cfc annual report 2010/11

empowering mothers to break the cycle of poverty

ANNUAL REPORT

2010/11

� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 1 of 34

of 34 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 �

CONTENTS Major accomplishments of CfC in 2010-2011 3

From the Chief Executive Officer... 3

About Us / Our Values 4

Organisational Structure 5-6

Our Board of Directors 7

Our Volunteers and Members 7-8

Our Chapters Around Australia 9-11

Sales and Marketing 12-13

External Relations and Media 14

Production and Logistics 15-16

Other Australian Programs 17

Cambodian Operations 18

Programs 19

- Income Generation 19

- School Attendance 20

- Micro-enterprise Program 20

- Scholarships Program 21

- Other community support 22

Statistical Information 23

Financial Information 24-29

Future Plans 30-32


Fro

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…

Key accomplishments in 2010/11

• We transitioned three of our families out of carpet making into establishing their own micro-enterprises

• Transitioning families represents the beginning of an empowering and sustainable organisation

• Our first full-time team, based in Cambodia

• Our highest income figures to date

• The launch of our largest fundraising campaign to date

• We completely re-vamped and re-launched our website

• We launched our scholarship program – enabling children to further their education at university

• Secured a long term storage solution via collaboration with a supporter and Trinity Grammar School in

Melbourne

If 2009-2010 was the year of rapid growth and expansion for Carpets for Communities, then

2010-2011 was the year for consolidating that growth.

For the first time ever, an executive team was recruited and based in Siem Reap, Cambodia.

With five eager and passionate individuals on the ground, we’ve had the capacity to do

more than ever before.

We’ve also realised this year that fulfilling our purpose is not just about supporting more

and more families. It’s also about how much support we provide to our families, and how we

do this in a way that is sustainable for our organisation.

We have a renewed focus, more stakeholders, and a whole new structure engineered

exclusively around our Empowering Communities purpose. Next year, Carpets for

Communities, and Empowering Communities, are going to have a greater impact than ever

before.

We’re excited. I think you will be too.

Kylie Hansen

Chief Executive Officer


Empowering Communities Inc, is 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.

Our Values

Education

Through continued education, people and communities can continually better

themselves. It enables people from all backgrounds to have a more enriched life.

Innovation

We take actions in a way that dynamically increases our impact.

Respect

We provide all individuals with the opportunity to express their views and

contribute their skills in any given area.

Sustainability

Social, economic and environmental sustainability guides our actions and

strategies to developing long-run solutions to wider issues.

Equality

We take actions that lead towards equal opportunities for all individuals.

Integrity

Our actions back up our words, with the full honesty and sincerity.

Passion

We love what we do, and this comes out in all our work with everything coming

through with energy and drive.

Ab

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s


Our Structure

Until January 2011, the Australian National Management Structure was as follows:

No changes were made to the Regional Management Structure of our organisation

in each state. This remained as follows:

Board of Directors

Lucy Chan, Kevin Chan, Melissa Willoughby, Richard Khoo, David Bacon

Volunteer Coordinator / HR

Kerstine Alba

Australian Volunteer Base

Regional Chapter President

Volunteer Coordinator

Interim CEO/Founder

David Bacon David Bacon (interim, Aug 10 – Oct 10)

Retail Manager Market Stall Manager

Casual market stall and events volunteers

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Rob Pfeiffer

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Luana Noroes

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Our Board of Directors

David Bacon (Founding Director) David is currently working in Cambodia to assist CfC in furthering its development activities on the

ground. David was the recipient of the 2009 AIESEC Young Alumni

Contribution Award. David’s goals are to create innovative self funded

organisations that by catalysing corporate sector investment in ‘pro poor’

social development globally.

Richard Khoo (Chairperson) Richard is a CPA with over 10 years experience with organisational change and systems development in the financial services and

non-profit sectors. Richard a qualified Finance Professional (CPA, CFP, B.Com,

DipFP, AMC) and a socially minded change agent.

Kevin Chan (Treasurer) Kevin is currently a successful independent Software Developer. Kevin has a background in financial management and

has a degree in International Business with a major in International

Management. Kevin is heavily involved in developing modern intentional

communities and is currently the Treasurer of the Aldinga Arts Eco-Village.

Lucy Chan (Secretary) With an ecotourism qualification, Lucy has focused

on environmental education, hoping to inspire the next generation to care for

their world. Now a full time mother of two young children, she volunteers with

Carpets for Communities and is an active member in the eco village where her

family lives.

Melissa Willoughby Melissa studied a Bachelor of International

Business with a major International Marketing, and has worked primarily

within the Human Resources area. Recently, Melissa has coordinated

major fundraising initiatives and other campaigns such as a National

Short Film Festival in 2010, and the container deposit scheme campaign

in 2011.

Our volunteers and members

“When the Executive team started our contracts in January, our volunteers were dropping in terms of numbers, motivation and dedication. We also faced a drop in sales and that affected the motivation of volunteers. For a couple of months we were struggling with engaging volunteers and trying to create a positive atmosphere. However, bringing in some new volunteers slowly, we managed to create a new momentum that is starting to generate results. One big challenge is that I am based in Cambodia which means I am geographically distanced from my main focus of work. Luckily, it's entirely possible to generate interest with new volunteers. We are hoping to see major achievements in terms of results in the next couple of months.”

