The document discusses IFC's perspective on strategic community investment to promote shared prosperity. IFC is the private sector arm of the World Bank Group and aims to reduce poverty through private sector development. The document outlines IFC's approach to strategic community investment, which involves voluntary contributions by companies to help communities address development priorities in a way that also supports business objectives. It provides examples of effective community investment programs and tools used by IFC to evaluate programs and their financial and social impacts, including a financial valuation tool and geomapping tool. The document concludes with good practice principles for strategic community investment.

1. Shared Prosperity through Strategic Community Investment:
An IFC perspective
Anil Sinha, Regional Head Advisory Services
IFC South Asia
26 September, 2013

2. IFC: Private sector arm of the World Bank Group
Mission to reduce poverty and increase shared prosperity
Guarantees of
private sector
investment’s non-
commercial risks
Interest-free
loans and
grants to
governments
of poorest
countries
Loans to
middle-income
and credit-
worthy low-
income country
governments
Finance
Debt
Equity
Advisory Services
Sustainable Business
Access to Finance
Investment Climate
PPP
IBRD
International
Bank for
Reconstruction
and
Development
IDA
International
Development
Association
IFC
International
Finance
Corporation
MIGA
Multilateral
Investment and
Guarantee Agency

3. What Our Clients Say About
Community Investment Challenges
• “We spend lots of money, but relations with
communities don’t improve (and sometimes
even deteriorate)…
• Our community communicates by blocking
our roads
• Infrastructure projects we build for them lie
abandoned
• Local stakeholders become dependent on us
• We get endless requests – it’s hard to say
“no”
• Our CI program has little to do with our core
business
• In the end, we have little to show for all the
resources spent”

4. Strategic Community Investment
"If you want to go quickly, go alone. If you want to go far, go together."
—African proverb
For IFC, strategic community investment (CI) involves voluntary
contributions or actions by companies to help communities in their
areas of operation address their development priorities, and take
advantage of opportunities created by private investment, in ways
that are sustainable and support business objectives.

5. Different channels for generating local benefits
Company
VoluntaryMandatory
Infrastructure
Consumption
Employment
Purchases
Projects &
Initiatives
Royalties /Taxes
Demand for
Inputs
Demand for
G&S
Roads
Increased Business Opportunities
Increased Income and Employment Improved Infrastructure and Services
indirect direct
Operational
Royalty
Management
Community
Investment Strat.
Local
Sourcing
$ for local public
investment
IFC’s
SBA/SCI
Offer

6. Cairn-IFC Program
• Program duration: July 2007 to December 2010
• Co-funded by IFC and Cairn
• Enterprise Centre:
• Started in July 2007 and continues as a legal
entity under Cairn since January 2011
• Focuses on skill development for
employability, MSME and vendor
development
• Child & Maternal Health (CMH): September 2007
to July 2009
• Dairy project: Started in January 2007 and
continues under Cairn’s CSR activities
• State government lends support to the program
Cairn CSR Barmer
SURE
CEDPA
ICECD

7. Key Outcomes in 3 years
 6617 persons (1771 women) received vocational trainings and 75%
of them linked with jobs/ self employment activities,. Income levels
have gone up from 25% to 32% for trainees across various trainings
given by EC
 60,000 workers were trained on Health, Safety, Environment and
Security (HSES), which led to more than 49 million incident free safe
man-hours on Cairn sites.
 119 new micro enterprises operate in the region, 2500 odd farmers
have been provided inputs for better farming practices and links with
inputs suppliers
 80 local MSMEs have received orders worth INR 89.3 Million, 22
have now their company websites
 Over 8700 persons have directly benefited by health camps/Melas,
more than 2400 children and 800 pregnant women have been
immunized
 4000 truckers been covered under awareness on AIDS
 13 dairy cooperatives now contribute by about 14% to the total milk
collection by the state dairy federation in Barmer. The average price
realisation has gone up from INR 9 to INR 16.80. 7

8. Financial Valuation Tool and its benefits
 Evaluation of site-specific
community investment portfolios
 Public tool (www.fvtool.com)
 Estimates expected net present
values (NPVs) of community
investments
 Answers two critical questions:
“what” is the right portfolio of
community investments?
“what” is the financial return
they will likely bring?
 Improve community investment
strategic planning
 Assess value of a community
investment portfolio
 Improve cross-functional
engagement around social
responsibility
 Establish an understandable
business case and business
language for community
investment
 Overcome “silo” approach in
cross-functional discussions

9. Key Components of the FV Tool
This tool adds an additional layer of rigor to your traditional approaches to
stakeholder engagement, risk analysis and financial modeling.
Monte Carlo is simply rolling the dice 1000+ times to model uncertain outcomes.

