Poverty Stoplight

The problem within the challenge (Poverty) we are trying to solve is the inefficiency and ineffectiveness of traditional poverty interventions that overlook the unique needs and circumstances of individuals and households. By offering tailored solutions, Poverty Stoplight achieves better outcomes in the fight against poverty.

It is important to recognize that poverty is a multidimensional problem that goes beyond the economic perspective. Globally, it is estimated that more than 1.3 billion people live in conditions of multidimensional poverty, which includes not only the lack of economic income but also the lack of access to basic services, education, health, adequate housing, drinking water, and sanitation, among others. This situation especially affects children, women, and people belonging to marginalized and excluded communities. Therefore, the scale of the problem is very broad and affects millions of people around the world.

According to the World Bank, over 700 million people around the world live in extreme poverty, defined as living on less than $1.90 a day. Additionally, many more people live in poverty or near poverty, struggling to meet their basic needs and access opportunities for education, healthcare, and employment.

In Paraguay, where the Poverty Stoplight program was first developed, poverty remains a significant challenge. According to the United Nations Development Programme, as of 2020, over 26% of the population of Paraguay lived below the national poverty line, with rural areas and indigenous communities facing even higher rates of poverty.

According to our PS records, 165,000 households suffer from some type of multidimensional poverty, affecting more than 1 million people. We understand that these are not representative statistics, but they can nevertheless illustrate the social reality, in which practically every family may have one or more indicators of multidimensional poverty that is affecting their quality of life.

Some of the factors that the Poverty Stoplight addresses include:    

• Lack of access to basic services: Many communities living in poverty lack access to basic services such as water, sanitation, health care, and education. Poverty Stoplight works to identify and address these gaps in service provision.

• Lack of income and economic opportunities: Poverty often results from a lack of income and limited economic opportunities. Poverty Stoplight helps communities to identify ways to increase their income and improve their economic situation.

• Poor health and nutrition: Poverty can lead to poor health and nutrition outcomes. Poverty Stoplight works to address these issues by providing education and guidance on healthy living and nutrition.

• Inadequate housing: Many people living in poverty lack adequate housing, which can have negative impacts on health and well-being. Poverty Stoplight works to address this issue by identifying and addressing housing needs in communities.

The Poverty Stoplight (PS) uses a metric and methodology that defines what it means to "not be poor" by conducting a survey with fifty indicators grouped into six dimensions: Income & Employment, Health & Environment, Housing & Infrastructure, Education & Culture, Organization & Participation, and Interiority & Motivation. These are matched to the UN's Sustainable Development Goals and each dimension is split into three colored panels with visual representations and simple text descriptions. The PS uses the concept of family in its self-evaluation and intervention, with a designated representative of the family, usually the head of household, implementing the program within the family supported by a mentor.

This allows individuals to identify their status corresponding to each specific indicator. All the information is uploaded to a digital Poverty Stoplight Platform (PSP) managed by their technical team that can instantly generate aggregated data of the results (number of families surveyed, gender of those surveyed, total number of reds/yellows/greens per dimension and indicator, etc.). From these aggregated data, Fundación Paraguaya (FP) develops a report that the family, can use to collaboratively determine priorities and develop a Life Map and associated Action Plan aimed at turning their reds and yellows into greens. Every step of the way, the mentor facilitates and also guides the family toward the development of their Action Plan. 

The PSP is a user-friendly technological platform (including software, an app, and an online site) designed around the PS. The PSP performs self-assessments in offline and online modes and generates life maps with prioritization of indicators to be improved for each family. It offers a central database with solutions identified by organizations implementing the PS worldwide, generates a geo-referenced map of multidimensional poverty, and provides grouped and disaggregated data visualizations.

The platform also enables different users to interact through various mechanisms, including building an action plan, prioritizing actions, suggesting ideas and solutions, and following up on the work done with different groups of users involved in the project. Once respondents complete the survey, the platform presents their results in a dashboard summarizing the poverty levels for each indicator and aids in constructing their Life Map.

