A Corporaid article by Katharina Kainz-Traxler
The largest NGO in the world does not come from the USA or Europe, but instead from a developing country: BRAC from Bangladesh reaches around 135 million people with its social programmes and enterprises. The recipe for success: innovation, evaluation and courage to do great things.
Before we begin, this corporAID article does not claim to cover everything. In the pages that follow we focus on BRAC – one of the largest development organisations in the world. BRAC is active in so many areas that even longstanding employees lose track of the overall picture. Andrew Jenkins explains that this happens to him regularly. Jenkins leads the Research Department and is therefore engaged in a field of activity which should actually make seeing the overall picture possible. However, ‘BRAC is constantly in motion, they do something new every day – we have a driving school, an internet provider, fishing businesses, mobile phone services – so much it’s unbelievable. Recently I suggested the idea of a radio station to a colleague – only to find out that we’ve had one for a long time.’
BRAC, with 120,000 employees and around 100,000 volunteers, reaches around 135 million people in twelve countries in Asia, Africa and The Caribbean. According to author Ian Smillie, who portrays BRAC in his book Freedom from Want, the organisation is ‘undoubtedly the largest and most diverse social experiment in the developing world.’
Nevertheless, apart from the areas in which BRAC is active, the NGO is all but unknown. New York Times journalist, Nicholas Kristof, tweeted: ‘BRAC is the best aid organisation that you’ve never heard of’.
So who or what is BRAC, and what is it about this organisation, apart from its size, that makes it so special?
Born from catastrophe
The name of the development giant offers our first clue. The four letters of BRAC once served as an abbreviation for the Bangladesh Rehabilitation Assistance Committee. When the NGO was founded in 1972, it was really only thought of as a temporary relief project. Two years before, a cyclone wreaked havoc, costing the lives of more than a half a million people. A few months later the war of independence broke out against Pakistan. At the end of the conflict the country was admittedly free, yet lay in ruins.
BRAC founder, Sir Fazle Hasan Abed, wanted to contribute to the rebuilding of his destroyed homeland. In the early 70s Abed, an accountant trained in England, led the Finance Department of oil company Shell in Bangladesh. He sold his home in London and with the proceeds, together with one of the first donations from the British NGO Oxfam, began to provide disaster relief. In the region of Sulla he distributed food to the victims of the cyclone and war refugees returning home. He also built houses, clinics and boats for fishermen. In the first year alone 14,000 bamboo shelters were erected – when only 10,500 had been planned. Incidentally, over-delivering against already ambitious goals is a trademark of BRAC to this day.
Abed quickly realised that disaster relief only works short-term. Reflecting on the organisation’s beginnings, the still highly active 78-year old said, ‘The poverty of the country was so prominent and endemic that I simply couldn’t move away’. Abed stayed, renamed the NGO the Bangladesh Rural Advancement Committee and pursued a mission to support the people and country long-term. ‘We wanted to give them better prevailing conditions to find their own way out of poverty’. Women stood – and stand today – as drivers of development for BRAC. For this reason many of the programmes give priority to empowering women – for example, improving access to education for girls; educating women on health issues, law or finance; as well as providing easy access to jobs and microcredit.
During the course of the century the organisation steadily grew and worked increasingly in cities. That had consequences for the name, as ‘rural’ suggested a local limitation and ‘Committee’ a rather small initiative. The NGO has been called simply BRAC since 1992.
Pilot, perfect, scale up
When Andrew Jenkins introduces his employer today, he laughingly speaks of a ‘BINGO’ – an abbreviation for ‘Big International NGO’ and one that is appropriate for BRAC. To name just two examples: BRAC is the largest private provider of secular education, running 40,000 schools in seven countries. The NGO also runs one of the largest microcredit institutions in Bangladesh, with four million customers and loans worth $1.5 billion paid out in 2013.
Experts praise the organisation above all for the innovative methods they use to reach social aims. BRAC confirm this with a certain ‘go-get-‘em mentality’: ‘We don’t puzzle for a long time over the perfect solution. Instead, we set up programmes relatively quickly, adapt them and constantly evaluate. The idea will then be set up more widely, or rejected’, says Jenkins.
In the 70s Abed set up a Department for Research and Evaluation, where 80 people work today. For new projects two percent of the budget is always reserved for evaluation purposes. For Stamford academic Christian Seelos, the willingness to systematically learn is what makes BRAC innovative. ‘As opposed to development organisations who have a ready-made solution, BRAC say: We don’t know the solution. The social problems in Bangladesh are many and diverse. We must experiment and systematically learn what works and what doesn’t.’
