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Mueller' Franklin' Warrick
Natioral Librarl, of Nelv Zealand Cataioguing-in-Publication Data
Muelier, Jens, 1956-
Non-profit excellence : learning from worldwide best practicc
cases / Jens Mueller, Rhonda Franklin, Don Warrick'
ISBN 978-0-9864597-7-1
1. Nonprofit o.ganizalions-Case studies. 2. Corporate
governance-Case studies. I. Franklin, Rhonda, 1977-
II. Warrick, D. D. lll. Title.
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TABLE OF CONTENTS
Lenming from worldwide B est Proctice Cases
NON-PROFIT EXCELLENCE
From the Authors
Editorial Foreword
Social Entrepreneurship: A Conscious Business
Approach for Sustainable Development
Dr. lyoti Gogia, Assistant Professor
Department of Economics, Faculty of Soclal Sciences
Dayalbagh Educationai Institute (Deemed University, Dayalbagh, Agra, U'P'
The paper portrays the unrealized concept of Social Entrepreneurship, which
assimilates human consciousness together with entrepreneurial approach,
so as to commit to meeting the reai needs of man and community and thus a
sustainabie future.
CHAPTER ONE:
Collaborations and Networking
I One Heart Many Lives - One Heart affects many lives 31
Marama Parore, Karen Jocobs & Roy Hoeraro"
A primary prevention program for heart disease in New Zealand, operated by
a state-owned pharmaceuticals distributor to reduce cardio-vascular illness
mainly among the Maori (indigenous) population in Aotearoa'
2 Supporting an NGO in Developing Mozambique 41
Carol Dalglish, Marcelto Tonelli, Katltleen Armstrong,
Helen lottnson, Katherine Farqulwr & Dauid Jamieson
The successful provision of micro-credit facilities and financial literacy
education in Mozambique to create an environment of successful
entrepreneurship that connect across borders.
3 Stitching Together a Dynamic Partnership: A Nonprofit 55
Leader Inspires the Transformational iQuilt Project
MichelLe M. Stronz
A visionary new cEo leads a failing Performing Arts center out of a crisis by
rallying stakeholders to become supporters.
i
ii
COLLABORATIONS AND NETWORKINC
2
Supporting an NGO in Developing Mozambique
Corol Dalglish, Marcello Tonelli,
Kotltleen Armstrong & Helen Johnson
lntroduction and Background
Awaken Mozambique (Despertai Mozambique) is a community
based partnership based in Brisbane, Australia and Beira, Mozambique,
respectively. Resourcing is a responsibility o{ Awaken Mozambique in
Australia which is a charitable incorporated association undertaking
micro credit projects in Mozambique. The proiect focuses on training
and equipping iocal people to improve their communities through micro
enterprises and capacity building. The aim is long term local economic
sustainability and a gradual transfer of fuil responsibility and accountability
to Despertai Mozambique. Awaken Mozambique is a project of the Clobal
Development Group, an NGO that carlies out humanitarian projects with
approved partners.
In more details, the aims of Awaken Mozambique are:
. To provide financial and training support to micro-enterprises in
Mozambique in a sustainable manner.
. To build capacity by developing expertise in association
management, micro-finance and enterprise development' This
will enable the local association to continue to provide support and
direction in the long term.
o To develop international linkages between entrepreneurs in
Mozambique and the developed world. This provides a two
way knowledge transfer and will greatly increase international
understanding. Internet technology now makes this both
achievable and affordable at both ends.
. To collect data and facilitate research into the process of enterprise
start-up and growth in a developing economy.
42 Leanzing from wotldwide Best Proctice Cases: N0N-PR0F|T EXCETTENCE
Mozambique lies along the Indian Ocean border of Southern Africa and
is among the poorest countries in the world. This is largely attributabie to
a history of both human and natural destruction. Some of the challenges
that the people, the government and the entrepreneurs of Mozambique
face include overcoming low educational standards, (50% of the adult
population has never been to school), high levels o{ unemployment,
inadequate development oI infrastructure, corruption and very high
mortality rates from curable diseases. Over the first 4 years of the new
century annual average growth of GDP was about 8% and the absolute
poverry level had dropped from 690/o in1997 Io 54.5o/o in2002. However,
the positive results of this trend are not yet reflected in the actual iife of
much of the population.
