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ANNUAL REPORT 2009/10

empowering mothers to break the cycle of poverty


CONTENTS From the Chief Executive Officer...

3

Major accomplishments of CfC in 2009-2010

3

About Us: Strategic Direction of the Program

4

Australian Operations

7

Our Structure, Volunteers and Members

7

AIESEC Partnership

8

Sales and Marketing

9

External Relations and Media

10

Conference Output

10

Cambodian Operations

11

HR Structure

11

Income generation project

12

Other community support

14

Statistical data

16

Financial Information

17

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EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10 


The young guy who met some kids while on a visa run never imagined it would turn into this. He never imagined having groups of volunteers all around Australia selling products from the little town where these kids lived. I hoped but never really believed that big retailers would be selling the products in their stores. And it’s all because of the countless hours put in by volunteers all around Australia (and overseas). I’ve been humbled by the dedication of people and their contributions to the project.

From the Founder…

By almost any measure this has been an incredibly successful year for Empowering Communities Incorporated (EC) and Carpets for communities (CfC), our founding project. For EC this July marks our first full year as a registered Organisation and for CfC it has been a year of incredible growth in sales enabling us to more than double the number of families in the program.

Key accomplishments in 2009/10 • We expanded our program from 20 to 45 families • We ran a fundraising movie night initiative – ‘Rug Trip’ in three states • We had our first full time CEO apart from our Founder • Our Stock Crisis appeal was extremely successful - we raised $7000 in 7 days • We hired our first National Volunteer Manager • We employed a social worker to work in Poipet • We became officially registered as a charity in Cambodia • We had our first major retail relationship with Discount City Carpets • Dave was invited to AIESEC International Conference as special guest.

Volunteers are the life blood of CfC and we’ve seen new groups start up in many areas of the country bringing in lots of new faces and energy into the CfC family. Through our partnership with AIESEC we’ve seen a lot of other new faces bringing over 7 AIESEC Interns in this financial year, not to mention the two Aussies we sent to Cambodia previously. 2009-10 also saw our first full time people in Australia with Frank Aquaah as CEO and Kerstine Alba as National Volunteer Manager. This year has been about growth and building our capacity for future growth so that we can reach as many children and families as possible.

David Bacon Interim CEO and Founding Director

 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10

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Our organisation is Empowering Communities Inc, an Incorporated Association in South Australia, Australia. We trade as ‘Carpets for Communities’, our flagship project.

Our Purpose The founding purpose for Empowering Communities is to create the ultimate social enterprise model that empowers children, families and communities to lift themselves out of poverty and create true freedom for their futures.

Our Mission Our core work is to offer immediate intervention to give at risk children an education through empowering their mothers to produce eco-fairtrade products, which sell globally.

Big Hairy Audacious Goal (BHAG) By 2012 we will return 2500 children at risk of exploitation to school by empowering 500 families in Cambodia and the world.

About Us

Why do we work in POIPET? Poipet is a Cambodian town on the Cambodia/Thailand border, in Ou Chrov district, Banteay Meanchey Province. It is a key crossing point between the two countries, and also extremely popular as a gambling destination as gambling is popular, but illegal in Thailand. There is a strip of casinos and hotels between the Cambodian and Thai passport control counters, enabling Thais to gamble in Cambodia without needing to go through Cambodian immigration. On the Thai side of the border there is a large market (long klua) where thousands of Khmers (Cambodians) go each day to sell goods and for market related work (such as ‘cart pushing’ to transport goods across the border). Many of the families that our project targets have children who work or beg at the border and or long klua market and who are at risk not only of missing out on an education but also of human trafficking, prostitution and other forms of child exploitation. Poipet has some of the highest levels of poverty in the country.