Success with electrolyte
An early and pioneering success, which Abed still likes to speak about in interviews today, was BRAC’s Oral Therapy Extension Programme (OTEP). In the 1970s hundreds of thousands of children died of dehydration in Bangladesh as a result of incorrectly handled diarrhoea-related illnesses. BRAC employees discovered that a simple electrolyte solution made of sugar, salt and water could prevent death from dehydration in most cases. An important prerequisite was that the ingredients had to be mixed in the exact proportions.
BRAC next wanted to test, within the limits of a pilot-programme, how to teach the production of the drink to illiterate mothers. They sent trainers to two villages and paid them dependent on their success – the more the mothers remembered, the higher the pay. An inspector visited the families one month after the training and tested whether the mothers could accurately make the electrolyte solution. BRAC worried whether the inspectors were actually doing their work or whether they simply filled the forms in themselves. They found a simple solution – when the trainer visited a household, they asked for the name of the youngest child, but didn’t give this to the inspector. The inspectors had to find out the name of the youngest child for themselves. When BRAC subsequently received forms with an incorrect name, they were strict and gave notice to the inspector.
OTEP was steadily adapted and expanded. By 1991, with the help of thousands of health workers, BRAC reached 14 million households in villages across the country. Since then the electrolyte solution has become established as a household remedy and, experts estimate, child mortality has fallen by about half.
BRAC were able to learn something from the programme: the importance of good planning, rigorous monitoring of success and effective recruitment of staff. It also gave them the necessary self-confidence, to set up future programmes on a large scale.
From time to time BRAC has been described as the ‘most commercially minded NGO’ (The Economist). Jenkins confirms that BRAC is highly business orientated and suspects that this has its origins in Abed’s professional past with Shell. The business-like way of thinking is evident for instance, through strict auditing of internal finances and the considered development of employees in BRAC’s training schools. This is also evident in BRAC’s desire to be financially independent.
In the early days Abed recognised that he needed money to play with for the realisation of new ideas: ‘It is not as easy to obtain donations for innovations compared to things which have already proven to be reliable. However we always want to try new things so that we can develop in the right way.’
For BRAC ‘to develop in the right way’ means to make themselves independent of external influences. Not only does this increase the scope for independent decisions, but also becomes necessary with increasing success. Last year BRAC spent a total of $728 million on its programmes (in 1980 it was just $780,000). Around $200 million a year comes from strategic partners, like the British and Australian development agencies, and supporters like UNICEF or The Global Fund. Today these funds make up only around 27 percent of the budget, which is in contrast to the NGO’s early days when it was dependant on donations. The majority of the remaining budget comes from the micro finance sector, from investments, and not least from the successes of social enterprises. The financing of the Oral Therapy Extension Programme was only possible at the time because BRAC generated profits from carefully managing a printing works.
Cross-subsidy is on today’s agenda. To date 18 ventures are active in a variety of areas such as animal food, solar power or salt, all under the umbrella of BRAC Enterprises. BRAC Enterprises reinvest half of their profit into the strengthening of their own businesses, while the other half is used to support social programmes. Incidentally the profits are tax free for BRAC because they remain within the NGO. Last year BRAC Enterprises made a total profit of €123 million. These funds are important to BRAC, however what the enterprises achieve for development is just as important. Jenkins says that these enterprises formed in the first instance to meet needs arising from the social programmes.
Milk with added value
For example, the reason BRAC run the second largest dairy in Bangladesh today is a result of the microcredit programme. BRAC stated that small loans would only be approved if their use was relevant to the fight against poverty. For instance, many of the borrowers bought cows, in the hope that with the sale of milk they would increase their income. However in their small, often isolated villages the demand for milk limped behind the supply. They hardly sold any, or sold it very cheaply. BRAC recognised that microcredit could only have the desired effect through a change in the prevailing circumstances. In practice this meant ensuring the milk reached a place where there were enough buyers – in the cities. Therefore in 1998 the NGO founded BRAC Dairy and built hundreds of chilling stations. The suppliers – at the time around 50,000 small time farmers – received a fair price for the milk, which was then made into yoghurt, butter or ghee in modern diaries. Today BRAC dairy, with the help of 500 employees, works with around 170,000 litres of milk a day and has a market share of 24 percent.
The NGO doesn’t just concern itself with the link between farmers and the market. They also look at the other end of the supply chain. As the breed of cows at the time only gave 3 litres of milk a day, they began breeding a locally adapted breed with significantly higher milk production. To do this BRAC began breeding bulls and trained 2,000 experts in artificial insemination, which is now carried out more than one million times per year. It’s also worth mentioning that BRAC produce animal feed for cows and packaging for their milk products.
