NGO & PRIVATE SECTOR PARTNERSHIP

BRAC s
experience in business, in partnerships & future opportunities and prospects
Muhammad A. (Rumee) Ali Managing Director, Brac Enterprises & Chairman, Brac Bank Limited
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We always thought nationally, worked

locally and looked for inspiration globally. We were inspired by Paola Freires work on pedagogy of the oppressed.It is wonderful to have a thinker who was thinking about the poor people and how they can become actors in history and not just passive recipients of other peoples aid. He made us realize that poor people are human beings and can do things for themselves, and its our duty to empower them so that they can analyze their own situation, see how exploitation works in society, and see what they need to escape exploitative processes March, 2005

Fazle Hasan Abed Founder and Chairperson

BRAC in Bangladesh
It takes a real flash of insight to attack a large-scale problem when you have very
little money to spend. That, however, is the position in which many social entrepreneurs find themselves. One solution is to unleash and redirect the creative energies of people within the communities being served. David Bronstein, How to change the world,2004.
Core Programmes of BRAC Economic Development Programme Health Programme Education Programme Social Development Human Rights & Legal Services Programme BRACs Social Enterprises Social Businesss that grew out its development interventions Bracs investments in commercial businesses with social underpinning Support Programmes of BRAC Training Division Research & Evaluation Division Advocacy & Human Rights Unit Human Resources Division Public Affairs & Communications Administration & Special Projects Finance & Accounts Monitoring Internal Audit Publications 3

BRAC in Bangladesh
BRAC: Economic Development Program
Microfinance: Cumulative disbursement (mil) Outstanding (in ml) Repayment Rate Average Loan Size Service Charge on Loan Total Borrowers (in million)/Branches USD 4,943.04 USD 597.54 99.54% USD 201.56 12.50% 6.53/ 3,000

BRAC Education Program

No. of Primary Schools No. of Students No. of Graduates Cost Per Child Per Year Community Libraries Adolescent Development Centres 37,500 1.15 ml 3.80 ml US $18 1,664 8,660

BRAC Health Program

Population Covered Health Volunteer Eligible Couple Served BRAC Health Centres (Shushastho) Patients Received Treatment 88.5 ml 70,000 10.05 ml 30 100,000 1.46 ml 0.63 ml

Other Programs include Targeting Ultra Poor; which has overall covered 111,322 persons with disbursement of US$ 6.6M in Asset Transfer and US$ 7.7M in loans We also have Social Development, Human Rights & Legal Services
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Pregnant Women received Anti Natal Care

Total Latrine Installes

BRAC in Bangladesh
Coverage, Staff Information, and Job Creation Job Creation
Industry Jobs Created 1,921,141 612,628 1,078,245 84,437 287,758 211,563 27,297 65,000 532,488 3,680,042 8,500,599

Villages Population Covered

Staff BEP Teachers Total

69,421 110 Million

57,119 53,379 110,498

Poultry Livestock Agriculture Social Forestry Fisheries Horticulture Sericulture Handicraft Products Small Enterprises Small Traders Total

All the data presented here are of March 2008

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BRAC International

Total Staff BRAC in Africa: Members of Village Organization Tanzania Loan Disbursement Uganda (in Million USD) Southern Sudan Liberia & Sierra Leone ( from 2008) 5,354 342,116 124.43

BRAC in Asia: Afganistan Sri Lanka Pakistan

BRAC USA & BRAC UK to mobilize resources, raise awareness

and cultivate partnerships for BRAC International.

The only international southern NGO

Bracs experience in Partnerships with the Private Sector.

In the Development Programs: Healthcare: Partnerships with:
Pharmaceutical Co/Private Clinics/Toiletries co./Foundry: for distribution of over the counter drugs/condoms through Shastho Shebikas (SS) . SS are Brac trained health volunteers who work in villages to raise awareness in five most prevalent diseases , on prevention and early detection. SS act as distribution network and create access for villagers to OTC drugs/condoms/birth control pills. SS also make primary referals to enlisted private clinics, where villagers get care on discounted prices. Health and Sanitation program which works to raise awareness on use of soap and latrines in rural areas has arrangements with Toileteries Co/Foundarys to supply soap and latrines at affordable price.

