T he Sandaang Mukhang Pinoy campaign

aims to raise $10,000 through $100 from

“San
100 donors to continue supporting and
empowering Gifts and Graces partner
communities. The campaign will feature
100 real stories of producer- beneficiaries

Mu
Progress Report
just like the ones featured here, who have
succeeded in providing a more dignified
standard of living for themselves and
2006 -2008

Pi
their families. As importantly they have
a new found self-esteem and a new hope
for themselves and their communities.

GIFTS & GRACES

F A I R T R A D E F O U N D A T I O N, INC.

Unit 131 Mile Long Building, Amorsolo St., Makati City

Tel no (632)7592525 info@gifts&graces
Table of Contents:

Executive Message

History

About Gifts and Graces

Accomplishments

Product development

Market Access

Technical support

Stories

Financials

Donors

\
Introduction and History

About 40% of Filipinos live on under $4 a day or less. They and their families live under vulnerable
conditions. What’s worse is they are trapped in a cycle of poverty.

Gifts and Graces supports marginalized communities in their quest to pursue entrepreneurship as a
means to overcome marginalization and poverty.

Gifts and Graces is the only social enterprise that partners with NGOs who work with marginalized
groups, thereby increasing Gifts and Graces’ penetration of its interventions to a broad range of dis-
advantaged and underserved communities.

Gifts and Graces Gifts and Graces Fair Trade Foundation was informally organized in 2005, and was
officially registered with the Securities and Exchange Commission in January 2006. Gifts and Graces
was a big idea that encompassed two big concepts – fair trade and social entrepreneurship.

As an advocate of fair trade Gifts and Graces promotes

the 10 principles of fair trade –

1. Create opportunities for economically

disadvantaged producers.
2. Transparency and accountability
3. Capacity building
4. Promoting Fair Trade
5. Payment of a fair price
6. Gender equity
7. Safe working conditions
8. No to child labor
9. Environment consciousness in production
10. Long term relationships with partners
 As a social enterprise Gifts and Graces seeks to carry out a
social mission and be sustainable at the same time.

Gifts and Graces’ mission was to improve the

quality of life of marginalized groups. Gifts and
Graces chose to work with marginalized groups
through NGOs, cooperatives, and people’s
organizations because they need know-how in
product development and marketing but they
don’t have the resourced to develop the necessary
human resources within their organizations.

The mission originally focused on marketing. It

was a simple and yet broad mission which has
evolved since. Among the questions Gifts and
Graces faced were

1. What groups do we serve?

2. How do we market livelihood products?

3. What development assistance would/could/

should Gifts and Graces provide in its role as
accelerator, i.e. is enterprise-management training
(on costing, pricing, sourcing, etc.)

One of the major shifts in strategy for Gifts and Graces

occurred when the board determined that in order to
survive as a social enterprise, Gifts and Graces must be
market driven rather than product driven. It was from
this insight that Gifts and Graces adopted the strategy to
build its brand to drive sales. From there the approach of
the whole organization followed.

This was evident in product development. Gifts

and Graces recognized the need to improve

“As
a social enterprise
Gifts and Graces seeks to
carry out a social mission
and be sustainable at the
same time.”
the products of its partner communities. Initial
product development efforts consisted of tweaking
existing community products to look better. With
the shift to the market-based approach, product
development became less product based and
became more focused on tapping the communities
skills such as sewing or basket weaving to make
products that had demand.
Today with a market driven approach, Gifts and
Graces has also realized that the best way for the
organization to help its partners grow is to help
them achieve organizational sustainability (aside
from financial sustainability) through capability
building particularly on enterprise management.

This report discusses the different ways that Gifts and

Graces accomplishes its mission and helps empower its
partners.

