Thoughts from the Last Mile Welcome to the VillageReach Blog

Category Archives: NGO’s

12.14 2009

IMG_0669With our focus on last-mile healthcare access for remote rural populations, it may sound like a contradiction to address the pressing challenge of improving access for urban populations.  But in 2010 that’s exactly what we’ll be doing.  In August and September we were in India to look at locations for a new vaccines distribution program, and to facilitate a workshop of local and regional NGOs, UNICEF, the Ministry of Health and Family Welfare (MOHFW), and the corporate sponsor of the program.  One of our site visits included a trip to one of Mumbai’s largest slums, built right on top of the city’s main garbage dump.

The workshop highlighted inadequacies of the cold chain in addressing the government’s immunization goals, critical gaps in energy, communications, and transportation infrastructure that exist for many last mile communities; and that health workers are overburdened due to the scope and scale of their day-to-day work.  Not surprisingly, our experiences in sub-Saharan Africa are addressing these same issues.

How did we get from rural to urban?  As part of the workshop we included discussions on India’s population growth and industrial development that is leaving millions behind in rural communities throughout the country.   The three states of Bihar, Madhya Pradesh and Uttar Pradesh make up over 50% of the country’s estimated 10 million unimmunized children.  That’s the largest unprotected population of any one country on the globe. The great majority of theses states’ children are the very rural poor.   But two of these states also have the highest child mortality rates for urban poor communities in the country, which highlights the correlation between the rural poor and the rapid urbanization of the country, as desperate migrating families look for employment.  Dr. Siddharth Agarwal of the Urban Health Resource Centre, based in Dehli, is a passionate and persuasive advocate for these urban slum communities.

Not unlike remote rural communities, urban slum populations are difficult to reach.  There is weak physical infrastructure, limited reliable health services and poor documentation of the populations.

IMG_0660The plight of India’s city slum dwellers certainly isn’t a new topic … Mumbai’s Dharavi Slum of “Slumdog Millionaire” fame helped ensure that, but that the task of improving last mile healthcare access for the urban underserved is strikingly similar to that of rural communities, certainly may be.

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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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09.21 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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09.01 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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08.06 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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07.01 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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06.17 2009

As a recent MBA graduate, I joined VillageReach for the summer tasked with evaluating our models and frameworks to further reach scalability and create sustainable business opportunities.Throughout business school, I was taught the importance of proving that financial profitability and measurable metrics are essential for making business decisions. Shouldn’t this common standard be used to measure socially-focused investing as well?Our philosophy at VillageReach is that there is a place for social investing in which we can create profitable businesses that have the potential to achieve both a financial and social return. We have proven a case in which the combination of non-profit dollars and entrepreneurism can build a sustainable business.  Whileventure capitalists seek to create financial returns by investing in new technologies, VillageReach aims to improve established energy and logistics platforms to build base-of-the-pyramid businesses. However, unlike the VC world, there is no standard metric to calculate and measure the value of a social enterprise.Instead, the development community of entrepreneurs, philanthropists, and foundations has the challenge to develop a standard methodology. We’re excited to see the momentum and collective steps that organizations and individuals are collectively taking, especially as the Acumen Fund declared yesterday the WMD (World Metrics Day)!

At VillageReach, we are evaluating different methodologies to formulate our approach to quantify and present the value of a social investment. We are considering two methods: a BACO Calculation (for best available charitable option – created by the Acumen Fund) and an SROI calculation. The BACO model enables us to perform a cost-effective analysis on philanthropic dollars by comparing two options: a charity donation vs. an investment in a business. This analysis provides us with decision-making data to assess and determine the return the greatest social impact at lowest cost. The SROI (“social return on investment”) methodology has been in development for many years, and calculated using a discounted cash flow analysis + projected socio-economic contributions (direct, demonstrable cost savings and revenue contribution that are associated with the social purpose enterprise) into a projected blended business performance. There are distinct challenges with both of these approaches as it is difficult to often find a “comparable” charity donation and quantify the context of social outcomes. However, we strive to build quantifiable metrics that will help continuously evaluate our investments and allow us to communicate our impact to an external audience. Let us know what steps you are taking or thoughts about this process as this is clearly a shared effort.

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06.11 2009

We all know that operation of any health center requires a variety of external inputs- energy, transport/logistics (delivery services), and communications systems to name a few. In wealthy countries, these services would normally be provided by the commercial sector. In focusing efforts on the “last mile,” however, any and all of these commercial services are simply not available or are so expensive to procure that they are not operationally viable.

At VillageReach we focus on energy, transport/logistics and communications, the “Enabling Services” that are required to fulfill the mission of VillageReach programs. When implementing health care programs in regions with weak or nonexistent Enabling Services, NGO’s have traditionally elected to handle the provisioning of Enabling Services internally. Trucking in generators, fuel and other supplies directly supports the program objectives but it does little to provide Enabling Services to the surrounding community. It is widely recognized that a successful and sustainable program intervention creates and uses local capacity. The VillageReach model and programs to date have as a guiding principle the creation of local capacity not only for last mile health care infrastructure but also for the Enabling Services that support that infrastructure.

To sustain the improvement in health and decrease in mortality that is the core of the VillageReach mission it is necessary to create permanent health care resources in last mile communities. Sustainability requires that Enabling Services be available, be reliable and can be procured at affordable rates for the long term. In order for Enabling Services to be available for the long term the customer base must be substantially larger than just the rural health care clinic and therefore must include a vibrant market in the local community. The lack of Enabling Services in many of these rural situations clearly shows that sufficient market demand does not exist today for a viable commercial business. It’s a classic chicken and egg problem – VillageReach is moving forward as a catalyst with creating basic demand for Enabling Services as part of its programs to support last mile health care and incubating the required commercial business for the services.

So, why is social enterprise required in the VillageReach model? Because without established Enabling Services as one of the key elements in the intervention – the VillageReach programs would not achieve the required sustainability and would become yet another solution that fails to provide the long term impact when transitioned to local operation.

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