Beira, iit the Province of Sofala, suffered gleatly during the i6 years
conflict that wreaked havoc on Mozambique. Today it has the dubious
reputation of being Mozambique's poorest province. As an economy Beira
is struggling, physical infrastructure is broken and its people have few
opportunities to advance.
The clients of the organization in Beira are the urban poor who want
to set up or grow micro businesses to support their families. The focus is
therefore on providing the essential framework for entrepreneurs to develop
sustainable businesses that can benefit their famiiies and help bring them
out of poverty.
To do this a number of leadership and management issues had to be
addressed, especially to overcome the main challenge facing Awaken
Mozambique: finding a way for the local community to be sufficiently
resourced internally to enable it to take a sustainable leadership role in
supporting micro-enterprises. Because of the very limited opportunities
for schooling, and the fact that loca1 staf{ are drawn from the community of
the poor, efforts in improving human knowledge, capacity and confidence
required particular attention.
Another important consideration concerns financial resources. No
business can start up or grow without a financial input of some sort. These
resources are not easily available to people without coliateral. Development
banks do exist, but in the words of one of the borrowers:
,,1 used. to toke loans from tlrc bank but my life neuer improved because
I was olways only able to pay bock the loan" (Manuei Balanca)
White Awaken Mozambique found a way of offering loans free of interest
- a wonder compared to the usual 200/o-600/o per annum - it is a fact that
with resources comes accountabiiity. This needs to be conveyed in a form
COLLABORATIONS AND NETWORKING
understandable by both the borrowers and the local staff, because long
term success is dependent on appropriate accountability processes being
in place.
Other factors that can make or break this sort of project are trust and
communication.
r Trust. Any partnership requires trust between the parties. Awaken
Mozambique is now in its third year of operations with the
relationship between the local community and the Australian team
going back a further three years. NGOs have come and gone in the
life of the poor of Beira, and it has taken time for them to trust that
they would not again be abandoned.
. Communication. The official language o{ Mozambique is
Portuguese, while Australians speak English. Literacy levels are
very low, even among those who have had some schooling, and
knowledge of English quite rare. The cultures of the two countries
are quite different, and distance makes communication difficult.
Case Study
Micro-credit has become a global strategy for poverty alleviation despite
warnings from the world Bank (Pless and Maak, 2009J and the Asian
Development Bank that its implementation alone may not result in poverty
reduction, as weil as a lack of evidence that it promotes entrepreneurship.
The skeptics might suggest that the reason micro-finance has become so
successful at the institutional level is because it fits within an internationally
adopted economic philosophy and transfers most of the risk and transaction
costs to the borrowers and away from the institution (Brett, 2006; Karim,
2008). This may not be in the best interests of the poorl
Generaily the literature does not relate to borrowers of micro-credit as
entrepreneurs with business ideas, but poor people who strive to survive.
Yet even in this context, research into the impact of micro-credit is lacking
fBuckley, 1997; Mayoux, 1999; Sievers and Vandenberg, 2007; Wilburn,
2009). A different modei is being trialed in Mozarnbique to deliver micro-
credit and training support to the very poor in a sustainable way, without
a1lthe risk being carried by the poor themselves (figure 1). If successful
this rnodel may provide a case for elsewhere in Africa where micro-credit
has not yet been adopted to the same extent as, for example, in Asia'
Ii.ia j:j[r!i s, rrw.I{3ssi$miih.tom
44 Learnirtg fromworldwide Best Practice Cases: i{0N'PROF|T EXCELLEf{CE
Figure 1:
A Theoretical Model for Poverty Alleviation in Devloping Gountries
a ao aaa. a.aaaa a aaa.aaaa.ata>
/,.----\
6Dpq@
-*-.-----.'-
a
:
'Micro-credit' and'Human
Capital Development' are
initially provided by an
external third party
(i.e. NG0), but over time
the system becomes
self supponed.