On the back end, the survey pinpoints the family's location, allowing FP to generate a georeferenced map. This map allows coordinators to understand the geographic distribution of families in the community, filter by dimension or indicator, and determine the distribution and concentration of reds, yellows, and greens. Armed with this information, coordinators and their organizations can make better choices regarding the allocation of resources based on the collective needs of the communities.

The geocoded map also connects supply (existing programs that help address social issues) with self-reported demands (respondents' needs). It shows local governments and organizations where families with similar needs are located, facilitating the optimization of efforts and redistribution of resources to where they are most needed. It also helps build a solidarity network between families of a community to help each other with their overlapping needs. 

Our target population is people experiencing multidimensional poverty (relative or absolute) or some form of deprivation in general. Among others, we work with people living in disadvantaged communities, blue-collar employees, microfinance clients, homeless populations, small-scale farmers, people living in public housing, immigrants, and survivors of human trafficking.

It has been identified that the actions implemented for families to overcome multidimensional poverty and improve their quality of life do not prove to be effective, due to the following:

● Limited involvement of families, in the design of interventions to address this social problem.

● The social programs implemented are focused on addressing needs in a general way, based on data that does not allow to deepen and know the real needs of the core of society, the family.

● Current social development strategies focus mainly on improving family income, leaving aside other aspects that guarantee that the family can improve its living conditions by increasing this income, for example, generating the necessary skills so that families know how to improve their quality of life, helping them to draw up short, medium and long term life plans, improving their self-esteem and motivation, internalizing their shortcomings, developing skills so that they can adequately manage their finances. In other words, increasing economic compensation does not guarantee that families will have a decent life.

● A strategy has not been developed to determine the real impact of the actions carried out to help families overcome multidimensional poverty.

Therefore, the PS seeks to complement the social strategies that are currently being implemented, through a new work model that empowers families and generates structural and sustainable changes so that they can overcome multidimensional poverty and improve their quality of life.

The Poverty Stoplight breaks down the overwhelming concept of poverty into smaller, manageable problems that can be solved through simple interventions, making the “invisible” manifestations of poverty visible in the shape of simple, understandable colors. One of the methodology’s greatest strengths lies in transforming the sub-optimal conditions being measured into motivating forces for positive change. By empowering respondents to pursue solutions to each indicator in need of improvement, it helps in the prioritization and generation of concrete action to better redirect existing resources and promote collaboration among all stakeholders. 

Fundación Paraguaya is an NGO whose main objective is the elimination of multidimensional poverty. Founded in 1985, its mission is to "Develop and implement practical, innovative and sustainable solutions to activate the entrepreneurial potential of families to eliminate their multidimensional poverty and live with dignity". It does this via four interrelated programs: a) Microfinance; b) Entrepreneurial Education; c) Self-Sustainable Agricultural Schools; and d) Poverty Stoplight.

FP is recognized globally for its social innovation and has received several prestigious awards, including the 2018 Juscelino Kubitschek Visionary Award for its contribution to poverty reduction, and the 2020 VIVA Schmidheiny Award for being the most innovative social ventures in Latin America. 

Fundación Paraguaya's experience with implementing the Poverty Stoplight tool has been a key factor in its success. Here are some examples of the organization's experience with the implementation of the tool:

Pilot testing: Fundación Paraguaya conducted extensive pilot testing of the Poverty Stoplight tool before scaling it up. The organization worked with a small number of families in Paraguay to refine the tool and ensure that it was effective in measuring poverty and identifying areas for improvement.

Capacity building: Fundación Paraguaya has invested significant resources in building the capacity of its staff and partner organizations to effectively implement the Poverty Stoplight tool. This includes providing extensive training on the tool, coaching on how to work with families to improve their self-assessment scores, and ongoing technical support.

Mentorship: Fundación Paraguaya has extensive experience in providing mentorship to individuals and families participating in the Poverty Stoplight program. The organization has developed a comprehensive mentorship training program that equips mentors with the skills and knowledge they need to provide effective support to program participants.

