Gonzalo Vial

Ashoka Fellow
Gonzalo Vial
Chile
Fellow since 2022
This description of Gonzalo Vial's work was prepared when Gonzalo Vial was elected to the Ashoka Fellowship in 2022.

Introduction

Gonzalo produces something of incalculable value in Chile, a country where the public and the private usually do not mingle: trust. His foundation promotes round table meetings in underprivileged communities where local stakeholders sit down with representatives of companies who have operations onsite, to define much-needed infrastructure projects which then are proposed to federal government with Huella Local’s help, producing tangible improvements for all and creating the basis for replication of investments.

The New Idea

Gonzalo is a trust-builder at heart. He has created a new institutional vehicle called Governance Tables among three sectors that historically mistrust each other: local communities, the private sector, and government, to foster investment in the poorest, most isolated areas of Chile. The results are tailor-made infrastructure projects and conditions for trained local staff for new and ongoing replicable governance structures. The process that Gonzalo has created with his Fundación Huella Local (FHL) can be best imagined as a round table, with FHL being the cushion of equity that elevates a smaller participant to the other parties’ eye-level. Thanks to the mediation of FHL, three vicious circles are broken: underprivileged communities now feel empowered to organize themselves in local democracies, becoming trustworthy partners who receive proper funding; local private firms channel their tax-deductible payment to FHL who designs co-created projects that make sense to all stakeholders. This ensures financial and social sustainability of operations, and the federal government can be sure that its frequently mis- and underutilized funding is well-spent transparently.

FHL is a foundation that acts as an active participant with a seat at the table, translating needs and adding value to each project by providing technical expertise and multiplicator effects since they work at a regional, rather than local, level and can replicate successful practices from previous interventions. Investments create conditions that attract qualified professionals to settle in those vulnerable areas, contributing to decentralization. FHL has an open-source model. They edit and distribute best practices manuals and regularly send Gonzalo for talks at national and international levels.

Gonzalo is not interested in growing FHL into a large, singular operation, but rather in good growth: focusing on planting roots of change in the poorest communities of Chile to begin a movement toward more collaborative changemaking. FHL teaches, investigates, travels, and edits its how-to manuals to ensure the replication of their successful model anywhere in Chile and other parts of Latin America. Their philanthropy program deserves a special mention: in case there are no private companies already in the area, more isolated communities are granted access to a common fund not linked to the specific territory.

The Problem

The division between “the public” and “the private” is deeply rooted in Chile’s political history. Chile is the only country in the world that voted a socialist president in, and a dictator out. Chileans experienced the Frei and Allende governments nationalizing private property, only to see the Chicago Boys under Pinochet’s military dictatorship privatizing it all, including education, health, pensions, and water. Hence, the wound that Gonzalo’s model heals is deep. When Gonzalo says, “let’s sit together at a round table and see how we can make lives better for everyone,” this is something people have not heard in a long time, if ever.

Today, many local governments outside the capital do not have the resources (human capital and financial capacity) to invest in basic infrastructure projects in their communities that allow their citizens to live in a proper way. While on paper there are governmental structures that exist to provide funding to communities in need through a National Fund (Fondo Común), in which municipalities must bid for funding, even bigger communities are often left with little to work with, as on average only 15% of state budgets are transferred to municipalities. The members of the 237 underdeveloped communities (of a total of 345) make up around 67% of the Chilean population. While the average amount of public investment carried out by local entities in developed countries is 60%, in Chile the figure sat around 12% in 2017. Funds are often underutilized, and remote municipalities understaffed.

Gonzalo uses his expertise in government agencies and knowledge of the private sector landscape to create a trustworthy bridge between companies, government, and community members in order to break this vicious cycle of mistrust: community members mistrust companies for the potential negative effects they might impose on the territory and for their potentially extractive approach; central governments mistrust communities and don’t consider them as sufficiently qualified for the execution of complex projects; companies mistrust the public sector, considering it inefficient, slow and prone to corruption. As a result, there is a generalized distrust of government and citizens have low expectations for local development carried out by the government. In a modern, but highly centralized country like Chile, many rural areas still lack investment in infrastructure in basic areas like water, housing, waste disposal, security, roads, and Internet. Also, local human resources capacities are limited, and so is interaction among municipalities, which results in limited collective knowledge and resources.

Private companies that have their industries in vulnerable territories do not operate much in these areas aside from modest CSR investments in communities where they are already present, as they are well acquainted with the dearth of public expertise, and as of late also fear stirring up socio-environmental issues. This results in infrastructure deficits going unaddressed. For example, a wealthy family in the South might finance a cultural center by the lake, but not the renovation of the roof of the local school, because that’s “the State’s” business.