Aarong – a Bangla word for village market – is a successful BRAC Enterprises brand. Around 65,000 craft workers, mainly women, make wedding saris, baby clothes, table cloths or shoes for Aarong. They can work independently from home or in an Aarong workshop. Designers set the styles and trainers carry out regular training sessions. Aarong looks to build its success through capturing the Zeitgeist (spirit of the times) and high quality products. ‘We want our customers to be convinced by good products and buy them, rather than our mission’, says Abed. This appears to be successful, the lifestyle brand is being sold across the country in 13 of their own shops and recently via an online shop too. They export to Europe and Japan and achieved sales of around $50 million dollars last year.
Stakeholders in place of shareholders
What differentiates BRAC Dairy and Aarong from purely commercial suppliers? ‘For our enterprises the fight against poverty is always the focus’, explains Jenkins. There are a dozen chilling stations at BRAC Dairy which would possibly never break even because of low volumes. Yet they are in ‘ultra-poor’ areas, where they give the chance of a good sale price to particularly poor people, and through this an income.
Aarong could also be more cost efficient. Instead of concentrating the production in a few central locations, the firm run 660 workshops in semi-urban, often rural areas, so that the craft women can stay with their families. Furthermore their staff cost more than elsewhere: they receive pay above subsistence levels (which is not customary in textile factories in Bangladesh), and on top of this they receive health checks, access to microcredit, a pension and free school places for their children amongst other benefits.
In the past century, undoubtedly with the support of BRAC, something positive has been achieved in Bangladesh. Admittedly the country mainly makes international headlines for fatal conditions in the textile factories or political unrest. Yet it has also fulfilled many of the United Nations Millennium Goals announced in 2000. The most important goal, the halving of poverty, was reached in 2012. Furthermore, the country has the lowest birth rate as well as the lowest mortality rate of children under five in South Asia – with the exception of Sri Lanka.
Above all Bangladesh has been achieving GDP growth of 6 percent for a number of years. Consequently it’s on course to leave behind its status as a Low Income Country. For BRAC this trend means that sooner or later they will have to do without the support of donors: ‘As soon as Bangladesh has the status of a Middle Income Country, even the most loyal donors will divert their development aid budget to comparatively poorer countries – even when there’s still a lot to do in Bangladesh’, Jenkins explains.
However, poorer countries are not seen by BRAC as rivals. On the contrary, for some time the NGO has exported its extensive know-how through a separate international foundation. The fact that BRAC comes from a developing country brings a sense of empathy, and the Muslim background of most of the employees is often an advantage.
BRAC’s first project abroad was in 2002 following the war in Afghanistan, as the devastating condition of the country reminded Abed of Bangladesh in the 1970s. Today BRAC is the largest NGO in Afghanistan. In 2005, after the tsunami, the NGO also became active in Sri Lanka, and then later in Pakistan, Uganda, Tanzania, South Sudan, Sierra Leone, Liberia, the Philippines and Haiti. At the moment BRAC health workers are in West Africa fighting to contain the Ebola virus, whilst BRAC teachers are teaching children the alphabet in hundreds of classrooms across the Philippines. ‘We adapt our programme to specific countries, yet the problems and desires of the poor are always similar’ explains Abed, who travels worldwide signing new partnerships and receiving honourable awards – amongst them the title ‘Sir’.
There’s much more to say about BRAC. For instance, that the NGO have founded their own bank in order to provide SMEs with loans, which has indirectly created 1.5 million jobs; or that since 2001 there has been a BRAC University where officials study the subject of compliance to make them resistant to corruption and therefore place Bangladesh on a better long-term footing. Yet as I already mentioned at the beginning, BRAC is simply too large to be able to explain its full story.
Background – A better Bangladesh (the box on p.20)
Bangladesh, with its mere 160 million inhabitants, achieved great progress by reaching the Millennium Development Goals (MDG). The main goal, to halve the number of people who must manage on less than one dollar per day, was met in 2012 according to the United Nations. There has also been success in a number of other areas such as the increase in the number of girls in primary education, as well as the lowering of the child mortality rate of those under five years old – in 2011 the number of still-born babies was 44 per 1,000 live-born which exceeded the target of the MDG. A successful programme of immunisation, the control of diarrhoea-related illnesses and vitamin-A supplements have contributed to this. There has also been progress in relation to maternal health – in 2001 the maternal mortality rate was 322 per 100,000 live-births, in 2010 this had fallen to 194. In the fight against serious illnesses, Bangladesh has reached the goals of identifying and curing tuberculosis and has achieved a significant reduction in the number of deaths from malaria.
Nevertheless there is still much to do. Goals such as ecological sustainability are hard to meet in one of the most densely populated regions in the world. Despite significantly improved access to drinking water and sanitary provisions, water quality is jeopardised by things such as arsenic and salt. Increasing the literacy rate amongst adults remains a challenge, as does the creation of enough jobs and fair pay, particularly for women. In the future the ability to provide the population with sufficient nourishment will also be a challenge for Bangladesh.
The original article can be found here.
This article was translated by Sarah Oliver, January 2015