From Marko Ivkovic Human Resources Manager


2009-2010 and 2010-2011 compared We currently have active volunteers in Perth, Adelaide, Sydney, Melbourne and Alice Springs. We were very lucky to have sourced a Product Development Manager and have her come over in March 2011 to start working with us, however grants to fund further stages of her position were not successful.

Statistics on volunteers and members

Statistic 2009-2010 2010-2011

Registered volunteers 80 125

Average hours spent

volunteering

3-10 hours per

month

10 hours per

month

States with a carpets

presence 5 7

Lessons Learned Having a full-time HR Manager in this financial year has been invaluable. However, the number one lesson that we learned from this experience is that the National Volunteer Coordinator/HR Manager role must be based in Australia so they can be closer to the volunteers and diversify recruitment channels utilised.

Focuses for 2011-2012

• Increasing our number of volunteer to increase sales and our impact • Create a volunteer induction and learning cycle, to ensure that our volunteers have

the support they need to carry out their work. • Hiring a Product Designer, whether it be a volunteer or a contract position to

develop new products • Establishing a system of volunteer reward and recognition

AIESEC Partnership

The AIESEC partnership has continued in 2010-2011, with the executive team all being sourced through AIESEC’s International Mobility Program. In this financial year, we sourced Kylie Hansen (Australia) as CEO, Marko Ivkovic (Serbia) as Human Resources Manager, Robert Pfeiffer (Australia), as Sales and Marketing Manager, Luana Noroes (Brazil) as External Relations Manager, and Dick Hoffmann as Finance and Logistics Manager. Unfortunately Luana was unable to fulfil her contract with CfC for a variety of reasons and left to return to Brazil in May 2011. We hope to continue to source some of our staff through AIESEC Cambodia in future years.


Western Australia

WA has come from strength to strength in 2010-2011. After

beginning in late 2009, 2010-2011 is the first

full financial year that WA has been in

operation. Sales have been steady,

although much stronger in last half of 2010.

WA has a core group of volunteers who work very hard,

but ideally needs to be sourcing new volunteers to fill

official roles. Markets are still the number one source of

revenue in WA, with Kalamunda Markets and Fremantle

Markets providing consistent sources of e342 revenue in this

financial year. September 2010 held a record breaking weekend for

CfC WA, and CfC nationally, as a combined carpet party and sustainability festival

assisted WA in selling just less than 70 rugs in one weekend.

Moving forward, WA hopes to focus on an external relations

strategy – strategically partnering with organisations that we

can work with and through to sell rugs and raise

awareness of CfC in WA.

South Australia … from Jessica Fabian

South Australia continues to enjoy festivals and

events as major methods of revenue raising.

These events are highlights for the volunteers as

well as increasing sales and awareness of our brand.

In July we continued the tradition of 'movie night

fundraisers' with a short film festival 'RUGTRIP' which

we had two sessions and generated close to

$10,000. We then attended the Oz Asian Moon Lantern

Festival in September for the second year in a row which

provided a great opportunity for volunteers to shine and

sell lots of rugs as well as $1000 worth of fairy floss! In

December an SA volunteer did an online auction that

raised approx $1000. March brought us the WOMAD

opportunity, which was a 4 day music event this year. This

generated around $3000 in carpet sales plus the

awesome opportunity for many volunteers to soak up

the exciting atmosphere of WOMAD.

The Rundle Street Markets ceased trading, which was a

disappointment for CfC-SA, and the new Adelaide

Market Square is proving less popular. Volunteers are

still keen to sell at markets, and there are two monthly

markets in regional SA that we regularly attend.

Volunteer numbers in SA have fluctuated over the year, with more

activity and numbers needed. Internal communications need to improve for the

state to flourish and to grow the volunteer numbers to avoid volunteer burn out.

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In 2011/2012 we hope to begin carpet parties, continue our event fundraisers and festivals

and try other methods of selling carpets.

Victoria …from Susan Chia

Victoria has about 15 solid volunteers whom can be counted on for organising fundraising

events, the occasional markets and transport. We are still currently depending heavily on

retailers. Particularly this has been the case for winter, however as summer begins, there is

more opportunity to sell more rugs.

Most of the current volunteers, many students, often do not have a

car and this limits transport. This is a particular issue when it

relates to retailers, as cars are required to get rugs to retailers,

and sometimes multiple times to show them stock in the

first instance.

Corporate and external partnerships are a great step for

Victoria, with Rachael Chan leading the corporate team. The

Trinity Grammar School partnership is a good example of

venturing into schools to help fundraise for us and spread the

word about Carpets for Communities.

New South Wales … from Belinda Brennan

CfC in NSW went through a huge growth period from December 2008

to late 2010, with an increase in markets being attended,

organisational structure, growth in management team, and the

introduction of online sales and retail outlets. However in the last

year CfC NSW has scaled back some of the operations, particularly

in the area of markets with Bondi and Balmain being

cancelled as we just were not selling enough to make it

worthwhile. Retail sales reached a plateau and online

sales have been steady but low. Week to week

attendance continued at Paddington Markets

providing a stable income, however carpet sales at

markets on average have also decreased. A new

management team is taking over from 1 October 2011

with plans to focus on Online and Retail sales as the

growth strategy as well as embedding the volunteer base

as this has also decreased in the last 12 months.

Major successes included maintaining operations at Paddington market with a dwindling

volunteer base; kicking off online sales thanks to Alison Harrington and the recruitment of a

new Management Team to take over from 1 October thanks to Ian Wang.

Points for NSW to improve upon in 2012 include a lack of volunteers; the inability to resource

a Fundraising committee to hold a fundraising event; loss of our Retail managers in June

2011 and lack of support from CfC Board & National Executive of Online Sales strategy.


