Scaling Up Human Capital

In 1974, at two years old, I emigrated with my family from Vietnam, eventually settling in Australia in 1980. For many years I focused on building a career in tourism and hospitality and, in 1996, my work brought me back to Hanoi. It was during this trip that KOTO was conceptualized, after seeing the extreme plight of at-risk youth who were willing and eager to be given an opportunity.

After a few years of planning and saving, I opened the first KOTO sandwich stall in 1999. What started as a plan to give nine street kids sustainable employment has now grown into an internationally recognized social enterprise that supports approx. 100 at-risk youth each year through a 24-month internationally accredited hospitality training program. For over 20 years KOTO has been my focus, and I continue to be inspired by the work we do each year, with now almost 1000 alumni.  

Vietnamese at-risk youth, including street kids and ethnic minorities, often become the victims of crime, human trafficking and sexual, physical and mental abuse; and, due to the extremely rare opportunities they have to break the cycle of poverty for themselves and their families, they are limited in the hope they have for the future. It is KOTO’s aim to change that reality for as many Vietnamese youth as possible. By providing a two-year program that trains them in English, life skills, and a certificate III in Hospitality (accredited in Australia), KOTO impacts not only the individual trainees’ lives but their families and communities. The proposed program will provide KOTO with the opportunity to put an additional 100 at-risk youth through the program, and empower 1000 alumni to pursue leadership, higher education, and international training opportunities, which will further expand the reach and impact of KOTO.

The scale of the problem of at-risk youths in Vietnam is difficult to measure. The most up to date statistic available from the Ministry of Labour, Invalids, and Social Affairs is from 2006, and estimates 23,000 street youth in Vietnam. It is unlikely this number reflects the scale of Vietnamese youth who are at risk, particularly those in rural Vietnam, where information is notoriously difficult to obtain, and often not prioritized.

One study of street children in Ho Chi Minh City, conducted by the Management and Sustainable Development Institute in 2013, showed that 92.5% of street children had been sexually abused at least once, and 98.3% had used illicit substances at least once. This small window into the lives of Vietnamese street youth highlights the danger they face daily. Unfortunately, vulnerable groups, including street kids, receive no support from the Government, with no social welfare system in place to assist them financially, mentally or with education.  These groups are left alone to fend for themselves, with the concept of escaping poverty and abuse unimaginable. KOTO provides these kids with both a future and a support network so they can pursue their ambitions and hope for a better life.

Each year KOTO accepts between 80-100 disadvantaged and at-risk youth (16-22 years old) to take part in our two-year training program. As part of the program we provide accommodation, training, uniforms, and meals to trainees. We also assist in their relocation from regional and rural parts of Vietnam to Hanoi, where they will live until graduation.

As a result of Covid-19, we have been significantly affected through all streams of income due to travel restrictions and economic challenges. In the process of navigating how to get through this period of uncertainty, we know that the kids we are trying to help are more in need at this time than ever before.  While we have needed to cancel one intake of 45 trainees are we cope with the financial struggle, our proposed program would ensure 100 students would graduate from the two year program.

Another element of our program is our alumni, and developing the capacity to harness and further develop their skills and experience. Our alumni program would seek further international partnerships, study opportunities, and leadership training for our graduates so they are able to further the KOTO mission of Know One, Teach One in the work they do.

We serve underprivileged and at-risk Vietnamese youth between the ages of 16-22. Our program has been delivered for 21 years and has been scaled from nine kids in 1996, to supporting 100 trainees each year. We want to continue to scale the program to increase our impact, through the number of trainees we can take each year and also by expanding opportunities for alumni beyond the two-year program. We want to prepare alumni to take on leadership roles across industries, and to make changes at the community and business levels that empower at-risk youth in Vietnam.

We have developed a strong reputation in Vietnam. The caliber of our graduates is high, and we now have five-star hotels and restaurants seeking out our graduates each year. Without exception, every graduate gains full-time employment. We have had trainees come from situations where they struggle to eat each day to working at hotels like the Hotel Metropole in Hanoi. This kind of trajectory impacts more than just the 100 trainees we take in each year. For many, their ability to complete the KOTO program and obtain secure employment creates a ripple effect of success for their siblings and parents to achieve the same.