Continuous improvement: Fundación Paraguaya is committed to continuously improving the Poverty Stoplight tool based on feedback and results. The organization regularly conducts evaluations and collects data on the effectiveness of the tool, and uses this information to refine the tool and its implementation.

Scaling up: Fundación Paraguaya has successfully scaled up the implementation of the Poverty Stoplight tool in Paraguay and several other countries, including Mexico, Colombia, and Guatemala. The organization has also partnered with a wide range of organizations, including governments, NGOs, and private sector companies, to expand the reach and impact of the tool.

Overall, Fundación Paraguaya's experience with implementing the Poverty Stoplight tool has been a key factor in its success. The organization's commitment to continuous improvement and capacity building, as well as its ability to scale up the implementation of the tool, have helped to make it a leading model for poverty elimination around the world.

Winning the challenge would bring significant visibility to the Poverty Stoplight tool and Fundación Paraguaya's efforts to address poverty. This increased visibility could attract new partners and supporters, who may be interested in supporting the tool's expansion.

Moreover, winning the challenge would provide Fundación Paraguaya with greater credibility and recognition for its work in poverty elimination. This could help to build trust with potential partners and donors, which could lead to additional opportunities and partnerships. The Poverty Stoplight would be viewed as an established player in the field of social innovation, and this could create opportunities for collaboration with other organizations and social entrepreneurs.

Additionally, winning the MIT Solve challenge would provide Fundación Paraguaya with resources to help scale the Poverty Stoplight tool and expand its impact. These resources could include funding, mentorship, and access to a network of social entrepreneurs and innovators. The organization would be able to leverage these resources to refine the tool, improve implementation, and expand the reach of its poverty elimination efforts.

Firstly, it represents a departure from traditional poverty measurement approaches, which often rely on quantitative data and standardized indicators to determine poverty levels. Instead, the Poverty Stoplight tool takes a more holistic and multidimensional approach to poverty, recognizing that poverty is not just about income levels, but also about a range of other factors such as education, health, housing, employment, and social inclusion.

Secondly, the Poverty Stoplight tool is innovative in that it actively involves individuals and families in the process of identifying and addressing their own poverty. By using a self-diagnosis approach, individuals are empowered to identify the areas where they are struggling and to prioritize their own needs based on their unique circumstances. This is a departure from more traditional top-down approaches to poverty reduction, which often rely on external experts to determine what interventions are needed.

Finally, the Poverty Stoplight tool is designed to be accessible and user-friendly, making it suitable for use in a range of contexts and populations. The tool uses a visual survey and a color-coded scorecard to help individuals and families identify their level of poverty across different dimensions. This makes it easy for individuals to understand and use, even in contexts where literacy levels may be low or where traditional survey methods may not be effective.

The Poverty Stoplight could change the market by providing a new approach to poverty reduction that involves the active participation of individuals and families in identifying and addressing their own needs. By empowering individuals to take control of their own situations, the Poverty Stoplight could lead to more effective and sustainable poverty reduction efforts. Additionally, the Poverty Stoplight's use of technology to collect and process data could lead to more accurate and timely information about poverty, which could inform the development of new products and services aimed at addressing poverty. This could create new opportunities for businesses and organizations to serve the needs of low-income populations, potentially leading to new market growth and innovation.

Overall, the Poverty Stoplight tool represents a more participatory and person-centered approach to poverty reduction, which puts individuals and families at the center of the process and empowers them to take ownership of their own development and progress out of poverty. This is what makes it an innovative approach to poverty reduction.

Horizontal scaling: We plan to expand to 75 countries within five years, and to most countries of the world within ten years. This is realistic given our growth over the past few years (two countries in 2014, ten in 2017, currently around 50). We have identified priority countries based on their poverty level and population, including India, Spain, Nigeria, Bangladesh, Ethiopia, Congo, Philippines, Egypt, Pakistan, and China. Our strategic plan foresees reaching 430,000 PS surveys by 2027, up from around 220,000 at present. We expect the growth rate of surveys to increase as more and more partners join the movement, and especially as the tool becomes established for use by government institutions and multinational companies with wide reach. Therefore, within ten years, we expect to reach at least one million families through 1000 organizations around the world. A number of potential partner organizations have already voiced their interest, often citing a need for more evidence as a major reason for hesitating.