Northern Territory

Our NT chapter has been steadily strong, despite the fact that we have only the one

volunteer – Ailsa Breheny – present in Alice Springs. Ailsa has been with us consistently for 3

years and continues to run successful carpet parties, and market stalls during market seasons

with little assistance. Ailsa is the Northern Territory chapter, and we are very appreciative of

all of her work.

Queensland

Queensland has run into some difficulties in the last year. Leaders of the region have come

and gone, leaving CfC with the difficult job of recruiting a manager for the entire state (a

formidable role description for many potential volunteers).

We have had some success in recent months in recruiting 2-3 very promising volunteers, and

will be working with them over the next six to twelve months to assist them in building up

the capacity of Queensland, and identifying what sales strategies will work best for them.

Tasmania

David travelled to Tasmania in May 2011. This trip was fruitful in that David found a church

willing to store a small stockpile of rugs and continue to sell them through the congregation.

Whilst this has been wonderful, we clearly want to expand further in Tasmania.

Similarly to Queensland, we have recently sourced a promising volunteer in Tasmania, and

will work with her to find her a team that she can work with in starting to slowly sell some

carpets in Tasmania.

Australian Capital Territory

Canberra is in yet another similar situation as Queensland and Tasmania. After a couple of

false starts, we have found some promising volunteers whom we plan to work with to start

up a CfC ACT in the next six to twelve months.


2009-2010 Carpet sales divided

by sales avenue

2010-2011 Carpet sales divided by sales avenue

Sales and Marketing

“CfC has seen strong sales and fundraising

growth till December 2010, coinciding with

strong activity throughout the country for pre-

Christmas sales, and an increase in retail and

carpet parties. Then, we saw a massive drop in

sales across the country. This was a

combination of the Australian retail market

being down and due to a drop in volunteers.

In reaction to this we implemented a number

of short term strategies through price

reductions and shifting focus in sales avenues.

We implemented fundraising initiatives to transition our families into their businesses and a

self-sustaining livelihood. Throughout this period, there are also long term strategies we are

working towards to increase the products capacity beyond a boutique nature.

CfC has been put in the direction to show real growth in 11/12 and beyond. I look forward to

carrying that through in the beginning of the year to set the platform for sustained growth.”

2009-2010 and 2010-2011 compared

Sales averaged $8,726 per month for the period of

2010-2011, with some great months in July 2010

($11,295), September 2010 ($15,747) and November

2010 ($12,390).

This year has seen more comprehensive sales support

materials created and diversification of our sales pool.

In 2009-2010, the dominant thinking was that market

stalls were the primary way through which to sell our rugs.

In 2010-2011 we have diversified this thinking, and the

mechanisms through which we make sales to include

carpet parties, and more strategic partnerships with

other organisations. Some of the other mechanisms which we are trying to shift state focus towards include:

• Retail partnerships – both wholesale and consignment

where necessary

• Carpet parties – similar to Tupperware parties, held in

the customer’s home

• School based partnerships – our Learn2Empower2Learn program has worked well

with our pilot school, and we hope to roll this out nationally

• Partnering with Rotary/Zonta/BPW clubs to present at their meetings and sell directly to members

Sale

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From Robert Pfeiffer

Sales and Marketing Manager


Statistics on sales and marketing

Statistic 2009-2010 2010-2011

Average monthly sales $7,920 $8,726

Average number of market

stalls per week 4.7 3.98

Average sales per event $393 $316

Our most successful sales events included:

Name Date State Amount

Retail – Wholesale to Discount

City Carpets 16 September 2010 South Australia $3,712

WOMADelaide 11 March 2010 South Australia $2,910

Trinity Grammar School –

Carpets Breakfast 30 April 2011 Victoria $1,495

Manly Market Stall 28 November 2010 New South Wales $1,375

Sustainability Fiesta 19 September 2010 Western Australia $1,374

Sales overall looks to have improved slightly however 09-10 was much more consistent.

Lessons Learned

The major lesson learnt in the sales and marketing arena is that a heavy reliance on market stalls and volunteers is not sustainable in the long term. In addition, as volunteers’ lives become more hectic, the first thing that they will exit from is their volunteering pursuits. This means that our current market stall/volunteer framework needs to change.

We have also learnt that coordinated and specific fundraising campaigns are highly effective. We plan to capitalise on this knowledge in 2011-2012 to significantly increase our impact on the ground with our families in terms of what we do in development.

Finally, we have learnt that our product, whilst popular on a small scale, has many hurdles that impact it's potential scale of sales. For this reason we are trying to find a meaningful way to engage in product development that we can afford.

Focuses for 2011-2012

The major focus for 11-12 will be in developing new roles and teams within the states and really driving towards that shift away from market stalls for sales, while is maintaining a sufficient sales.


External Relations and Media

Luana Noroes was our External Relations Manager from January 2011 until she finished her

role in May 2011.

During her time here, Luana was able to develop a number of resources:

• Professional brochure

• Videos for fundraising campaigns

• Footage of our families, and interviews with particular families in Poipet

Our most recent fundraising campaigns – My Business and My Education – began in May

2011 to fund our mothers’ foray into micro-enterprises, and our scholarships program

respectively have been ably managed by Robert Pfeiffer.

My Business, or Fund an Entrepreneur, was primarily conducted via Facebook and online

social mediums. As at June 2011, CfC had raised out $11,347 of a required $14,800 ($400* 37

families) for this campaign.

