“It Is Important for Us that Small Communities Develop”: How Kernel Is Changing the Well-Being of Its Operation Territories

Kernel is Ukraine’s largest grain producer and exporter, a global leader in the sunflower oil market, and a key supplier of agricultural products from the Black Sea region. It is also a business that is a powerful agent of change in the settlements, villages, and towns hosting its production facilities.

The Kernel team takes responsibility for improving the well-being of residents in the company’s operation areas. To this end, they initiate and implement various social projects. But is this easy to do? How do they choose priority initiatives? Is it always possible to find partners along the way?

On these and other aspects of change-making activities, we spoke with Lilia Marachkanets, Head of Corporate Social Responsibility, Social Development, and Partnerships at Kernel.

Tell us about the issues you work with. Which of them are priority ones?

Kernel is an agricultural production company, and this undoubtedly affects our corporate social responsibility. We focus on improving the well-being and quality of life of people in our operation areas. This is the first filter when selecting initiatives and projects. But now the situation is changing due to the tremendous challenges that we are all facing and dealing with both locally and nationally. Besides, there is war ongoing, and supporting the army is the only way for us to survive. We work with the military in a comprehensive and systemic way: from training on UAV operation to providing various equipment.

At the national level, we are interested in issues related to people’s well-being: reintegrating veterans, overcoming the challenges of war, activating society, community capacity, education, culture, healthcare, energy independence, and infrastructure.

In line with our strategy, we have two options for working in all these areas. The first one aims at quickly solving key problems: These include challenges related to the war, veterans, humanitarian aid, infrastructure, and healthcare. The second one is long-term: It concerns activity, capacity, accessibility, and economic development of territories.

Are the social projects you implement in partnerships your own initiatives or are they based on external requests?

We have two lines. The first one is bottom-up, where initiatives come from the bottom. Such projects can be submitted by a community, a group of activists, or a public organization. The second one is top-down, where we work with experts on a specific issue and decide to bring it down from the top and implement it. In this case, we always do this ourselves, while first looking for partners who share our values, vision, and approach. For our manufacturing business, it is unnatural to simply give someone funding and watch how well they implement the initiative we wanted to support. It is important for us to be involved from the inception of an idea to its implementation and monitoring of results. That is why we have been running our own charitable organization, Together with Kernel, for 12 years.

So, is it easier to start your own initiative than to find capable local partners?

In my opinion, businesses create foundations not because they do not trust the civic society sector, but because it is usually very difficult to meet the criteria they set for the implementation of desired initiatives. For example, I know only few organizations willing to go and work in the settlement of Varva in Chernihiv region — few people are interested in that. However, we operate there, and it is important for us that there is life there. Hence, we take responsibility and do what is necessary. We wouldn’t mind passing our initiatives to CSOs (civic society organizations). It would be great if there were local organizations meeting the criteria, doing everything clearly and efficiently, and working toward a common goal. We would gladly delegate our responsibilities and support them, and we would visit them to see how well everything is implemented.

A CSO in the settlement of Varva would need to find partners other than us and rally the community around itself. It would need to seek resources, too: not only financial ones but also time, expertise, etc. To do all this, one needs to have understanding, possess the tools, and work hard. Not everyone in the civic society sector has enough energy to fulfil this.

Therefore, among the top-down initiatives that we are currently implementing is “My Community” crowdfunding training for active groups and CSOs, which we launched together with “My City.” Within this program, we teach people to raise funds through crowdfunding, design and promote projects, and build partnerships. So far, there are 33 initiatives from six communities. This is currently a pilot project that we are monitoring, and we will scale it up in the future, as we operate in 190 communities.

Is it possible to find a CSO that does not yet meet your criteria but has the potential for development and could work on site instead of you?

In our case, we won’t be able to find a single organization, as we need constant physical presence in the community. Someone may appear temporarily, but how long will they stay? What will change during that time? For example, though local residents can receive humanitarian aid, they will continue to live in the same conditions and with the same problems. There are many international and Ukrainian organizations we cooperate with. Still, even having a good strategy, they simply lack the people to implement it on the ground.

How do you find partners and what criteria do you use to determine whether you are ready to cooperate with them?

If these are grassroots initiatives, potential partners contact us themselves, and we process their requests. We see how much they fit in with our strategy. To be honest, the civic society sector is not very common in our territories, but local governments contact us. We have designed request forms and developed standards that potential partners use to prepare their projects, where they specify their goals, objectives, and expected results. Then, we assess where we have a common ground. Another mandatory condition is co-financing.

How did you come to this? Do you conduct training for local governments?