\
 About Gifts and Graces
OUR MISSION
To improve the quality of life of
marginalized members of society,
by providing product development,
technical training on enterprise
management, and global market
access to livelihood communities
under the Gifts and Graces brand.
OUR VISION
Gifts and Graces has a global presence
and is the brand of choice for hand-
crafted quality gifts made by liveli-
hood communities of marginalized
members of society.
Gifts and Graces’
innovation was in its
partnering with NGOs,
cooperatives, and
people’s organizations
to carry out this mission.
HOW WE HELP
As a social enterprise that champions livelihood prod-
ucts, Gifts and Graces works together with communities
primarily through three key business solutions
1. Product development
2. Market access
3. Capability building on Enterprise management
In the short term, market access means more sales and
more income for the producers. Product development
on the other hand helps producers improve their craft in
terms of design and production processes, making their
products more marketable and competitive. Enterprise
management helps communities deal with supply and
production challenges as well as growth and impact.
In the long term, these interventions will mean en-
hanced livelihood programs that will put the NGOs and
their beneficiaries on the road to sustainability and pov-
erty reduction.
Unlike other fair trade networks and social enterprises
which focus on small and medium enterprises, Gifts and
Graces is the only social enterprise that partners with
NGOs who work with marginalized groups, thereby in-
creasing Gifts and Graces’ penetration of its interven-
tions to a broad range of disadvantaged and underserved
communities. Sustainability of the livelihood program
may also lead to sustainability of the NGOs’ other pro-
grams and interventions e.g. health and education.
Through a strong partnership with other NGOs and
non-profits, and with the help of committed and pas-
sionate board of trustees, staff, and supporters who be-
lieve in our cause, we help communities and individuals
reach their full potential and break free from the cycle
of poverty.
 Accomplishments
Gifts and Graces started
out with 10 communities. New
In 2007, it has expanded its
outreach to 15 communities. Partners
Today, Gifts and Graces
is partnered with 18
communities.

G&G’s primary clients i.e. the ones whose lives

are changed by the organization’s work to create
opportunities for livelihood enterprises are livelihood
communities of marginalized groups.
Alay Kapwa Tindahan Urban poor women
Gifts and Graces started out with 10 communities.
In 2007, Gifts and Graces expanded its outreach to 15 Coco Natur Coconut farmers
communities. Today, Gifts and Graces is partnered with
18 communities. Convent of the Holy Spirit Indigenous groups

The board has defined Gifts and Graces criteria for Development Action for Former migrant workers to
Women Japan
partner communities as follows:
FCED Foundation Urban poor families
1. Organization (NGO, Cooperative, People’s
Organization) must have a legal identity i.e. it must be Hardin ng Kalikasan Displaced women in Quezon
registered with the appropriate government agency
(Securities and Exchange Commission, Department of He Cares Foundation Urban poor men
Social Welfare and Development (DSWD), Cooperative
Isla sa Kaunlaran Urban poor
Development Authority.
Kaakbay Entre-worker Urban poor
2.Organization’s livelihood program consists of creating/
producing/manufacturing products (as opposed to Cooperative
trading products).
Kaibhan Inc. Urban poor women
2a. Products have handcrafted component
Kapitbahayan Urban poor women
2b. Products have marketability potential
Kilusang Pinagkaisahan Urban poor men
3. Livelihood program has a track record, with sales
Pag-Asa sa Paglaya Multi- Former prisoners
between PhP 50,000 –
1,000,000/yr. Purpose Cooperative

4. NGO officers are committed to fair trade and prac-
ticing fair trade principles
in their livelihood pro-
gram.
5. NGO is willing to undergo a developmental process
with Gifts and Graces.
Pangarap Foundation Streetchildren
Tahanang Walang Hagdanan Persons with Disabilities
The Learning Center Special needs individuals
Virlanie Foundation Streetchildren/abused girls
Visayan Forum Victims of trafficking
 Product
Development