The KOTO philosophy –  Know One, Teach One – encapsulates each of the

Elevate Prize dimensions. KOTO is focused on providing opportunities to a
severely marginalized population in Vietnam, at-risk youth. This group
continues to be overlooked in Vietnam, with KOTO being the largest enterprise in Vietnam working to address this problem. KOTO has elevated the issue of youth homelessness and disadvantage by changing the perceptions of street kids as lazy and helpless, to one of hardworking and capable if given the opportunity. Out of the success of KOTO, other social enterprises have emerged to address other social challenges.

When I traveled to Hanoi in 1996, I saw in many ways the life I had escaped when my family left 20 years earlier. I saw myself in so many of the street kids begging for money, and so I did what I thought would help – I gave them money for food and shelter. As I traveled back and forth between Vietnam and Australia, I came to recognize the same group of kids. I decided I could help this group of kids by using my savings to pay for their food and English classes. After three years of thinking my help was making a difference the kids admitted they had taken advantage of my support for their immediate benefit. They said they realized after three years of returning to Vietnam that I genuinely wanted to help, and that rather than giving them food, they wanted my help to get a job so they could support themselves. I had been giving them fish when they wanted to learn how to fish. At that moment I committed to getting them the independence they wanted and began laying the foundations for what eventually became KOTO.

As a Vietnamese raised in Australia, I feel a strong connection to the people of Vietnam. I have been extremely fortunate to have been given an education, and to have had the opportunity to travel as part of my work. When I returned to Vietnam in 1996, it was clear that many of the challenges my family escaped were still affecting Vietnam, and I was immediately overcome with a need to make a difference, even if it was only for one person. The first three years I spent failing to make a dent in the issue, but what I learned in that time about empowerment, support systems, and tenacity formed the foundations of KOTO, a social enterprise focused on giving a family to those without. As the years have passed, I have seen the drastic impact of kindness and confidence, and I have witnessed the power of hundreds of young adults beaming with pride as they realize they no longer need to worry. It is an emotional and empowering feeling to know that a simple idea has literally saved lives. I am proud of what we have accomplished but I know there is still so much more to do. 

When I started KOTO, the concept of social enterprise did not exist. With a background in tourism, I used my skills and experience to build an organisation that would provide the funds needed to give nine kids a salary and get them off the street. Without any business experience, I learned to be a social entrepreneur through a combination of failures and successes, and by giving tourists a chance to create meaningful change through the purchase of a meal. Over the past more than 20 years, I have gained the skills I need to operate in the often-complicated Vietnamese system, achieving the status of the first legally recognized social enterprise for KOTO. I have forged individual, corporate and government partnerships that have helped to bolster the reach and impact of KOTO, and I have never swayed from my simple original mission of teaching these kids to fish so they could provide for themselves and their families.  

I know every aspect of KOTO. Over the years, I have worked in every role, and I have stepped in to teach every class. The growth of KOTO over the past 20 years has required me to build a team of people, many of whom are KOTO alumni, to ensure the ethos of the organisation remains the same. My dedication to this mission, and my commitment to building a family for these children, is unwavering

Over the past 21 years there have been many moments when it didn’t seem like KOTO would survive. In the very early days of KOTO, finances were a big struggle. At that stage I was funding the sandwich shop entirely on my savings, and we were forced to close three times until I was able to collect enough money to reopen. The persistence during the early stages allowed us to begin to develop a reputation for the work we were doing, and later in the year we had our first international volunteer walk through our doors. This reinvigorated the program and gave the students a sense of pride that they were being trained by a foreign chef.

Shortly after this we encountered another setback, President Bill Clinton visited KOTO for lunch. What should have been a positive marketing opportunity created many issues for KOTO, with the Vietnamese Government deducing that a visit from the President to a small-time sandwich stall was suspect. This led to a number of setbacks and delays in processing business documents, and a constant police presence outside the stall. However, we continued with our program and eventually the work we were doing alleviated their concerns.

When I started KOTO, no one had taught me about leadership or what it took to make an impact in society, especially in a developing country. My leadership style has been shaped by the kids who have come through the KOTO program over the past 21 years, and in the three years prior to that.

