EFTA01159009.pdf

Dear Members of GDLG and others joining us on Friday: Please see attached a rough working draft of the Urban Poverty Special Initiative Refresh Manuscript. Please note that as per agreement with Jeff and Sylvia, this is deliberately heavily weighted on Look Back and Scoping with a rougher, more open-ended Look Forward that we hope to refine further and discuss in our co-chair meeting and flesh out in future analysis and grantmaking. As per our discussion in the GDLG retreat last year, what we are trying to do is make the shift from a pure learning initiative focused largely on means — capacity and voice — towards one starting to think more deliberately about ends — impact on the lives of the poor. In a hugely complex and dynamic space, there are no easy answers to this question, but we have agreed with Jeff and Sylvia that after nearly four years of learning it is a good time to take stock and try to craft a more deliberate path forward while keeping urban poverty as the "anchor" issue for Special Initiatives. We know we have an enormous amount still to learn but continue to believe that this is an area of work with huge potential for impact and also some synergies with other parts of GD and GH. We very much welcome your comments and advice and look forward to a great discussion. Thank you... Melanie and Mark DRAFT 1 EFTA01159009 Urban Poverty Draft March 15 LOOK BACK Common Themes and Targets 4 1. Strengthening Community-Level Organizations 4 2. Developing Livelihood Opportunities for the Urban Working Poor 5 3. Promoting Inclusive Municipal Governance 6 Lessons from our Grantmaking 7 Lesson 1: "Nothing for us, without us" 7 Lesson 2: Follow the Money 8 Lesson 3: Good governance is more than a process 9 Lesson 4: Sometimes we miss the target 10 Overarching Themes 12 Going to Scale 12 Finding the Right Partner 13 Creating an Enabling Legal and Regulatory Environment 14 How we are catalytic 14 Administrative and Institutional Learning 15 Challenges 16 Institutional 16 Programmatic 16 Funding Trade-offs 16 SCOPING Historical Perspectives and Alternative Views on Urban Development 18 Where are all the people going and why? Migration Patterns and Population Trends in the Developing World 20 The Role of the City in Poverty Alleviation 20 How do the poor survive in cities? The Urban Working Poor and Their Stake in the Economy21 LOOK FORWARD Opportunity Map 24 2 EFTA01159010 Look Back The 18 months of scoping we undertook in 2005-6 before receiving authorization to commence grantmaking in 2007 led us to conclude that the incredible pace and scale of urbanization in the developing world required a rethinking of traditional methodologies to meet the needs of the rapidly growing numbers of poor living in slums. In particular, we realized that the meager donor support offered for urban development was largely dysfunctional, disconnected from the realities on the ground, and for various reasons — not reaching the poorest. The dysfunctional funding stems from poorly planned and executed pilot projects not taking into account the multidimensional nature of urban poverty. The disconnection arises from governments moving towards political, regulatory and economic decentralization while donors remaining wedded to an outmoded model of support at the central level, trapping funds centrally. From this starting point, we identified two gaps: lack of capacity for organizations working on the ground with the urban poor and failure to integrate the voice of the poor into the municipal planning process. Our working theory of change therefore was that investments into building community and municipal capacity would have a direct and measureable effect on the quality of life for the urban poor and effect change across multiple key areas such as housing, municipal finance, urban planning, and governance. As a learning initiative, we began with a set of questions, but not a clear theory of change. These questions helped us navigate the landscape and inform our search for indicators of urban poverty alleviation. Because of our ground zero start and magnified by the multi-dimensional nature of the problem, our initiative has undergone several major shifts over the past few years. After our first year of grantmaking, we realized that process indicators were not sufficient to guide decision-making and that most of our partners were not only capable of but active in data collection when the metrics were relevant to their interests. While our impact assessments look different grant to grant, we are closer to a theory of change and a more coherent set of indicators across the portfolio. A second strategic shift in our initiative arose from external portfolio reviews we conducted with experts, select governments, donors, and private sector partners. At the time, our grants were either focused on building from the bottom-up, or linking these groups with top-down sympathizers. The recommendation to support organizations that sat in between the communities and international actors was taken. We operationalized this suggestion by shifting the node of focus to organizations in the "middle" which included both city governments and NGO networks offering direct support for communities. We support these middle-tier actors because they have authenticity derived from bottom- up legitimacy and professionalism from top-down executive heritages. Taking all of this into account, we built the Urban Poverty learning initiative around the idea that directly engaging the poor and their local governments would accelerate poverty alleviation among the vulnerable — and do so