Gifts And Graces Progress Report 2006-2008

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Sandaang Mukhang Pinoy campaign aims to raise $10,000 through $100 from 100 donors to continue supporting and empowering Gifts and Graces partner communities. The campaign will feature 100 real stories of producer- beneficiaries just like the ones featured here, who have succeeded in providing a more dignified standard of living for themselves and their families. As importantly they have a new found self-esteem and a new hope for themselves and their communities.

Progress Report 2006 -2008

GIFTS

& GRACES

F A I R T R A D E F O U N D A T I O N, INC.

Unit 131 Mile Long Building, Amorsolo St., Makati City Tel no (632)7592525 info@gifts&graces

“San

Mu

Pi

Table of Contents: Executive Message History About Gifts and Graces Accomplishments Product development Market Access Technical support Stories Financials Donors

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Introduction and History About 40% of Filipinos live on under $4 a day or less. They and their families live under vulnerable conditions. What’s worse is they are trapped in a cycle of poverty. Gifts and Graces supports marginalized communities in their quest to pursue entrepreneurship as a means to overcome marginalization and poverty. Gifts and Graces is the only social enterprise that partners with NGOs who work with marginalized groups, thereby increasing Gifts and Graces’ penetration of its interventions to a broad range of disadvantaged and underserved communities. Gifts and Graces Gifts and Graces Fair Trade Foundation was informally organized in 2005, and was officially registered with the Securities and Exchange Commission in January 2006. Gifts and Graces was a big idea that encompassed two big concepts – fair trade and social entrepreneurship.

As an advocate of fair trade Gifts and Graces promotes the 10 principles of fair trade –

1. Create opportunities for economically disadvantaged producers. 2. Transparency and accountability 3. Capacity building 4. Promoting Fair Trade 5. Payment of a fair price 6. Gender equity 7. Safe working conditions 8. No to child labor 9. Environment consciousness in production 10. Long term relationships with partners

As a social enterprise Gifts and Graces seeks to carry out a social mission and be sustainable at the same time. Gifts and Graces’ mission was to improve the quality of life of marginalized groups. Gifts and Graces chose to work with marginalized groups through NGOs, cooperatives, and people’s organizations because they need know-how in product development and marketing but they don’t have the resourced to develop the necessary human resources within their organizations. The mission originally focused on marketing. It was a simple and yet broad mission which has evolved since. Among the questions Gifts and Graces faced were 1. What groups do we serve? 2. How do we market livelihood products? 3. What development assistance would/could/ should Gifts and Graces provide in its role as accelerator, i.e. is enterprise-management training (on costing, pricing, sourcing, etc.) One of the major shifts in strategy for Gifts and Graces occurred when the board determined that in order to survive as a social enterprise, Gifts and Graces must be market driven rather than product driven. It was from this insight that Gifts and Graces adopted the strategy to build its brand to drive sales. From there the approach of the whole organization followed. This was evident in product development. Gifts and Graces recognized the need to improve the products of its partner communities. Initial product development efforts consisted of tweaking existing community products to look better. With the shift to the market-based approach, product development became less product based and became more focused on tapping the communities skills such as sewing or basket weaving to make products that had demand.

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social enterprise Gifts and Graces seeks to carry out a social mission and be sustainable at the same time.”

Today with a market driven approach, Gifts and Graces has also realized that the best way for the organization to help its partners grow is to help them achieve organizational sustainability (aside from financial sustainability) through capability building particularly on enterprise management. This report discusses the different ways that Gifts and Graces accomplishes its mission and helps empower its partners.

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About Gifts and Graces Gifts and Graces’ innovation was in its partnering with NGOs, cooperatives, and people’s organizations to carry out this mission.

OUR MISSION To improve the quality of life of marginalized members of society, by providing product development, technical training on enterprise management, and global market access to livelihood communities under the Gifts and Graces brand.

HOW WE HELP As a social enterprise that champions livelihood products, Gifts and Graces works together with communities primarily through three key business solutions 1. Product development 2. Market access 3. Capability building on Enterprise management

OUR VISION Gifts and Graces has a global presence and is the brand of choice for handcrafted quality gifts made by livelihood communities of marginalized members of society.