My Education was, similarly, conducted via social media. It aims to raise funds for Tout

Kimchhean, Hing Prempey and Hourt Pesith to attend university in Phnom Penh. As at June

2011, CfC had raised $3,885 out of a required $4,800 ($1,600 per student per year) for this

campaign.

At the time of writing this report, we have achieved our fundraising targets.


Production and Logistics

From Dick Hoffmann Finance/Production/Logistics Manager

Henry McQuinn began as our Production and Logistics Manager in

January 2011 on asix month contract. Now that his contract period

has ended, Dick Hoffmann has taken over this area in addition to his

Finance Manager responsibilities.

2009-2010 and 2010-2011 compared

The rapid expansion of families in the last financial year meant a large increase in the

number of rugs being made. Unfortunately this did not correlate with our sales figures

and this financial year we have been accumulating a stockpile of rugs.

First, production has been significantly decreased from 2009-2010, through providing a

ceiling cap to which families can earn, but they cannot make any more carpets. This

ceiling has still proven to be a ‘fair wage’ according to the Fair Trade Association of

Australia and New Zealand, and is ample for our families to live on.

The price of cotton of-cuts increased significantly during this year, and in recent times

we have found it increasingly difficult to obtain a consistent supply of cotton at an

economically viable price.

To ease the ongoing issues we have faced with storage, we are renting a used shipping

container, which was purchased by a CfC supporter, that will be used for the storage of

carpets in Australia. Trinity Grammar School in Melbourne has provided storage space

for the container on the grounds of their sports fields.

After years of generous support from GKR Transport, they have decided to cease their

partnership with CfC. Fortunately; we came into contact with Chele Smith of Future

Freight, who has very generously offered to partner with us. In the first instance she

has provided us with $1,000 in free transport, to ensure the most recent shipment of

carpets is dispersed throughout the country.

Statistics on production and logistics

Statistic 2009-2010 2010-2011

Australian stockpile 350 sqm 1104 sqm

Cambodian stockpile 380 sqm 1040 sqm

Total stockpile 730 sqm 2144 sqm

Australian stockpile/average monthly sales 5.1 months 13.5 months

Total stockpile/average monthly sales 10.7 months 26.3 months

Rate of production : average monthly sales 1.92 : 1 3.4 : 1

Pro

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The three major achievements during the 2010/2011 financial year are:

1. Acquiring Future Freight as a partner for the delivery of carpets within Australia;

2. Securing a permanent lock-up storage location;

3. Establishing a relationship with a local Cambodian shipping agent for discount LCL (less

than container load) shipments internationally.

Lessons Learned Supporters and partners of CfC are critical to our success, and as a result, we should take the

time to recognise and reward them for their support.

Focuses for 2011-2012 One major focus in 2011-2012 needs to be improved relationships with the Phnom Penh

garment industry to ensure a more consistent supply of cotton off-cuts. Cotton off-cuts are

integral to our current product, and in order to continue to make this product, we need to

ensure we have the supply of cotton to be able to do so.

A functioning stock tracker for Australia needs to be a second major focus in 2011-2012.

Currently, it takes some work to find out where rugs are located, and whether they have

been sold. An effective stock tracker will make staff and volunteers’ lives much easier.


Other Australian Programs

Learn2Empower2Learn

Learn2Empower2Learn is a new program effectively looking at proactive ways to partner with

high schools, and perhaps universities and primary schools.

In Melbourne, there has been a highly successful relationship started with Trinity Grammar

School. David has guest lectured in their Society and Environment class, and provided input

into creative and interesting ways to incorporate world issues and education about global

poverty into teaching.

In return, TGS have run a huge Carpets breakfast at the school in our honour, which sold

$1500 of our carpets to families of the school. They have continued to fundraise for us

through various school events, including a sports day and a house breakfast.

Learn2Empower2Learn is the roll-out of this relationship with schools across the country. We

are looking at new and collaborative ways to partner with schools, which in addition to the

above ideas might include:

• ways in which we could assist students to achieve their Duke of Edinburgh

awards,

• a role that we can play in educating students about fair trade and poverty,

perhaps via S&E classes,

• connecting schools to our schools in Poipet for cross cultural communication;

• education and fundraising events ran through the school, which serve multiple

purposes:

� involving students and educating them in events management

� selling carpets

� raising money for various initiatives (for CfC and the school)

• study tours we could provide in Cambodia for students to visit our families and

see our joint impact

We've received very positive feedback from the Trinity Grammar students that CfC

has provided a practical example of what can, and is being done, to fight issues of

poverty and female empowerment in developing countries.

Au

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Cambodian Operations

From Mongheng Seng Cambodian Country Manager

Our Cambodian team holds the critical role of managing the production

process whilst engaging and working with our participants.

The Cambodian National Management Structure evolved to pass

back some pieces of work to the executive team, based in

Cambodia (for example, financial management of Cambodia is

now completed by the Finance Manager and not the Country

Manager). This has been very important for the Cambodian

operations as having this extra resource and capacity has

enabled the Country Manager to participate in fleshing out other strategies such as the

Scholarship Program.

In June, 2010 our Office Manager Naren sadly passed away and his position was filled

by then, office assistant, Bunchhuon Morn.

Chhut Naren

Naren’s was a life largely defined by the protection and support of women and he

worked extremely hard for CfC, putting in huge amounts of overtime and even

sleeping in the office to keep it safe before any staff lived there.