Participation in the
Formal Economy
iMicro-
entrepreneurs
grow into SMEs
--------=-
-lllHumanl
I Micro-credit | | Capital i
I I lDevelopmentl
--)
.______=-r=-
Giving back to
the community
In designing a viable working system, the social responsibility of everyone
involved was central to the undertaking. There was no imperative that
the project should have been commercially viable, but that it should be
sustainable over time. The manner in which the project was developed
took into serious consideration the potential difficulties identified in the
literature and applied them to the specific context of Beira' Each issue
raised was discussed with the community in Beira be{ore processes were
put in place. As an example, for the long telm sustainability of the project,
and therefore the inteiiectual and financial resources needed by new micro
entrepreneurs, the loan repayments are deposited in an investment account.
Academic
Qualifications
Access to Commercial
Financial lnstitutions
lncreased trust in
the social system
Voluneering/
donations
PositivelY lmprove processes
and stakeholders'
Micro-entrepreneurs
COLLABORATIONS AND NETWORKING 45
The interest from this account will then be used to cover the recurring cost
of the local NGO, providing a more secure source of funding. By the time
this fund is sufficientiy large to support ongoing expenses, it is anticipated
that local staff will be sufficientiy trained to manage the resources at theil
disposal in an accountable and socially responsible way.
Community support and engagement: human knowledge, capacity and
confidence
It was clear early on that the existing local expertise was insufficient
to support entrepreneurs; hence building capacity became a priority.
Sustainability of resources is critical if micro-enterprises are to grow. Long
term sustainability requires a shift towalds a model that broadens the
base of both economic and intellectual lesources until it builds sufficient
capacity (Elkington and Hartigan, 2008).
This required tappilg into the extended knowledge network to work with
local people to adopt best practice, and to ensure that local administrators
are competent and able to access not only their local networks but also those
of the wider community when the needs arise. The setting up of a sustainable
organization that can spur community development includes responding to
the community's priorities, investigating individual problems and solutions,
encouraging agency and active invoivement in goal setting, with on-going
consultation and co-development of solutions (Matthews, 20A9)'
To assist with capacity-building and ensure transparency, the processes
and policies were writtelr in Australia and then discussed and modified
in Beira. The local management committee is well aware of the issue of
perceived corruption and the importance of transparency and equity in the
allocation of loans. The Beira committee reports monthly to the Australian
committee. The Beira committee is responsible for making decisions about
loans and debt collection. The presence of community leaders on the iocal
advisory committee acts as an incentive {or repayment, though some
default must be expected.
Recipients of loans are obiiged to undertake training during the period
of their repayment. This training is personalized to the specific needs of
those involved and is conducted by the local staff. The capacity building
is ongoing with email communication almost daily between the staff in
Beira and in Australia. This means that JusI in time'training is provided
and both groups, in Australia and Mozambique, get almost instant answers
to questions raised. Through this process the confidence of local staff
has grown and trust has further developed. Initiatives are no longer the
prerogative of the Australian team.
46 Lear/7ing from norLdwide Best Practice Cases: N0N'PROFIT EXCELLENCE
Financial Resources: Accountability
There is a need ln Beira to assist those who are unemployed to start their
own businesses, but there is also an equally important need to provide
support for those who have only survival businesses and the inclination
and skilis to grow them so that others can be empioyed. Micro credit
and relevant training may be the bridge that takes micro-entrepreneurs
from survival to becoming part of the established economy able to use
'mainstream' services.
The local staff run public meetings making the community aware of
the opportunities available and accepts applications for funding. Often
they will write the business plan for the potential borrowers who may
not be able to read and write. Next, a local advisory committee elected
at a public meeting decides who gets the loans, using an agreed set of
criteria. These criteria divided the possible borrowers into three groups -
those who had never had their own business before, those who wanted to
expand an existing micro business, perhaps from their home to the market,
and those who through expanding their businesses would employ others.
