Luksic Foundation

The Luksic Foundation (LF) is a family foundation that focuses on strengthening people’s capacities through training to contribute to Chile’s development.

Principle

Case submitted by Empatthy

The Foundation does an excellent job of taking on a diagnosis, which involves closing the existing and fundamental information gaps and complementing it with management tools. Things don’t happen on their own; they need to be pushed. I believe that having a mindset that focuses on goal achievement is important for developing a programme that will have a high potential for scalability.

Raúl Figueroa, Former Chilean Minister of Education

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About the Luksic Foundation

The Luksic Foundation (LF) is a family foundation that focuses on strengthening people’s capacities through training to contribute to Chile’s development. The Foundation is committed to implementing effective evidence-based programmes in each action area – education, entrepreneurship, sports and emergency response – with a people-centred approach in collaboration with other expert entities.

 

 

What was the challenge?

As of 2022, Chile has a growing micro-entrepreneurial landscape, with nearly two million micro-entrepreneurs, 22% of the economically active population, contributing to the country’s business landscape. However, a deeper analysis reveals a series of challenges that halt their growth.

The entrepreneurship sector in Chile is affected by limited access to training and business guidance, difficulty in accessing financial resources and gender disparities. According to data from the Ministry of Economy, Development and Tourism and the National Institute of Statistics, 75% of micro-entrepreneurs, totalling 1,487,570 individuals, say that they lack formal training in their economic activities. The gender disparity within this group is noteworthy, with 37.5% being women and 62.5% being men. Starting a business is a financial challenge, and almost 70% of micro-entrepreneurs rely on personal savings for startup capital. Among them, 60.5% are men and 39.5% are women. This sheds light on the need for targeted initiatives for women entrepreneurs and reveals a lack of alternatives for accessing funding. Only 11.9% of micro-entrepreneurs (234,468 people) utilised credit, loans, government programs, or non-profit institution credit as their source of financing, while 18% asserted that they did not require any financing.

These situations underscore the need to provide a multi-faceted solution to the obstacles micro-entrepreneurs face for their businesses to grow.

 

 

What was the response?

The Luksic family is passionate about supporting the development of small businesses. In response to the gap in entrepreneurial support, in 2018, the Foundation teamed up with the Faculty of Business and Administration of the Pontifical Catholic University of Chile to develop Impulso Chileno.

Impulso Chileno is a six-month programme that supports entrepreneurs in long-established industries through
mentorship, capacity development, and financial support.

The initial iteration of the program unfolded between 2018 and 2019. Subsequently, in 2020, a new theory of change specifically tailored for micro, small, and medium enterprises was developed. This was followed by an implementation evaluation carried out in 2021 and a results evaluation spanning from 2021 to 2022. An impact evaluation, initiated in 2022, will be carried out by the Abdul Latif Jameel Poverty Action Lab (J-PAL) until 2025 to assess and improve the programme. Since there are no comparable programmes with comprehensive and in-depth evaluations of all their various components, the Foundation seeks to deliver Impulso Chileno as a model for the public good, which can be scaled if the review is favourable. The fifth cycle of the programme is currently being implemented.

In 2020, during the third year of programme implementation, LF underwent a significant organisational restructuring to help refine the social problem it was trying to address and identify specific target groups where they could add the most value. The Foundation adopted a rigorous data collection process and continuous evaluation, which included initial research, interviews with public and private stakeholders, reviews of existing bodies of work and other local and global initiatives that respond to the same challenge.

During this period of restructuring, LF teamed up with the nonprofit organisation Simón de Cirene and reviewed the first two years of learnings from Impulso Chileno in relation to the broader social context in which the programme was being run. This process involved an in-depth analysis of the entrepreneurship ecosystem and existing support programmes to identify the specific profiles of entrepreneurs and businesses that Impulso Chileno should target and the actions required to ensure a meaningful service. Despite the first two versions of the programme not having a theory of change or evidence of impact, some of the participants who continued to build their businesses with resources from the programme and who remained connected to LF provided important insight into the impact of Impulso Chileno. LF also examined the profiles of the entrepreneurs that had done well on the first two versions of the programme to inform a selection process that would more effectively identify business profiles that demonstrated a greater probability for growth.

Based on its research, which identified a gap in state funding for more formalised micro-sized businesses, LF believed that Impulso Chileno could make the most meaningful impact by providing more tailored opportunities for these entrepreneurs with its three components of funding, mentorship and capacity development, especially because there were no other similar programmes. The approximately 21,000 applications the programme receives per cycle testify to entrepreneurs’ appetite for this comprehensive support.

To quantify the impact, in the third version of the programme, LF measured aspects such as changes in income and tools employed to support the businesses at the beginning of the programme and a year later. These measurements, coupled with positive feedback from both programme participants and mentors, found the programme to be making a favourable impact on the businesses they support.

