to quantify the logistics challenges for a variety of medical commodities
  • Dr. Seth Berkley, President of the Global Alliance for Vaccines and Immunization (GAVI) visited the DLS program
  • Technology Initiatives

  • ODK Scan: update on our collaboration with the University of Washington’s Computer Science & Engineering to improve the quality of data collection
  • OpenLMIS: new website with updated details on activities and partners
  • Social Enterprise

  • VidaGas: our collaboration with the ghdLABs program at MIT, to evaluate the marketplace for our social enterprise in Mozambique
  • New Additions to Our Team

    Malawi:

  • George Chinkwita – Project Officer, Kwitanada Economic Development Initiative
  • Erin Larsen-Cooper – Program Associate
  • Mozambique:

  • Antonio Gaspar Tomboloco – Field Officer, Niassa Province
  • See here for details …

    Updated Financial Report

  • our recently posted 2011 independent financial audit
  • We welcome your questions and comments,

    Allen Wilcox
    President

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    06.07 2012

    I spent a couple of weeks in Mozambique recently to review our energy services social enterprise, VidaGas, that provides much-needed propane to hundreds of rural health centers throughout the north of the country. VillageReach owns the for-profit business in partnership with Oasis Fund and FDC.

    I was joined by two MBAs, Alexandra Fallon and Deborah Hsieh, from MIT’s Sloan School of Management who are enrolled in an intriguing course. ghdLABs, developed by Anjali Sastry, is focused on assessing opportunities to improve healthcare delivery through changes in management, engineering and systems. See here and here for background on the course, which includes links to blogs from Deborah and Alexandra about their experiences. The students have been assisting with our plans to help build a longer business outlook for VidaGas and also to measure the social benefit the company provides. Both efforts will be important in helping attract additional capital for the company in the coming years as it continues to grow and further support the public health system.

    Energy Improves Health

    When VillageReach first started its work to improve the last mile of delivery capacity in Mozambique’s Ministry of Health, we realized a critical gap in energy supply was affecting the performance and economics of the cold chain, and in turn limiting the ministry of health’s ability to store and distribute vaccines. VidaGas was established to address this lack of reliable energy supply.

    Since its founding in 2002, the company has progressively expanded its operations to serve more and more health centers and communities. In the past two years, the growth rate has accelerated, due in part to a critical investment made by Oasis Fund.

    The additional capital enabled VidaGas to step beyond its presence in Cabo Delgado Province in the northeast and establish additional filling and storage facilities, greatly increasing the addressable market for propane sales. By the 4th quarter of this year, VidaGas will be operating in all four northern provinces from an operational base of three filling plants in the cities of Pemba, Nampula, and its newest facility in Mocuba. More on Mocuba below.

    Operating VidaGas as a business instead of a charity addresses the critical requirement for a sustainable supply of energy for the health system. The majority of Mozambique’s population in the north resides in remote villages with no electricity and little access to transport and communications services. Health centers in these communities need a reliable supply of energy for refrigeration, lighting and sterilization in order to provide even basic medical care.

    To ensure its service to the health system is sustainable, VidaGas supports this social mission by selling gas to a variety of enterprise customers: restaurants, hotels, small factories, plus a growing retail network and several urban hospitals. VidaGas Sector Share of RevenueHere’s the share of sales across these categories for 2011 – rural health centers represent only 17%. The message is that without the private sector revenues, the company would not have the resources to support its obligations to the health system.

    VidaGas’ social benefit isn’t limited to the benefit it provides to the ministry of health. Other government ministries use propane for their facilities and a growing number of households are buying the gas for cooking, reducing the use of charcoal and wood that produce harmful indoor pollutants. Reductions in biomass consumption also contribute to limiting the rate of deforestation.

    What’s Next

    pic We’ve been at this effort since 2002. As VidaGas sales have grown, so has its reputation as a reliable supplier to the ministry of health and other customers. In 2011, VidaGas shipped more than 350 tons of propane, an increase of 35% over 2010. Now the business has identified the opportunity to supply health centers in the province of Zambezia. In April, VidaGas broke ground on a new facility in Mocuba City in central Zambezia, see this image on the right. Once the facility is completed in August, Mocuba will have the same 21-ton storage capacity as the Nampula facility you see below. With a population of nearly 4 million and more than 300 rural health centers across Zambezia Province, pic1we anticipate both strong demand and see an important opportunity to assist the health system. In 2012 we expect sales to increase at a significantly higher growth rate than the year before.