In the short term, market access means more sales and more income for the producers. Product development on the other hand helps producers improve their craft in terms of design and production processes, making their products more marketable and competitive. Enterprise management helps communities deal with supply and production challenges as well as growth and impact. In the long term, these interventions will mean enhanced livelihood programs that will put the NGOs and their beneficiaries on the road to sustainability and poverty reduction. Unlike other fair trade networks and social enterprises which focus on small and medium enterprises, Gifts and Graces is the only social enterprise that partners with NGOs who work with marginalized groups, thereby increasing Gifts and Graces’ penetration of its interventions to a broad range of disadvantaged and underserved communities. Sustainability of the livelihood program may also lead to sustainability of the NGOs’ other programs and interventions e.g. health and education. Through a strong partnership with other NGOs and non-profits, and with the help of committed and passionate board of trustees, staff, and supporters who believe in our cause, we help communities and individuals reach their full potential and break free from the cycle of poverty.

Accomplishments Gifts and Graces started out with 10 communities. In 2007, it has expanded its outreach to 15 communities. Today, Gifts and Graces is partnered with 18 communities.

New Partners

G&G’s primary clients i.e. the ones whose lives are changed by the organization’s work to create opportunities for livelihood enterprises are livelihood communities of marginalized groups. Gifts and Graces started out with 10 communities. In 2007, Gifts and Graces expanded its outreach to 15 communities. Today, Gifts and Graces is partnered with 18 communities. The board has defined Gifts and Graces criteria for partner communities as follows: 1. Organization (NGO, Cooperative, People’s Organization) must have a legal identity i.e. it must be registered with the appropriate government agency (Securities and Exchange Commission, Department of Social Welfare and Development (DSWD), Cooperative Development Authority. 2.Organization’s livelihood program consists of creating/ producing/manufacturing products (as opposed to trading products). 2a. Products have handcrafted component 2b. Products have marketability potential 3. Livelihood program has a track record, with sales between PhP 50,000 – 1,000,000/yr.

Alay Kapwa Tindahan

Urban poor women

Coco Natur

Coconut farmers

Convent of the Holy Spirit

Indigenous groups

Development Action for Former migrant workers to Women Japan



FCED Foundation

Urban poor families

Hardin ng Kalikasan

Displaced women in Quezon

He Cares Foundation

Urban poor men

Isla sa Kaunlaran

Urban poor

Kaakbay Entre-worker

Urban poor

Cooperative Kaibhan Inc.

Urban poor women

Kapitbahayan

Urban poor women

Kilusang Pinagkaisahan

Urban poor men

Pag-Asa sa Paglaya Multi-

Former prisoners

Purpose Cooperative

4. NGO officers are committed to fair trade and practicing fair trade principles in their livelihood program.

Pangarap Foundation

Streetchildren

Tahanang Walang Hagdanan

Persons with Disabilities

The Learning Center

Special needs individuals

5. NGO is willing to undergo a developmental process with Gifts and Graces.

Virlanie Foundation

Streetchildren/abused girls

Visayan Forum

Victims of trafficking

In

Product Development

order to improve the products of its partner communities Gifts and Graces partnered with designer Carlo Tanseco when Gifts and Graces was first launched in 2006. Some of the products from that first collection are still in production today. In 2007, Gifts and Graces worked with the communities to come up with 20 new products. A special designer bed and bath collection was made in collaboration with entrepreneur Ricco Ocampo. Mr. Ocampo worked with communities to come up with embroidered pillows, towels, and powder room linen, embroidered neck rolls and boudoir pillows, crochet neck roll and boudoir pillows, and a citronellascented candle.

Gifts and Graces continued to do product development through customization of specific products for clients. One of the other ways Gifts and Graces helps its partners is by paying for the samples it requests from its partners. By creating different products not originally in the partners’ repertoire, Gifts and Graces is able to expand their thinking on the possibilities of their products. Some communities have gone on to continue producing the products for their other clients besides Gifts and Graces.

embroidered pillow by the urban poor women of Novaliches

string bookmarkers created by persons with disabilites

candle made by strretchildren

recycled newspaper bag made by the urban poor women of Paco, Manila

jeepney made from recycled pinewood Sarao Jeepney

Beetle model from reycled Coca-Cola can

messenger bag from used tarpaulin

Market Access

The

initial marketing and distribution strategy studied was the opening of pop up retail outlets but the overhead costs of a retail outlet made it prohibitive. The strategy adopted instead was to target individual buyers through product viewing parties, and corporate clients through direct m a r k e t i n g . Seasonality of sales was recognized with Christmas being the main season and the wedding months of June and December being secondary seasons. Various corporate conferences were targeted as G&G’s between peak seasons sources of sales. To champion and promote our partners’ products, Gifts and Graces conducts direct marketing, one-on-one presentations with corporate clients and participated in select bazaars such as the American Womens’ Bazaar. A partnership with Ayala Land to occupy a charity booth in Glorietta for a few months in 2007 and 2008 also contributed significantly to sales. Gifts and Graces also held special product viewing parties for individuals for them to do their Christmas shopping in a relaxed set up. In 2006 Gifts and Graces generated sales of PhP 650,970.00. In 2007 this figure more than tripled with sales of a little over PhP 2Million. The goal for 2008 is to generate sales of P3Million. G&G will also conduct an in-depth analysis of how the sales of partner organizations translate to income earned by producer beneficiaries.