10. Value Driver Examples
 Cairn learned pipeline security issues reported by farmers
through SMS cell phone program led to up to $2 M in savings
from averted sabotage.
 Rio Tinto Madagascar identified large potential savings through
local workforce training to reduce dependency on expat workers
at very remote operation.
 Newmont’s community relations team in negotiating land and
owners cost helped 6-month fast forward at second site creating
savings in owners cost = approx $350K.
 Oyu Tolgoi realized the value of shifting from onsite housing for
workers to developing a local town.

11. Revenue Management: Sample Tools
• Investment Capacity Assessment (ICA)
• Municipal Knowledge-sharing Platform: Municipio al
Dia;
• Promoting Internal Accountability
• Citizen Report Cards (CRC)
• Educational Caravans
• Stakeholder engagement meetings
Practitioners Guide Rating Matrix & Good Practices Report templateWide range of web-based services
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2008-Qtr1
2008-Qtr2
2008-Qtr3
2008-Qtr4
2009-Qtr1
2009-Qtr2
2009-Qtr3
2009-Qtr4
2010-Qtr1
2010-Qtr2
2010-Qtr3
2010-Qtr4
2011-Qtr1
FAQs Downloaded
Visits to Municipal
Calendar
Visits to Library and
Training material
Visits to the Tip and
Question of the Month
Citizen Report CardStakeholder meetings

12. GeoReach: IFC’s Geomapping tool
• IFC has piloted a country focused district based
geomapping tool
• Why Georeach?
– Varied definitions of “poverty” globally that do not necessarily fit
South Asia
– Lack of understanding of access issues in defining ‘Base of the Pyramid’
– India has high growth but still home to 30% of the world’s
extreme poor
– Demonstrating relevance of investments in underserved markets
– Clients might be based out of Tier 1 cities, but have reach that
expands in poor/underserved areas
– Gathering more granular level data to inform operational strategy

13. Benefits to Strategy and Operations
• Understand where there is a lack of access to specific
resources, such as Health & Education, Infrastructure, and
Agribusiness-- help advocate where projects may have a
greater impact
• Helps to visualize the reach of client interventions
• Synthesize complex data into simple, yet powerful ways
• Maps and Analytics can guide client expansion strategies at a
district level in India

14. Note: This map has been provided for illustration purposes only.
Illustration: Financial Inclusion Project (FINO) Results
14
Data not Available
BOP districts (as per IDG 4 )
Non-BoP districts
BOP districts targeted by
FINO
Non-BOP districts targeted
by FINO
183
400
No. of districts
across India
(583)
BOP Districts
117
257
No. of districts
targeted by FINO
(374)
BOP Districts
31% of FINO’s target districts are
BOP districts
FINO covers 64% of India’s BOP
districts
Comments from FINO
• Perfectly aligned with our strategy, very helpful tool
• Very helpful in designing and launching new products. For
example: crop insurance/ weather insurance product - tool
provides initial data about density of customer pockets to
support product development and access the initial product
demand

15. Good Practice Principles for Strategic Community
Investment
1. STRATEGIC
 Activities flow from a well-defined strategy
 Addresses both short and long-term objectives
 Focuses selectively on a few key areas for greatest impact
 Looks beyond financial resources
 Evolves with the business phase
2. ALIGNED
 Aligns the strategic issues of the business with the development priorities of local
communities, civil society, and government to create “shared value”
 Coordinates CI with other company policies and practices that affect communities,
 Promotes cross-functional coordination and responsibility
3. MULTI-STAKEHOLDER DRIVEN
 Positions the company as a partner in multi-stakeholder processes
 Recognizes that a multi-stakeholder approach reduces company control
 Supports communities and local governments

16. Good Practice Principles for Strategic Community
Investment (contd)
4. SUSTAINABLE
 Seeks to avoid dependency, encourage self-reliance, and create long-term benefits
 Does not commence activities without a viable exit or handover strategy
 Invests heavily in capacity building, participatory processes, and organizational
development
 Reinforces, rather than replaces, indigenous institutions and processes where feasible
5. MEASURABLE
 Measures return on community investment to both the company and the community
 Uses outcome and impact indicators to measure the quantity and quality of change
 Tracks changes in community perceptions to gain real-time feedback on performance
 Uses participatory methods of monitoring and evaluation
 Proactively communicates the value generated by CI to internal and external audiences

17. Measuring Shared Value