The applicants are drawn {rom the poorest communitites in Beira. These
applications are then sent to Australia where the necessary iunds are raised
and a final approval is given.
once funding is in place, the borrowers have io attend training regularly for
the duration of their loan. A 10% service charge is made for this training,
but no interest is charged on the 1oan. With resources comes accountability
that is understood by the borrowers and the iocal staff. At a local level the
staff monitor repayments on a regular basis and are available to provide
advice to those who may experience difficulties. The staff provide monthly
reports to Australia on their operating budget, their activities and the loan
repayments.
Placing decision-making power in the hands of the locai committee and
staff encourages community leadership and an understanding of the
issues that impact on the success of each of the micro businesses and the
organization itself.
Building Trust: A long Process
In 2004, Dr Carol Dalglish visited Mozambique to conduct research into
micro-entrepreneurship in Beira and to conduct training. She returned
in 2005 and 2007 conducting a longitudinal study of a group of micro-
entrepreneurs. By this stage the sponsoring organization had withdrawn
from Mozambique. Hopes had been raised but for most, these hopes had
not been fulfilled. Dr Dalglish was impressed by the people she interviewed.
lqe. Li:ii 1r d:srtil:!llan ari iidi.iSrrill'yB w.RossiSil!iih.ctff
COLLABORATIONS AND NETWORKING 47
They had been victims of short term projects that had often left them
without the means to coniinue to rebuild their world. The people she met,
whilst suffering abject poverty, had great initiative, were concerned not
only for themselves but also for their extended family and community.
It is not possible to address these issues from afar. Understanding
a particular cultural conlext is critically important (IEG, 2008) and
recognizing and valuing local expertise is vital for accessing knowledge
networks, having local participation, and promoting ownership. The
inclusion of local knowiedge into a model allows individuals to make
productive use of the portion they have access to.
The process of developing an NGO involving iocal peopie began in 2007,
during the third visit to Beira by the researchers. Around 40 local business
people, community and church leaders attended a meeting at which they
expressed a willingness to work together toward the establishment of an
NCO that would provide micro-loans to individuals and small businesses
who did not have access to other sources of funding. This group elected
a management committee, nominated the people they wished to run the
organization once it was established, and voted on an appropriate name:
Despertai Mozambique. This group then became the local focal point for
the development of a sustainable support system for aspiring entrepreneurs
and the body accountable for all the operations of the organization in
Mozambique.
This local involvement ensured that the mechanism put in place would be
culturally appropriate and socially responsible for that particular context. It
also linked into the grassroots religious movements existing in Beira, with
the many different groups working together to support the scheme. Over
the succeeding years this group and the staff, now appoipted, have worked
closely with their Australian counterparts, learning from their mistakes
rather than being punished for them, and developing competencies that are
essentiai for long term success.
One peculiarity of this project, which sets it apart from other NGOs and
has significantly helped the strengthening of a trusting relationship, is its
assessment based on qualitative outcomes rather than numbers. In other
words, loca1 staff are not pressured to deiiver against the usual criteria that
will secure their jobs: large number of borrowers and high repayment rate'
Instead there is an honest interest in seeing the growth of businesses and
the elevation of borrowers from poverty through the self-generation of a
sustainable income stream.
|.rf,irrlei tr'iil rv !i rv,tross;Srli{h-.0il}
48 Learning from worLdtuide Best Practice Cases: N0N'PR0F|T EXCETLENCE
Communication: training and learning
communication between Australia and the people of Mozambique is
central to the delivery of training both locally in Beira and remotely,
largely via email, which occurs more regularly. with regard to training,
being a key focus of Awaken Mozambique's mission, it is necessary that
its delivery meets the requirements of the micro entrepreneuls and the
Iocai committee, and that it conforms to the level of education previously
attained by the beneficiaries.