Vertical scaling: Our focus shifts increasingly to vertical scaling. In particular, we work towards making the tool a more integral part of our partner organizations' work, so that it can fulfill its potential to make connections between various areas of intervention, and be a truly multidimensional, multi-level tool. As part of this effort, we are working towards increasing the number of participants with follow-up surveys (to at least 300,000) and documented indicator improvements (at least 1,200,000 documented improvements). A particular focus lies on governments, which not only allows us to reach a wider audience, but has the potential of changing the way that poverty is being approached. Our goal is to become an official government tool for the measurement and eradication of multidimensional poverty in the next ten years. Some government organizations are already using the tool at a smaller scale, and we recently won a large European Commission tender that allows us to pilot the PS to connect Eastern European citizens with government services, changing service delivery.

We are striving to measure our progress on all levels and stages of the theory of change. This includes the self-assessed multidimensional poverty by participants; the immediate changes experienced by participants and implementing organizations; as well as higher-level changes. Most importantly:  

1. Self-assessed level of multidimensional poverty: One key feature of the Poverty Stoplight tool is that it is based on self-assessment. Individuals and families use a visual survey and a color-coded scorecard to identify their level of poverty across different dimensions and approximately 50 indicators. Many of these indicators are aligned with SDG targets, across the vast majority of the 17 goals. By measuring changes in self-assessment scores over time, participants are able to track their progress, and Fundación Paraguaya is able to evaluate the effectiveness of its poverty reduction interventions.

1. Short- to mid-term changes within participants and organizations: The Stoplight aims to produce a number of short-to mid-term changes within participants and organizations. Most prominently, we aim to improve people’s understanding of the status quo, and increase aspirations to produce change. Therefore, indicators that capture aspirations, goal-setting, and engagement have had a prominent role in our evaluation strategy. Due to the complexity of these concepts, their operationalization is context-dependent, and we often use qualitative methods and case studies to understand our progress towards these goals. 

1. Long-term objectives: We think that in order to achieve the impact of poverty elimination, it is important to enhance critical and collective agency of participants, as well as to foster systems change. In various evaluation studies, including quasi-experimental and qualitative studies, we have used participant’s agency as a key indicator to measure progress towards our goal. Agency is a complex concept that needs to be operationalized multidimensionally, and we have found qualitative, participatory approaches particularly helpful for this purpose. 

1. Poverty Elimination: Ultimately, the impact we aim for is the elimination of poverty in all its forms, in line with SDG1. A multidimensional poverty index, constructed from the self-assessment dashboard data using the Alkire-Foster methodology that also underlies the Global MPI, is our main indicator to measure our progress towards that goal. We have been able to document our impact based on that approach in a number of evaluation studies, including randomized controlled trials and studies based on quasi-experimental designs.

1. Reach: While not measures of impact per se, indicators about our program reach have been important for us to monitor our progress related to our scale-up plan. Important indicators include the number of active implementation partners around the world, and the number of Poverty Stoplight self-assessments done. 

Our theory of change is grounded in a capability-based multidimensional approach to poverty, which recognizes that poverty is not just a lack of income, but rather a multidimensional phenomenon that involves deprivation across multiple dimensions of well-being. Drawing on the work of Amartya Sen and Martha Nussbaum, we view poverty as a lack of critical capabilities or freedoms that enable individuals to lead a life they value. Our theory of change also draws on Paulo Freire’s work on poverty reduction through restoring the sense of agency and community transformation, and Albert Bandura’s theory of self-efficacy as a behavioral driver.

We believe that individuals and families are best positioned to choose the specific dimension of their improvement, formulate realistic goals based on their environment, and overcome poverty by prioritizing the improvement of specific dimensions of their well-being. Our Poverty Stoplight methodology is designed to empower individuals and families to take ownership of their own poverty reduction process, by providing them with the tools and resources they need to identify their own strengths and weaknesses across a range of different factors that contribute to poverty.

