World Vision's approach to inclusive business collaborations

As a part of our series on NGOs and inclusive business, we spoke to Katharina Jeschke, Economic Development, Microfinance and Inclusive Business from World Vision, an international charity with a focus on children’s rights, on their approach to using inclusive business models to improve the lives of those living on low-incomes.

The interview was conducted by Anne Salter and Carolina Zishiri.

What is World Vision’s inclusive business approach in order to improve livelihoods of low-income communities?

The reason World Vision is engaged in livelihoods work, is because we see one problem: poverty, and are aiming to address the causes of it. So, with the livelihoods sector approach we focus on graduating the poorest households with children out of poverty, by developing productive and resilient livelihoods. Thus we enable parents from the base of the pyramid to feed and care for their children, educate them from infancy through adolescence and to give them hope and skills for a productive adulthood. We also emphasise women’s economic empowerment, in order to ensure that women have a certain influence on their households and their children’s further development.

With these objectives we are trying to address the SDGs, especially 1, 8, 12 and 17. When you go into the elements of our livelihoods approach (see below), you will see we have a specific understanding of our target group and different intervention packages based on their needs.

When it comes to number 10, microfinance, we have our own MFI called Vision Fund, who operate in 35 countries and are a separate entity from World Vision International, providing special services for microfinance, e.g. savings accounts, loans, micro insurance and financial literacy training.

When we think about inclusive business at World Vision we think about the IFC definition:

“Inclusive business is a private sector approach to providing goods, services, and livelihoods on a commercially viable basis, either at scale or scalable, to people at the base of the economic pyramid by making them a part of a company’s core business value chain as suppliers, distributors, retailers, or customers”

When we look at this from an NGO perspective, we have different models we are applying:

1)      Sourcing is a part of the resilience and livelihoods approach. One of our best practise approaches is local value chain development, when we work with producer groups (both formal and informal) to integrate companies into our work. Our vision is to support companies to develop local value chain services, so they get access to quality products and services, while local communities are employed as producers and service providers.

2)      Co-creation model: we are trying to work with communities and companies in the co-creation process, so we are bringing companies to the field, showing them the needs, the challenges and then trying to work together with them on the solution to improve the situation of poor people. World Vision co-ordinates and facilitates the process and tries to create a triple win situation for World Vision, communities and companies. For more information about this approach have a look at this  blog.

3)      Existing solutions: World Vision Canada works with social enterprises on a global level, e.g. The Plastic Bank, from Canada. They have already thought about the solution, in this case how to recycle plastic, so we are working with them to integrate the solution in our work with the communities and to scale up their business model. Another example is the One Dollar Glasses in Malawi.

4)      Funding: World Vision Initiatives invests in inclusive business models, such as investment to financially support market based solutions. This is something in an early stage. It touches on the complex topic of impact investing, we are working on this to create a good investment environment for inclusive business. It can be beyond philanthropy, or within the area of philanthropy. So, it could be donations, or grants, possibly attached to a social impact bond, World Vision UK is working on that.

5)      Local solutions: sometimes on the ground level there are already good ideas for how to solve social issues. When we see these ideas from producers we consider it and engage communities more and more to support them as entrepreneurs.

What kind of support do you offer to these local solutions?

It depends on the case, in general we provide advisory support and training. As discussed in the project model operations, we have business facilitation, a model which helps entrepreneurs to strengthen not only their network in their own business area, but also to access networks to expand their products or services. We support and facilitate this network, but in addition to that we also provide training, e.g. using the CANVAS business model, to discuss how to develop a better product or service that is customised for the community. In case we see a lot of potential for one specific business in a community we would also provide an initial stage grant or help them to get access to microfinance

How can local entrepreneurs access your support services?

We have been present for almost 15 years in some communities, with various interventions including health, education etc. Participants already part of these programmes can reach out to their branch offices for specific support.

What sectors are you active in? Currently we are focusing a lot on agribusiness. World Vision Germany is focusing on agriculture, coffee, cocoa and certain foods such as cashew nuts and ground nuts. We have different opportunities to work with companies, we would be willing to create a project with any commodities in order to scale up the business of farmers, or to try to integrate the value chain work of a certain company into our programming.

We already have some interesting case studies such as Mondelēz, where we have been working in Ghana with cocoa value chain development since 2008. This is the typical case where a company is working successfully with World Vision Ghana, and supporting local farmers, children and especially women, in order to have a better income from cocoa farming. We are also working with them to diversify their income streams outside of cocoa.

What are the motives and reservations regarding World Vision engaging with the private sector? What should be the role of NGOs in Inclusive Business?

When World Vision partners with business beyond philanthropy, it is because we see an added value that companies offer for World Vision and the people we represent. They offer access to resources, including products and services for low income populations and partnerships may also provide World Vision the opportunity to be integrated into value chain activities, which provides local employment. As a by-product of inclusive business partnerships, we see also the potential of revenue for World Vision itself, and also cost recovery for our project activities.

Nevertheless, there are some challenges. We see our role as a facilitator and partner for companies. This requires a sufficient level of neutrality. As an NGO in this role we should be able to respect all actors and positions we have in a typical stakeholder process. This makes for tension, when there are obvious reasons that NGOs want to prioritise the rights and needs of local communities. Sometimes businesses want to create a business opportunity. They want to integrate their products into our programming, but maybe these products are not the best for the community. For example, a certain company was interested in selling their healthy snacks in our programme activities, but we realised these snacks contained too much sugar and would be unhealthy for the children. So, we decided to step back and not collaborate with the company, but suggest we collaborate on a co-creation process, where we work together to develop a snack for the community, which would have enough nutrition for children, but not too much sugar. But this also needs good negotiation skills, as the company wants an easy business opportunity and the co-creation process needs a lot more time and funding to create a customised product. As an NGO we want to consider and respect all positions, but we must prioritise the rights and needs of local communities.

Do you feel that with this livelihood approach you are straddling the world of philanthropy and business?

Yes, we are in-between, this why we want to be a facilitator or a broker, as we are creating a platform to bring different interests together to see what is the best for all the different stakeholders. This is a challenge, because we need to at first create trust. Trust that also the communities will trust the businesses we are bringing into their communities, and trust that the businesses believe we are working with communities that are willing to collaborate. Some communities are used to receiving handouts, so we are trying to work with an approach, especially with local value chain development, that we have a healthy understanding of when we need to withdraw subsidies.

What can World Vision offer the companies they partner with?

We can offer knowledge of the local context and communities, which shouldn’t be underestimated. We have been present for many years in some communities, there is trust and knowledge about the where we operate and the people we work with, this is not something that every organisation can offer.

We have sector knowledge to address gaps in the value chain. We also have capacity development of local producers and micro entrepreneurs, such as technical and financial skills. When it comes to parameters for social impact assessment or financial monitoring and evaluation, we have our own evaluation system.

We have an ecosystem that enables NGOs to advocate for certain topics. For example, if there are some issues in human rights we can be a good partner in order to, not only help the company get a better reputation but to help them to solve the problem on different levels, for example talking to the government.

For more information on World Vision’s work with inclusive business visit their website here.

This blog is a part of the October 2017 series on NGOs in inclusive business, in partnership with endeva.

Read the full series for insights on what kind of roles NGOs have carved out for themselves, either as partners of companies, as intermediaries, investors, or even as entrepreneurs and their lessons learnt in doing so.