Under my leadership, KOTO has grown from a small sandwich shop to a program that encompasses a 200-capacity restaurant, a training center, and accommodation for 150 trainees at any one time. We have built a community that is reflected in the fact that 62% of KOTO staff are alumni, all of the KOTO trainers are alumni of the program, and I remember each and every one of the almost 1000 names that have walked through our doors. As a leader I learned early on that I needed to listen if I was ever going to make a change. I have continued to listen and shape the program based on the needs of our trainees and staff. The support the trainees have is unlike anywhere else, and the confidence they gain from that support in unparalleled.

KOTO is a social enterprise. All profits generated from the restaurant are reinvested into the program. 

KOTO’s innovation stems from the focus on empowerment and building a community that continues to contribute to its success. KOTO is not about charity. It aims to give young people the skills they need to be independent and break the cycle of poverty for themselves and their families. The KOTO program is intensive, it is hard. Some students go on to start their own businesses, some have gone on to study Masters’ degrees overseas, and 100% have employment that they can be proud of. 

What makes KOTO innovative is that it has disrupted the idea that vulnerable people need ongoing support. KOTO demonstrates that sometimes all they need is a genuine opportunity to succeed. KOTO has built not only a training program, but a community that continues to give back. Graduates return to help in training or, in one of the 50+ restaurants that have been opened by KOTO alumni, they hire KOTO trainees. Further to this, KOTO is the only social enterprise in Vietnam that provides trainees with an international qualification that is recognized around the world.

Finally, KOTO is not only about hospitality. It prepares trainees for the challenges of life, and how to deal with some of the many complex experiences some of them have faced. They learn anger management, sexual protection, budgeting, and soft skills. Making sure KOTO graduates leave with all the tools they need to succeed is critical to KOTO’s program.

Our strategic plan in the next one year is:

1. Strengthen the relationship between KOTO International and KOTO Vietnam to collaboratively develop and leverage corporate funding opportunities and other projects.  

2. Acquiring and retaining profitable customers (trade agents, corporates, commercial partnerships, organisations).  

3. Engaging and strengthening the existing relationships with big funders and corporate sponsors (CSR grants, sponsorships, donations), education partners, and individuals.  

4. Increase organisational capability by investing in our people and process.  

5. Increase cash flow and liquidity ratio. 

6. Increase cost efficiencies.

Our strategy in the next five years is:

1. Bringing KOTO to the next level and make KOTO as a group that adopt different businesses by:

• Merging KOTO Alumni Community Company Limited under KOTO Group 
• Opening KOTO VietHarvest - A social enterprise that rescues and cooks for underprivileged communities. 
• Bringing Box Hill Institute to Vietnam for fee paying courses 
• Building our own school so that we do not have to pay for rent 

 2. Replicating our models into different cities and countries.

 3. Revolutionalising fishing industry by investing more in the KOTO alumni future leaders 

 4. Scaling up our model by doubling the number of trainees and expanding two more restaurants. 

 5. Making KOTO investment ready 

 6. Influencing policy makers to make changes of law and regulations that can support

The largest barrier we currently face is the financial impact of Covid-19. This has place a significant burden on our ability to generate income through the restaurant, study tours, and selling merchandise. It has also resulted in Australian Aid-funded staff being returned home as a result of their government's advice, and volunteer staff returning to their homes.

We expect the impact of Covid-19 to continue to be felt for years to come, not only through decreased tourism but also through the financial strain put on individuals and corporations who have donated to KOTO in the past.

In the immediate future, we may have to make adjustments to the number of trainees we are able to put through the program each year. We have cancelled one class of 45 in 2020 as we work to better understand how we move forward. It is possible that we look to scale down the program in the short term until we are able to generate the funds required to continue at the level we have been operating in recent years. While this is not an ideal solution, it will allow us to continue to make a difference to the lives of at-risk kids in Vietnam. With Elevate Prize we can continue to put trainees through the program without concern. 