In
candle made by
strretchildren
order to improve the products of its partner
embroidered pillow by
communities Gifts and Graces partnered with de- the urban poor women of
signer Carlo Tanseco when Gifts and Graces was first Novaliches
launched in 2006. Some of the products from that
first collection are still in production today. In 2007,
Gifts and Graces worked with the communities to
come up with 20 new products. A special designer
bed and bath collection was made in collaboration
with entrepreneur Ricco Ocampo. Mr. Ocampo
worked with communities to come up with em-
broidered pillows, towels, and powder room linen,
embroidered neck rolls and boudoir pillows, crochet
neck roll and boudoir pillows, and a citronella-
scented candle. string bookmarkers
created by persons
recycled newspaper bag
with disabilites
Gifts and Graces continued to do product develop- made by the urban poor
ment through customization of specific products for women of Paco, Manila
clients. One of the other ways Gifts and Graces helps
its partners is by paying for the samples it requests
from its partners. By creating different products not
originally in the partners’ repertoire, Gifts and Graces
is able to expand their thinking on the possibilities
of their products. Some communities have gone on
to continue producing the products for their other
clients besides Gifts and Graces.

jeepney made from

recycled pinewood

Sarao Jeepney

Beetle model from reycled

Coca-Cola can messenger bag from used tarpaulin
 Market Access

The
initial marketing and distribution strategy studied was the opening of pop up retail outlets
but the overhead costs of a retail outlet made it prohibitive. The strategy adopted instead was to
target individual buyers through product viewing parties, and corporate clients through direct m a r k e t i n g .
Seasonality of sales was recognized with Christmas being the main season and the wedding months of June and
December being secondary seasons. Various corporate conferences were targeted as G&G’s between peak
seasons sources of sales.

To champion and promote our partners’ products, Gifts and Graces conducts direct marketing, one-on-one
presentations with corporate clients and participated in select bazaars such as the American Womens’ Bazaar.
A partnership with Ayala Land to occupy a charity booth in Glorietta for a few months in 2007 and 2008 also
contributed significantly to sales. Gifts and Graces also held special product viewing parties for individuals for
them to do their Christmas shopping in a relaxed set up.

In 2006 Gifts and Graces generated sales of PhP 650,970.00. In 2007 this figure more than tripled with sales of
a little over PhP 2Million. The goal for 2008 is to generate sales of P3Million. G&G will also conduct an in-depth
analysis of how the sales of partner organizations translate to income earned by producer beneficiaries.

2006 2007 2008

Gross Sales (approximates) PhP 600,000 PhP 2,000,000 PhP 3,800,000.00
Cost of Goods sold PhP 400,000 PhP 1,300,000 PhP 2,900,153.60
% Retail 370,445.00 56.69% 542,207.50 26% 794,638.00 24%
% Corporate 283,050.00 43.41% 1,535,719.46 74% 2,522,728.92 76%

1 LSA
2 KIL
3 CHS
4 KBH
5 AKT
6 FCD
7 KKB
8 TLC
9 PNG
10 TWH

Market Distribution Based on Communities’

Work Output
 Technical Support

Gifts and Graces is able to increase its outreach to more unserved or underserved communities by
partnering with other organizations.

“Gifts and Graces conducts

regular informal and formal
dialogues with its communities
to be able to serve them better.
Beginning 2006, focused group
discussions were held with the
communities to discuss policies
and practices by both Gifts and

In
Graces and the communities.”

2008

, recognizing the need for a more formal setting to share experiences and learnings,
Gifts and Graces conducted its first Partner’s Conference last November 11, 2008. The theme of the conference
was : Trends, Issues, and Prospects for Fair Trade: A Forum on Community Based Livelihood Initiatives. The
conference was well attended with two to three representatives from each of Gifts and Graces’ 15 community
partners.