In the Development Programs: Human Rights: Partnership with:

Panel of Lawyers: A panel of 450 lawyers have been enlisted under this program and for a lump sum fee they conduct cases of Human Rights violations that are reported, prepared and facilitated by Bracs field workers. Bracs program exists in 61 districts of Bangladesh and is the largest legal aid program in the world in terms of size and coverage

Bracs experience in Partnerships with the Private Sector.

In the Development Programs: Agriculture Development: Partnership with:

Private Sectors Banks (PSB): BRAC has stepped in to assist PSBs to disburse agro-loans through its Microfinance Program. PSBs have signed agreement with BRAC to finance BRACs agro-loans. Skill-gap and limitations of distribution network has made this partnership possible. There is a level of regulatory persuasion too.
Social Mobilization & Advocacy: Partnership with:

Private Sector TV/Radio/Print Media: BRAC has arrangements with these corporation to disseminate public awareness material in the form video documentaries and publications. The media offers these to be published/aired at cut rates. Social Enterprises: Renewable Energy/Partnership with:

Alternate Energy Co :
MOU signed between BRAC and Emergence Bio-Energy Inc (USA) to pilot a new technplogy of producing Bio-gas and a manure as a by product. On succesful completion of pilot. The company jointly owned by the parties will embark on commercial production. This will make energy available to rural areas at a cheaper price than traditional fuels.

Private Contract Farms:

Private farms have been contracted in Agriculture to grow seeds/vegetable, in Livestock to rear chicken. BRAC guarantees off-take of the produce at current market price. It also provides technical assistance in modern agro and broiler rearing methods. 8

Bracs experience in Partnerships with the Private Sector.

Brac Investments: Partnership with Investment Co & Strategic Partners
Brac Bank Limited/Brac Afganistan Bank both were resulted from BRACs initiative to create Access to Finance for Small & Medium Enterprises in these two countries. BBL was set up in 2001 and BAB in 2005 by a consortium of Brac, IFC, Shorecap. BBL has became a publicly listed company with 50% shares publicly held in 2007. The charter of the Bank is to have minimum of 51% of the lending portfolio in Small & Medium Enterprises. BracNet, an internet service provider, is a joint venture(60/40) with an international consortium of private investors. Purpose was to eventually use the communications network for BRACs Health, Education, Advocacy and Microfinance programs.

Bracs experience in Partnerships with the Private Sector.

Nature and sustainability of the present partnerships

Nature
A commercial arrangement Address a skill gap Contribution linked to strategic objectives of the company Address a regulatory requirement Corporate Philanthropy

Sustainability
Sustainable Non -Sustainable longer term Non -Sustainable Non - Sustainable Non -Sustainable

There is limited sustainability for most of the partnerships

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BRAC can suggest a solution from its own experience in business..

BRAC Enterprises
Enterprises Program Support Enterprises

BRAC Investments
BRAC Bank Ltd. bracNet Documenta Ltd. Delta BRAC Housing Finance Corp. Ltd. BRAC Afganistan Bank

Why is Brac in business?

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BRAC Enterprises:
BRAC started investing in enterprises so as to ensure sustainability of its interventions and through linkages; evolve job creation opportunities and over time become donor independent. This venture includes the following enterprises:
Agro & Salt Industries Salt Feed Artificial Insemination (AI) Cold Storage Vegetable Export Poultry Broiler Rearing & Processing Retailing Aarong Dairy & Food Project Printers Print Pack Tea Program Support Enterprises Seed Production & Processing Tissue Culture Fisheries Nursery Solar Energy & Bio-gas

Financial Information

Balance Sheet Items Total Asset Total Equity

Income Statement Items

Dec. 2007 (Million US$)

70.0 41.5 2007 (Million US$) 85.7 25.0 7.7

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Sales Gross Profit Net Profit

INTERVENTIONS TO CREATE LIVELIHOOD IN LIVESTOCK & FISHERIES SECTORS BY EXTENDING MICRO FINANCE LEADING TO ENTERPRISE DEVELOPMENT THROUGH LINKAGES

1988:FISH & PRAWN HATCHERY:

To ensure distribution of environmentally safe fish spawn and prawn PL to the rural people to create income generating activities.
1996: POULTRY FARMS/FEED MILLS/BROILER PROCESSING

Grew out of one of the core interventions of BRAC employment and income generating activities. This was to increase the availability of quality chicks at a competitive price and provide supports to the poultry extension programme. The need of feed for high yield variety (HYV) birds and the expansion of poultry industry in Bangladesh by using mainly locally available ingredients led to setting up of these mills. The linkage to market for farmers involved in rearing poultry led to the broiler processing plant.
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INTERVENTIONS TO CREATE LIVELIHOOD IN LIVESTOCK & FISHERIES SECTORS BY EXTENDING MICRO FINANCE LEADING TO ENTERPRISE DEVELOPMENT THROUGH LINKAGES