For further reading… http://www.cosecam.org/publications/goods&girls_trade_border_research_eng.pdf http://www.cosecam.org/publications/newsletter02.pdf http://www.ucw-project.org/Pages/bib_details.aspx?id=11552&Pag=0&Country=36

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EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10 


Brief History of Carpets for Communities Founded in 2005 as a joint effort between some Australian Volunteers, a Thai Factory, A Thai Foundation and a local Cambodian Foundation, CfC grew slowly for the first 2 years making wool and silk carpets for the Thai carpet factory eventually reaching 18 women and 58 children. In 2007 we lost funding for the project manager and were no longer able to produce the technically difficult wool and silk rugs. We started focusing on a product that we had developed that we could market ourselves (the cotton off cuts rugs), cutting out the middleman and making it more fairtrade, generating more income for the women for the same amount of work done. While the transition meant a reduction in productivity and therefore a reduction in the amount that the women could earn this also led to the start of a period of strong growth for the organisation from 2008-2010. In 2008 we registered as an independent organisation in Australia and later in Cambodia. This year we also started doing volunteer run market stalls in Adelaide and in Sydney and in 2009 expanded around the country until we had volunteer groups running market stalls in Adelaide, Sydney, Melbourne, Alice Springs, Brisbane and Perth which allowed us to expand the number of families at the end of 2009 to 40 families and 180 children.

Program Philosophy and Strategic Direction CfC’s vision is being implemented according to a long term, 4 phase implementation plan outlined below and so far, despite setbacks in finding managers for the project and having to change the product and target market, we have progressed through Phase I (Set up), Phase II (Proof of concept) and are now into Phase III (Expansion). Initially we had hoped to use the profits from Phase II in the expansion for Phase III. However, after extensive financial modelling and market research, including feedback from large Australian rug wholesalers and many fair trade retailers, we concluded that to keep the prices attractive to the market (and hence keep the expansion financially viable) it would be necessary to secure external funding for Phase III. The expansion plans for the CfC project rest entirely on the ability to sell all the carpets that are produced. The market research that we have done in Australia alone and our experience in selling the carpets over the past year supports this. Moreover, we have been in discussions with rug importers about taking our rugs as an ethical, environmentally friendly line and they have agreed to do so if we can scale production up to commercial levels.

 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10

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Our 4 Phase Implementation Plan Phase

1

Phase

2

Phase

3

Phase

4

Set up (2 years, approx 2005-2007) • Secure set up funding • Form partnerships • Bring in families • Start production Proof of concept (1.5 years, approx. 2007-2008) • Work with a small number of families (10-20) • Prove the economic and gender empowerment benefits to families and individuals • Prove the elimination of child labour and trafficking in target families • Prove the product in the marketplace • Economies of scale – find potential buyers for large quantities of product • (Note: No funding required. Proof of concept means that it funds itself on sales profits only) • Expansion (3.5 years, approx 2008 - present) • Get funding for expansion • Secure sales contracts for large quantities of product • Bring in more families (year 1 - 100) • Refine production model to produce at commercial levels • Use profits for increasing development outcomes for participants • Increase producers participation in the running and decision making of the project Diversification and replication (4 years, in the future) • Get funding for replication • R&D other products, means of income generation and opportunities in different locations • Transition volunteer families into different streams of income generation (to trial) • Put together replication team to replicate model in different contexts • Replicate model in other locations and countries

After over 5 years of developing this project we are we and truly into phase III of implementation. This was to be the really exciting part; where we get to take the idea that we have spent so much time and energy proving over the last five years, and realise it on a scale that will have a real impact across the community. However, we have been meeting more challenges than we expected in phase three and it looks like there are more ahead before we get a clear run at expansion.

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EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10 


Our Structure For the 2009-2010 year, the Australian National Management Structure was as follows:

Australian Operations

Board of Directors Lucy Chan, Kevin Chan, Melissa Willoughby, Richard Khoo, David Bacon

CEO

Volunteer Coordinator / HR

Frank Acquaah (Sep 09 – Aug 10) David Bacon (interim, Aug 10 – Oct 10)

Kerstine Alba

Australian Volunteer Base In 2009-2010 we formalised the Regional Management Structure of our organisation in each state. This was as follows:

Regional Chapter President

Volunteer Coordinator

Retail Manager

Market Stall Manager

Casual market stall and events volunteers

Volunteers and Members Volunteers are the lifeblood of CfC and have been entirely responsible for it's success selling rugs in Australia. Every person that has given time for CfC has contributed towards the improvement of the lives of the families we work with in Poipet. The importance of this is reflected in the fact that we brought on a full time volunteer coordinator this year as the second full time role (after the CEO). Volunteers also see the value in the work we are doing, which is clear by the growth in our registered membership base from approximately 20 to approximately 80 at the end of 2009-2010. Our volunteer surveys during this period indicated that 100% of our volunteers would definitely recommend volunteering with CfC to their friends and family.

 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10

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Main benefits volunteers recognize in volunteering with CfC are: “Learning about yourself and others”, “growth in networks and skills”, “making a difference to people in countries which really need it”; “An exciting and uniting environment where people can find themselves as an important part of a positive impact”; “The feeling of community” - our volunteers get along really well and volunteering at a market is likened to having a great chat with great people whilst making a difference to the less fortunate; “Increase in networking skills”; “A legit organisation that works hard and is run by volunteers, that have fun together and are committed and passionate about the organisation”; We also found that volunteers spend between three to ten hours per week volunteering for CfC on average.

AIESEC Partnership The first internship was arranged in the last financial year and realised in September 2009. David chaired the AIESEC National Conference in Melbourne in July 2009 and proposed a partnership to AIESEC that would bring in a lot of extra capacity for CfC. The interns that have come through this partnership have been Frank Acquaah (Ghana) as CEO, Kerstine Alba (Philippines) as National Volunteer Coordinator), Liudmila Volcovici (Moldova), Helena Montenagro (Croatia), and Beata Majewska as Queensland expansion officers, Priscilla da Silva (Brazil) as Victoria Expansion Officer and Laurens Koppelaar (Netherlands) as New South Wales Fundraising and Sponsorship coordinator. At the close of the financial year two more were in the pipeline with the CEO application process closing soon after that and one more intern already selected for Sydney. The fees we pay to AIESEC and stipends that we pay to the interns are our largest weekly costs in Australia and as such we need to analyse the costs and benefits of the program as well as the effectiveness of the type of roles and people we are bringing over. Also the partnership was not as successful for AIESEC as it was hoped it would be. The experience and benefits for CfC have been positive with contributions to the success of the organisation, but there is also a lot of room for improvement and we will be reviewing the best way for us to make use of AIESEC’s services. Page 8 of 18

EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10 


Sales and Marketing Sales and Marketing in 2009-2010 grew in leaps and bounds, as we expanded to more states and more markets. This is illustrated through our figures to date. Overall, in calendar year 2009 we had sales of $55,926 (AUD). As at June 2010 we have had sales of $54,729 (AUD). Continuing at this trajectory means in calendar year 2010 we should more than double the sales of calendar year 2009. As part of this large increase in sales, in April 2010 we welcomed an order from Discount City Carpets in Adelaide for 84 carpets (each unit 1.2m x 1.7m). This order amounted to approximately $12,000 dollars, and became CfC’s first ever large retail partnership. Sales averaged $7,920 per month for the period of 2009-2010, with some great months in December 2009 ($12,928), March 2010 ($11,996) and May 2010 ($14,278). Our most successful sales events included: Name

Date

State

Amount

AIESEC Movie Night Fundraiser Valley Market Stall Perth Cultural Market Market Stall Paddington Market Stall Fair Trade Market Stall Kalamunda Market Stall WOMAD - Market Stall Fairbridge Festival Market Stall Emergency Fundraiser for cash flow Manly Fair Trade Market Stall

16 September 2009

South Australia

$4,687

28 November 2009 6 December 2009

New South Wales Western Australia

$1,450 $1,650

12 December 2009 13 December 2009 2 January 2010 8 March 2010 9 April 2010

New South Wales Victoria Western Australia South Australia Western Australia

$1,475 $1,700 $1,370 $3,492 $1,250

30 April 2010

Australia Wide

$7,000

8 May 2010

New South Wales

$1,495

We have averaged 4.7 market stalls per week across the country, with the spread being as follows:

Unfortunately a comparison to last year is not currently available, however the 2010-2011 annual report will be able to provide this comparison.

