The Business Side of a Non-Profit, Social Impact Company

An Interview with Claire Baker, Director of Development and Acting Country Director, LivelyHoods

By Mariga Thoithi

LivelyHoods is a nonprofit organisation creating employment for disadvantaged youth through training programs aimed at selling and distributing clean energy products in the slums, while at the same time working towards fighting climate change.

LivelyHoods is a great example of an organisation which was founded on non-profit, impact funding, but has a revenue model that aims the organisation towards self sustainability over the long-haul. It is a model that other social entrepreneurs in Nairobi can learn from. Where and how did you get your initial funding and how has the sustainability and funding journey been so far?

Our co-founders, back in 2011, were strong, ambitious and tenacious young ladies with a big idea and they needed funding. They first turned to their networks, and found that they had some connections to funders and impact investors who put in the first amounts to kickstart the organisation. It's also important to note that we have, from the beginning, generated revenue, which means the sale of the clean energy products helps to fund our work. As we have increased the scale of our operations w have also increased our sustainability, reaching over 50 percent. This means that half of our total budget comes from the sales of clean energy products, which we're incredibly proud of.

It's not been an easy journey, but from an early stage it's something we've deliberately focused on, so it's one of the things we constantly monitor and aim for, meaning we're efficient and deliberate about this.

What are your biggest success stories over the years?

Our biggest successes really are the incredible youth and women that turn their lives around with the support and though the opportunity that LivelyHoods offers them. We don't give handouts, we give training, support, and an opportunity to earn, learn and save. But it takes hard work and determination of an individual to make the most of what we offer.

Here's Rachel's story, one of our biggest successes, but also this is a personal success for her that she's proud of:

“Before Joining LivelyHoods I was just from a broken marriage. I was confused because I was literally dependent on my husband for everything and anything. When my marriage broke down I was devastated. I moved to Nairobi without any plans on how to get a job, and life was hard trying to get people to host me. I had just moved to Nairobi, rented my own house (a single room) and the house was empty and I could barely get rent to pay for the house, let alone food.

Since joining LivelyHoods I now never have to worry about what to eat or where to get money for rent. The best thing that happened is that a few months after joining LivelyHoods I got money to claim my kids’ custody, which came through, and I’m now able to care for them and even pay their school fees and their upkeep.

The fact that I can save with LivelyHoods gives me courage that my emergencies are catered for. I had never worked in a sales company and so I didn’t have any idea what I was doing, but I was given a chance here, given the skills I was missing, and it made me become one of the best sellers; I’m now a senior sales agent.”

What are the misconceptions that people have about your work?

People sometimes have a tough time reconciling the fact that we're a business-minded non-profit. They either imagine we should solely be focused on sales numbers and growth, or purely looking at the impact of our training. Juggling both at once, whilst aiming to be a financially sustainable social enterprise.

Oh and a small thing, when I mention we work in slums/informal settlements, almost everyone says the same thing: "Oh, Kibera?" We're in nine different informal settlements, and there are so many more across the country, but everyone just knows and talks about Kibera.

What are the biggest assumptions you made about your business model initially and how did you work towards correcting them?

We initially thought that youth wanted loans to start businesses. Everyone wants to be an entrepreneur, right? Wrong. Whilst everyone does dream of having their own business, the youth in Kawangware that we first worked with did not know how to handle such a loan, launch a business, have a business plan, and manage their finances in order to pay back a loan. They told us they just wanted jobs. So that's what we gave them!

Why were energy products, particularly solar product, the products of choice for Livelyhoods to both generate revenue and change lives? What has the reception been so far?

Again, going back to the beginning, we worked with a pilot group of youth in Kawangware, and we asked them what they could sell and what they wanted to sell. They were the ones who went out and surveyed the community and came up with solar products. That's what we started with, but soon branches out into clean cookstoves, which soon took over the solar, as they became more standardised and mass produced in Kenya. We recently redressed the balance, and now sell a mix of clean cookstoves, solar, and a few other products, such as water filters and household appliances.

What this means is that our impact is actually two-fold: job creation, AND environmental protection.

What are your expansion and growth plans for 2020 and beyond?

We of course have big plans! We're already in nine communities in Kenya, but there's a lot of areas where we still don't have any coverage, particularly more rural areas. Next year we're going to start expanding outside of the main towns into these more rural areas. We've also started tip-toeing into other countries, with small pilots with partners in Uganda and Tanzania. hopefully over the next few years we'll truly become a regional force to be reckoned with!

Ultimately, we want to become increasingly financially sustainable so that our operations fund themselves to a great extent and we can secure project-based funding for experimental and innovative projects within our existing training and distribution work.

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