Gross Sales (approximates) Cost of Goods sold % Retail % Corporate

1 2 3 4 5 6 7 8 9 10

2006

2007

2008

PhP 600,000 PhP 400,000 370,445.00 56.69% 283,050.00 43.41%

PhP 2,000,000 PhP 1,300,000 542,207.50 26% 1,535,719.46 74%

PhP 3,800,000.00 PhP 2,900,153.60 794,638.00 24% 2,522,728.92 76%

LSA KIL CHS KBH AKT FCD KKB TLC PNG TWH

Market Distribution Based on Communities’ Work Output

Technical Support

Gifts and Graces is able to increase its outreach to more unserved or underserved communities by partnering with other organizations.

In

“Gifts and Graces conducts regular informal and formal dialogues with its communities to be able to serve them better. Beginning 2006, focused group discussions were held with the communities to discuss policies and practices by both Gifts and Graces and the communities.” 2008



, recognizing the need for a more formal setting to share experiences and learnings, Gifts and Graces conducted its first Partner’s Conference last November 11, 2008. The theme of the conference was : Trends, Issues, and Prospects for Fair Trade: A Forum on Community Based Livelihood Initiatives. The conference was well attended with two to three representatives from each of Gifts and Graces’ 15 community partners. The conference was an offshoot of the focused group discussion Gifts and Graces conducts among its partners every year. The objective of the conference is for the different communities to learn from each other and network amongst each other. Sandy Romualdez, Philippine Daily Inquirer President and Gifts and Graces President and Founder gave the welcome remarks while Greg Perez Gifts and Graces Executive Director gave the keynote address which touched on the topics in the conferences title – trends, issues, prospects for fair trade. After the keynote address, two communities Ms. Cielo Bueno of Kaakbay Entre-Workers Cooperative, and Sr. Celerina Zabala from Social Action Center of the Convent of the Holy Spirit, gave brief presentations about their experiences with spotting trends and growing their social enterprises. After the presentations the group broke out into workshop groups to discuss how to apply the experiences of other communities to improve their own output. One of the highlights of the conference was they symbolic signing of the Memorandum of Agreement between Gifts and Graces and Pangarap Foundation to symbolize the commitment between Gifts and Graces and its partner communities. The culmination of the conference was a commitment building activity where each participant stamped their right hand on one long katsa cloth as a sign of solidarity and commitment to our common dream and vision. Below are the proceedings from the workshops shared during the plenary session:

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Workshop Results of Partners Conference

Group 1 - FAIR TRADE NOT FREE TRADE 1. In what ways are our organizations practicing fair trade? • Fair Wage/Benefit • Conducive work area • Consultation with producers re: price of products • Eco-friendly materials 2. What are the greatest challenges to adopting fair trade practices?

Group 2- THE FUTURE IS HERE

1. Given the trends above, how can we maximize

the above trends?

Maximize Trends

• (e.g. beeswax, compoboards} offer option for green products but with higher prices



- wood trimmings turned to potpourri



- sawdust-fuel (save gas)

• Availability of eco-friendly products

• Get materials from licensed/accredited suppliers

• Marketing

(no illegal loggers)

• Lack of Fund/Capital

• Promote and use green/environmental materials

• Orientation of Fair trade • Internalization of values/culture 3. What concrete steps can be done in the short term? medium term? • Orientation on Social Enterprise • Capability Building • Consistent Marketing

Social Responsibility • Provide fair wages to community members/

• Share stories of the community to encourage

more support



o e.g. “Made by the loving hands of of children

• Sustainable Development 4. What resources (human, technical, financial, etc.) will we need to implement these steps?

put stickers with stories



from Pangarap Foundation

• Human Resources

Partner with companies with raw materials/scrap materials that our communities can use to make