more sustainably as it could potentially work across sectors, interest groups, and 3 EFTA01159011 with social resources to weather political shocks that often contribute to the failure of such efforts. We operationalized this vision through our grantmaking, by putting a premium on the means to meet three ends': strengthening community-level organizations, developing livelihood opportunities for the urban working poor, and promoting inclusive municipal governance. Common Themes and Targets 1. Strengthening Community-Level Organizations Sample grants Organization Amount Aspiration Success Reason(s) Inference (USD mil) / Failure Slumdwellers 7.0 Organize Success Consistent community- Savings and International slumdwellers and based rituals and enumerations link them to their city methods allow rapid provide visibility governments scale and credibility Asian Coalition 11.0 Community-planned Success Graduation from small Sweat equity and for Community and managed to large community co-finance keep Action upgrading and projects ensures partners motivated livelihood projects capacity Carolina for 1.0 Youth-focused Failure Difficult metrics for Wrong population Kibera integrated youth programs as they target development in are highly mobile; lack urban Kenya of viable business model Pamoja Trust 0.3 Community-led Failure Competing community Wrong geographic development in interests; obstructive choice Kenyan slums government Approximately 35% of grant funds have been dedicated to exploring whether and how increased capacity within the community leads to real change. Through a variety of grantees, many of whom are member-based organizations of the poor, we are learning about how key organizing principles evolve over time and what is required to mobilize communities towards collective action that improve their lives. In addition to encouraging a number of rituals and practices, these collectives also build social fabric and stability. Two of the most powerful early organizing principles we have seen are community savings, and enumeration. ' Comparative advantage is defined as our ability to produce a particular good or service at a lower opportunity cost than another party, with the highest relative efficiency. 1 Rubina Islam & Shams Mustafa, "Poverty Impact Assessment: Local Partnership for Urban Poverty Alleviation," United Nations Development Program, 2006; C.S. Reddy & M.B.S. Reddy, "Poverty Reduction and Women Empowerment: Role of SHG Federations in Urban Areas — "APMAS Experiences" from the National Workshop on Urban Poverty Eradication Strategies, Hyderabad 2008; Arsene M. Balihuta, "Approaches to Poverty Reduction in Urban Sub-Sahara [sic) Africa," World Bank Municipal Development Program, 2001. 4 EFTA01159012 Though savings, credit, and information fill critical gaps for the urban poor and are an important entry point to build united communities (and track progress), it is the strength of the collective that is the greatest lever for change. By strengthening these community-level organizations, we support the development of productive assets, democracy, and a self-help (versus entitled) mindset. 2. Developing Livelihood Opportunities for the Urban Working Poor Sample grants Organization Amount Aspiration Success Reason(s) Inference (USD / _ mil) Failure Women in 12.5 Create or improve Success Use of community Right sectoral focus Informal jobs for millions of networks and (foci) and partners Employment urban working poor investment in voice of Globalizing and the poor enables Organizing identification of (WIEGO) barriers and solutions Self-Employed 10.0 Full employment for Success Organic program Multi-dimensional and Women's women poor development and integrated approaches Association workers in India modules added based create more robust (SEWA) on demand (ie, SEWA livelihood Bank) opportunities Aarong 1.0 Full employment for Success Clear understanding of Competitiveness with home-based the supply chain and formal sector must be garment workers in market taken into Bangladesh consideration SEEP Network 6.0 Microenterprise Failure No linkage to markets Partner too far development in or municipal removed from field diverse urban governments; "retail" environments efforts without potential for scale Idealab 0.5 Affordable housing Failure Partner inflexible on Wrong (sub)partner technologies intellectual property, not interested in local manufacturing (jobs) or stakeholder Input Through community-led development grantmaking we tackle the social aspects of poverty; our second set of grants (nearly 35% of portfolio commitments) squarely targets the economic aspects of poverty. Given the demographic overlap, we have found that there is both synergy and dependence between savings-based groups (as those described above) and livelihood-oriented networks. Due to historical conflict over resources and message, these groups are still learning how to trust/work together. While complementary and closely linked, different tools and approaches are required for groups that organize around social or economic issues. We are one of the few organizations to invest in both and recognize their interdependence. Whether it is livelihood or asset development, the poor are equally susceptible 5 EFTA01159013 to market forces and competition as everyone else. The academic delineation between formal and informal economies is artificial as all markets respond to a bottom line. Through our grantmaking, we seek to balance the appetite for innovation with a competitive workforce. In addition to identifying emerging markets/sectors, we foster rural-urban linkage that grow local economies and remove binding constraints. We view our investments as complementary and catalytic to growth, rather than a substitute for an existing practice that has a zero-sum yield. 