Models of community Models of community development among the development among the

urban poorurban poor

Applying principles of Applying principles of community development in community development in

poor communitiespoor communities

Bengali poet Rabindranath Tagore Bengali poet Rabindranath Tagore wrote a Gitanjali as a song wrote a Gitanjali as a song

offering….offering….

““God loves the humble and God loves the humble and lives among them. Those lives among them. Those who want to meet God who want to meet God should look for him among should look for him among the poor and lowly. Loving the poor and lowly. Loving service to them is the best service to them is the best form of worship of God”.form of worship of God”.

The wealth of the poor is….The wealth of the poor is….

Their unused labourTheir unused labour Most days the urban Most days the urban

poor only have poor only have piece work or part-piece work or part-time worktime work

Many of the urban Many of the urban poor have several poor have several hours each day of hours each day of unused time that unused time that can be directed into can be directed into a productive a productive activityactivity

How can we turn the unused labour How can we turn the unused labour of the urban poor into wealth?of the urban poor into wealth?

Create productive Create productive well paid workwell paid work

Teach the value of Teach the value of their unused labourtheir unused labour

Find local materials Find local materials that can be made that can be made into creative into creative productsproducts

Form a co-operative Form a co-operative activity that a group activity that a group of poor workers can of poor workers can enjoy togetherenjoy together

The urban poor are exploited..The urban poor are exploited..

By evil powers that By evil powers that seek to destroy the seek to destroy the quality of their quality of their community lifecommunity life

By ethnic, social, and By ethnic, social, and spiritual factions that spiritual factions that divide the community divide the community and keep it powerlessand keep it powerless

By the rich and the By the rich and the poor who pay them the poor who pay them the least possible pay in least possible pay in return for their labourreturn for their labour

By unscrupulous By unscrupulous politicians, politicians, bureaucratsbureaucrats

By five major vices By five major vices that plague the poorthat plague the poor

a)a) Alcohol addictionAlcohol addiction

b)b) Drug addictionDrug addiction

c)c) Immorality and Immorality and sexual exploitationsexual exploitation

d)d) GamblingGambling

e)e) Criminal gangsCriminal gangs

All these powers seek to destroy…All these powers seek to destroy…

The quality of family The quality of family and community life in and community life in poor communitiespoor communities

Fear, hatred, envy, Fear, hatred, envy, pride, lust, greed and pride, lust, greed and selfishness reigns in selfishness reigns in hearts and minds of hearts and minds of the poorthe poor

What is the answer to What is the answer to this problem?this problem?

How can quality How can quality community life community life become a reality become a reality among the poor?among the poor?

Even well-meaning Non Even well-meaning Non Government Organisations keep Government Organisations keep

the urban poor powerless…the urban poor powerless… The dependency model –The dependency model –

An NGO supports a An NGO supports a school, medical clinic, school, medical clinic, water project, electricity water project, electricity project, etc among the project, etc among the poor. They give money poor. They give money to do the project, as long to do the project, as long as they give the project as they give the project continues – the poor are continues – the poor are dependent on charity dependent on charity

When the project ceases When the project ceases the poor become the poor become disillusioned and even disillusioned and even angry or violentangry or violent

The micro-credit model.The micro-credit model. Poor individuals are Poor individuals are given loans (usually given loans (usually women) to commence women) to commence or expand small or expand small businesses. They pay businesses. They pay back the loan from back the loan from profits over 1-2 years. profits over 1-2 years. As their business As their business expands they often expands they often employ poor people on employ poor people on very low wages and very low wages and they are exploited while they are exploited while the borrower gets rich. the borrower gets rich. The poor need a fairer The poor need a fairer business model.business model.

The co-operative model seeks to The co-operative model seeks to build a sustainable and viable build a sustainable and viable

community.community. Income generating Income generating

cooperative (IGC)cooperative (IGC) The income generating The income generating

cooperative is where a cooperative is where a group 5-20 commence group 5-20 commence a business based on a a business based on a creative idea that uses creative idea that uses local materials to make local materials to make hand-made products hand-made products that will appeal to the that will appeal to the rich in the city. This rich in the city. This transfers wealth from transfers wealth from the rich to the poor.the rich to the poor.

This model that seeks to build a This model that seeks to build a sustainable and viable community.sustainable and viable community.