• Capital



products

• Technical assistance



o e.g. streamers to bags, plastic bags to yero,

• Networking • Prdomotion and Advocacy



pampers to cement block

2. What issues, challenges will we encounter, what resources are needed? (information, exposure, etc.)

CHALLENGES/ISSUES 1. Expensive environment-friendly materials forced to buy less cheap materials to meet price of customer 2. Lack of manpower 3. Seasonality of products 4. Development of second-line leaders/family responsibility

Group 3

Do we have an entrepreneurial attitude in our own organizations? • Yes

SOLUTIONS (information needed) 1. Increase awareness of environmental products (sticker-environment friendly) 2. Early scheduling-add people from other communities/group Culture building- orient on the purpose of the group to give dedication to the job 3. Other products (make candles, food, taho) 4. Group leadership training/ steady stream of leaders

3. What other problems do we observe that may be the signal for a new trend? what other problems do we observe that may be the signal for a new trend? Needs/ Opportunities 1. DOT -soap -

network connection



communication-available markets

2. Recyclable Materials -Saleable and doable

products



Skills trainings



Exposure to other communities

1. How quickly are we able to respond to identified opportunities? • Each organization can quickly respond to opportunities presented by G&G through submission of planned production for the coming year 2009 • Sample -

Metro Manila 3-7 days



Mindoro 15 days

• Final Production - Metro Manila depends on the volume and product item

Mindoro 60 days

2. How important is product development and marketing in our current plan? • Very important as described above

3. five concrete ways to adopt the lessons learned in our own organizations? • Continous education

-work values

• Community organization • Skills training and establish standards • Provide guidelines created by the organization in each community • Commitment

Group 5

Group 4

1. How will professionalizing/automating our processes impact our organization?

1. How does our livelihood program make an impact on our beneficiaries?

• Schedules - production lead time - production rate/work schedules/availability of materials and manpower

• Fix income for the workers

• Standard -establishing trends - branding of G& Products

• More responsible individual

• Build self-esteem

• Collection • Labelling -acknowledging-more market access

producers

• Identifying partners’ needs 2. Where do we start - what can be done immediately, in the next month, six months, one year • Next month - resource Speakers

possible collection for next year

• 6 months -Improving Product Dev’t -collection • 1 year

2. How does our livelihood program contribute to our communities?

improving Labelling capacity building - consolidating

• Help stir local economy • Build good reputation

3. How would we like to deepen and/or broaden our impact?

• By building partnership with other groups who can help us in promotion and marketing.

4. How can we use fair trade as a tool for long term social transformation?

diversifying

3. What resources are needed to achieve this? • Connections/Networking • Trainings • Websites/Links

• Start within yourself/ equality and transparency

Earth Day Gifts and Graces joined Ayala Foundation, Rockwell, and ABS CBN in celebrating Earth Day 2008. Gifts and Graces set up advocacy booths with some of our products made out of recycled material on display.

Other Activities

Ayala Foundation Recyclables Fair

Gifts and Graces helps different communities, companies, and organizations with the proper disposal of their old tarpaulin by collecting them at the Ayala Recyclables Fair every Friday. By participating in the fair more people become aware of the possibility of recycling consumer products. To make it easier for people to donate their tarpaulin Gifts and Graces also picks up the tarp from the donors.

Recycling Efforts 1. Market! Market! Tarp bags Gifts and Graces partnered with Market! Market! An Ayala mall to recycle their old tarpaulin banners and billboards that they use for promotions. Gifts and Graces made 4000 bags for Market! Market! In 2008 who in turn gave it away as a redemption promo to the mall patrons. The project has gained recognition and has won an Anvil and Tambuli award. 2. Edsa Shangri-la Jeep Gifts and Graces does not only help recycle tarpaulin but other products such as paper, old directories, zesto bags, and soda cans. The Edsa Shangri-la Jeep project involved making a “facade” jeep out of recycled soda cans collected by Edsa Shangri-la Hotel from their own operations. The jeep was on display in the hotel for the duration of the Christmas season.

Spreading our Advocacy 1. SWAPCON Gifts and Graces Executive Director Greg Perez gave a presentation on Recycling Post Consumer Products for use in Arts and Crafts Enterprises at the Solid Waste Management Association of the Philippines Conferences (SWAPPCON) The presentation showed that you can turn garbage into gold.

2. Talk on fair trade Gifts and Graces invited representatives from Advocate of Philippine Fair Trade to talk to its partner communities to give them an overview of fair trade and to answer their concerns regarding implementing it within their own organizations.