Naren had such a rich life story. He was young when the Khmer Rouge took over the

country and his family became displaced, forcing them to flee to Vietnam. After

reaching Vietnam Naren was imprisoned under suspicion of being Khmer Rouge and

later conscripted to fight against them in a Vietnamese unit. He later deserted after

being forced to shoot a Vietnamese officer from his unit in order to protect a Khmer

girl from being assaulted. After that he worked in a stone quarry and moved around

before meeting his wife and settling in Poipet. He then worked for the Cambodian

Women's Crisis Centre before joining CfC. He leaves behind a wife and two children.

His wife is a chronic diabetic and due to a disability is unable to work in most jobs. He

was completely dedicated to looking after her, spending nearly all of his salary on her

treatment each month.

Naren had worked with us for the past two years, after being very sick for the last few

months. He was unable to find sufficient treatment in Phnom Penh or

Vietnam, where he was with his family seeking treatment when he passed.

We believe that he died of liver and or kidney failure caused by chronic

Hepatitis C and complicated by Typhoid. Both of these diseases are

relatively common in Cambodia and it's a sad reflection of the state of

the country that he was not able to find treatment.

Rest in Peace, Naren.

Cam

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Income Generation Program

The income generation side of Carpets for Communities has been able to support 45

families, with an average income of $121.82 per month per family.

In this period, as outlined under the finances section, our Income Generation project

(making carpets) was operating at a significant cash loss. For this reason in this

period we had to make very drastic and swift changes to ensure that the

organisation would not enter a negative cash flow situation.

Related to this, we began transitioning women from making rugs and assisting to

enter them into their own businesses. In this period then, our Income Generation

program became one aspect of our broader organisational direction, and reduced in

scope to something that families engage in forever to something that families

engage in for a period of 12-18 months maximum.

Lessons Learned

One major lesson we have learned is that many children in the family are still

involved in working both at home and outside. This is difficult for CfC to combat, as

we cannot monitor families at all times, and it is often considered culturally

acceptable for children to play a large role in working at home. We are working on

education programs to provide positive incentives to attend school rather than

consistently using warnings and punishments.

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Seng Sean making it personal

Seng Sean joined CfC in 2008. She has five children and four attend school. The fifth child is

more than 15 years old and no longer attends. Before she joined CfC, Seng Sean earned

$64.50 per month; now, her average income (as of 2010) is $120 per month. Her husband

collects wood to sell and earns about $1.44 per day to supplement her carpet-making

income. Although this does not cover their costs every month, they have no outstanding

loans. Unfortunately, Seng San and her family live in very poor health. They often seek

treatment with an expensive private doctor and need IV drips.

Despite these setbacks, Seng San feels 100% confident that she can feed her children and

prevent them from further sickness. Her life has definitely improved since joining CfC. In the

past, due to her poor health, she normally stayed at home and did nothing. Now she can

earn an income at home making carpets, her children can have an education, and she has

the funds to pay for the family’s needed medication.


Weekly School Attendance Monitoring Our weekly school attendance monitoring occurs across 12 schools. Our social worker

Kimsreang spends approximately 30% of her time monitoring and checking school

attendance.

This program also includes follow up support with the mothers when children's attendance

drops.

Micro-enterprise Program As at June 2011, approximately 10 of our families had started micro businesses and most are

doing quite well. The rest of the families will start their micro businesses between June and

December and will finish producing carpets at the end of December.

We ran a fundraising campaign to raise the funds for this initial transition. The total raised

was approximately $13,000 for 37 families. Approximately $1,850 ($50 per family) was used

to hire, and to continue to hire, a Khmer consultant to assist in developing the program and

administering training, and to contribute to the social worker’s wages.

One grant however is not going to solve income issues so we will help them both build

multiple streams of income and also build on current streams by expanding businesses

where appropriate.

Average cost per beneficiary

Statistic 2009-2010

Venture capital $300

Training (ie financial literacy, etc) $40

Overheads (ie staff time, costs related to fundraising

campaign)

$10

Total $350

Kon Sokha making it personal

Kon Sokha started a fruit selling business when she was

funded in August of this year. She sells fruit and

vegetables difficult to find in Poipet from Thailand.

She works very hard, and now, although her business is still fledgling, she is doing very well, nearly earning as

much as she was making carpets.

We are very proud of her, and so is her family.


Scholarships Program

As much as CfC has helped their families’ lives improve 100% and allowed them to gain an

education, finishing their final year of high school, University study is still a stretch from what

their families can afford.

As part of Carpets for Communities initiatives to further the education of impoverished

children in the Poipet commune, we have raised an initiative to further

our participants education. Two of our families participants’ sons, and one of CfC’s staff

member’s son have applied to and been accepted into our scholarships program.

Breakdown of scholarship costs

Tuition Fee $400 p.a.

Bicycle $30 (once off)

Rent and Utilities $30 p.m.

Living Costs $55 p.m.

Study Costs $12.50 p.m.

Total $1600 p.a.

Kimcchean Tout

making it personal

Kimchhean Tout is one of our scholarship recipients. He

is bright, entrepreneurial and extremely proactive. He is

very active at home and within his community – not only

does he help out extensively around the house, never

misses school, and in his spare time he teaches younger

children in his village English.

He also created an invention from rubbish lying around his house which assists his mother in making carpets – it

rolls many pieces of cotton at one time. We are very

proud of Kimchhean, and very excited that due to CfC

supporters he has been able to start university this year.


