# **How a Corporate Foundation Can Change the Way an NGO Does Business. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**The Partners.**

Founded in 1951 and based in the city of Córdoba, the ARCOR Group is an
Argentine multinational that produces over 1,500 types of candies,
chocolates, crackers and other foods. With 31 factories and 13,000
employees, ARCOR exports to over 100 countries worldwide. The ARCOR
Foundation was created in 1991 to honor ARCOR Group founders and to
improve the standard of living of Argentines. Its staff of seven
administers an annual program budget of one million pesos.

"A business is well when the community is well,' my father \[ARCOR Group
founder Fulvio Pagani\] always used to say...It is difficult to imagine
greater business results without improved social scenarios. And to
improve them, in our perspective, is to support the community not just
in resolving a need, but also to encourage its spontaneous initiative to
organize itself and act with autonomy in response to other needs. This
is why we work with civil society organizations. Amid a panorama of
scarce resources and a complex and growing social demand, we have the
duty to do good, and to apply the same criteria of quality that apply to
our business work to the development of our social commitment."

*Lilia M. Pagani, President, ARCOR Foundation*

In 1996, the ARCOR Foundation and the Inter-American Foundation (IAF)
created a grant-making fund to support non-governmental organizations
(NGOs) in five Argentine provinces---ARCOR's first experience of this
type. In addition to benefiting numerous people and communities, this
fund allowed the ARCOR Foundation to transfer business principles to
recipient groups, mobilize public & private resources to meet the fund's
goals, and formalize and professionalize its own operations.

**FEPIC.*\
***Between 1996 and 2000 the ARCOR Foundation and the IAF contributed
\$240,000 each to create the Fund for Training, Education, Prevention
and Community Integration (FEPIC). FEPIC financed 22 NGOs in the areas
of nutritional health, at-risk youth and non-formal education. The
greatest impact of the fund, however, has been in the intangible
transfer of business acumen from ARCOR to its partners in the community.
The IAF was critical in getting ARCOR to consider the community as its
partners.

The ARCOR Foundation organized periodic exchanges among grantee
organizations working in the three thematic areas to compare strategies,
coordinate efforts, and analyze and resolve difficulties. Periodic
monitoring visits helped groups adjust their strategies and resolve
implementation problems along the way. Furthermore, the ARCOR Foundation
supported publications such as a highly demanded book that summarized
the methodologies and results of their nutritional health projects.

Through FEPIC, the ARCOR Foundation made a dramatic philosophical and
operational shift. Previously, the ARCOR Foundation responded to
scattered requests for donations from individuals or entities such as
schools and hospitals. FEPIC marked a significant change in ARCOR's work
by orienting its support to NGOs with a focus on community development
and by fostering ongoing projects and programs with clear funding
criteria.

In the process, ARCOR shifted from making donations to making social
investments, from being reactive to being pro-active, and from operating
informally to operating with greater specialization, order, and
professionalization. As a result of these changes, FEPIC allowed the
ARCOR Foundation to shift from depending solely on its own resources to
working in similar partnerships with other national and international
entities, both public and private.

Finally, as a result of this project, the ARCOR Foundation adopted the
IAF's Grassroots Development Framework for measuring project results.
Now, ARCOR and its grantees know exactly how many project beneficiaries
have increased skills and knowledge in areas ranging from child
development and nutritional education (including breastfeeding) to
reading & writing and community gardening. According to Ms. Peralta
Director of SEAP, a grantee of FEPIC, "we now have data about results
that is both qualitative and quantitative. We continue to gather
information using the same indicators even though the project with ARCOR
is formally over."

FEPIC's grants mobilized \$1.3 million in counterpart resources such as
donated labor, use of community facilities for training programs, and
matching funds leveraged from public and private sources. In other
words, each dollar provided by the ARCOR Foundation leveraged four
dollars in turn---one provided by the IAF and three mobilized by the
grantee organizations. Several grantees went on to successfully secure
funding from public and private sources to sustain their projects.

To understand the value added the IAF had on ARCOR's philosophy and, in
turn, the value added ARCOR had on the NGOs supported through FEPIC,
consider the following projects:\
\
**Cáritas. Transforming Individuals and Communities.***\
*FEPIC made a grant to Cáritas of Córdoba City to provide training in
nutrition to women who cook for ten community soup kitchens, who in turn
trained women at twenty additional sites. Unforeseen benefits of this
program include the transformation of these soup kitchens into
sustainable community centers. Also, illiterate women became literate
community leaders capable of organizing and mobilizing resources for
income-generating activities for the adults and tutoring for the
children.

According to Cáritas' Celia Susana Fava, "in addition to the results at
the community level, there have been lasting results inside Cáritas.
Through this project we took on a business logic in our work, partly
from the financial and programmatic reports that were required. For the
first time, Caritas adopted the practice of planning, managing
project-level budgets, projecting growth, and measuring results." The
World Bank showcased this project in its Partnerships for Poverty
Reduction program.

**SEAP: Setting in Motion Community Development.\
**FEPIC made a grant to Córdoba's Servicio a la Acción Popular (SEAP) to
train five to ten "promoters" each in five impoverished communities to
develop and implement initiatives to serve at-risk youth. According to
SEAP's María Inés Peralta, "as a result of the training, we saw a
qualitative leap in the community work \[aimed at children\].
Furthermore, although the FEPIC project has ended, the promoters
continue to sustain projects that help these youth, especially
adolescents. We also created a center for educational orientation in a
very poor neighborhood. The cooperative there has taken responsibility
for the children's library and other initiatives and has
institutionalized these programs."

This project is now used as a case study for students preparing to be
teachers. Indeed, an unforeseen project result has been SEAP's increased
ability to secure the inclusion of topics related to working with
impoverished students in the university curricula for teachers---an
absolutely critical but totally lacking element of their training. Ms.
Peralta adds, "the promoters have lost their fear of speaking in public
and have become actors with weight in the eyes of professionals,
academics and public officials. They often become involved in situations
in their communities such as domestic violence, which leads to processes
of community organizing and intervention with public officials. In other
words, women working at soup kitchens or day-care centers have now
expanded their work and set in motion community development processes."

According to Ms. Peralta, "NGO's like SEAP normally focus on the
extended process of our work, but the ARCOR Foundation insists that its
grantees show products as well. This insistence was good for us. We
learned that we could show process through our products, for example
written material that made our project replicable. This is something
that would never have occurred to us alone." She added, "at the same
time, ARCOR was absolutely respectful of our institutional priorities
and never required us to adjust our objectives, policies or activities.
Our relationship with ARCOR has been agile, dynamic and harmonic."

**Lessons Learned:**

-   FEPIC's results have been sustainable. According to ARCOR Foundation
    Manager Claudio Giomi, "for a project to be sustainable, the
    initiative must come from the community organization. Also,
    strengthening those organizations and their people is what makes the
    results sustainable. The projects funded by FEPIC tend to create
    capacity for replication. That is, they leave installed resources
    and knowledge that later are multiplied in other communities and
    organizations;"

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-   The impact on the corporate donor of administering a small-projects
    fund can be stunning. In the words of Claudio Giomi, "the wisdom and
    experience acquired through our partnership with the IAF transformed
    all of our work. It also made it possible for us to leverage
    additional resources by establishing new partnerships with
    corporations and other entities in Argentina."

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***Martha Farmelo*** *is a former Representative of the Inter-American
Foundation and is currently a fellow of the Institute of Current World
Affairs based in Buenos Aires, Argentina.*