The conference was an offshoot of the focused group discussion Gifts and Graces conducts among its partners
every year. The objective of the conference is for the different communities to learn from each other and net-
work amongst each other. Sandy Romualdez, Philippine Daily Inquirer President and Gifts and Graces President
and Founder gave the welcome remarks while Greg Perez Gifts and Graces Executive Director gave the keynote
address which touched on the topics in the conferences title – trends, issues, prospects for fair trade. After the
keynote address, two communities Ms. Cielo Bueno of Kaakbay Entre-Workers Cooperative, and Sr. Celerina Za-
bala from Social Action Center of the Convent of the Holy Spirit, gave brief presentations about their experienc-
es with spotting trends and growing their social enterprises. After the presentations the group broke out into
workshop groups to discuss how to apply the experiences of other communities to improve their own output.

One of the highlights of the conference was they symbolic signing of the Memorandum of Agreement between
Gifts and Graces and Pangarap Foundation to symbolize the commitment between Gifts and Graces and its
partner communities. The culmination of the conference was a commitment building activity where each par-
ticipant stamped their right hand on one long katsa cloth as a sign of solidarity and commitment to our com-
mon dream and vision. Below are the proceedings from the workshops shared during the plenary session:

\
 Workshop Results of Partners Conference

Group 1 - FAIR TRADE NOT FREE TRADE Group 2- THE FUTURE IS HERE

1. In what ways are our organizations practicing

fair trade?
1. Given the trends above, how can we maximize
• Fair Wage/Benefit
the above trends?
• Conducive work area
Maximize Trends
• Consultation with producers re: price of
products • (e.g. beeswax, compoboards} offer option for
green products but with higher prices
• Eco-friendly materials
- wood trimmings turned to potpourri
2. What are the greatest challenges to adopting fair
trade practices? - sawdust-fuel (save gas)

• Availability of eco-friendly products • Get materials from licensed/accredited suppliers

• Marketing (no illegal loggers)

• Lack of Fund/Capital • Promote and use green/environmental materi-

als
• Orientation of Fair trade
Social Responsibility
• Internalization of values/culture
• Provide fair wages to community members/
3. What concrete steps can be done in the short
put stickers with stories
term? medium term?
• Share stories of the community to encourage
• Orientation on Social Enterprise
more support
• Capability Building
o e.g. “Made by the loving hands of of chil-
• Consistent Marketing
dren
• Sustainable Development
from Pangarap Foundation
4. What resources (human, technical, financial,
Partner with companies with raw materials/scrap
etc.) will we need to implement these steps?
materials that our communities can use to
• Human Resources make

• Capital products

• Technical assistance o e.g. streamers to bags, plastic bags to yero,

• Networking pampers to cement block

• Prdomotion and Advocacy

2. What issues, challenges will we encounter, what re-
sources are needed? (information, exposure, etc.)

CHALLENGES/ISSUES
1. Expensive environment-friendly materials
forced to buy less cheap materials to meet
price of customer Group 3
2. Lack of manpower
3. Seasonality of products
4. Development of second-line leaders/family Do we have an entrepreneurial attitude in our own
responsibility organizations?

• Yes

SOLUTIONS (information needed)

1. Increase awareness of environmental
1. How quickly are we able to respond to identified
products (sticker-environment friendly)
opportunities?
2. Early scheduling-add people from other
communities/group • Each organization can quickly respond to
opportunities presented by G&G through
Culture building- orient on the purpose of submission of planned production for the
the group to give dedication to the job
coming year 2009
3. Other products (make candles, food, taho)
4. Group leadership training/ steady stream • Sample - Metro Manila 3-7 days
of leaders
Mindoro 15 days

• Final Production - Metro Manila depends

on the volume and product item
3. What other problems do we observe that may be
the signal for a new trend? what other problems do we Mindoro 60 days
observe that may be the signal for a new trend?
2. How important is product development and mar-
Needs/ Opportunities keting in our current plan?

1. DOT -soap - network connection • Very important as described above

communication-available markets

2. Recyclable Materials -Saleable and doable
products
Skills trainings
Exposure to other communities
3. five concrete ways to adopt the lessons learned in
our own organizations?
• Continous education -work values
• Community organization
• Skills training and establish standards

• Provide guidelines created by the organiza-

tion in each community

• Commitment
 Group 4 Group 5

1. How will professionalizing/automating our pro- 1. How does our livelihood program make an impact
cesses impact our organization? on our beneficiaries?