Other Community Support In the 2010-2011 financial year, CfC also provided additional support to our families:

Health clinic We organised a medical clinic for our families in Poipet, in April 2010, with a doctor and

nurse sourced through Collaboration Cambodia. They donated their time in-kind and we

purchased approximately $150 worth of medication to take to provide to the families.

Average cost per family

Medications $3.50

Time of nurse and doctor – donated in-kind $0

Total $3.50

General purpose micro-loans General purpose micro-loans provide assistance in circumstances where families can be

financially vulnerable (ie health concerns and hospital visits, sons and daughters weddings,

etc). This is currently only provided during the stage that they are producing carpets and

is essentially an advance lump sum payment against labour.

Average loan per beneficiary: $115

School Uniforms for children returning to school One of our Sydney donors contributed their wedding favour budget to our organisation. We

do not usually provide handouts, but rather provided one hundred school uniforms at a cost

of $5 per uniform. Photos of the children in school uniform will be distributed to guests as

party favours at the wedding.

Flood Relief In this financial year we raised approximately $400 for families whose houses were ravaged

by the floods in October 2010. Funds were administered to 2-3 separate families to assist

them in rebuilding their homes.

We hope that, in 2011-2012, as we did in 2009-2010, that 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.

Warehouse Production Thanks to an online plea for funds, we were able to fund the construction

of a small warehouse in An Dong Thma Mies. The participants around this

village are located relatively far from Poi Pet and as a result now have

easier access to raw production material. The wives asked for the storage

space, and the husbands all matched our investment through donating

their time in-kind to purchase materials and construct the warehouse.


Statistical Data – KPI’s

Development KPI’s

• In 2010/11, 26 more target children were added to the program for a total of 210 children • 75.2% were attending school regularly, up from 73.9% in 2009-2010

• Average family income was USD$121.82, up from USD$63.78 in 2009-2010 • 18% of our children are still working for money, down from 29.9% in 2009-2010

• 4 of our children are in years 11 and 12 (a rarity in Poipet) • 3 scholarship applications received and approved

Production KPI’s • Our current stockpile of carpets is 1040 m2 in Cambodia and 1104 m2 in Australia.

- This is up from 380 m2 and 350 m2respectively in 2009-2010

Sales KPI’s • Our average monthly sales (AMS) were AUD$9483 up from AUD$7920 in 2009-2010 • We have 26.3 months of rug stocks (based on our stockpile / avg. monthly sales rate)

• AUD$315 is made on average at each sales event (eg; a market stall),

down from AUD$363 in 2009-2010

HR KPI’s

• We have 125 registered volunteers, as compared to 80 in 2009-2010

26 more target

children were added

to the program for

a total of 210 children.

“

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Finance From Dick Hoffmann

Finance/Production/Logistics Manager

As the first person ever to fill in this position full time at CfC,

I’ve had the liberty to set up some of the main monitoring

instruments. Pretty soon after we started our terms, it became clear that with the unexpected

drop in sales and the high production rate cash flow management would be one of my top

priorities. There is a big difference between a “normal” enterprise and a social enterprise. If

we would have been a normal business the solution was simple. Stop production until we ran

through most of our stock, after which point we can start producing again. But for CfC we

could not do this, because of the major implications this would have for our participants. As

a result, in our decision making process there are always two sides of the story. This makes

this role very interesting as there are real stories present behind the numbers.

2009-2010 and 2010-2011 compared

In Cambodia a new financial management system was implemented alongside a Production

tracker in April 2010, and this has been the first full financial year in which these

systems have been operating. Both of these systems utilise Excel and have only had

some small adjustments made.

In Australia we have started to use Xero in this financial year. Xero is an online

accounting program that is linked to our bank and Pay Pal account. As a result any

transactions will feed automatically into Xero after which these transactions can be

classified. This significantly reduces room for human error, and gives us an up-to-date

picture of the financial reality.

Compared to last year Empowering Communities, we have a much clearer picture of

the financials of the organisation and the registration is kept up to date as a result of

the achievements mentioned previously.

Focuses for 2011-2012 The major focus for 2011-2012 needs to be the tracking and inventory of the rugs. This

improvement should be linked with our sales tracker, which due to its dependency on

manually entered date from our volunteers is not completely accurate.

Furthermore we will need to focus on how to get our financial results audited

externally. The high costs involved are a barrier for us, however in order to move

forward to the next level of professionalism, this is a step that needs to be taken.

Major Donors

UNESCO $10,320

Planet Wheeler $30,000

Fin

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Financial Year Report 2010-2011 The following table shows CfC’s profit and loss statement for the last 3 financial years. The

following part will give further explanation on many of these figures. All amounts are in

Australian Dollars except when mentioned otherwise.

Revenue

2010-11 2009-10 2008-09 Donations 4,439 2,240 1,699 Events 813 2,634 - Fundraising 32,645 17,771 8,746 Grants 40,320 1,058 19,015 Sales

- Market Stalls 82,025 75,630 19,676 - Retail Sales 10,167 15,675 4,008 - Other Sales 21,607 5,140 7,556

Other Income 5,305 5,010 964 Total Income $197,321 $122,524 $61,664

Expenditure 2010-11 2009-10 2008-09 Cambodian Expenses

- Development Expenses 11,265 - 3,273 - Executive Team (Wheeler) 18,989 - - - Production 40,320 68,293 52,430

Event Expenses 4,722 1,414 - Financial Expenses 660 462 90 Fundraising Expenses 2,758 247 - Market Stall Expenses 6,377 4,745 - Other Expenses

- Insurance 3,225 3,344 1,747 - Marketing / Sales / Promo 93 446 - - T-Shirt Printing 20 1,380 - - Other Expenses 3,283 1,536 6237

Staff 9,788 12,830 - Transport Fees 5,745

- Australian Domestic 3,451 2,865 - - International 9,708 15,437 -

Total Expenses $186,940 $112,735 $69,523

Net Surplus $10,381 $9,789 -$7,860

Income Notes

Donations: include the donations we have received at our market stalls and donations

from externally organized fundraisers held for CfC.