3. Promoting Inclusive Municipal Governance Sample grants Organization Amount Inference (USD i mil) Cities Alliance 15.0 Link urban upgrading Success All stakeholders in Domestic programs and alignment with resources communities to national decentralized national available for local poverty alleviation planning projects can be programs and resources substantial Sister Cities 8.0 Long-term technical Success Low cost projects make Successful small International assistance for secondary partnership affordable projects are good cities and most "big sister cities stepping stone in partnership have for larger ones technical capacity to spare City of 5.0 Create a municipal solid Success Dynamic leadership and Easier to create Monrovia waste management community with very little systems that system opportunity create jobs and have visible outputs City of 2.5 Create a city planning Failure No mayor and no sense of Need executive Lilongwe division "urban" yet in rural- decision-maker economy even though it is and not decision Africa's most rapidly by committee urbanizing city While local elections create social turbulence and selec geographies have a clear political bent, developing-world city governments are generally as pro-poor as their constituency. Most cities aspire to be inclusive and to upgrade the living conditions of the urban poor, but lack the basic capacities required to make change. Our work with service delivery, job creation, and municipal planning has demonstrated that local governments can be more prosperous and stable if they foster participation. The grants above demonstrate that projects of escalating responsibility build strong capacity, citizen confidence and have a greater chance of long-term success. 6 EFTA01159014 Lessons from our Grantmaking Lesson 1: "Nothing for us, without us" • Community organizations can implement nationally-allocated domestic resources effectively. Our $15 million "Land, Citizenship, and Services" grant to the World Bank's Cities Alliance has begun to attract government focus, resources, and commitment. This grant, our largest single investment, partners urban poverty alleviation programs and communities in Uganda and Ghana, and will soon expand to Vietnam and Burkina Faso. Bolstered by $355 million, in commitments over the next 5-7 years from the World Bank, this grant allows national governments to engage with their local counterparts and directly with organizations of the urban poor to upgrade their living conditions and improve their livelihood opportunities through land allocation and improved service delivery. • Communities have a greater sense of urgency and change can happen fast. Funds put close to the ground, into the hands of communities, are managed with accountability, expediency, and much greater scrutiny than elsewhere. Our $7 million grant to the Asian Coalition for Community Action (ACCA) program is two years ahead of schedule at full scale in 106 cities. The project works by prioritizing, organizing, and implementing small and medium-sized community development projects funded by 35% community savings, 30% local government funds, 15% donor funding and 20% debt.° Our grant has to date catalyzed nearly 550 community development projects, tripled the savings rates for almost 1,000 communities and leveraged local government resources across Asian cities of all sizes. These outputs lay the groundwork for better jobs, more secure housing, and access to government at an unprecedented level. • Community organizations build and leverage local resources. With nearly $15 million of our direct funding (now matched nearly 2:1 by bilateral and private foundation resources), Slum Dwellers International (SDI) has demonstrated their ability to draw on the power of savings- based community organizations to be a powerful local driver for poverty reduction. At the center of this is an Urban Poor Fund which is a self-governed financial facility that matches capital to slumdweller savings federations undertaking community-level and incremental urban improvement and housing projects. The fund currently supports hundreds of community groups in more than 30 developing countries. Our startup grant, regarded as controversial and risky by other funders because it was being made directly to a community group with limited capacity and geographic reach, has since grown in scale and reputation to the point that the World Bank's Cities Alliance has extended an invitation to join their advisory board (the first community group with such a distinction) and made SDI one of their major partners for urban upgrading in Africa. 3 Based on joint planning with SDI and Cities Alliance, we were able to secure $200 million from the World Bank in Uganda this year for a five year national urban renewal program, led by the Ministry of Housing. Ghana is on track to receive $155 million this summer, with similar community-driven processes. 4 This blend of capital is fairly consistent throughout the ACCA Project. Debt may be up to 30% in some cases and is obtained through local capital markets by leveraging community savings or other community assets. 