The challenges that arise in doing this effectively are mostly the result
of cultural differences - the need to understand the local environment is
imperative in understanding the educational needs of the local business
peopie. The development of training and resources was therefore more
effectively developed after spending significant time communicating
with committee members face to face and supported by an interpreter.
In such an environment, there are no assumptions to be made. The
challenges soon unfold beyond basic language differences. The preparation
and deiivery of training requires the recognition of the low level of
education that is held by the local people and yet their wholehearted thirst
for knowledge.
Access to training and experience is fundamental to this model. Awaken
Mozambique provides the local committee access to training and coaching
via telecommunications, though availability of necessary resources is
often a challenge for the people of Mozambique. It is through the weekly
communication between the two countries that incremental training is
provided. Not dissimilar to any relationship, the effectiveness of coaching
is reliant on the establishment of a relationship of trust and respect.
It is thlough this regular communication that the basic educational
requirements of the people are ideltified and addressed. Workshops have
been run on accountability reporting and basic budgeting and future
plans lnclude interviewing skills and marketing'
It is these learnings that the local committee can then share with the local
businesses. This ongoing communication about issues that are currently
relevant to them as staff or to the businesses they advice is essential for
the progressive development of the organization iocally.
Conclusion
To date, reviews have been undertaken of 20 borrowers who have had
their loans for 6 months or more. Fifteen of them consider they have
improved their lives, 3 have had difficulty keeping up with lepayments
COLLABORATIONS AND NETWORKINC 49
and 2 businesses have not been successful though Iepayments have been
made. The different level of hardship faced by poor entrepreneurs in
deveioping countries, like Mozambique, is testified by the fact that 4 of
these borrowers experienced a death in their families over the past 5
months.
The type of businesses funded thus far included: selling goat meat,
carpentry, selling maize, selling chicken parts, grocery shop/canteen,
selling sleeping mats, tailoring, drying and selling fish. The demand for
Awaken Mozambique's offering is proved by the more than 40 borrowers
waitilg for funds to become available. Regular community meetings are
held to inform the community of what is available and to assist with skills
development. This often means that more than 70 people a month have
access to training provided by the locai staff. Not raising expectations
too high is a continual concern.
while attending training is a condition of the ]oan, evidence su8gests that
it has not been difficult to enforce and it has repetitively been recognized
as a vital factor for success. In the words of borrowers training helped:
"a Lot more than I thought in the beginning.
The principles taught by Awaken Mozambique when put into
practice generote money.
Tod.ay I have 3 workers ond 2 sltops." (Ilda Maria)
Robinson (2001J argues that commerciai micro-finance is not appropriate
for extremely poor people who are badly malnourished, ill and without
skills or employment opportunities. For these people micro-finance is the
next step - after they are able to work, however this begs the question
- where is the work? In Mozambique peopie living in extreme poverty,
below the minimum subsistence level, amount to nearly 50% of the
popuiation (world Bank, 2006) and include those who are unemployed or
underemployed, as weli as those who are so poorly remunerated that their
purchasing power does not permit the minimum calorie intake required
to overcome malnutrition. How do people in developing economies, with
little or no education, get their foot on the first step of the economic ladder?
How do they move to a position where they could access commercial
micro-finance? The micro entrepreneurs of Beira are proving Robinson
wrong - if the modei of delivery is appropriate.
The benefits of micro-credit are often justified by the age old saying, "Clue
a rlan a fish and- you feed- ltim for a day, teach him to fish arud you will feed
ttim for a tife time". But micro-credit does not teach anything - it enables
the fisherman to buy a net, but in many cases does nothing to ensure
R.ir:S!nirl u*r.RDssiSfi ilh.cstr
50 Learnblg fronl worLdwid.e Best Practice Cases: N0N'PROFII EXCELLENCE
rhat he knows how to use it to benefit his family and the community.
If he doesn't know how to use the net, he will return to his old way of
doing things - but with the added burden of having to pay back the
debt. There has to be another way - and this is being trialed in Beira.
The development of a socially responsible, suslainable model for providing
intellectual and financial resources to micro-entrepreneurs in Mozambique
will, if successful, provide a blueprint for offering services in other poor
developing nations.