Events: refers to the fees paid by volunteers who attended our conference in March in

Victoria.


Fundraising: includes all the funds received from specific fundraisers organized by CfC.

Examples are our successful Rugtrips held in the winter of 2010 and our more

recent campaigns to fund small businesses started by for our participants and

university scholarships.

Grants: in the last financial year CfC received two grants. A grant of $10.320 was made

from UNESCO to expand our operation, and a $ 30,000 grant from Planet

Wheeler was made to fund our Executive Team in Cambodia.

Market-stall sales: CfC’s biggest source of income, totalling $82,025.

Other sales: include our online sales and revenue from custom orders, carpet parties

and personal sales.

Other income: includes volunteer membership fees, delivery charged for sending rugs

to retailers, etc.

Expenses Notes

Cambodian expenses: the Cambodian expenses consist of three forms of costs.

Expenses incurred for the production of the carpets, expenses made for

developing the Poi Pet community and the expenses that were incurred to install

and support the executive team in Cambodia. The latter expenses are covered by

a grant from Planet Wheeler.

Development Expenses: includes the expenses to set up a development fund. In 2010

CfC started with a development fund after successful fundraising events in

Australia. From this fund we have hired our social worker.

The development fund also provides interest free loans, described in ‘other

community support’, above.

There were also other development expenses, all directly related to specific

fundraising causes. The Naren Campaign referred to a fundraiser we held for our

Poipet Officer Manager, who sadly passed away during this financial year after

several months of illness. The fundraiser was organized to support him and his

family to pay for the medical bills. All other expenses are described in the annual

report information above.

Planet Wheeler Expenses: the Planet Wheeler Foundation funds the costs for installing

and supporting the executive team for one year in Siem Reap. Table 1 gives a

summary of these costs. These figures are in USD as they are made in Cambodia.

Table 1 (in USD)

Planet Wheeler Expenses December 2010 - July 2011 Total Expenses

Office Costs 6,128

Team Costs 8,125

Other Costs 2,554

On Cambodian Bank Account 2,120

Total $18,927


Other costs: are the expenses incurred for furniture and equipment for the office, such

as desks and chairs; and the costs related to making the house suitable for living,

such as curtains and mattresses, and repairs for the office.

Due to the differences in currencies the costs mentioned in our

financial statement differ from the total amount mentioned in Table 1.

Production Costs: table 2 shows the Cambodian operational costs by category in USD.

Development expenses and costs made by the executive team are excluded.

Cambodian Operational Expenses (in USD) Total Expenses

Carpet Labour Charge 65,785

Carpet Raw Materials 9,817

Other Direct Costs (inc packing and equip) 1,608

Total Direct Costs $18,927

Staff 19,824

Office / Admin Costs 14,126

Logistics 2,368

Sales and Marketing 901

Total $114,429

As can be seen, the vast majority of the costs are directly related to the

production of the carpets. Our participants together received an amount of

$65,785 USD. This means that on average we supported every one of our 45

participants with $121.82 USD a month.

Due to the differences in currencies the costs mentioned in our financial

statement differ from the total amount mentioned in Table 2.

Financial Expenses: includes the fees charged on our bank account, fees for the

international transfers to Cambodia plus fees Pay Pal charge for every transaction

on our account.

A lot of costs are grouped together under other costs. The largest contributors

are the costs for our liability and volunteers insurance and other expenses, such

as the FTAANZ membership fee.

Although CfC mainly thrives on volunteers, in the end of 2010 our interim CEO

and HR manager received a stipend. AIESEC fees were charged for the stipend

and costs of various internships. This was included in staff costs of $9,788.


Breakdown of Income Income

The following figure shows the different types of income for CfC in this financial year and

their relative contribution.

Breakdown of Expenses Total Operational expenses per SQM

The following table and figure are a combination of the Cambodian and Australian

operational costs per SQM. The Cambodian operational costs have been converted from US

dollars to Australian dollars by taking the average exchange rate for this financial year. In

some cases different kinds of costs have been added together in order to keep down the

total number of categories.


Comparison with previous years

The table at the start of the ‘Financial Year Report 2010-2011’ section above shows the

summarized profit and loss statements for the last three financial years of CfC. All figures are

in Australian Dollars.

Income The gross income has risen from $ 60,700 in 2008-2009 to $ 192,016 in 2010-2011. In other

words, the gross income has more than tripled within two years.

There are two reasons for this increase in gross income. First, the yearly sales numbers have

more than tripled over this period, although the major part of this sales growth was realized

in the 2009-2010 financial year. Compared to last year sales grew less impressively, but still

by $ 17,354 (18%). All sales channels grew in the last year, but the biggest relative growth

was realized in other sales (carpet parties, personal sales and custom orders) and retail sales,

which grew by 98% and 38% respectively.