7 EFTA01159015  • Competent support organizations will continue to build community capacity even after grants end. Customer demand for services from support organizations will continue to grow, provided the terms of their engagement are sufficiently attractive to the customer entities. Our portfolio has supported three types of support organizations, in some cases as sub-grantees to the primary partner to ensure that their support needs are being met. o Academic institutions to instill reporting, transparency, and communication capacity into a large network of CBOs (TIED, Asian Institute of Technology). o Sophisticated subject-matter expert firms to advise CBOs on sound technical practices for their solid waste management, infrastructure, or financial innovation (Waste Concern, Sustainability Institute, Affordable Housing Institute). o Transnational organizations to facilitate high level government discussions to inform, bolster, and align work being done locally (WIEGO, UNESCAP). Lesson 2: Follow the Money • Grants can create and improve jobs. More than 70% of the workforce in developing world cities works within the informal sector, with very little opportunity for fully formalized (wage labor) employment.5 These individuals are among the poorest in the world, often earning less than $2 a day. In January 2009 we funded a $50 million package of grants called the Inclusive Cities Project with the aim of improving the livelihoods of the urban working poor.' Through five grantees—WIEGO, SEWA, Fundacion AVINA, Street Net, and Home Net—and more than a dozen sub-grantees? throughout Asia, Africa and Latin America, this project has focused on building the capacity of member-based organizations of the poor in the areas of organizing, advocacy and policy analysis. With enhanced capacity along these dimensions, these groups aim to create or improve jobs through inclusive spatial planning, zoning, regulations, greater access to urban infrastructure and services. • Trash is cash. Municipal solid waste management is the only urban service with a large financial upside. In late 2008, we funded a two-part, $10 million grant, to the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) and Waste Concern, to introduce a new mechanism for building the capacity of cities and citizens to sustainably process urban organic waste in Asia. By formalizing relationships between municipalities and the urban poor through a decentralized set of processing stations we call Integrated Resource Recovery Centers (IRRC), our grantees are building community-level solid waste management projects in 10 Asian countries. The unique characteristics of the 10,000+ tons of daily solid waste generated in each of the developing world's secondary cities can be exploited to create jobs (6-12 per ton of waste), reduce municipal costs, improve health, and transform urban environments. Our gains exceed $100 million per year, which are reinvested into developing world city solid waste systems through our Waste To Resources Fund (W2R) with significant growth anticipated. s International Labour Organization, Global Wage Report 2010/11: Wage policies in times of crisis (Geneva: ILO, 2010). 6 For more information please see: www.inclusivecities.org. Including Asiye eTafuleni, KKPKP, Recicladores Sin Fronteras, Global Alliance for Incineration Alternatives, Chintan, among others. 8 EFTA01159016  • Potential for private sector development. AVINA Americas was granted $3 million to broker projects in several Latin American countries between Recicladores Sin Fronteras (Wastepickers Without Borders) and international partners like Coca Cola, PepsiCo, and Danone. Through these engagements, we link the private sector to inputs generated by wastepicker cooperatives. • Using simple technology can link people with work. LabourNets is an Indian social enterprise which seeks to improve earning opportunities, working conditions, skills and security for workers in the informal sector (90% of India's workforce). LabourNet uses mobile technology, including automated, multilingual SMS messaging, GIS and GPS applications, to announce daily job openings for urban informal workers. It provides training opportunities, access to health insurance, ability to open bank accounts, and assistance receiving proper identification cards for workers been denied these social benefits. The system also offers assistance to the growing professional class and mid-sized business community who find it difficult to access workers. Lesson 3: Good governance is more than a process • Community voice and participation in local government decision-making is an antidote to corruption. Local or municipal governments are more likely to be responsive, accountable, and transparent in relationships with their constituents if there are mechanisms through which CBOs can express their priorities and concerns and monitor local government processes. These mechanisms include municipal oversight councils with CBO representation, shared budgeting exercises (or in some cases, even grants/contracts), and participatory or transparent planning. • Cities will tackle tough challenges if they have learned from each other. In 2010, Sister Cities International launched the $8 million Africa Urban Poverty Alleviation Program (AUPAP), a three-year project to alleviate poverty in 25 African cities through water, sanitation, and health initiatives led by U.S. and African sister city programs. Through this unique project, U.S. sister city programs collaborate with African counterparts to identify and address critical problems that form a barrier to sustained development in urban areas. While the projects attempted in each city are small, each one meets a critical community need and builds capacity for participation and basic project management, motivating the city to tackle similar problems at larger scale. This program demonstrates that cities