The Strategy

Gonzalo’s Fundación Huella Local (FHL) was founded to work with underprivileged local governments through strategic partnerships based on FHL’s technical expertise. This expertise allows them to apply for and access public funds otherwise often stuck or underutilized. FHL builds a trustworthy bridge between local communities, regional and federal government, and the private sector. Their Governance Tables, where stakeholders sit down together, are changing the way local governments, businesses, and citizens interact to achieve infrastructural community improvements for all. The model allows citizens to raise the urgent problems of their community to government level and, in turn, involve companies in the search for solutions.

The process involves first detecting the needs of an underprivileged community, fostering informed community participation, and strengthening local decision making. Then FHL designs the model and applies for federal funding. In parallel, FHL proposes its services as a consulting firm to local private companies explaining that, instead of developing costly infrastructure themselves, it is more strategic to invest in FHL’s proposal and form partnerships with residents and local government, hence multiplying their (tax-deductible) investment and assuring that the projects relate to the local needs and experience no resistance.

The figures speak for themselves: From 2017-2019, FHL had unlocked close to US $8.5M in public investment for a total of 93 infrastructure projects in 76 vulnerable communities. By 2019, they were operating in 26 municipalities, in nine of the sixteen regions of Chile. In 2022, just six years since starting FHL, Gonzalo has had tremendous success facilitating over US $17.5M in community investments in 140 projects and 40 public-private alliances – a 100% increase since the virtual panel – benefitting 250,000 people in 13 regions. The exponential growth that the foundation has had, starting from zero and approaching a projected multi-million-dollar revenue stream, signals the critical role it has played in kickstarting community development. More recently, FHL has started collaborating with several public institutions (including a major initiative led by the President of Chile), Sofofa (the major business association in Chile), and social entrepreneurs, among them Ashoka Fellows Delfina and Sebastián Salinas, to create a supporting ecosystem and mechanisms for future replication of the funding process independent of FHL.

FHL's multi-sectoral intervention process empowers members of vulnerable communities to assume the task of detecting needs and applying for funding in the future. In each of the established working groups, the institutional counterparts – companies and community organizations involved in the project – co-create strategies to strengthen social organization. In addition, development plans are generated in which the community is the protagonist of the entire diagnostic process and the execution of the initiatives contemplated in these plans. Gonzalo along with several of his teammates created a development indexing model to locate the communities with elevated levels of need. This proprietary index developed by FHL is based on the UN 2030 Social Development Goals.

It should be noted that at this stage, FHL works with infrastructure that enables territorial development: sanitation and drinking water, urbanization, green areas, bicycle lanes, public lighting, are among the projects that they consider the basis for the possible emergence of opportunities for progress for the communities in which FHL is active. One striking figure that exemplifies this approach is that, of the almost 10% of Chileans who do not have access to drinking water and/or a toilet, 70% live in rural areas. Only once the basics are ensured, can communities strive for more.

Gonzalo’s experience working for a government agency, combined with his prior knowledge on the country’s geographical inequality, have given him an insight into a pathway to solve the issues of funding, transparency, and project development. Whilst in the public and private sector, he learned the fundamentals of three key factors: where government budgets are spent, how to bring both government and the private sector to the negotiation table, and the functional organization needed to complete projects. With these factors, he designed a new model of intervention: once a preliminary list of infrastructure projects are defined, he would consult with leaders of the local community and the local municipality to determine which infrastructure projects are of the highest priority. Once the community identifies key projects, FHL engages private companies seeking to invest in infrastructural projects near their industries. FHL then instructs the local authorities on how to access federal funds to implement those projects, and once the funds are released, FHL advises the local government on their execution. To facilitate this process, the model involves Governance Tables (with all parties) at the municipal level, which meet every month to discuss progress and identify new opportunities. They work as a space of cohesion and dialogue between actors who typically do not work together.

Key to this is transparency: FHL provides a structure where all parties can see where the money goes. This transparency does not exist elsewhere and is only able to exist because the foundation is not constricted with the profit motive as other consultants are. Adding to this: in 2021, for the fourth consecutive year, FHL obtained the national FECU (Uniform Coded Statistical Form) certification for reporting, certifying it as a non-profit organization in favor of transparency. Another big plus for trust creation is that FHL was conceived solely as a foundation, always reinvesting earnings.