• Schedules - production lead time -

production rate/work
schedules/availability of materials and man- • Fix income for the workers
power
• Build self-esteem
• Standard -establishing trends -
• More responsible individual
branding of G& Products

• Collection
2. How does our livelihood program contribute to our
• Labelling -acknowledging-more market
communities?
access

producers
• Help stir local economy
• Identifying partners’ needs
• Build good reputation
2. Where do we start - what can be done immediate-
ly, in the next month, six months, one year

• Next month - resource Speakers 3. How would we like to deepen and/or broaden our
impact?
possible collection for next
year

• 6 months -Improving Product Dev’t • By building partnership with other groups who
-collection can help us in promotion and marketing.
improving Labelling
capacity building
4. How can we use fair trade as a tool for long term
• 1 year - consolidating social transformation?
diversifying

3. What resources are needed to achieve this? • Start within yourself/ equality and transpar-
ency
• Connections/Networking

• Trainings

• Websites/Links
 Other
Earth Day

Activities
Gifts and Graces joined Ayala Foundation, Rockwell,
and ABS CBN in celebrating Earth Day 2008. Gifts and
Graces set up advocacy booths with some of our prod-
ucts made out of recycled material on display.

Ayala Foundation
Recyclables Fair
Gifts and Graces helps different communities, companies, and
organizations with the proper disposal of their old tarpaulin
by collecting them at the Ayala Recyclables Fair every Friday.
By participating in the fair more people become aware of the
possibility of recycling consumer products. To make it easier for
people to donate their tarpaulin Gifts and Graces also picks up
the tarp from the donors.

Recycling Efforts

1. Market! Market! Tarp bags

Gifts and Graces partnered with Market! Market! An Ayala

mall to recycle their old tarpaulin banners and billboards that
they use for promotions. Gifts and Graces made 4000 bags
for Market! Market! In 2008 who in turn gave it away as a
redemption promo to the mall patrons. The project has gained
recognition and has won an Anvil and Tambuli award.

2. Edsa Shangri-la Jeep

Gifts and Graces does not only help recycle tarpaulin but
other products such as paper, old directories, zesto bags, and
soda cans. The Edsa Shangri-la Jeep project involved making
a “facade” jeep out of recycled soda cans collected by Edsa
Shangri-la Hotel from their own operations. The jeep was on
display in the hotel for the duration of the Christmas season.
 Spreading our Advocacy

1. SWAPCON

Gifts and Graces Executive Director Greg Perez gave a presentation on Recycling
Post Consumer Products for use in Arts and Crafts Enterprises at the Solid Waste
Management Association of the Philippines Conferences (SWAPPCON) The presen-
tation showed that you can turn garbage into gold.

2. Talk on fair trade

Gifts and Graces invited representatives from Advocate of Philippine Fair Trade to
talk to its partner communities to give them an overview of fair trade and to an-
swer their concerns regarding implementing it within their own organizations.

Networking -
Connecting with
Trainors
While Gifts and Graces does not provide skills traning to its partner
communities it helps connect them with other organizations or indi-
viduals that may be able to help them. One example was connecting
FCED Foundation with Ms. Lulu Ocampo who conducted a work-
shop on making bags out of newspapers. Gifts and Graces currently
markets this product.

