Executive Summary Manila, November 2012
Life Project Center
When Young Adults from exclusion become entrepreneurs! 1.
Presentation of the project: “Life Project Center”
The concept of the "Life Project Center" (LPC), is an innovative one. It is the proposed solution of NGO LP4Y, to the problem of excluded youth, and consists of an “incubator” or business school for young entrepreneurs, located in the heart of slum areas. In the LPCs Young Adults acquire hands-on experience in the creation, development and management a business, learning how to become entrepreneurs through local economic initiatives developed by the center and through training. This learning system gives them the keys to becoming entrepreneurs themselves and to developing their own "Life Project" with support from the LPC. In addition, through the development of these economic activities the LPCs become financially independent and their profits are reinvested in the creation of new Life Project Centers.
Today the results of the five LPCs based in the Philippines confirm the validity of this approach. The first LPC (created 3 years ago) has achieved financial independence and has already helped 10 young people to enter the professional world. A total of 120 Young Adults are currently in training. Encouraged by the initial success of these centers, LP4Y approached GSVC with a view to further developing the model and expanding its network of experts and investors with the benefit of expert advice. LP4Y hopes thus to develop many more LPCs to enable Young Adults in South-East Asia and elsewhere to achieve social and professional integration.
2. The starting point: The enormous entrepreneurial potential of young victims of extreme poverty and exclusion In 2009, there were 512 million socially marginalized Young Adults worldwide; not only living below the poverty line, but also most of them lacking basic education and therefore unable to find a decent job. In 2025, just 15 years from today, it is estimated that the number of excluded Young Adults will have doubled (to one billion)! They often inhabit the slums of large cities around the world, and may be current or former gang members,
drug addicts, prostitutes or ex-prisoners. They may be excluded because of a disability or social maladjustment. But LP4Y found that these young people showed a potential for great energy and creativity â€“ qualities which enabled them to survive in the slums. The association has confidence in their extraordinary resilience, which can be transformed into entrepreneurial potential in areas where many economic opportunities are underutilized. This belief, which led to the founding of LP4Y, has been confirmed by the initial results of five LPCs to open in the Philippines.
3. The market solution: The Project Life Center, a social incubator located at the heart of the slums The LPCs give these disadvantaged Young Adults the opportunity to share their ideas, their energy and abilities by taking an entrepreneurial path, creating employment at the heart of the slums. The computer-equipped center welcomes excluded Young Adults, with proof of motivation as the only entry requirement. It offers business training called PTE: â€œProfessional Training 4 Entrepreneursâ€?, consisting of three branches: creation and development of micro-economic activities; professional training (business, English, Computer); personal development with the design of a life project plan. And four steps: Autonomy, Responsibility, Management, and Entrepreneurship. The "Micro-economic initiatives" (MEI) are rooted in the youth environment and adapted to the realities of daily life. Some examples of MEI already established in the Philippines: > In the LPC of Cebu, located next to a cemetery where impoverished families have made their home, scraping a living by selling votive candles, the LPC has developed a business producing candles and bamboo handicrafts. > At LPC Tondo, Manila, located near a huge landfill which forms the largest slum in Manila, young single mothers have developed a small business, making limited edition dolls and toys from recyclable materials recovered in the landfill. > In LPC Old Balara, another slum in Manila, young people are working with members of the local community producing soap and other products using medicinal herbs, and selling through the neighborhood pharmacy.
These MEIs enable Young Adults to gradually put into practice the theoretical lessons they have learnt, while simultaneously earning a small allowance ($4/day) that helps them to gain financial independence, contributes to their reintegration and allows them to exceed the poverty line of $2/day. After 9-18 months of training, the Young Adults have the tools and stability necessary to launch their own life projects: creating their micro-enterprises with the support of the LPC; finding a job, having regained their employability; or returning to school (night school) while working. As a result of its location at the heart of or in close proximity to slum areas, the LPC not only enjoys a privileged relationship with the neighborhood youth, but has also formed close relations with the surrounding community (families, church, community leaders...). This integration of the LPCs into the local landscape helps anchor the youth by creating the long-term relationships and the support network needed to increase economic activity.