can deliver on their vision, and three cities have graduated to larger projects funded through their own national governments. • Partnering cities and community organizations creates new opportunity for poverty alleviation. The Global Project for Inclusive Municipal Governance (GPIMG) is a $25 million five year package of grantees and contractors supporting 5 African cities to create sustainable and inclusive municipal processes that deliver new or improved jobs, services, or shelter for the urban poor. We have chosen rapidly urbanizing cities as laboratories where we can compare and contrast their experiences and results. We are the first international organization to make grants LabourNet is a sub-grantee of CHF International's $8 million "SCALE-UP" project that works to promote livelihood opportunities in secondary cities of India and Ghana. They also received funding and business development assistance from our "Urban Value-Chain Development" grant to the SEEP Network. For more information on this organization please see www.labournet.in. 9 EFTA01159017  to city governments in the developing world (as we have been for community and member- based organizations); though it is too early for results, as with SDI our move is catalyzing the space. Our first tranche of cities has allowed us to experiment with different tools, as suggested by our reviewers, to guide future city-level grantmaking: o Implementation by bilateral (intermediary) organization: Cairo9 o Implementation by NGO: Luanda o Extreme transparency measures: Harare o Engagement with municipal assemblies and no mayor: Lilongwe o National government Ministries as fiscal agents: Monrovia • City governments have too few capable people. Qualified personnel for finance, planning, and monitoring systems are in short supply at the municipal level. Since our targets aspire to practical outcomes (and not process), capacity building support can only complement the necessary experiential learning and must be time-limited so we hand over the task to local actors. For now, capacity is being built internally, through grants made directly to Harare or Monrovia City Assemblies, and also through partnerships and contracting arrangements with private sector firms or NGOs capable of supporting local and municipal governments. In some cases the grants are shared (requiring joint sign-off on deliverables for payment) and in others, support is given for imbedded long-term technical assistance, which we are doing through solid waste management, drainage, planning, and housing projects. Lesson 4: Sometimes we miss the target • Our weakest grantmaking has been in the area of micro-enterprise development (individual vendors, laborers, or craftsmen), as philanthropic capital is essentially free money that creates unfair advantage to micro-lenders and has the unintended consequence of drying up long-term development of local access to capital. The projects also tend to be "retail" and best left to financial institutions who understand local demand, markets, and risk. This should be clearly differentiated from small-enterprise development (cooperatives or organized worker groups), where we see greater collective benefit and more enduring links with wider local economic development. • Local land markets are not readily accessible and are intermeshed with the political landscape. Outsiders are tools to be used and discarded by various factions. Entry into this space (for example, Kibera) risks political alignment that is best left to democratic processes within communities and revisited in areas where reforms are likely to take root. While we cannot resolve land issues, our grantmaking can facilitate their resolution by offering information via new technologies like GIS mapping and more inclusive enumerations as part of cadastral efforts. Detailing the settlement patterns allow for municipalities to provide services, such as water, sewer service and electricity. Mapping is more than technical; the resulting information compels catalyzing the politics. Mapping slums provides the first step toward land governance, Despite the political challenges in Egypt and Zimbabwe, our city-level projects in Cairo and Harare have been among the most stable and outperformed those being implemented in less volatile situations. 10 EFTA01159018  recognizing investments, allowing for land to be used as collateral to help bring the populations out of poverty. It also provides the means for setting up property taxes to offset new services. • Housing is not an end in itself but the physical manifestation of building the urban poor's assets. A home by itself is not transformative; instead transformation arises when the home, however informal, becomes a place to build assets and a family asset in itself. Conversely, aggressive intrusion of philanthropic capital distorts local financial markets even as it produces too few homes to improve them. Land and titling issues also complicate investment by outsiders. • Service delivery is best explored by the WSH team and Special Initiatives Governance portfolio. Though we have found services to be a good proxy or outcome measure for some of our city-level projects, we do not see service delivery as an endpoint for our grantmaking — with the exception of solid waste, which we have targeted it is the only city service that generates revenue for poor people and cities. As very few cities have recognized this, and there is growing interest from the private sector, we see this as a major opportunity to generate resources and create jobs. • There are several additional areas that we will