Download - CFC Annual Report 2010/11
Page 2 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
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 3 of 34
Fro
m t
he C
EO
…
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
Page 4 of 34 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 �
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
ou
t U
s
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 5 of 34
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
Ou
r Team
Str
uctu
re
In J
an
ua
ry 2
01
1,
the
ne
w e
xecu
tive
te
am
be
ga
n t
he
ir 1
2 m
on
th c
on
tra
cts.
Fro
m t
his
po
int
on
wa
rds,
th
e o
rga
nis
ati
on
al s
tru
ctu
re w
as
as
foll
ow
s:
Board
of
Dir
ect
ors
Lucy
Ch
an
, K
evi
n C
ha
n,
Me
lissa
Will
ou
gh
by,
Ric
ha
rd K
ho
o,
Da
vid
Ba
con
Chie
f Execu
tive O
ffic
er
Kyl
ie H
an
sen
Fin
ance
Man
ager
Dick Hoffmann
Sale
s an
d M
ark
eti
ng
Man
ag
er
Rob Pfeiffer
Exte
rnal
Rel
atio
ns
Man
ag
er
Luana Noroes
Lo
gis
tics
Man
ag
er
Henry M
cQuinn
Hu
man
Reso
urc
es M
an
ag
er
Marko Ivkovic
Cam
bodia
n C
ountr
y M
anager
Mo
ng
he
ng
Se
ng
(H
en
g)
Po
ipet
Off
ice
Man
ager
Chhut Naren
Fiel
d W
ork
er
Emda
So
cial
Wo
rker
Kimsreang Kun
Fiel
d W
ork
er
Vanny
Fiel
d W
ork
er
Hokseng (Seng)
Off
ice
Ass
ista
nt
Bunchhuon M
orn
Pro
duct
Develo
pm
ent
Manager
Juju
Ha
ifa
wi
Pro
gra
m D
evelo
pm
ent
Off
icer
Cla
y N
ayt
on
(A
YA
D)
Org
anis
ati
onal
Develo
pm
ent
Off
icer
Da
vid
Ba
con
(V
IDA
)
Ca
mb
od
ian
op
era
tio
ns
Au
stra
lia
n o
pe
rati
on
s
Ex
ecu
tiv
e T
ea
m
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
Page 8 of 34 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 �
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.
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 9 of 34
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.
Ou
r C
hap
ters
Aro
un
d A
ust
ralia
Page 10 of 34 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 �
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.
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 11 of 34
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.
Page 12 of 34 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 �
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
s an
d M
ark
eti
ng
From Robert Pfeiffer
Sales and Marketing Manager
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 13 of 34
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.
Page 14 of 34 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 �
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.
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 15 of 34
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
du
ctio
n a
nd
Lo
gis
tics
Page 16 of 34 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 �
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.
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 17 of 34
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
stra
lian
Pro
ject
s
Page 18 of 34 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 �
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
bo
dia
n O
pera
tio
ns
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 19 of 34
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.
Cam
bo
dia
n P
rog
ram
s
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.
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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.
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 21 of 34
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.
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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.
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 23 of 34
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.
“
”
Perf
orm
an
ce S
um
mary
Page 24 of 34 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 �
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
an
cial S
um
mary
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 25 of 34
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.
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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
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 27 of 34
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.
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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.
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 29 of 34
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.
Page 30 of 34 EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 �
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.).
� EMPOWERING COMMUNITIES | CARPETSFORCOMMUNITIES.ORG | 2010/11 Page 31 of 34
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.
“ ”
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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.