 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10

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External Relations and Media The resources were not available in this financial year to really push through this area; however the hope is that having a full time ER manager in calendar year 2011 will be able to push CfC further into the media and community spotlight.

Conference Output Carpets for Communities hold conferences approximately every six months. The aims of these conferences vary with each one, but on the whole they include aims such as: • •

Conducting official association business at Annual General Meetings; Bringing volunteers around the country together to o Conduct planning o Create and drive strategies o Provide a connection point Providing networking and learning opportunities for our members These were the conferences held in 2009-2010: RugCon – January 2010 RugCon in January 2010 was held at Glennbarr in South Australia. This conference had 25 delegates, and ran from 29 January to 1 February 2010. The major outcomes of this conference were: • • • • •

Decision on goals to reach our big hairy audacious goal (BHAG) by 2012 Recruitment of potential volunteers Australia-wide Examination of what work Empowering Communities Inc might become involved with Discussions on future development focus of CfC and what that might be Sharing of good case practices at market stalls RugFest – June 2010 RugFest in June 2010 was held at Mariner Shores in Queensland. This conference had 21 delegates, and ran from 18 to 21 June 2010. This was our first conference operating under the concepts of Open Space Technology. The major outcomes of this conference were:

• • • • •

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Current reality of each region Corporate grants and sponsorships would be a strategy that CfC pursues Joint understanding on child labour in Cambodia Product development would be a strategy that CfC pursues The organisational structure that CfC will take moving forward

EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10 


Cambodian Operations

Cambodian Structure Our Cambodian team manages the critical role or managing the production process whilst engaging and working with our participants. For the 2009-2010 year, the Cambodian National Management Structure was as follows:

Founding Director / Interim CEO David Bacon

Country Director Mongheng Seng

Poipet Office Manager Naren Chhuut

Field Worker

Field Worker

Field Worker

Seng

Emda

Vanny

The CEO was based in Australia, whilst the Country Manager was based in Siem Reap, and the rest of the Cambodian staff based in Poipet. Over the last year, the Cambodian team have has a strong focus on production and quality control for our carpets. Systems have dramatically improved to support the Cambodian team in both these aspects. In the future, as the basis of our social enterprise strengthens (income generation), a greater focus on quality of development outcomes will ensure our participants are getting the best we can provide for their future and the future of their children.

 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10

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Income Generation Project The income generation side of Carpets for Communities has been able to support 40 families, with an average income of $63.78 per month. During 2009-2010 we expanded to 25 new families, more than doubling the number of families we were supporting at the end of the 2008-2009 financial year. This was a staggered approach, conducted in waves: Month

Increase Total families in families supported

Total number of children back in school

July 2009 August 2009 December 2009 January 2010

N/A 5 12 8

63 children 83 children 131 children 168 children

20 families 25 families 37 families 45 families

*The figure of $63.78 for monthly family income is equal to: (total paid to families for financial year 2009-2010)/12 months, then divided by the number of families (40) as at financial year end.

This means that the increase in the number of families (from 18 to 40) by the financial year end has provided a figure that is an average for a period for which it is extremely difficult to take an average for. Here is a summary of the average monthly income per family for the entire financial year: Month July August September October November December January February March April May June

Number of families 20 25 25 25 25 37 45 45 45 45 45 45

Ave monthly income per family $58.31 $33.22* $116.18 $57.57^ $56.32^ $42.42^ $53.24 $42.67 $110.54 $83.88 $105.60 $77.29

*Month of transition which means average monthly income was likely slightly higher than this ^Flooding and many public holidays during these months prevent the women from making as many carpets – they often visit families in other villages and spend time celebrating

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EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10 


The income generation side of Carpets for Communities makes a difference to all of our families. Many of them come to CfC with similar stories – here is just one of those stories.