continue to monitor for potential, but have yet to identify a clear opportunity for foundation engagement that would benefit the poorest. o Housing technologies: Affordable, efficient and durable housing materials remain one of the greatest aspirations for slumdwellers around the world. We do not believe the foundation is in a position to endorse any particular product, and instead have introduced these products for evaluation directly to the organizations of the urban poor. Groups like SDI, India's Monitor Group, and South Africa's Sustainability Institute, serve as our primary resource partners in this area. o Municipal finance: Traditional municipal infrastructure projects tend to benefit "cities" in aggregate, rather than offering a direct benefit to the poorest. New financial tools are emerging that support focused efforts at urban upgrading, but these have yet to mature. Julie Sunderland and the CFO's office liaise with external partners like OPIC and the World Bank on our behalf and continue to monitor progress in this area. A related area, metafinance10, was pioneered within our portfolio and continues to thrive and provide broad community benefit by leveraging pooled savings and municipal concessions to attract resources for basic community-level infrastructure. o Advocacy: As our thinking around urban poverty evolves and stronger linkages can be established to our internal priorities, our ability to add value in this space may increase. The best advocacy arises when grantees lead the charge, but situations may arise where our voice, in chorus, can legitimize or globalize a local experience. Specifically, if we can demonstrate cost effective and replicable models, external advocacy may be warranted. Currently, we practice selective external advocacy only with like-minded donors, and avoid 1° For more about the evolution of metafinance and our role please see: htto://affordablehousinginstitute.ordbloes/us/20O3/03/meta-finance-oart-1-the-challenge-of-arouo-benefit-lendinthtml 11 EFTA01159019  advocacy at the project or community level, largely at the request of our grantees as they seek to engage and deliver on their own terms.n Overarching Themes Going to Scale While there have been many sectoral pilot efforts in the past, few have had a material impact on macro- indicators of poverty. As we are learning across the foundation, the challenge of scaling up is not about bigger projects or bigger organizations, but rather about achieving sustainable results in a large number of communities. In order to effect real change at the macro level, replication must take place in many communities simultaneously with increasing efficiency and not simply be a reproduction of pilots at the same or greater cost. Principles for scaling up community projects are therefore exercises in business planning since execution and sustainability are at the heart of every project. We discovered this through our annual external portfolio reviewer process, when evaluators recommended more attention to capacity (specifically related to approval and disbursement) so that our partners could benefit from efficiency of scale, reap more immediate benefits, reduce delays, and respond expeditiously to landscape changes and demand. We have to date been agnostic about whether scale is best achieved through networks of CBOs or through a larger number of small CBOs, since both have demonstrated ability to deliver. As CBOs learn by doing and their capacity increases, a subset of CBOs may grow into larger networks, or unite more formally with public sector processes as we have seen with SDI and others. For other contexts, processes will remain driven by a growing number of small CBOs. While it is abundantly clear that alignment with national urban policies and an enabling and interested local government are clear pre-conditions for engagement, two different models for scale up show promise, depending on context: • Clustering of program activities. Concentrating livelihood or asset-building activities into a nodal area or micro-region can be an effective strategy for focusing inputs in the initial stages, rapidly demonstrating impacts, convincing neighboring groups of the benefits of collective action, gaining credibility, spreading information, and self-mobilizing demand for project activities. Over time, numerous nodes emerge; each one acts as a demonstration project to motivate surrounding communities to participate in community-driven development. • Promoting networks among CBOs. As outcomes are verified and reputations grow, lateral communication between communities and grassroots organizations can become very valuable. For example, networks like Street Net or SDI can inform member groups about changes in procedures or policies that affect their work. They can also coordinate activities, support horizontal learning, accelerate the establishment of new CBOs, build social capital and relationships, and branch out into new strategic activities (like SEWA). Support for C8O networks can take the form of organizing meetings for clusters of CBOs in a particular region as 11 We have had only 11requests in 3 years for name and logo use; 8 of those have been from our 2 partners with a USA home- base. 12 EFTA01159020  with Home Net in 10 countries across Asia, establishing a newsletter or annual conference as Street Net has done, or providing training for key leaders (WIEGO) or individuals (Asiye Etafuleni and municipal planners). Finding the Right Partner We are committed to partnering both to disseminate our ideas and learnings and also to assure us viable exits, and in urban, lots