    Beyond the rural health center network VidaGas supports today are many more health centers that suffer from unreliable energy supply. To expand its social impact, VidaGas must scale further: in the future the company will require additional capital in order to invest in new facilities, equipment and personnel.

    Attracting investors is inevitably a challenge, even as the social enterprise industry matures and encourages more socially conscious investors. Our work with MIT will help support VidaGas’ future growth, helping us prepare a more robust strategic outlook for the company and producing an evaluation of anticipated financial and social returns for investors. As this review progresses, we’ll write more on our views of VidaGas, so look for additional reports on the company’s milestones and prospects for the future.

    John Beale
    Director, Strategic Development &
    Group Lead, Social Business Group

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    04.08 2010

    IMG_0669My name is Peter Nakamura and I am one of the newest members of the VillageReach team. I am currently based in Nampula, Mozambique to help coordinate a project funded by USAID to help individual households gain access to propane. The project is coordinated through VillageReach and its social business, VidaGas – the largest distributor of LPG (Liquid Propane Gas) in Northern Mozambique. As the next step in its growth, VidaGas is working to expand its customer base to households in order to diversify its clientele and expand the availability of a cleaner and more efficient source of cooking fuel than charcoal or wood (which are the most common types of cooking fuel in Mozambique).

    IMG_0669

    In order to increase the demand and awareness of LPG among households, we will be launching a social marketing campaign tailored to the realities on the field. From personal demonstrations of around 10 people to big events where we expect over 200 people to attend, we will be testing different methods to stimulate demand and awareness. In the end, our goal is to be able to learn from this experience and create a social marketing model and toolkit which we will be able to implement in other developing countries and with a variety of product (whether that be bed nets or batteries).

    Check in regularly for updates on our progress.

    Peter Nakamura, Project Administrator

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    12.22 2009

    Peter Singer’s new book, The Life You Can Save, has sparked a growing debate amongst VillageReach staff. In his chapter, Why Don’t We Give More, he writes about the power of an identifiable victim — as opposed to group or mass need.  He describes Paul Slovic’s research that identifies two distinct ways that we process a call for action. The first is derived from images or stories real or imagined that target an emotional response. The second is based on logic and abstract thinking and can take much longer before we act. Consequently, “the identifiable person moves us in a way that more abstract information does not.”the_life_you_can_save.large-732235

    Certainly this concept is not new as non-profits flood their year-end marketing appeals with individual sponsorship programs and passionate stories of hardship and suffering. Kiva is a perfect example of the power of connecting to the individual as they market to donors with a personalized story and photo of each borrower.  So what is our debate about you ask? The question in the office is: If this type of marketing works, and research shows that it does, shouldn’t VillageReach change its message to focus more on individual stories and less about systems?

    Up until now, VillageReach has presented its message and for that matter, our brand, as a social enterprise. We are capacity builders and have been recognized as one of the top non-profits for our cost effectiveness in strengthening healthcare systems.  Our work directly impacts those children who so successfully appeal to donors. Yet, this is our challenge. If we focus on the child who we are able to save through immunization, do we lose the opportunity to educate donors on the critical importance of systems building and social change? Do we lose the chance to describe the complicated and sophisticated nature of what we do?

    Perhaps this is not black or white and just as any good fund development or marketing manager knows, you need different messages for different audiences. Yet, Professor Singer’s book has given us an opportunity to step back and discuss how we tell our story to current and potential donors.  And wherever we land at the end of this debate, we know either way the most important message of all is in our ability to save a life. That we all agree on. What are your thoughts?  Join us in this debate.

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    12.03 2009

    This week VillageReach President, Allen Wilcox, will be speaking at the 2nd Annual Global Health Supply Chain Summit.  The theme of this years conference is “Bringing Government, NGOs, and Academia Together: What can be learned from the for-profit world?”  We are excited to be included in this conference again this year- the theme alone could be a subtitle for VillageReach’s mission.  Allen will be speaking about what logistics and supply chain bring specifically to the last-mile.  VillageReach’s experience shows that since the last-mile is often much weaker than the rest of the health system, programs can have a disproportionately large impact by effecting change at this level.  Our colleagues at the Zaragoza Logistics Center have been doing terrific work bringing their academic backgrounds to bear on problems in global health supply chains.  As the “implementers” in the field, VillageReach has found that working with academics provides them with a useful real-life case study and provides us with access to sophisticated, cutting-edge, cross-sector knowledge and best practices, so far it’s really been a win-win and we are excited to continue the work.

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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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    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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