4. The environment: Supporting socially marginalized Young Adults not targeted by the traditional circuits The LPC specifically targets Young Adults aged 17 to 24 years old in situations of extreme exclusion, in the belief that they have the potential to overcome the difficulties associated with the marginal and unstable nature of their origins. Few organizations target this particular population. NGOs or local religious communities, public bodies that replace nonexistent public services within the slums, tend to focus primarily on children (e.g. Mekong Children in the Philippines), while those who share LP4Y’s belief in entrepreneurship as a means to gain independence and escape poverty, tend to focus on Adults or those with prior entrepreneurial experience (this is the case of Entrepreneurs of the World, present in the same areas as LP4Y), or on more advanced projects. LP4Y identified several grassroots NGOs with which it has created synergies. For example in Manila, the NGO TNK (http://www.tnkfoundation.org) that works with street children. Excluded youth from these associations can subsequently decide to join an LPC to follow an entrepreneurial training. More than competitors, these organizations are therefore potential partners.
The management team:
LP4Y was founded by two former entrepreneurs, Jean-Marc and Laure Delaporte, who with their 25 years of entrepreneurial experience in Europe have instilled in the association the values of entrepreneurship which constitute its uniqueness. They are now supported by a network of 40 administrators and 400 active members in France, Belgium, Luxembourg, and the United States, and are assisted by an international team of 15 full-time volunteers in the Philippines. Each LPC is the responsibility of a "Center Coordinator" (a volunteer combining work experience and social development). The Coordinator is assisted by a Coach / Training Manager (multi-LPC), in charge of academic training. To support these local teams, experts cover several LPCs overseeing the Business Development (Marketing, Communication, Sales) and Business Management (Production, Organization, Finance). These experts each have over 10 years of professional experience in large international companies. This structure allows the LPC to offer a complete framework connecting members with sources of economic expertise, local knowledge and key local figures. The entire management team is made up of voluntary workers and International Solidarity Volunteers (VSI) from different nations: Philippines, USA, Poland, Switzerland, France, Japan.
6. Summary of the Social and Financial Impact: financial model and budget plan Located near or within a slum and run by two volunteers FTE (full-time equivalent), the LPC requires low initial investment (e.g. computer equipment was donated by Cap Gemini) and has an extremely low cost structure of less than €30K per year. The main areas of expenditure are rental costs, social charges (8K€ / year), payment of allowances for the Volunteers (€5K / year for two volunteers per center) and to the Young Adults (€16k / year for fifteen Young Adults). The budget invested by LP4Y in 2011 for all activities in the Philippines required less than €150,000.
During the first two years the LPC is financed by external funding (equity financing of LP4Y) and the revenues of the MEI cover a growing share of its needs. The five first centers showed that the LPCs could be financially balanced before the end of the third year. The subsequent surpluses are reinvested in new centers to exponentially increase the impact of the social model. The first LPC, created in 2010, will be balanced before the end of 2012, and then will begin to generate surpluses. LP4Yâ€™s objective for 2013 is to replicate the LPC model on a large scale in South-east Asia, drawing on the expertise already gained. The model is easily replicable firstly because the LPC requires a low initial investment, and secondly because it easily adapts to realities on the ground due to its small size and its location in the heart of the slums.
1. Social impact: o The LPC has a double impact: helping excluded Young Adults to integrate into working life, while at the same time revitalizing the slums by creating a dynamic within the local community. o 34 Young Adults joined professional life after 9 to 18 months in the first LPC and bear witness to the success of the model. o 100 are in training and will complete their training in the 5 LPCs in 2012. o 120 will be in training by the end of 2012. While it is still premature to draw any statistical data, experience shows that within the LPCs about four out of five Young Adults are able to recreate the conditions of integration, either by taking up studies, finding a stable job or, as is the case for one in five young people, by developing the entrepreneurial project developed during their training to LPC.