Once individuals and families have identified their own areas of need, the Poverty Stoplight methodology provides them with a personalized action plan to address those needs. This plan is developed in collaboration with the individual or family and takes into account their own goals, priorities, and resources. By involving individuals and families in this process, the Poverty Stoplight methodology helps to build their capacity to take meaningful steps towards improving their own lives and breaking the cycle of poverty.

Our theory of change is based on the belief that by empowering individuals and families to take ownership of their own poverty reduction process, and by providing them with the tools and resources they need to do so, they can take meaningful steps toward improving their own lives and breaking the cycle of poverty. We also recognize the importance of collective agency and social networks in achieving sustainable poverty reduction outcomes. By building critical and collective agency, the Poverty Stoplight methodology seeks to create sustainable, long-term solutions to poverty that are tailored to the specific needs and circumstances of each individual and family. This approach is underpinned by evidence from a range of sources, including third-party research, findings from process and impact evaluations, and data from interviews with our target population.

In summary, our theory of change links our activities to immediate outputs and longer-term outcomes for our target population and is supported by a range of evidence-based sources. By empowering individuals and families to take ownership of their own poverty reduction process, and by building their critical and collective agency, we aim to create sustainable, long-term solutions to poverty that are tailored to the specific needs and circumstances of each individual and family.

The Poverty Stoplight Platform (PSP) is a software that works on 3 levels, first enabling collaborative work in building customized survey forms for different social contexts around the world, then collecting data through a survey model, and finally analyzing the collected data and tracking the progress of families' well-being over time.

The PSP relies on the Stoplight server, which provides a secure API to the main consumers of the software. This server is structured as securitized microservices via OAuth2 and is used by two main clients, Stoplight Web, and Stoplight Mobile.

Stoplight Web is a web application built with React that aims to be the management tool for program administrators and partners. Its user interface is intuitive and easy to use, which facilitates field evaluation with families by workers. For its part, Stoplight Mobile is a mobile application available for Android and iOS that allows field workers and facilitators to collect data for surveyed families.

In addition, PSP has an integrated chatbox that allows the sending of assessment results to families at any time, from the convenience of their mobile device and through messaging applications such as Whatsapp. These features make PSP a powerful tool for measuring, monitoring and impacting social welfare in communities.

Fundación Paraguaya has a strong commitment to diversity, equity and inclusion in all areas of our organization. This commitment is based on our Code of Ethics, which promotes diversity in all its forms, including diversity of gender, ethnicity, religion, sexual orientation, age and abilities.

To fulfill this commitment, we have implemented inclusive and non-discriminatory policies and practices in our hiring, training and professional development process. In addition, we have created committees and affinity groups dedicated to promoting diversity, equity and inclusion in our organization.

In the Poverty Stoplight team, we can highlight women in leadership roles such as Nancy Ramos, Director for Methodology; Lourdes Agüero, Manager; Katharina Hammler, Director for Monitoring and Evaluation; and Karina Bogarín, Project Manager for Stoplight Technology. We value the diversity of perspectives and experiences that all of our employees bring, and we foster an inclusive work environment where everyone feels safe to express their opinions and feel valued for what they bring to the table.

Our focus on diversity, equity and inclusion is reflected in our objectives to create an inclusive work environment and promote diversity in all areas of our organization. Through our strategy to incorporate these values into our work, we seek to foster a diversity of opinions, perspectives, and experiences, and to create an environment in which all people feel safe and valued.

The model is based on a "social franchise" approach, where Fundación Paraguaya trains and certifies local and international partners organizations as Poverty Stoplight implementers. These partner organizations are responsible for delivering the Poverty Stoplight tool and related services to individuals and families in their local communities.

The partner organizations are required to pay a licensing fee to Fundación Paraguaya for the use of the Poverty Stoplight tool and related materials. In exchange, they receive training, ongoing technical support, and access to a network of other Poverty Stoplight implementers around the world.