A cooperative principleA cooperative principle

The income generating The income generating cooperative (IGC) cooperative (IGC) provides security to provides security to lender and participants lender and participants that an individual that an individual business does not. business does not. When a cooperative When a cooperative member is sick the member is sick the cooperative still pays cooperative still pays the member. The the member. The members can still meet members can still meet the loan payments.the loan payments.

The strengths of a cooperativeThe strengths of a cooperative Communal relationshipsCommunal relationships The co-operative The co-operative

develops caring develops caring attitudes for the welfare attitudes for the welfare of each member.of each member.

There is re-investment There is re-investment of profits into the of profits into the cooperative and cooperative and community.community.

There is strength in a There is strength in a communal project and communal project and greater security for greater security for capital borrowed or capital borrowed or invested.invested.

The strengths of a cooperativeThe strengths of a cooperative Values transformationValues transformation The co-operative will only The co-operative will only

work well if the members work well if the members develop a focus on develop a focus on values that are values that are sustainable and viable. sustainable and viable. These values build a These values build a caring community.caring community.

These values found in the These values found in the great Teacher, Prophet great Teacher, Prophet and Messiah Jesus Christ.and Messiah Jesus Christ.

He taught values called He taught values called the be-attitudes. They’re the be-attitudes. They’re universal principles for universal principles for building healthy building healthy community relationships.community relationships.

A co-operative business should be A co-operative business should be built on healthy community valuesbuilt on healthy community values

If the co-operative If the co-operative members do not have members do not have healthy relationships healthy relationships within the community it within the community it will not lastwill not last

Healthy values will Healthy values will make a sustainable and make a sustainable and viable co-operativeviable co-operative

Each member should Each member should care for and look after care for and look after the others - the others - interdependencyinterdependency

The members should be The members should be filled with joy filled with joy

Do unto others as you Do unto others as you would have them do would have them do unto you.unto you.

Hard work, knowledge, Hard work, knowledge, and wisdom makes a and wisdom makes a co-operative community co-operative community prosperprosper

The poor must not The poor must not exploit the poor – they exploit the poor – they will be no better than will be no better than the richthe rich

The poor must create The poor must create wealth to be free from wealth to be free from their many oppressorstheir many oppressors

The history of sustainable and The history of sustainable and viable human communities....viable human communities....

The Creator God has The Creator God has always wanted the always wanted the people He created to people He created to live in live in interdependent interdependent communitiescommunities where where every aspect of their every aspect of their life would be God life would be God glorifying.glorifying.

This history is found in This history is found in the Torah, the ancient the Torah, the ancient Book of the Jews.Book of the Jews.

The Early Christians The Early Christians (33AD to 313AD) (33AD to 313AD) followed these values followed these values too. They were strong too. They were strong in their joy-filled in their joy-filled community community relationships.relationships.

These early Christians These early Christians were not focussed were not focussed around a specialised around a specialised building (temple) until building (temple) until after 313 AD.after 313 AD.

King Constantine, a King Constantine, a pagan King, paganised pagan King, paganised Christianity from 313AD Christianity from 313AD onwards and eroded onwards and eroded the interdependence of the interdependence of the early Christians.the early Christians.

The Christians The Christians gradually served the gradually served the needs of needs of an institutionan institution rather than a rather than a community, and community, and gradually lost their joy. gradually lost their joy.

Community values that are viable Community values that are viable and sustainable….and sustainable….

The Be-attitudesThe Be-attitudes These teachings These teachings

commend the poor in commend the poor in spirit, the humble, the spirit, the humble, the gentle, those who gentle, those who comfort others, the comfort others, the merciful, the pure in merciful, the pure in heart, those who heart, those who hunger and thirst for hunger and thirst for justicejustice

The peacemakers who The peacemakers who reconcile families and reconcile families and communities who are communities who are divided divided

Thankfulness to your Thankfulness to your Creator – for your lifeCreator – for your life

Characteristics of people Characteristics of people who build good who build good relationshipsrelationships

They show unconditional They show unconditional love, peace, long-love, peace, long-suffering, joy, suffering, joy, gentleness, kindness, gentleness, kindness, tenderness, faithfulness, tenderness, faithfulness, meekness, patience, self-meekness, patience, self-control by not getting control by not getting drunk, not fighting or drunk, not fighting or violent, no substance violent, no substance abuse, no immorality.abuse, no immorality.

They show hospitality, They show hospitality, friendship, charity, faith, friendship, charity, faith, trust, respect and trust, respect and honour.honour.

