PEF Social Enterprise Program Guidelines
The Peace Equity and Access for Community Empowerment Foundation or Peace and Equity Foundation (PEF) was established in 2001 by the Caucus of Development NGO Networks (CODE-NGO), the largest network of NGOs in the country. PEF was organized to manage an endowment fund for poverty reduction programs of NGOs and other civil society organizations.
In the last 10 years, the Foundation has reached out to 336,000 families in more than 30 poor provinces. Over 1,000 organizations have been provided with technical and financial support to implement programs in:
- microfinance
- rural and urban micro-enterprise
- aquaculture
- market promotion and linkages
- potable water systems
- solar lighting
- fuel efficient cook stoves
- access to medicines
- leadership training
- partnership with local governments
- advocacy for good governance
- various other poverty reduction initiatives
Beginning in 2011, the foundation will focus on developing social enterprises to help rural households gain better incomes and move out of poverty. It will build on proven social enterprise models and enable its civil society and community partners to become more entrepreneurial.
PEF envisions its new strategy to increase self-sustaining households that are well-provided for their basic needs in life. The positive impact of social enterprise will also be felt through the socio-cultural growth, effective governance, cleaner environment and genuine empowerment of communities.
What is the new program thrust of PEF?
For 2011-2015, PEF will focus on social enterprise (SE) development as a strategy to achieve the following:
Rural households have:
- productive assets
- savings & capital formation
- decreased vulnerabilities of their livelihood, life and properties to the effects of climate change and social conditions
- mechanisms for wealth creation
- secure and continuing access to resources including technology for productive enterprises
- secure and decent living conditions (shelter and basic services)
- sufficient water, lighting, cooking fuel, electricity and/or heat for product processing from affordable and environment-friendly energy sources
Rural communities have:
- Vibrant local economic activities
- Sustainable community oriented enterprises
- Empowered organizations
What type of partnerships and programs will be supported?
PEF shall primarily support partnerships and programs that will build, promote and scale up social enterprises.
PEF believes that successful SE programs and partnerships must have the following fundamental characteristics:
- Value chain driven to focus on the barriers and potentials of growth of the enterprise.
- Business oriented to highlight partnerships between the private and public sectors and adoption of and compliance with standards such as fair trade, operating above break-even, certification of good governance or industry best practices.
- Market based to ensure that products (food, non-food) and services (business development services, etc) are responding to a real demand or market gap or adequately meeting the needs of consumers.
- Development focused to ensure that the program will create social impact among rural households and communities as expressed in the PEF strategic plan. PEF, for example, will set up a “Climate Change Fund” to offer financing and business development services to programs related to climate-smart agriculture and renewable energy.
Who are qualified partners?
PEF will continue supporting non-profit civil society organizations such as cooperatives, people’s organizations, non-government organizations, faith-based groups, and academic and private sector foundations. In pursuit of its new strategic direction, PEF will also actively develop and support partnerships with “for-profit social entrepreneurs.”
As in the previous years, PEF will strongly encourage its prospective partners to involve or secure the participation of relevant government agencies, local government units, and community-based traditional or socio-cultural decision making units in the implementation of their projects.
What forms of development partnerships are available?
The scope of partnerships will be expanded. Financial and business development services will be the key thrust in the development of social enterprises. Thus, PEF may provide management and business services to an SE partner.
In view of its focus on social enterprises, PEF will also expand its modes of financial assistance to include fund management, guarantee agreement, joint ventures and equity partnerships. In previous years, interest-bearing loans and grants were the main form of development financing assistance provided.
Grants for general development support activities, e.g. institutional capacity building, development fora and small and short-term relief operations will still be available
In financial partnerships, a 20% counterpart (cash, labor, materials, intellectual property valuations, research investments) on the total project cost will be negotiated with the prospective partner. The need for security for financial loans will be handled on a project-to-project basis.
How will partnership and program proposals be developed?
The Foundation will take an active role in the development of proposals especially those related to SE. Prospective partners will be required to submit an Initial Project Outline (IPO). The IPO will determine the type of support that PEF is able to provide.
Promising IPOs will then be jointly developed by PEF with business or SE experts to be selected by PEF and the prospective partner. The full SE Project Proposal must be approved by the board or decision-making unit of the prospective partner before it is finally submitted for the consideration of PEF.
PEF will adopt a “double due diligence” (3D) approach in the assessment of proposals. The business practices and/or performance, financial assumptions, governance, organizational structure and development track record of the prospective partner will be part of the project assessment criteria.
Where will proposals be submitted?
All proposals can be submitted to pef @ pef.ph.
The guidelines of the new social enterprise programs are still being fully developed. Please check the PEF website (www.pef.ph) for regular updates and additional information.