References
Brett, J. 2006. We Sacriiice and Eat Less The Structural Complexities of Microfinance Participation,
Human Organisation, 65: 8-19.
Buckley, G. 1997. Microfinance in AlriCa: Is it Eithel the Problem or the soiution? world Developmet,t,
25i 1081{093.
Dalglish, c. 2008. From Abject Poverty to AspirinS Middleclass - MicIo-entlepreneurshlp in lJrban
Mozambique, Journal oI Asian Entrepreneurship and Sustainability' 4:77-100'
Karim, L. 2008. Demystilying Micro-credit: the Grameen Bank, NGOs ar.rd Neoliberaiism in
Bangladesh, Cultural Dynamics, 20: 5-19.
Matthews, l. H- 2009. whal are the Lessons tor Entlepleneurship from creativity and Design?
Procee.lings of the Academy of Management Meeting. Chicago, USA'
Mayoux, L. 1999. Questioning vlrtuous spirals: Micro-finance and women's Empowerment in Alrica,
Journal of International Development, 11: 957-984.
pless, N. and T. Maak 2009. Responsible Leaders as Agents of World Benefii: Learnings from Proiect
Ulysses, Journal of Business Ethics, 85: 59-71.
Robinson, M. S. 2001. The Microfinance Revolution: Suslainable Finance for the Poor. Washington DC:
World Bank.
Sievers, M. and P. Vandenberg 2007. Synergies Thlough Linkages: Who Benefits llom Linking Miclo-
finance and Business Development Services?, trVorld Development, 35: 1341-1358'
The Human Sciences Research Councii 2002. Micro-finance in Rurai Communities in Southern Africa'
Pretoria: l'he Human Scielces Research Council.
wilburn, K. 2009. A Model tor Partnering with Not-for-Profits to Develop socially ResponsiLrle
Businesses in a Global Environment, Journal of Busittess Ethics, 85: 111-120
world llank 2006. www.orglwbsite/external/counlries/africa/mozambique (accesscd 4.4.06)
Resources
Awaken Mozambique - www.awakenmozambique.org
Ciobai Development Group - wwrv.globaidevelopment.org.au
COTLABORATIONS AND NETWORKING 51
Discussion Questions
1. What are considered the key issues to be addressed when
establishing an NGO to assist the poor?
2. Why is community involvement important to the sustainable
operations of an NGO?
3. How do you show a return on investment for donors?
4. What role does capacity building have in a successful organization?
5. What is the responsibility of the committee in Australia regarding
the management of financials? Transfer of lump sums or over
viewing each and every expense item in Beira?
Learning from uorLdwide Best Prcctice Cases: N0N'PROFlT EXCELLEI{CE
B IOG RAPHY
has taught, studied and consulted
in Australia, England, South Africa, Europe
and Asia. Her areas of expertise are leadership
development, executive coaching, international
issues in education and institutional development.
She has published several books and many papers
in these and related areas. Prior to joining QUT,
Carol was a management consultant and heid a
number of senior management positions in the
public sector in Australia and abroad.
i.lo re!ii.lu.riil, il!:i ai:! sill pt.nlille(l \tiillo!i !i.illen Irernirjiari L! ii{rssiirliilli ruurc'ltossiSftil}: rorx
COLLABORATIONS AND NETWORKING
B IOG RAPHY
is a Project Administrator for
the Australian Centre for Entrepreneurship
Research (ACEI in the Faculty of Business.
Marcello has a PhD in strategic decision-making
and has undertaken numerous consultancies
for CRCs and CSIRO in relation to international
business development and commercialisation of
R&D.
Marceilo is also the founder and Managing
Director of WorlDynamics Pty Ltd, a small
management consulting practice. He is
a pro{essionally accredited management
consultant with 15 years of experience across a
number of industry sectors including
. Public administratiott
r Construction
. Education
r On.line retailing
' SPort
r iCT
r Start-ups/SMEs
. Research centres-
),