Principles for selecting a business Principles for selecting a business activity for an IGC!activity for an IGC!

EthicsEthics Is it ethically sound?Is it ethically sound? Does it provide a Does it provide a

profitable return profitable return sufficient to pay the sufficient to pay the members a fair wage members a fair wage that is much higher than that is much higher than what they would get as what they would get as exploited slum workers?exploited slum workers?

Is their a local market Is their a local market for the products or for the products or services?services?

Is it fair and just?Is it fair and just?

Future viabilityFuture viability Will the project support Will the project support

an an entrepreneur/business entrepreneur/business manager who can manager who can supervise the supervise the cooperative for the cooperative for the workers?workers?

Will it employ 5 -25 Will it employ 5 -25 workers?workers?

What future do the What future do the products have in the products have in the market place? Is it a market place? Is it a short or long term short or long term future?future?

Principles for selecting a business Principles for selecting a business activity for an IGC!activity for an IGC!

ProfitabilityProfitability

Does the business Does the business activity produce activity produce sufficient profit to sufficient profit to provide a good standard provide a good standard of living from 40 hours of living from 40 hours work per week?work per week?

The wage rate should be The wage rate should be 5-10 times what the 5-10 times what the poor normally get for poor normally get for their labour in their their labour in their contextcontext

Family LifeFamily Life

Are the working hours Are the working hours such that they support such that they support a good relationships in a good relationships in the family and allow the family and allow time for giving time time for giving time into community into community activities so the wider activities so the wider community will benefit community will benefit from the life and from the life and wisdom of the co-op wisdom of the co-op membersmembers

Principles for selecting a business Principles for selecting a business activity for an IGC!activity for an IGC!

QualityQuality

Are the products and Are the products and services produced by services produced by the co-operative of the the co-operative of the highest quality, so highest quality, so they are attractive to they are attractive to the rich and glorify the rich and glorify God by their unique God by their unique creativity?creativity?

Market researchMarket research

Have the products or Have the products or services have been services have been made after made after consultation with the consultation with the end-users or end-users or customers in the customers in the marketplace so they marketplace so they are attractive them?are attractive them?

Community impact assessmentCommunity impact assessment Every new project Every new project

should have a should have a community impact community impact assessment report. assessment report.

This report assesses This report assesses the impact of the the impact of the project on the project on the communitycommunity

The impact must be The impact must be positive, sustainable positive, sustainable and viableand viable

Will this project Will this project provide new resources provide new resources and services to the and services to the community?community?

Some Some criteria for criteria for assessing community assessing community impact?impact?

What is the impact on What is the impact on the quality of family the quality of family and community life of and community life of the members?the members?

What is the What is the environmental impact environmental impact of the project?of the project?

What services and What services and materials will it use materials will it use and are they available and are they available locally?locally?

Terms used in Co-operative Terms used in Co-operative business modelsbusiness models

CapitalCapital The amount invested The amount invested

to start a project until to start a project until it has a positive cash it has a positive cash flowflow

Working CapitalWorking Capital The amount needed to The amount needed to

cover the labour and cover the labour and materials used to materials used to produce goods until produce goods until they are sold. Working they are sold. Working capital is calculated by capital is calculated by subtracting current subtracting current liabilities from current liabilities from current assets.assets.

InvestmentInvestment The amount contributed The amount contributed

to the capital of a to the capital of a business by the business by the members so the members so the business will have business will have enough capital to enough capital to operateoperate

SavingsSavings The portion of a The portion of a

persons income that persons income that they do not spend so it they do not spend so it can be invested and can be invested and produce an income or produce an income or cover a period of rest or cover a period of rest or incapacity.incapacity.

Definitions of business termsDefinitions of business terms ProfitProfit The surplus amount of The surplus amount of

income over the cost income over the cost of sales and the of sales and the expenses of running a expenses of running a business business

Return on CapitalReturn on Capital The percentage of The percentage of

profit to the capital profit to the capital introduced into the introduced into the business. This amount business. This amount needs to be greater needs to be greater than the cost of than the cost of interest on borrowed interest on borrowed fundsfunds

BudgetBudget The discipline of The discipline of

producing an accurate producing an accurate estimate of the income, estimate of the income, cost of sales, and cost of sales, and expenses of a businessexpenses of a business

Cash Flow Cash Flow The amount of cash The amount of cash

produced by a business. produced by a business. The cash inflow needs The cash inflow needs to be greater than the to be greater than the cash outgoings once cash outgoings once the initial capital has the initial capital has been used up.been used up.