1998: DAIRY & FOOD: BRAC designed a particular model for cattle development comprising of technical training, vaccination, fodder cultivation, AI and credit facilities to the rural poor. As a result of these activities milk production has increase substantially in the BRAC operational areas. The Project was set up to create a supply chain to provide fair price to the farmers. 1999: BULL STATIONS: Artificial Insemination (AI) program was begun to improve the quality of the livestock sector in Bangladesh. It is an important strategic industry for BRAC since it is expected that improvements in the cattle population in Bangladesh will lead to greater yields in raw milk.

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INTERVENTIONS TO SUPPORT AGRICULTURE EXTENSION AND GENERATE HIGHER EARNINGS FOR FARMERS LEADING TO ENTERPRISE DEVELOPMENT.

1995/6: SEED PRODUCTION/ PROCESSING/ TISSUE CULTURE/ NURSERY:

In order to meet the increasing demand for good quality and high yielding seed and seedlings for poor and marginal farmers to increase agro-productivity and increase farm earnings led BRAC to initiate this program. BRAC also provides training to farmers in modern methods to successfully adapt to High yielding varieties of seed.
2003: BRAC TEA: Started in 2003 with four tea estates in Chittagong. Aim to set up model tea estates with the objective of improving the lives of Tea Estate workers. Introduce Teak, Rubber, Bamboo Shoots, Agar plantation.

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JOB CREATION INTERVENTIONS WITH LINKAGES TO SKILL DEVELOPMENT LEADING TO ENTERPRISE DEVELOPMENT THROUGH LINKAGES

1978: AARONG : Supports and ensures the livelihoods of more than 60,000 rural artisans, mainly women. Protector and promoter of Bangladeshi handicrafts and craft producers. Trains and supports artisans through well rounded member support program. This includes access to health and sanitation, education for the children through Bracs schools, microfinance and also Aarongs welfare programs.

INTERVENTION TO SUPPORT HEALTH PROGRAM

2001: BRAC SALT came about to fulfill the need to give people access to a cheap source of iodized salt in Bangladesh. This intervention was instrumental in tackling iodine deficiency diseases.

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Raison d'tre of BRAC Enterprises

To enable BRAC to attain its vision and mission statements by Sustaining the development interventions Creating job opportunity and thereby contributing to poverty alleviation Generating surplus for BRAC The investments (companies/land/shares) are a hedge for future market volatility..

Essential to ensure continuity and sustainability of BRACs interventions to improve the lives of the people who are the most vulnerable in the community.
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Donors Contribution in Annual Expenditure Bangladesh Operations consolidating sustainability

Year
1980 1985 1990 1995 2000 2005 2006 2007

Amount (million US$)

0.78

Donor Contribution (Percentage) 100 97 68.20 54 21 24 30 20

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2.30 21.25 63.73 152.0 259.0 330.0 485.0

BRACs annual budget is more than USD 450 million, but BRAC has successfully reduced donor funding as was directed by the Govt. of Bangladesh Presently (2007), 80% of this budget is financed by BRAC itself BRAC Enterprises, the profit wing of BRAC, is a partner of this success

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BRAC: pioneer of social business model

BRAC Enterprises runs somewhere between profit seeking organization and nonprofit social organization with the vision of serving the society in a profitable manner.

The concept of double bottom line in BRAC, is driven by the second bottom line, that is, social objective and this takes precedence over the first; profit

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BUSINESS MOTIVE SPECTRUM& SUSTAINABILITY THE CHALLENGE..HOW TO ACHIEVE THE RIGHT BALANCE?
WHERE IS THE RIGHT BALANCE?

COMMERCIAL B USINESS

SUSTAINABLE

SOCIAL BUSINESS

EXPLOTATIVE

IDEALISTIC

BRAC has pioneered a social business model which defines Corporate Social Responsibility
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Our effort at BRAC Enterprises is not driven towards maximizing profit for the shareholders but we work to benefit our stakeholders.

Our main stakeholders are not, as in the commercial firms, the owners/ shareholders but the millions of deprived and disenfranchised poor of the country.