Networking Connecting with Trainors

While Gifts and Graces does not provide skills traning to its partner communities it helps connect them with other organizations or individuals that may be able to help them. One example was connecting FCED Foundation with Ms. Lulu Ocampo who conducted a workshop on making bags out of newspapers. Gifts and Graces currently markets this product.

In January 2002, the sisters of the Little Sisters of Assumption congregation started to meet with the residents of Isla, Maricaban, a squatter area bordered by a creek. It is an over-crowded place, with whole families paying rent to live in a 36 square ft space. Work was scarce, as was money. In response to the needs of the poor, the sisters set up a youth program, a health program, a child development program, and a livelihood program.

For many, a candle is just a source of light. But for the released prisoners who are part of the Pag-asa sa Paglaya (PSP) Multipurpose Cooperative, it’s a source of hope. One hard fact of life is that former prisoners – no matter how determined– seldom get a second chance at life. Despite their determination to seek an honest living after being released from prison, the former inmates find it hard to find jobs and a stable livelihood. This situation has pushed many released prisoners to go back to their old ways out of desperation. PSP was established in August 1993 to provide livelihood opportunities to former prisoners and their families. Today, after 15 years, the candles the cooperative produces is the main source of income for around forty families.

Mang Artemio

Gifts and Graces’ intervention has been of great help to Artemio Dumaring, a member of the Pag-asa sa Paglaya Multipurpose Cooperative (PSP). Dumaring served a six-year sentence at the National Penitentiary for his involvement with drugs. Dumaring knew that his chances of landing a regular job after serving his term was greatly diminished by his record.  He grabbed the chance to learn a new livelihood making candles with PSP and process discovered a new way to provide for himself and his family. Candlemaking has served as his source of income for over a decade now. He is making the most of his second chance by living a dignified life through his hard work.

With the delivery of seven industrial machines, an initial 13 people were employed. Today, six years later, the congregation has built a center for the livelihood program where the mothers can work while the children read and play.

Aling Thelma            

Thelma Coroza is a woman who is part of the Isla para sa Kaunlaran Enterprise in Maricaban, Pasay City. Sewing bags have enabled sewers like Thelma Coroza to go beyond a hand-to-mouth existence and earn as much as P2,000 a month. Coroza relishes the idea that she can now serve a meat dish to her family once a week.  Moreover, her additional income has also bought her visible proof of improvements in her quality of life --  a cellphone, a TV set and DVD player. Best of all, her earnings have given Thelma a new sense of empowerment that comes from enjoying the fruits of her labor. It translates to a fresh outlook on life -- new hope that spills over to her family and neighbours.

Gifts and Graces has developed an impact monitoring tool for its partner communities in order to capture the value of the service it provides. This tool will be used starting 2010.

Financials

Donors 1. Assumption HS' 81 Foundation Inc. 2. Trio MOD Range Inc. 3. Sen. Manuel Villar 4. Luciano Zanirato / Sally Son 5. Philippine Racing Commission 6. Benjamin Alimurung 7. Dita Sandico 8. Bantayog Foundation ( Noel Bazaar ) 9. Gianna Montinola 10. Gizela Gonzales 11. Eastern Twin Stars 12. Globe Telecom, Inc. 13. Peter Coyiuto

Future Plans

Gifts and Graces plans to expand its outreach to more communities and reach more people in advocating social entrepreneurship and fair trade while at the same time continuing to empower our current partners.

Projects 1. Lecture Series and Partner’s Conference During the lecture series the participants will receive input that will broaden their minds and increase their knowledge. During the Partner’s Conference we come together to share how learnings were applied to improve the livelihood programs and organizations.

2. Partnering with Designers Gifts and Graces will continue to be a venue for designers and other stakeholders to be involved in community building by using their own skills and talent

3. One of the major projects Gifts and Graces will undertake is setting up its own retail store. The retail store will a. Provide regular sales for our partner communities b. Will be a platform for advocating Gifts and Graces and our partner communities’ advocacies c. Provide a venue for on-the-job training of beneficiaries of our partner communities. This will give them hands-on experience on inventory management, customer service, and store management.

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Thank

you for your support for Gifts and Graces. Support for Gifts and Graces means success stories like these are surpassed and duplicated to the 1000 other non-profits all over the Philippines who need help with their livelihood programs. This is a wonderful opportunity to support entrepreneurship at the grassroots level that spreads hope and changes lives. We look forward to continuing to partner with you on this worthy endeavour.