Yes, we do, of course. For many years, we’ve had educational projects on various topics for communities. We teach them how to manage projects, build strategies, attract investment, and everything related to management. We cooperate with community associations that are also involved in education. We organize exchanges of experience through holding meetings between communities and taking their representatives to forums and various events.

What is the biggest challenge in local projects? Which initiatives require the most resources?

In terms of financial resources, projects related to infrastructure, while being vital, require the most investment. In order for people, including our employees, to continue living in a particular settlement, the latter must have appropriate conditions. Unfortunately, we still have villages without gas, water supply, sewage systems, and adequate sanitary conditions in schools, where children are forced to use outdoor restrooms. All of this needs to be addressed.

Infrastructure projects are always a challenge, since neither businesses nor local authorities have enough resources for everyone. This will probably continue for some time until our society achieves a certain level of economic development.

Another challenge is human capital. A lot depends on it, too, but, unfortunately, many people are leaving small communities. In Trostianets community in the Sumy region, we’ve been unable to complete the construction of a school bomb shelter for six months. While we have the funds, we lack constructors; besides, it’s dangerous.

How many people on your team are involved in communicating with partners when implementing various initiatives? Have you faced any communication errors?

We have a large team: about 200 people from the lowest level to managers. According to our corporate culture, we have no right to stagnate, but we do have the right to make mistakes. Sometimes, people miscommunicate, because we are all different, and we all filter information through the prism of our own experience. It can be difficult to find common ground. We are all imperfect, there may be certain issues, but we try to maintain a dialogue. Sometimes, we or our partners make mistakes. However, the main thing is to learn from them and not to stand still.

Can you share reputational risks with your partners?

Yes, that’s what we actually do. If something happens within one of our projects, we can’t simply shift the responsibility to our partner. Saying that it was not us but those we work with who did something, as well as making them solve the issue themselves, is far from a mature position. We always engage in a dialogue with our partners or community and find out what went wrong, explaining the problem where necessary.

Can any of your successful local projects be scaled up?

That’s what we’re trying to do. For example, we have a medical support project where we hired a doctor to travel to a community to provide medical services. We had no other option: Local health post had an employee who was physically unable to do the job, and there was no one to replace her. Such a project can be scaled up.

Educational projects scale well, too, with more and more communities joining them. Our latest project is the one we are implementing with CSOs — Capable Communities: A Local Development Platform. This is an online course that aims to help local government leaders master the theory of implementing reconstruction projects and the possibilities of attracting investment. It currently covers 350 communities. We have conducted such training several times and even met offline, though with fewer people.

Have you tried to launch any of your programs at the national level?

We partner with the Ukrainian Veterans Foundation and the Ministry for Veterans Affairs to enhance the businesses of defenders and their families. We support the development of a project as a whole — provide resources and expertise and co-finance veteran businesses that operate in the same areas as we do. Why do we do this? To improve people’s economic capacity and their independence from any resource flows, including ours. We are interested in communities being economically developed.

When problems arise, people turn to us, but we do not have endless resources to meet all the needs. Therefore, when civic society hubs appear that are ready to solve problems on their own, unite their community, and implement initiatives and positive changes, we support them. We work in the same way with small businesses that want to develop, create jobs, and pay taxes.

In general, the more diverse a system is, the more resilient it gets. Although we are the core of certain local formations, in order for them not to collapse and for their infrastructure not to fall into complete disrepair, they need to be strengthened. Local businesses and active citizens involved in economic and social activities are the pillars of this system.

Have you had any difficulties communicating important ideas to state institutions?

I can’t complain about any of the ministries we work with. The state is made up of people like us. I talk much to stakeholders at different levels, and I don’t see them failing to do something because they don’t want to: They just lack time or resources. For example, it took me about six months to meet with a deputy minister about one of our projects. And it’s not because they don’t want to — it’s just that the person has a lot of issues to deal with at different levels and lacks time. Experts are lacking, too, and sometimes it is also about the physical lack of employees. That’s why we reinforce them where we can.

Perhaps, in addition to those already mentioned, you have other projects you are implementing together with the state? If so, which ones?

We cooperate with the Business Without Barriers community and the First Lady’s How Are You? initiative while also launching rehabilitation centers in district hospitals. We negotiate with the Ministry of Health on a project assuming mobile teams for communities and energy independence for hospitals.

What do you look at to assess the success of local projects? How do you understand which initiatives can be continued and which ones should be terminated due to the lack of outcomes?

We understand which projects to work with and which ones to reject at the request stage. As for assessing success, we look at what the expected results were at the start and compare them with what has been achieved or what has changed after the idea was implemented.

Ideally, we want to create a platform where everything is digitized and we can segregate and analyze the indicators we collect. This will also help us assess the impact of projects and our investments on community changes. But that is still a long way off.