Embassies 

• Australian Embassy in Hanoi 

• New Zealand Embassy in Hanoi 

• The U.S embassy in Hanoi 

Foundations

• EMpower 

• The Intrepid Foundation 

Educational partners 

• Box Hill Institute 

• RMIT 

• Macquarie University 

• Swinburne University of Technology 

Private Sector

• Experian 

• Rolld

• GUEST Accounting 

• Adobe 

• Univerlever 

• KPMG 

• Deloitte 

• PWC

• CSIP 

• Intercontinental Hotel Groups

The KOTO business model is a social enterprise training program. The business element of the organisation is run primarily through the KOTO restaurant, a 200-seat restaurant that serves a variety of cuisines, deserts, and beverages, all prepared and served by KOTO trainees. The purpose of this restaurant is two-fold. It provides a training ground for trainees to gain their first experience interacting with customers, and all the revenue made through the restaurant, through food and merchandise, is invested back into the training program.

The business also includes a social enterprise study tour, with international university and study groups paying a fee to learn about the KOTO program, and visiting the training center. KOTO also provides cooking classes, catering services and delivery services via the restaurant. The revenue generated from these programs and the restaurant cover approx. 50% of KOTO’s operating costs each year.

The social element of the organisation is the training centre and the support services that are provided to the trainees throughout their two-year program. This includes accommodation, meals, training, and administrative costs. KOTO also runs a community engagement program called the Winter Appeal, and the Dream ride. These are fundraising events for KOTO to cover expenses and to give back to underprivileged communities. 

Prior to Covid-19, KOTO had focused on targeting foreign tourists as the main customers of the restaurant. We have seen that with a global crisis such as this, we must also focus on generating a local customer base if we want to be resilient. We have needed to shift our business model slightly to accommodate the current market, shifting to target expatriate communities, Vietnamese businesses and locals, and developing a new menu to appeal to local customers. KOTO also plans to develop a Baking and Bartending class targeted at local Vietnamese customers.

Regarding fundraising, KOTO also plans to make changes to our sponsorship model during this economic crisis. Where we previously offered a single option to sponsor one trainee for the duration of their program, we will now look at offering shorter funding options to seek more, smaller donations to cover training expenses. In addition, we will continue to activity fundraise, and we will resume our well-known fundraising events – KOTO dream ride, and Gala dinner. We have also been granted the fundraising platforms from GlobalGiving which allows KOTO to provide tax deductions for donations from the U.S and UK. 

USD$805,000

KOTO has provided opportunities for at-risk youth for over 20 years in Vietnam. We would like to use the Elevate Prize to help continue to provide this life-changing program, and to expand it to include additional training and development for alumni. At KOTO, we have been heavily impacted Covid-19. We have had to implement changes that unfortunately means we are temporarily unable to maintain the numbers of trainees going through the program each year. Because of the tremendous impact KOTO has, not only on the trainees but their families and communities, we would like to use the Prize to ensure our intake can return to normal, or higher, as soon as possible. 

Our impact on the at-risk youth population in Vietnam is great. The success of our graduates speaks for itself, we have graduates who have gone on to study a Masters in Australia, or to work in international hotels and restaurants around the world, and over 50 alumni are now businesses owners themselves. We want to use the Elevate Prize to continue to empower at-risk youth, and to provide skills and training beyond their two-year KOTO programs that will see them become business and community leaders who can make an even greater different. 

We would like to partner with:

1. Universities via our Social Enterprise Study Tours - bring their students to KOTO for lunch/cooking classes and visits to learn and be inspired by KOTO. We also seek universities that can offer scholarships to our outstanding alumni as part of our KOTO Future Leader program.  

2. Corporations - via their CSR programs that have a shared values with our mission to implement such program via sponsorship or new initiatives 

3. Foundations - to build a sustainable funding mechanism for our program. 

4. Businesses - Services that can support us with consultancy for both business and program development. 

5. Organisation - we seek a research organisation to conduct social impact measurement, monitoring and evaluation report. 

6. Media partnerships - to deliver the story of KOTO and expand our reach 

7. International hospitality partners - to offer our alumni work-placement overseas. 

8. Social Impact Investors - we hope to empower our alumni to be leaders  by providing them with necessary funding and mentoring to start their own businesses and social enterprises.