The other reason is the increase in the funds acquired through grants, fundraising and

donations. Compared to the 2008-2009 these sources of income have increased with $

48,757 (66%). Compared to last year this amount grew with $ 54,513 (130%) as we almost

received no grants in the 2009-2010 financial year.

Expenses Compared with two years ago total expenses increased by $ 117,417 (169%) from $69,253 to

$ 186,940. Last year our expenses have risen by $ 74,205 (66%).

The mean reason for this big increase in expenses is the increase in the number of

participants we have taken into our program. As a result production expenses have increased

by $ 60,210 (115%) over the last two years which means these costs have more than

doubled. Other reasons that help to explain this 160% increase is that costs are made that

haven’t been made before. Examples are the set-up of the executive team in Cambodia and

the start-up of the development fund. Increased production has also lead to an increase in

shipping costs as more rugs are shipped from Cambodia to Australia. Another factor is the

increase of the size of the organisation. Starting in 2009-2010 costs were made for having

our first full time CEO and short term internships in order to manage operational more

professionally.

Net Income While in 2008-2009 CfC made a loss of $ 7860, this has been turned around in the last two

financial years. Both years resulted in a net profit of around $ 10,000.


Future Plans

Our first major decision has been to split Carpets for Communities into two clear bodies:

• The social enterprise Carpets for Communities

o Encompassing carpet production and sales

• The broader programs umbrella Empowering Communities Inc

o Encompassing everything outside of carpet production and sales

The reason for this demarcation was that in the past, production has consumed any funds

put aside for other development purposes. Therefore, the social programs we run currently

are limited, due to not having had the resources to develop programs and apply for funding

for them. If we resource the NGO/programs side of what we do independently, it can focus

on getting funding for and implementing complimentary social programs instead of waiting

for the enterprise side to be profitable enough to fund programs.

Another major, and the most exciting, change has been the development of a transitionary model for our families. This was created for three reasons:

a) Our sales were not sustaining the families’ production, and the organisation was in

danger of running out of money;

b) Previously there was no exit strategy for families, which meant they could be making

carpets forever;

c) Related to b) above, this tended to create dependency of the families upon us, and

was not the most empowering organisational structure for our families.

Going forward our new model will be a cycle where we work with women initially for a

period of 12-18 months, and assist them through four stages – Intervention, Stabilisation,

Empowerment and Transition to Sustainable Livelihoods.

Intervention (A matter of weeks)

During intervention families are immediately entered into the program, earning money

straight away through making products. We select families based on their commitment

to education. Mothers can learn a variety of skills that are transferable, through

experience making a variety of products, and most importantly, their children are

immediately entered into the education system.

Stabilisation (6 months)

During stabilisation we should be dealing with as many of the negative issues as

possible - assisting families in clearing their debts, accessing health insurance, dealing

with any major health issues, and addressing other pressing concerns before families

think about trying their own income generation activity. As families (perhaps for the

first time) have access to a steady income, we can assist them with purchases and

actions to solve their own problem (i.e. water filters, glasses, micro health insurance

etc.).


Empowerment (4 months)

The empowerment stage includes planning for the future, and is where they plan,

acquire skills and knowledge for and actively start working toward a new income.

Activities might include

• building their own financial literacy,

• purchasing equipment required (ie sewing machine),

• improving their own management skills,

• working with other mothers/families to look at options for cooperation or

small business partnership,

• accessing micro-business training.

• getting involved in improving their situation and the communities (school

committee, group projects etc)

• exposure visits to markets and around Cambodia

• exposure visits to various other income generation projects

• visits and talks from others who have succeeded to inspire, motivate and

train

• creating a plan for sustainable income generation for selves and children

• start relevant training / preparation for the activity

Sustainable transition (2-3 months)

When they start their sustainable transition, families are establishing their new income.

Carpets for Communities will partner with TPC, a local micro-financing firm, to assist

the women in receiving low interest loans for the capital to start their ventures. The

women will have lower levels of risk associated with them than normal micro finance

clients because they have Carpets for Communities providing support and tracking for

their small businesses, and ensuring their continual access to the parallel community

development and education support initiatives.

Families can continue making products on reduced cap for this

period as their fledgling businesses start to earn money.

More than one family member may be involved in the business, or perhaps the family

shares a number of micro-enterprises to ensure that the family has a consistent

income, regardless of the season. For example, one family may get sewing training for

a daughter, start poultry farming as a livelihood supplement, get motorbike mechanic

training for an older son and then start up a road side shop. Families can continue

making products on reduced cap for this period as their fledgling businesses start to

earn money. While none of these activities alone might provide for the entire family,

together they should help them live comfortably.

“ ”


Parallel community development and education support initiatives (ongoing)

These programs aim to assist families in being more resilient to health and financial

shocks which can disrupt their income earning ability.

Education support programs such as:

• teacher training,

• non formal classes,

• university scholarships

will help incentivise school attendance and improve the quality of education.

Ideally each family moves steadily through this four stage process. Many will jump

back and forth before they exit fully. Some will move quickly and some more slowly.

Some will vastly improve their incomes and others only modestly so. Some will even

drop out of the project. We know that no program or idea works for everyone. What

this approach does offer is a smoother, steadier approach to improving livelihoods

that, while not a one size fits all model, does cater to more of the people within the

community we work with all their diverse ranges of needs, skills, abilities and

potentials.


empowering communities inc. carpetsforcommunities.org

cfc annual report 2010/11

Documents

empowering communities

empowering mothers

risk children

executive team

founding purpose

microenterprise program

year of rapid growth

scholarships program