Saturday, May 21, 2011

New Entities Scale Better Through Angel Philanthropy

The opportunity and the challenge of scale are effectively the two sides of the development coin that social enterprises have to deal with, often against the backdrop of a complex socio-economic matrix. Shell Foundation’s quest for creating scale is based on the understanding that is fundamentally about “delivering cost-effective solutions that impact large number of beneficiaries in multiple locations in ways that are ultimately financially viable and self-sustaining”.

Shell Foundation’s Regional Director Anuradha Bhavnani speaking to Sustainability Outlook points out that the Foundation’s quest for scale has had encouraging results on the ground with partners such as Envirofit , Husk Power Systems, Embarq and Agrocel.A key condition for achieving scale, paradoxically, seems to be to find partners who are in the nascent stage of development rather than entities with an established track record.

According to Bhavnani, “We find it striking that in large instances where partnerships achieved scale and measurable impact, it has been with newly created entities that were using new business models that we had jointly developed. We do believe that Angel Philanthropy as a starting point of development change has significant potential to catalyze scalable solutions to global development challenges. For us, Angel Philanthropy is about investing in a new venture without a proven track record or documented impact but with a new business based concept, a new product in a new market which has the intrinsic goal of going to scale, achieving measurable social impact and becoming financially viable.”

With four programs running in India on Indoor air pollution, urban mobility, ethical trade and access to modern energy which address the country’s core development goals, Anuradha feels that the most important factor is to have partners who share an aligned vision on scale and sustainability.

Envirofit, a newly created entity, had a new product: Clean cook stoves. And it wanted to market it in India to counter lethal indoor air pollution that kills two million women and children each year in developing countries.

Anuradha feels that “Building sustainable enterprises that can effectively address development challenges takes time, patience and considerable investment. It involves huge risk to venture with new partners with a new product in new markets.”

There is, of course, the fine line between an enterprise based solution and commercial enterprises that are, for example, looking for fortunes at the bottom of the pyramid. Says Anuradha, “ Being enterprise based is about adopting a mindset and process of thinking rather than an expectation of delivering solely financial returns in a way typified by most commercial enterprises.”

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Tuesday, May 10, 2011

Enterprise Driven By Philanthropy

“The approach is market-based and we are looking at the poor person as a customer and not a beneficiary”. Shell Foundation Regional Director Anuradha Bhavnani’s observation sums up the approach that resulted from the transition that Shell Foundation made when it moved from supporting NGO run projects that tended to fall by the way side and moved to investing in businesses that provide enterprise-based solutions to poverty-linked issues.

Ahona Ghosh and Gauri Kamath of India’s Economic Times assess three organizations that have taken a marked based approach to philanthropy in a special feature on Philanthro-capitalism.

The thought is echoed by the Chairman of Naandi Foundation which is promoted by India’s three leading industrialists K Anji Reddy, Chairman of Drug maker Dr Reddy's; Anand Mahindra , Vice-Chairman and MD, Mahindra & Mahindra; and Rajendra Prasad Maganti,Chairman of infrastructure company Soma Enterprises. The three promoters along with DANONE.Communities have invested in Naandi Community Water Services (NCWS) to supply safe and affordable drinking water to Indian villages, at a nominal price. Says Reddy, “ To provide high quality safe drinking water and collect user fees from communities, one needs a team with an entrepreneurial outlook that is driven by passion, efficiency and the creation of an economic surplus."

Chairman of Piramal Group, Ajay Piramal, makes the point, “For-profit ventures give a greater push in getting more customers and delivering high-quality service at minimum costs."

According to Bhavnani, history has shown that results don't last with plain-vanilla charity, as "there are simply not enough grants available." So, the new approach to philanthropy for Shell is solving developmental issues through the creation of scalable, sustainable enterprise-based solutions. Shell Foundation India has committed $16 million to the eight enterprises it supports.

The report points out that as investors with business partners, Shell hopes to achieve its twin targets of scalability and profits, which will ensure sustainability in the long run as it means less reliance on continued grants and the end customer benefit from innovations that are required to deliver affordable goods and services.