DefinitionsDefinitions Cooperative/CollectiveCooperative/Collective A business with a A business with a

number of members number of members who all have an equal who all have an equal share in the businessshare in the business

Member/InvestorMember/Investor The owners of the The owners of the

business or the risk business or the risk takers, who have takers, who have invested their savings invested their savings to provide the capitalto provide the capital

If these members do If these members do not have capital they not have capital they may have to borrow may have to borrow funds to contribute to funds to contribute to the co-op.the co-op.

Security/CollateralSecurity/Collateral Bankers usually require Bankers usually require

security for a loan. security for a loan. They want to secure They want to secure the loan over an asset the loan over an asset they can sell if the they can sell if the business failsbusiness fails

Bank/Mutual FundBank/Mutual Fund A Bank is a place A Bank is a place

where people invest where people invest their savings and the their savings and the Bank lends those funds Bank lends those funds to people needing to people needing capital for a business capital for a business venture. A Mutual Fund venture. A Mutual Fund is a Bank owned by the is a Bank owned by the borrowers of the fund.borrowers of the fund.

DefinitionsDefinitions

SustainableSustainable

Sustainable is an Sustainable is an enterprise that has enterprise that has enough capital, assets enough capital, assets and resources to and resources to continue without a continue without a further injection of further injection of capital. It uses capital. It uses resources in a way resources in a way that replenishes what that replenishes what it uses.it uses.

ViableViable

Viable is the type of Viable is the type of business enterprise business enterprise that makes enough that makes enough profit to keep going profit to keep going without further capital without further capital and makes a return on and makes a return on the capital that gives the capital that gives the owners a good the owners a good return and pays wages return and pays wages that are sufficient for that are sufficient for people to live on. people to live on.

DefinitionsDefinitions LoansLoans A loan is money A loan is money

advanced to a advanced to a borrower by a lender at borrower by a lender at an agreed interest an agreed interest rate. Usually the lender rate. Usually the lender wants security over an wants security over an asset in case the loan asset in case the loan is not paid back. This is not paid back. This type of lending is type of lending is usually not accessible usually not accessible to the poor because to the poor because they have no assets. they have no assets.

Micro-creditMicro-credit FundsFunds Micro-credit loans are Micro-credit loans are

usually small loans usually small loans made by an organisation made by an organisation with charitable with charitable objectives and does not objectives and does not require security over require security over assets only the promise assets only the promise of the borrower to repay of the borrower to repay the loan. Some micro-the loan. Some micro-credit organisations credit organisations offer skilled advice in offer skilled advice in running a business in running a business in addition to the loan.addition to the loan.

DefinitionsDefinitions

DepreciationDepreciation The amount assets wear The amount assets wear

down each year they are down each year they are used. It creates a cash used. It creates a cash fund to replace the asset fund to replace the asset when worn out.when worn out.

Write off expired plant or Write off expired plant or equipmentequipment

Sometimes an asset Sometimes an asset becomes obsolete or wears becomes obsolete or wears out before it has been out before it has been depreciated to nil. The depreciated to nil. The balance is written off balance is written off against income when the against income when the asset is no longer usefulasset is no longer useful

Assets Assets Assets are the objects Assets are the objects

belonging to a business belonging to a business that help it produce its that help it produce its income or manage its income or manage its operation. Assets should operation. Assets should be depreciated over their be depreciated over their estimated useful life. estimated useful life.

LiabilitiesLiabilities These are the debts owing These are the debts owing

by the business. They by the business. They include monies owing to include monies owing to lenders, and accounts lenders, and accounts owing for purchasers and owing for purchasers and wages not yet paid. wages not yet paid.

DefinitionsDefinitions SalesSales The value of goods of the The value of goods of the

products produced by the products produced by the business and form the business and form the income of the business.income of the business.

Cost of SalesCost of Sales This is the cost of making This is the cost of making

the products made by a the products made by a business to create the business to create the sales income of the sales income of the business. It usually business. It usually includes purchases of raw includes purchases of raw material and wages paid to material and wages paid to manufacture the products manufacture the products produced for sale.produced for sale.

ExpensesExpenses These are the overhead These are the overhead

expenses incurred in expenses incurred in running the business which running the business which may not be directly may not be directly attributed to the production attributed to the production costs.costs.