The licensing fee is typically based on a percentage of the partner organization's revenue from Poverty Stoplight-related activities, such as training, coaching, and consulting services. This fee structure incentivizes partner organizations to generate revenue from their Poverty Stoplight activities, while also ensuring that Fundación Paraguaya can sustainably fund its operations and continue to expand its impact.

Overall, the social franchise model of the Poverty Stoplight tool has proven to be a successful and scalable approach to poverty reduction, allowing Fundación Paraguaya to partner with a wide range of organizations and individuals around the world to implement the tool and empower individuals and families to overcome poverty.

Social Business Model: Fundación Paraguaya uses a social business model to fund the Poverty Stoplight program. The organization provides training and consulting services to other organizations, governments, and NGOs on how to implement the Poverty Stoplight methodology. This generates revenue for the organization, which is then used to expand and sustain the program.

Partnerships: Fundación Paraguaya has developed partnerships with various organizations, including governments, corporations, and NGOs, to support the implementation and expansion of the Poverty Stoplight program. For example, the organization has partnered with the Ministry of Education in Paraguay to implement the program in schools, which has helped increase its reach and impact.

Technology: The Poverty Stoplight program uses technology to reduce costs and increase efficiency. For example, the Poverty Stoplight app is used to collect and analyze data, reducing the need for expensive fieldwork and manual data entry. This helps reduce costs and makes the program more scalable and sustainable.

Community Empowerment: The Poverty Stoplight program focuses on building the capacity of local communities to become self-sufficient over time. This includes providing training and resources to help individuals and communities develop the skills and knowledge they need to improve their lives and break the cycle of poverty. By empowering communities to take charge of their own development, the program becomes more sustainable in the long run.

Impact Evaluation: The Poverty Stoplight program conducts rigorous impact evaluations to measure its effectiveness and identify areas for improvement. By continually improving the program and demonstrating its impact, Fundación Paraguaya is able to attract funding and support from various stakeholders, ensuring the program's long-term sustainability.

Our organization has been able to achieve financial sustainability through various means. One of our key strategies has been to diversify our funding sources. This includes seeking out grants from a variety of sources, generating revenue through our products and services, and securing investment funding from partners who share our vision and mission.

Through these efforts, we have been able to secure a number of grants that have supported our programs and operations. Some of the most recent grants we have been granted include the following:

Grants awarded

Funding Source: Skoll Foundation

Project Name: Skoll Community Impact 2023

Amount: USD 400,000

In partnership with Kiva, Fundación Paraguaya will work with organizations located in countries in South Asia, such as the Philippines and India, to expand the implementation of the Poverty Stoplight and reach the most vulnerable in different geographical and sociocultural contexts. Strategic partners that have been working closely with Kiva in those regions will be mapped out and established as "Stoplight Hubs": strategic partners that represent and distribute the Poverty Stoplight in their geographic area.

Funding Source: GIZ - Cooperación Alemana al Desarrollo

Project name: Comprehensive Social Responsibility Strategy for Overcoming Multidimensional Poverty of Small Producers and Collaborators in the Banana Industry.

Amount: USD 180,000

The project involves the adaptation and implementation of the Poverty Stoplight methodology on the most sensitive link in the banana chain, the small producers. It consists of measuring the quality of life of producers and their families in order to make their current situation visible, identify opportunities for management and implementation of targeted projects with funds from certifications such as Fairtrade, Rainforest Alliance, Naturland, among other certifications and social programs, and identify and generate alliances with specialized markets that connect the end consumer with the small producer through strategic communication of their living conditions and concrete actions to improve them.

Funding source: Atlas Network

Project Name:  Increasing Public Appreciation for Dignity and Liberty through the Poverty Stoplight

Amount: USD 40,000

The project "Increasing Public Appreciation for Dignity and Liberty through the Poverty Stoplight "

aims to increase public appreciation for dignity and liberty by educating and advocating for a participatory approach to poverty elimination. To achieve this, we provided Paraguayan local government officials with capacity-building workshops focused on the Poverty Stoplight: a dignity-based solution for the elimination of multidimensional poverty, which is already being implemented by 423 organizations in 50 countries.