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An interesting dialogue *CCIC website on PS/NGO partnership..

We would like to dance with the voluntary sector - James Gallon, President,
Canadian Institute for Business & Environment

NGOs have values and these values can bring income and resources that will keep the ethical work going. You have
skills and expertise that the private sector wants.

But, if we agree to dance, who leads?

"There is a danger in such marriages that NGOs will lose their idealism and their ability to be creative in terms of a future world. . If they ever lose what is their own ideology or what they are working for then they will be gobbled up by the business ethic - - Dr. Bill Ryan, Director, Jesuit Project on Ethics in Politics

Will I respect myself in the morning?

"Is there a danger of getting involved with the private sector and then being discarded once a firm's international marketing efforts are in place; ultimately business would set the terms? - Dr. Bill Ryan, Member of the CCIC Taskforce on Building Public Support for Sustainable Human Development

Seminar held by Canadian Council for International Co-operation (CCIC) in Ottawa, Canada to discuss opportunities for collaboration between NGOs and Private Sector in May, 1996.
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Private Sector/NGO partnership. What stands in the way?

A commercial organization primarily looks for profit or shareholder value whereas a NGO focuses on altruistic outcome. Markets determine success of a commercial enterprise purely on financial parameters with compliance issues as an add-on Corporations do not feel any responsibility for solving worlds problems Corporations are control-orienteddo not want to risk giving up control Lack of trust.Confrontational postures? A meaningful engagement can happen only when the society and markets puts a premium on non financial parameters that make an organization socially responsible

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How does Bracs businesses provide a platform for PS/NGO Partnership.

Brac Bank an act as models for future partnerships in:
Retailing : Aarong Dairy Products Agro business Poultry and Livestock Alternative Energy: Bio gas & Solar Energy

Structure of the Partnership:

Use the Strategic Partner/Investment co. Model as in Brac Bank Franchise Model for a retail business like Aarong Outsourcing upstream or downstream production chain

Any partnership which a Private Sector Corporation enters into with an NGO; whether for financial, expertise, raise profile, supply of goods reasons; or for leveraging to gain additional financing; can assist an NGO engaged in development using the BRAC model by making them more efficient thereby generating a greater surplus from their social enterprises to fund the programs which are essentially non-earning in nature

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How do we overcome the concerns and issues raised in the CCIC dialogue..

Conflicting objectives Dominant partner? Sustainability? Trust?

Can these issues be resolved?

BRAC has been able to resolve these issues by:
Finding common grounds and shared objectives for partnership Dominant partner issue is resolved through:
Clearly defined expectations
Roles Accountabilities Policies

Sustainability is ensured by making the enterprises commercially viable without moving away from the core objectives of BRAC Trust is a function of transparency, accountability and reputation of the partnering institutions.
acknowledgement of possible constraints mechanisms for communication shared risk-taking

What do we actually put in place to ensure these issues are resolved

Know your intended partner Agree what objective we are trying to achieve? Identify what competencies, expertise or physical resources each can offer. What role in terms of accountability each of the partners are going to play Agree the risk sharing parameters Agree to a information sharing and communications mechanism Agree a structure e.g Board, Advisory Committee or Governing Body to manage the partnership

THE ABOVE STEPS WILL RESULT IN A BINDING AGREEMENT..AND TRUST!!

How does Bracs businesses provide a platform for PS/NGO Partnership.

This model will have: Sustainability since it will be run on sustainable basis as
Bracs businesses are.

Social Objective It will not deviate from the core objectives

since is ingrained in the organizational DNA and be a one of founding charters

CSR Organizations that are focused on CSR can consider

this as their contribution which will be on a sustainable basis since this is not charity.

However, ultimate sustainability (to reiterate) can only be assured when it can get a consensus on measurable parameters of social responsibility and the markets start attaching a premium to this activity.
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SHALL WE DANCE? BRAC has presented a scenario or shall we say a dance floor what a possible partner can offer and some new steps. WHO SHALL LEAD? If a level trust can be created by ensuring transparency and accountability in the engagement, this should not remain an issue WILL I RESPECT MYSELF IN THE MORNING? If we are committed towards working for a common and accepted shared value and can make sure that we do not deviate.the morning after should only bring pleasant thoughts.
REMEMBER: IT TAKES TWO TO TANGO ARE WE READY TO RIDE THE WIND?.....THE WIND OF CHANGE?
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Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has.

Margaret Mead

THANK YOU !

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