Koul Pow joined the project in 2009. She has seven children—two under the age of six and five between six and 15. Before entering the project, some of Koul Pow’s children were not enrolled at all in school, and the rest, while enrolled, did not attend regularly because they had to beg or work as cart-pushers to support the family. Since their mother joined CfC, all of the children have the chance to study full-time at the local school. Koul Pow earned $58 a month before 2009. Now she earns $115 on average each month making carpets. Even so, she must purchase commodities on credit at times, because she also supports her elderly mother. Her son, who works in Thailand, also sends the family money and they manage, at present, do not have any outstanding loans. Koul Pow’s life has changed for the better since joining CfC. She feels that the family can eat enough and have better health, her children have the chance to study every day, and her relationship with her husband has improved.

 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10

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Other Community Support In the 2009-2010 financial year, CfC also provided the following additional support to our families: • • •

School uniforms for children returning to school; Debt relief; Small loans for domestic needs; eg health costs, a well etc

In 2009-2010 our community support and development activities have operated at a minimal level. This is largely due to lack of funding and lack of resource on the ground in Cambodia. We have regular quarterly meetings with the women, to enable and empower them to have input into the operation of Carpets for Communities, and to assist us in identifying the most important issues that they are facing on a day to day basis. Thus far, health care is one of the most significant concerns. We hope that, in 2010-2011, we will have more resources (both in terms of labour and financial) to contribute to undertaking good community development work in these areas of importance to our women. We particularly want to assist in ensuring they have access to high quality, low cost health care for themselves and their families.

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EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10 


 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10

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Statistical Data – KPI’s

“ 100

more target children were added to the program for a total of 184 children.

Performance Summary

Development KPI’s • In 2009/10, 100 more target children were added to the program for a total of 184 children • 73.9% were attending school regularly • Average family income was USD$63.78* • 29.9% of our children are still working for money *Refer to Income Generation for more information

Production KPI’s • •

Our current stockpile of carpets is 380 m2 in Cambodia and 350 We have 200kg of raw cotton in our raw materials stockpile

m2 in Australia

Sales KPI’s • • •

Our average monthly sales (AMS) were AUD$7920 We have 3.5 months of rug stocks (based on our stockpile / average monthly sales rate) AUD$363 is made on average at each sales event (eg; a market stall)

HR KPI’s

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We have 121 registered volunteers

30-40% of registered volunteers are actively involved in activities.

EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10 


Financial Summary

Revenue Donations Events RugCon 2010 RugFest 2010 Fundraising Crisis Appeal School Supplies Other Grants Market Stall Sales Stalls – NSW Stalls – NT Stalls – QLD Stalls – SA Stalls – VIC Stalls – WA Retail Sales Memberships Other Carpet Sales Other – NSW Other – QLD Other – SA Other - WA Other Income T-Shirt Sales TOTAL INCOME

Expenditure 2,240 2,494 140 7,306 325 7,505 1,058 35,122 3,045 2,050 18,189 6,152 11,071 15,675 300

TOTAL ASSETS

198 146 1,414 100 2,865 15,436 1,250 11,580 3,344 964 82 434 68,292 1,380 500

1,514 600 2,340 45 4,710 640 $122,524

Assets Cash at Bank Accounts Receivable Market Stall Equipment

Bank Service Charges Event Expenses ‘What About Me?’ RugCon 2010 Brisbane Film Night Freight and Delivery Interstate Cambodia – Aust. Human Resources Volunteer Expenses Wages Insurance Marketing and Sales Memberships Other / Sundry Cambodia Production Shirt Printing Other Product Purchases

TOTAL EXPENDITURE NET SURPLUS

$112,734 $9,789

Liabilities 30,613 450 341 $31,404

Loans

TOTAL LIABILITIES NET EQUITY

 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10

11,000

$11,000 $20,404

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empowering communities inc. carpetsforcommunities.org Page 18 of 18 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2009/10 

CfC Annual Report 2009-10  

CfC Annual Report 2009-10