The advantages for the private sector are multiple: apart from not having to invest in infrastructure themselves, companies multiply their small initial investment in FHL’s consultancy by assuring themselves that their projects are aligned to the local needs and embedded in the community. Here is an example: Let us say a company needs a road to their plant. They can either buy the land, cut the trees, and build it, possibly facing opposition from the locals, or they can donate to FHL who develops the project, considering environmental aspects and receive a tax deduction certificate from the foundation. FHL then facilitates the State paying for the road, ensuring budgets marked for infrastructure actually get utilized by local projects. By creating the consensus at the beginning for the investment, the company investment is secured, and the local community has decision-making power on where the road should be, or could advocate for additional priorities and accommodations such as a bike lane, etc.

FHL has created a governance structure in which the oversight dashboard for projects, based on FHL’s own development indexes, is reviewed transparently by governments and firms providing a reliable pathway to connect opportunities. However, Gonzalo understands the most important outcome is not merely the infrastructure projects themselves but rather the new trust dynamic created, that allows for more future development in these communities.

Other foundations have been created to use Gonzalo’s business model and he has provided training, encouragement, and support from his foundation to help them get started. FHL is also constantly writing procedures manuals, with the methodological packaging for this purpose (how to set up the table, how to raise funds, etc., streamlining procedures to be able to reach more people), all in open-source methodology. Furthermore, Gonzalo has already started working with Ashoka Fellow Delfina Irazusta’s network “Red de Innovación Local” (RIL) on a project for community development in Argentina during the COVID-19 pandemic. Gonzalo is not interested in growing FHL into a large, singular operation, but rather in good growth: focusing on planting roots of change in the poorest communities of Chile to begin a movement toward more collaborative changemaking. For this reason, he has been giving many interviews and talks about his approach to other people and organizations and recently formed a group within FHL to help others replicate FHL’s approach and create a supportive and transparent ecosystem in local communities. The rule is simple: everything is online, and of public access to all stakeholders – full stop. As of today, FHL has 35 employees in four regional offices, hiring local professionals with specific knowledge of the particularities of the municipalities and regions in which they work. FHL has also created an area of studies for public policy advocacy and a diploma for municipal officials in Sustainable Local Development at the Pontificia Universidad Católica de Chile university. Furthermore, FHL has created a philanthropy program for the complex territories that are difficult to reach and where there is a major lack of funding. Thanks to this program, FHL can add contributions from corporate partners or even foundations that are not restricted to certain territories; today, they operate in 24 of the poorest municipalities.

The Person

Gonzalo Vial Luarte’s essence is to bring people together. He grew up in a Chile very different from the well-developed 21st century image of one of Latin America’s most prosperous countries. It was through a series of firsthand experiences and education that Gonzalo came to know that there were many other communities like his small hometown: underdeveloped, and with few avenues for public improvement. Gonzalo’s main goal in life is to improve the quality of life of the most vulnerable. A journalist once called him a “social cook,” who puts together ingredients to make the perfect dish.

Having gained admission to one of the best universities in Chile thanks to a table tennis scholarship, Gonzalo was drawn to study geography, which exposed him to the territorial inequalities in countries like his own. After his studies he went on to work for TECHO Chile, a social development non-profit organization eradicating shantytowns and providing permanent housing. It was with this experience that he became intimately familiar with the needs of rural, isolated communities and started several innovative programs within the organization to benefit them. He later went on to work with the Ministry of Housing and Urbanism (Minviu) in his native region in central Chile, Maule, in technical and financial positions, before being put in charge of one of the largest disaster relief efforts that the country had seen in response to the severe earthquake of 2010.

However, he continually saw that federal funding was often limited to natural catastrophes, and not linked to community needs in a permanent way. It was during this experience that he found a way to improve upon the funding pathways that had become stagnant due to bureaucracy.

While working at the Ministry, he was once forced to formally reject a private firm’s proposal for a beneficial project due to bureaucratic difficulties in a large meeting setting. However, instead of outright rejecting the project, afterwards he invited the firm to continue conversations with him individually, and he was able to make the project fit within the budget guidelines that the government agency proposed. It was right at that moment when he saw the opportunity to pave his own pathway to make community funding more attainable and came upon his idea for Huella Local, quit his job, sold his car, and cut his salary to approximately 1/6 of what it had been. He then started the foundation with that first project and began to build his team of engineers, former government workers, and an extensive list of community members from his past experiences with Techo. Gonzalo is the father of two small children, 4 and 6 years old. The pandemic saw them living in a poor rural area, experiencing the need for FHL firsthand.