For many, a candle is just a
source of light. But for the
released prisoners who are part
of the Pag-asa sa Paglaya (PSP)
Multipurpose Cooperative, it’s a
source of hope.
One hard fact of life is that former prisoners – no
matter how determined– seldom get a second
chance at life. Despite their determination to seek
an honest living after being released from prison,
the former inmates find it hard to find jobs and a
stable livelihood. This situation has pushed many
released prisoners to go back to their old ways
out of desperation. PSP was established in August
1993 to provide livelihood opportunities to former
prisoners and their families.
Today, after 15 years, the candles the cooperative
produces is the main source of income for around
forty families.
Mang Artemio
Gifts and Graces’ intervention has been of great help to
Artemio Dumaring, a member of the Pag-asa sa Pagla-
ya Multipurpose Cooperative (PSP). Dumaring served
a six-year sentence at the National Penitentiary for
his involvement with drugs. Dumaring knew that his
chances of landing a regular job after serving his term
was greatly diminished by his record.  He grabbed the
chance to learn a new livelihood making candles with
PSP and process discovered a new way to provide for
himself and his family. Candlemaking has served as his
source of income for over a decade now. He is making
the most of his second chance by living a dignified life
through his hard work.
In January 2002, the sisters of the Little Sisters of
Assumption congregation started to meet with
the residents of Isla, Maricaban, a squatter area
bordered by a creek. It is an over-crowded place,
with whole families paying rent to live in a 36
square ft space. Work was scarce, as was money.
In response to the needs of the poor, the sisters
set up a youth program, a health program, a child
development program, and a livelihood program.
With the delivery of seven industrial machines,
an initial 13 people were employed. Today, six
years later, the congregation has built a center
for the livelihood program where the mothers can
work while the children read and play.
Aling Thelma
Thelma Coroza is a woman who is part of the Isla para
sa Kaunlaran Enterprise in Maricaban, Pasay City. Sew-
ing bags have enabled sewers like Thelma Coroza to go
beyond a hand-to-mouth existence and earn as much
as P2,000 a month. Coroza relishes the idea that she
can now serve a meat dish to her family once a week. 
Moreover, her additional income has also bought her
visible proof of improvements in her quality of life --  a
cellphone, a TV set and DVD player. Best of all, her
earnings have given Thelma a new sense of empower-
ment that comes from enjoying the fruits of her labor.
It translates to a fresh outlook on life -- new hope that
spills over to her family and neighbours.
Gifts and Graces has developed an impact monitoring
tool for its partner communities in order to capture
the value of the service it provides. This tool will be
used starting 2010.
Financials
 Donors
1. Assumption HS' 81 Foundation Inc.
2. Trio MOD Range Inc.
3. Sen. Manuel Villar
4. Luciano Zanirato / Sally Son
5. Philippine Racing Commission
6. Benjamin Alimurung
7. Dita Sandico
8. Bantayog Foundation ( Noel Bazaar )
9. Gianna Montinola
10. Gizela Gonzales
11. Eastern Twin Stars
12. Globe Telecom, Inc.

Future Plans
13. Peter Coyiuto

Gifts and Graces plans to expand its outreach to more communities and reach more people in advocating social entre-
preneurship and fair trade while at the same time continuing to empower our current partners.

Projects

1. Lecture Series and Partner’s Conference

During the lecture series the participants will receive input that will broaden their minds and in-
crease their knowledge. During the Partner’s Conference we come together to share how learnings
were applied to improve the livelihood programs and organizations.

2. Partnering with Designers

Gifts and Graces will continue to be a venue for designers and other stakeholders to be involved in
community building by using their own skills and talent

3. One of the major projects Gifts and Graces will undertake is setting up its own retail store. The
retail store will

a. Provide regular sales for our partner communities

b. Will be a platform for advocating Gifts and Graces and our partner communities’ advocacies

c. Provide a venue for on-the-job training of beneficiaries of our partner communities. This will
give them hands-on experience on inventory management, customer service, and store man-
agement.

Thank
you for your support for
Gifts and Graces. Support for Gifts and
Graces means success stories like these
are surpassed and duplicated to the 1000
other non-profits all over the Philippines
who need help with their livelihood pro-
grams. This is a wonderful opportunity
to support entrepreneurship at the grass-
roots level that spreads hope and chang-
es lives. We look forward to continuing
to partner with you on this worthy en-
deavour.