of entities explore, giving us no shortage of potential international, national, sub-national and community relationships. However, their strengths and limitations must be clearly understood. • Multilateral agencies often only have a country-level focus (no smaller), due to the difficulty gaining consensus on geographies. They are not strong at local implementation, and most rely on global north career technocrats for project planning. Generally a poor fit for us, but with two very notable exceptions: the World Bank and UNESCAP. • Bilateral agencies frequently seek to meet trade or aid agreements along general guidelines that align with a sectoral or political mission. Because relationships are arranged at the Ministry- level, sub-national or sectorally integrated engagement is difficult but not impossible. We have found, for example, GIZ to be a strong implementation partners in geographies where they have expressed long-term commitment and shared vision. • National governments are committed to poverty reduction strategies, treaties, bilateral agreements and domestic priorities that are frequently planned many years in advance of programmatic roll out. Their ability to be nimble is limited, with many different partnerships being juggled at once. Ministerial or national government capacity exceeds that of local governments, but international brain drain of competent government officials is frequent. • Local governments bear the brunt of program implementation and citizen expectation; however have access to the least amount of resources. The right partner is a great fit, but capacity fluctuates randomly and their motivation tends to be timed to election cycles. The most promising if fickle partner set. • Nongovernmental organizations are dependent on donor resources and therefore subject to alignment with multiple missions. Larger international NGOs require significant resources to manage developing world projects, and often work through multiple smaller intermediaries to increase their reach; they also tend toward intellectual imperialism that is mistrusted at the community level. Community-based organizations have deep roots at the local level, but suffer from severe capacity limitations and there is (mutual) mistrust with organizations outside their immediate sphere of influence. Community participation in CBOs can weaken over time due to frustration when their needs are not addressed or due to complacency when their immediate needs have been met. With the right entity, we can partner successfully. • Member-based organizations of the poor are democratic organizations that the poor themselves control and partially or fully finance such as cooperatives, self-help groups, and 13 EFTA01159021  trade unions. They struggle to overcome issues of credibility with other partners but have staying power, a vested interested in the outcomes and a greater sense of urgency. They make great intermediary grantees for us, subject to limitations of their organizational capacity and culture. • Private sector players cannot engage over time unless there is a clear revenue stream, but many will offer short term capital on a speculative or even CSR basis. Issues relating to corruption are prominent and difficult to manage at the interface between local government and the private sector. Creating an Enabling Legal and Regulatory Environment Poverty alleviation efforts benefit tremendously when community decision making and management of resources are supported by a legal and regulatory framework. While it naive to think that this happens in a comprehensive fashion, there are some specific areas where appropriate policies, laws, and enforceable regulations can foster inclusivity and promote competitiveness for the urban working poor. While some of our funding is used to promote local reform around issues such as the tendering process, we have also supported public interest litigation through our partners in Latin America, Africa and Asia. Some of the legal victories associated with these efforts in Peru, Colombia, Chile, India, and South Africa include the ability for CBOs to participate in public tender processes, social recognition and protection for wastepickers, and equal rights to public resources and space. How we are catalytic Urban poverty has no one cause, and therefore focusing on a single intervention is not likely to be transformative. Instead, we believe that there is potential to alleviate poverty at large scale by investing in a series of inter-related processes that link cities with communities. Our approach is catalytic because it: • Addresses failures of government and market. Government and the private sector must treat wastepicker cooperatives or self-help groups in ways different from how they treat the members individually. • Reduces transaction costs. Structural poverty arises in part because small-scale transactions have high costs. As seen with our recycling and home-based workers, creating poor-owned and poor-controlled entities (aggregating workers) reduces costs and increases the poor's net earnings. • Focuses on durable linkages. Beyond creating new entities, our work forges demand-driven linkages that are based on sound business practice and/or build social fabric. Whether through street vendor rural-urban connections or the formation of informal settlement units within city governments, the connections are organic and provide mutual benefit. • Captures and grows sustainable flows. Rather than promoting a mere substitution of one type of worker or input for another, our work promotes complementary interventions and growth of