This approach is evident in the investment in Envirofit and dealing with the challenges of marketing improved cook stoves to rural households. The challenges to scale in the case of enterprises seek to market products that combat indoor air pollution range from raising awareness to enabling financial options and ensuring distribution reach to the smallest and furthest villages.

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Sunday, May 8, 2011

Envirofit Among Finalists Of Sankalp Clean Energy Technology Awards

For Envirofit, being a finalist for Clean Energy Technology in the Sankalp Awards 2011 was yet another testimony to the difference that its stoves had begun making in rural India.

Over the years, the Envirofit stoves have become in a sense one of the symbols of the battle to bring a market-based solution to the challenge of Indoor Air Pollution.

Ever since 2007 when Envirofit started working with Shell Foundation in India to tackle the problem of Indoor Air Pollution, the challenge has been to put in the market a line of durable clean cookstoves which reduce emissions, improve fuel efficiency and reduce cooking time. The Envirofit stoves have done that and more, if market acceptance is a measure.

In the words of Harish Anchan, Managing Director of Envirofit India, “We are delighted that these cookstoves, which have been well received in rural India and have sold over 200,000 units, impacting the lives of an estimated one million people, are today being recognised by SANKALP as a significant contributor to dealing with a global challenge. The stoves sold are predicted to save over US $30 million for India’s lowest-income consumers through fuel-saving over their lifetime. The recognition of the effectiveness of the stove will also help take the product to a wider audience.”

Anuradha Bhavnani, Regional Director of the Shell Foundation, said: “There are an estimated 1.9 million deaths per year due to the toxic fumes created when people cook on open fires or use inefficient stoves in poorly ventilated homes. Over the past four years, Envirofit has successfully scaled up its model of creating a market for improved cookstoves in India and the African continent. We are working with Envirofit India in all three areas of building distribution, awareness and affordability. This is being achieved by engaging rural entrepreneur networks, microfinance institutions and by running awareness campaigns.”

Envirofit cookstoves reduce toxic emissions by almost 80% while using 50% less fuel and reducing cooking time by 40%. Envirofit utilizes rigorous product-development methodology and protocols used in modern industry to develop and commercialize energy-efficient, pollution-reducing technologies that have the greatest potential positive impact on global environmental, economic, and public health issues. Envirofit India’s enterprise-based model has created over 500 local jobs and supported enterprise development through the growth of its 400-strong network of manufacturing, sales and distribution partners.

In 2011, Envirofit will complete the registration of the Voluntary Carbon Programme developed in conjunction with Eco-Securities, making it the first stoves carbon programme of its kind in India. This will allow Envirofit to reduce the consumer price or reinvest funds in addressing some of the key market barriers and, as market growth continues, Envirofit will shift further towards localised assembly and manufacture in India so as to continue efforts to lower end-user costs.

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Saturday, May 7, 2011

Julia Roberts To Star In Saving Lives In Rural Kitchens

The Pretty Woman is getting her hands dirty and for a good cause. The Global Alliance for Clean Cookstoves has announced that Academy Award winning actor Julia Roberts will serve as Global Ambassador, helping to bring attention to the deadly smoke from unsafe and inefficient cookstoves. 

According to a GACC Press Release, Julia Roberts will help raise awareness about the millions of people who face health effects, accidents or death in developing countries due to the reliance on traditional cookstoves and open fires that use wood, coal, charcoal, or animal waste for fuel. 

“Nearly 2 million people around the world – mostly women and children – die each year from an activity that many of us take for granted: cooking for our families,” Roberts is quoted as saying.


Cookstove smoke contributes to a range of chronic illnesses and acute health impacts such as early childhood pneumonia, emphysema, lung cancer, bronchitis, cardiovascular disease and low birth weight.  The smoke from inefficient stoves continues to contribute to global climate change by producing harmful greenhouse gas emissions such as carbon dioxide and methane, and aerosols such as black carbon.  Reliance on biomass for cooking and heating also increases pressure on local natural resources and forces women and children to spend many hours each week collecting fire wood – an especially dangerous task for women and girls in refugee camps and conflict zones.
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