MarketingMarketing This is the strategy used by This is the strategy used by

a business to make sure a business to make sure that all of its products are that all of its products are sold as soon as possible sold as soon as possible after they are produced. It is after they are produced. It is essential to the operation of essential to the operation of a business and products a business and products should not be produced until should not be produced until it is known that there is a it is known that there is a market for the products. market for the products. Products should only be Products should only be made to the customers made to the customers requirements.requirements.

DefinitionsDefinitions ManagementManagement This is the skill requiredThis is the skill required to to

ensure the business is ensure the business is successful. A Manager successful. A Manager brings together all the brings together all the resources of the business resources of the business in a strategy called an in a strategy called an Annual Operating Plan Annual Operating Plan (AOP) to ensure the (AOP) to ensure the success of the business. success of the business.

SupervisorSupervisor The person who manages The person who manages

the production of the the production of the products of the business products of the business and ensures that quality and ensures that quality standards are achieved standards are achieved

Production planningProduction planning The supervisor plans the The supervisor plans the

production of the business production of the business to ensure that all the to ensure that all the materials and labour the materials and labour the business requires to be business requires to be successful. It is essential successful. It is essential that raw materials are that raw materials are delivered on time so no delivered on time so no labour is wasted in the labour is wasted in the production process.production process.

Hourly rateHourly rate The amount paid to The amount paid to

workers for each hour of workers for each hour of their labour used in the their labour used in the production process. production process.

Reporting business results!Reporting business results! Monthly reportingMonthly reporting Every month a well Every month a well

managed business managed business should produce a should produce a report that shows how report that shows how much the business has much the business has made in that month. made in that month. This is an important This is an important management tool that management tool that management uses to management uses to make decisions for the make decisions for the effective management effective management and planning of the and planning of the business. business.

Reporting business results!Reporting business results! Annual accountsAnnual accounts These are the These are the

comprehensive comprehensive accounts of a business accounts of a business produced as soon as produced as soon as possible after the end of possible after the end of each year that show each year that show how much profit the how much profit the business has made, business has made, what amount can be what amount can be paid to shareholders, paid to shareholders, and how much tax is and how much tax is payable to the payable to the Government authorities. Government authorities.

What is a business plan?What is a business plan? This plan is developed This plan is developed

before a business starts before a business starts to show to show how muchhow much capitalcapital is needed to is needed to fund the business. fund the business.

It also shows It also shows how muchhow much profitprofit the business will the business will make and how fast the make and how fast the capital can be paid capital can be paid back once the business back once the business starts.starts.

This plan This plan overviewsoverviews all all aspects of the business aspects of the business operation and what will operation and what will be needed to be needed to ensure ensure success.success.

Sales

Costs

Profit

Be fruitful and multiply…Be fruitful and multiply…

This is the Creator God’s This is the Creator God’s first commandfirst command to to mankindmankind

Every co-operative Every co-operative should seek to plant, should seek to plant, fund and mentor fund and mentor another community into another community into an an “Income Generating “Income Generating Co-operative” (IGC)Co-operative” (IGC)

This is how This is how we keep we keep planting joy-filled planting joy-filled communities among the communities among the urban poor.urban poor.

Good relationships with the local Good relationships with the local authorities…authorities…

It is very important that It is very important that Income Generating Co-Income Generating Co-operatives (IGC’s) have operatives (IGC’s) have good relationships with good relationships with and support local and support local municipalities.municipalities.

Every community needs Every community needs water, sanitation, rubbish water, sanitation, rubbish collection, electricity, good collection, electricity, good roads and good local roads and good local Government.Government.

The members of the co-op The members of the co-op should be advocates for should be advocates for the poor through their the poor through their relationships with local relationships with local authorities.authorities.

Workshop – activity?Workshop – activity?

Form groups of 6-Form groups of 6-10 people and 10 people and discuss the ideas discuss the ideas group members group members have to develop an have to develop an income generating income generating cooperative (IGC).cooperative (IGC).

Use the worksheet Use the worksheet provided to record provided to record the important the important statistics.statistics.

Use the manual Use the manual provided to develop provided to develop a business plan for a business plan for the two best ideas the two best ideas that members of that members of your group have for your group have for an income an income generating co-generating co-operative (IGC).operative (IGC).

How long will it take How long will it take to pay back the to pay back the capitalcapital