In the first two versions of the programme, the Catholic University ran the capacity-building classes, managed the mentors, and administered the funding provided by LF to the participants. The evaluation and redesign of the programme in 2020 on how resources (including financial resources) were being transferred to participating entrepreneurs, as well as the quality of the mentorship being provided, found that it would be more effective to have different expert teams managing each aspect of the programme. The University then focused on running the classes, Simón de Cirene leveraged its network to lead the mentorship aspect of the programme, and LF managed the administration of funding.

After four versions of the programme with good results apparent, LF believed that Impulso Chileno had matured enough for an impact evaluation to be run — the results from which could play a significant role in attracting public and private funding and inspire programme replication in other parts of Chile, and even internationally, with the potential for similar or greater impact. Despite having the necessary internal resources and expertise to conduct the evaluation, the Foundation teamed up with J-PAL to ensure an unbiased process.

 

 

What have they learned?

 

  1. Create a long-term vision and a qualified team. It is key to create a team of people who can manage long-term processes to build capacity and processes that will eventually allow for an impact evaluation. It is essential to ensure that the evaluation model matches the stage of the initiative, with the capability and resources to deliver, relying on multi-disciplinary teams with long-term vision to lead.
  2. Integrate the learnings of the evaluation process to address broader needs. In the evaluation process of Impulso Chileno, a gender gap was identified, which led to the design of a gendered approach to the programme called Despega Mujer, which structures communities of support among peers to enable the development of female entrepreneurs. Another improvement that will be incorporated in the next version of the program in line with the learnings from the evaluation process is to develop knowledge-based sections for four of the nine learning modules as part of the capacity-building component of the programme. This will enhance the learning experience because the topics in each module will be more contingent on the participants’ needs.
  3. Disseminate knowledge and gain insight from other experts to reach more people and emphasise to civil society organisations and public actors the importance of impact measurement of social projects. LF does this by developing policy briefs shared with relevant actors in the ecosystem and presenting the case to stakeholders for feedback, which is then incorporated into the programme. The outcome of this entire process has led the LF to develop an impact evaluation course for smaller civil society organisations, in partnership with the Catholic University, to share its experience in designing evidence-based social programming, considering the different evaluation phases required for the successful measurement of an initiative.
  4. Measure at each stage of social programmes to ensure the desired quality of service and, therefore, impact. Measurement is equally necessary at the beginning (when the initiative is being designed), in the middle (when specific components are being implemented), and at the end (once the initiative has been executed) to develop a robust and valuable offering.
  5. Design programmes with technical rigour, interrogate whether they achieve their intended goals, and constantly question whether the desired social impact is being generated. Evaluation processes support civil society to achieve greater impact by facilitating a deeper understanding of the aspects of programming that should be maintained and areas for improvement. It also helps to sustain or increase fundraising thanks to the proven effect of social investment. Implementing all these actions under a systemic approach in practice implies embracing a comprehensive model whose whole purpose is to ensure the program’s quality.
  6. Use comparative evidence to design and implement an innovative model to address gaps in the ecosystem. As the first programme in LF’s portfolio that was redesigned for a more specific target audience, Impulso Chileno has had a profound impact on the way that the Foundation now sets out to address social challenges – focusing on targeting underserved groups, rather than carrying out programming similar to what already exists.
  7. Motivate programme implementers and participants to remain engaged in the evaluation processes. It takes considerable engagement with programme implementers and participants to foster an understanding of the importance of evaluations and secure their continued commitment to the process. Motivate them by showing the added value of implementing evaluation processes to strengthen the programme and align it better with the target audience.
  8. Adapt to changes. Covid-19 struck during the third version of Impulso Chileno. The teams of LF and Simón de Cirene rallied together to reorganise the programme online and used the unexpected opportunity that the pandemic presented to explore the possibility of scaling the programme since it would now be accessible to more entrepreneurs virtually. To avoid disconnection and maintain contact with entrepreneurs, they introduced different strategies such as virtual meetings, networking sessions and in-person seminars nationwide.

 

Key outcomes and impact indicators

An 89% increase

in participants’ average monthly sales, from USD 3,608 to USD 6,843.

An increase

in the average number of paid workers in a business, from 1.45 to 2.26.

 A 10,7% and 19,1%

increase in entrepreneurs who improved management of their personal and business income streams, respectively.

An 18% increase

in the number of entrepreneurs who paid their total bills on time and a 50% increase in the number of entrepreneurs who paid themselves a regular salary.

By 2023,

more than 670 entrepreneurs will have received formal training from the Faculty of Business and Administration of the Pontifical Catholic University of Chile.

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