FairBuilding Network: increasing the market power of the not-for-profit sector

How to apply the principle of a business model in the building sector to create an innovative concept to support not-for-profit organisations and their beneficiaries? This was the initial question for Dr Matthias Krups, CEO and founder of BCI Media Group. BCI is a successful construction information service in the Pacific region, which creates a degree of market transparency that allows the building industry to compete efficiently and on a level playing field. Where BCI is active and utilised, developers and designers have more choice when sourcing products and services.

While BCI is successful in the mainstream sector, our market analysis revealed an even greater need for not-for-profit organisations and social housing developers that are normally off the radar of the mainstream building industry.

The answer came with FairBuilding Network which was established about four years ago with the principal aim to create an online platform for non-for-profit developers, designed to attract discounted or pro-bono products and services from the building industry. Our concept is characterised by two main elements: on the one side, it’s a lead-sourcing service for the building industry that offers firms an opportunity to show off their social credentials by supporting projects for the poor. On the other side, the platform gives not-for-profit organisations developing homes for the poor access to cheaper construction material and services.

The first country to trial the concept was the Philippines. As in many parts of South East Asia poverty is a critical social problem. The statistics reveal that 24 million people live below the poverty line, while 4.5 million are reportedly homeless and 3.1 million are informally settling in the slums. While the government cannot solve these issues alone, organisations such as Virlanie, Base Bahay and Habitat for Humanity are at the frontline to provide shelter for homeless kids living on the street; help families move out of slums and unsafe living conditions, and into new homes; or for rehabilitation after natural disasters. These and 12 other non-profit organisations are partners of the FairBuilding Network. Our aim is to support their work by building a bridge to the construction industry.

However FairBuilding Network encountered different hurdles on its journey. The main challenge was an initial lack of interest by the commercial building industry which impeded our expectation to scale up the organisation’s output quickly. It was necessary to take the time to explain the concept and its added value. In this process we recognised that the social component plays a vital role. Face to face meetings and building trust in personal relationships are crucial to bring together the different market players.

We address this need in our bi-monthly Engagement Forums, where we give non-for-profit organizations the platform to present a current project to a number of local suppliers to seek their support. The outcomes of those meetings are, for example, newly painted walls and tiled floors in Virlanie’s homes for disadvantaged children; new plumbing equipment; new doors; roofing and lighting requirements for new homes of Base Bahay and Child and Family Service Philippines, Inc.. Usually the materials and labour are provided at a discounted rate of 20 to 50 percent, which made a significant difference for the non-for-profit organizations and helped to stretch their engagement opportunities even further.

Our annual FairBuilding Awards provide an additional incentive for businesses to collaborate and support social and not-for-profit projects since they are recognised and acknowledged for their contributions in a highly visible event.

Of course the Awards are also used to celebrate FairBuilding’s achievements. To date, the organisation has become a capacity to bring together willing buyers and sellers in a neglected segment of the construction market in the Philippines. We fostered more than 40 transactions between industry suppliers and non-for-profit organizations. These transactions help non-for-profit organisations to stretch their market power while saving them more than 4.6 Million PHP (~91,500 USD).

To learn more about FairBuilding Network, please visit our website: www.fairbuilding.org or Facebook page

This blog is a part of the August 2017 series on Affordable Housing in partnership with Business Call to Action.

Read the full series for more innovative inclusive business models, lessons learnt by practitioners, and the unique challenges of understanding and measuring impact in the housing sector.