Adventures in Philanthropic Investing - Lombok
Firstly, if you haven't been to Bali, stop reading and go! Secondly, if you love Bali, but want someting a bit farther off the beaten path, head over to Lombok (one island over), it's like Bali but circa 2000 AD.
Anyways, I came across this project because my sister has business in Indonesia. From here on I'm just going to keep writing as things come to me, so the information will likely get a bit convoluted as it's quite the random side project.
The general gist of it is that after the earthquake they're still far from fully rebuilt in some places even a full year later. I chalk it up to part villager naievety, part local indonesian investor greed, and a heaping of much-to-be-desired-beaurocracy sprinkled throughout. The image of the unfinished house below has been sitting as is for months when a single house shouldn't take a small team more than a couple weeks.
But... why???
So the Indonesian government is funding the rebuild according to certain guidelines; of note, is that they pay out construction in phases, so X $s when you finish X % or X item. Certain investors who shall not be named, mostly because I don't know anything about them other than they're local to the country, likely Jakarta, but not local to Bali, will as an example, spend the bare minimum to build say, the roof, then collect the government payout and bail, likely because building the project in its entirety isn't as profitable. Why the government doesn't just do the construction themselves is beyond me,
So what's so different about you?
Well, simply put, any potential profit doesn't really matter to me, as the only reason I'm even considering this is because I just want the houses built so these people have a roof over their heads, maybe also a school or two, and other things like working street lights. And as long as we're breaking even we can continue to fund more projects. I have run the numbers from my partner on the ground, Andreas, however, and it does seem that we'll have a positive margin of about 20% per project, each of which takes 1-3 months depending on team size and weather. This is great news as it'll beef up our funds, and allow us to take on larger projects, with the only downside that I can think of being, "what if the government doesn't pay out for whatever reason?" This is still indonesia after all...
Stay tuned...
As of today, a local entity has been incorporated, a bank account created, and a wire is on it's way. Though the funds I've sent are non-trivial (at least to me), I do have enough confidence this will all work out in the end, and that the financial risk is worth it because the altenative would be these people will continue to sleep without roofs over their heads, or schools, or basic utilities.