The journey of Jhun is indicative of the kind of opportunity the LPC gives to these Young Adults. Arriving in Manila at the age of 16 to find a job, Jhun was immediately confronted with the precarity of employment: he found accommodation in a slum where he did odd jobs, but was unable to adequately provide for himself and his child, finally falling under the influence of young criminal gangs. At the age of 21, he joined the LPC that had just opened in his slum of Old Balara. After a period of adjustment, he became a driving force in the LPCâ€™s microenterprise of soap and beauty product production. During the first year he regained self-confidence, taking initiative and responsibility as part of the management team. He completed his training at the LPC with a life project, and left the LPC to open a hairdressing salon on his native island. As a hairdresser he is realizing the entrepreneurial potential that he discovered during his time in the LPC.
These Young Adults are mentors for the next intake of excluded young, showing them that it is possible to break the cycle of poverty. Their success creates a ripple effect within the neighborhood and boosts the economic and social life of slums. It should be noted that, at the present time, about one in five Young Adults leaves the LPC during the first 3 months: LP4Y is seeking to develop a more appropriate accompaniment to reduce the dropout level, however the fragility and instability of the target population are such that it will never be able to completely prevent this phenomenon.
2. Impact indicators Indicators of success are built around two dimensions: the functioning of the center and its social impact.
Type of criteria
Economic performance of the LPC
Examples of indicators -
Quality of management team
Characteristics of the beneficiaries
Quality of the training and social effectiveness of the LPC
Impact on the local community
Financial balance Growth of the margin of the MEI Costs / Turnover Share of external/internal financing Ratio of trainers to Young Adults Changes in the team that manages the center Amount of professional experience Number of local trainers
Examples of expected results The LPC must be balanced financially (funding source = expenditure) at the end of year 3. The share of external funding decreases over time while the turnover (and ultimately the margin) must grow to cover expenses. Eventually, the excess from the fund must finance other LPCs. There must be a minimum of 6 trainers per center to provide a sufficiently personalized follow-up. The LPC needs experienced volunteers who stay for periods of at least one year to ensure continuity of training. Ultimately the association aims to maximize the number of local trainers to promote local ownership.
Number of Young Adult in each center Previous experience (academic or vocational)
The LPC aims to train 12 to 24 youth per center. They are between 17 and 24 years of age living below the great poverty threshold and are victims of exclusion (disability, desocialization, misery, violence, prison).
Dropout rates What do Young Adults do after going through the LPC (education, employment, entrepreneurial project...) Number of centers open
The LPC must attract and keep Young Adults throughout the duration of the whole training period. After 9-18 months of training the Young Adult should have defined his Life Project and be able to find jobs or launch his micro-enterprise. The number of centers open multiplies the social impact.
In what way are the Young Adults from the LPC models for the others? How many people (in families and the community) are affected by the LPC and its economic activity?
The LPC should be as integrated as possible in the neighborhood, offering the community new opportunities for young people who are not part of the LPC. The social impact in the community will be greater if more people are affected by the LPC: purchasing products of the MEI, deciding to enroll in the program, developing a business in the family, etc ...
3. Projections By late 2012, LP4Y aims to complete the design phase of the 5 LPC initiators. 50 Young Adults will graduate from the LPCs, leaving 120 pursuing training. The training center (Green Village) of the coordinators and coaches will be ready to receive the first training class. In 2013, LP4Y plans to open 10 LPCs in two other countries in South East Asia (a feasibility study will be conducted during the second half of 2012 in China, Indonesia, Laos, Papua New Guinea, and Burma). A total of 250 Young Adults will be trained in the 15 LPC and 120 Young Adults will have graduated. Maintaining growth at this rate over the following years will depend on the recruitment of the management teams of the centers (two FTE per center), on the financing costs of the center (expenses less income earned by the MEI) and on the ability of LP4Y to expand its network of experts and partners, to provide technical support and to entrust the operational part to partner NGOs in the field. LP4Y is presenting its Life Project Center model at the Global Social Venture Competition in order to benefit from the expert advice to improve the replicable model of LPC and make it more easily financeable with new partners. But the goal is also to increase the visibility of the LPC model and facilitate its replication. Funds attributed by the Global Social Venture Competition would develop the model, making it suitable for any environment with severely excluded Young Adults.