4 Small Nonprofit Challenges that Major Donors should understand (a Latin America lense)

Over and over again whilst working in collaboration with different nonprofits in Latin America, the same 4 challenges for small, local, organizations presented themselves. It is therefore essential that Major Donors understand these challenges if they want to be responsible and committed to making long term sustainable change in the region.

Supporting small nonprofits in Latin America has many benefits including higher comparative impact due to lower overhead and running costs and higher local community involvement and sustainability prospects. Nevertheless, before doing so, take into account the following challenges before taking the plunge!

Challenge 1: Visibility

  A little girl at one of our Education nonprofits wearing traditional dress

A little girl at one of our Education nonprofits wearing traditional dress

With over 1.5 million nonprofits in the US and 10 million worldwide, it’s no surprise that those with the loudest voices and biggest marketing budgets get noticed first. Furthermore, donors are bombarded more than ever in history with advertising. For example a city dweller 30 years ago saw 2,000 ads a day, compared with 5,000 today. This means that gaining donor attention is even more problematic for small nonprofits with already stretched resources. For Latin American small nonprofits, the geographic and cultural distance on top of other challenges make their visibility even smaller.

Advice for donors:

Do your research before deciding on where to direct your giving. Don’t go with the shiniest looking nonprofit (even if your best friend recommends it). First, analyse your values and identify which themes are important to you (eg Health, Education, Human Rights etc). Then research online or hire a consultant specialist to make recommendations based on these factors amongst others such as length and level of involvement etc.

Challenge 2. Nonprofit Lack of Donor Understanding

 Another School nonprofit. Here is Harriette getting to know the kids. This girl was telling her about her pets!

Another School nonprofit. Here is Harriette getting to know the kids. This girl was telling her about her pets!

For small nonprofits run by locals who are trying to attract foreign donors, it is usually very difficult to attract them due to a lack of knowledge regarding donor values and drivers. For example, during the evaluation process when my Philanthropy Consultancy vets nonprofits in Guatemala, a few nonprofits were surprised and uncomfortable when we asked about financials. One of the reasons for this is because there isn’t a very transparent or strict accountability system for nonprofits in comparison to more developed countries.

This lack of knowledge on the nonprofit side regarding foreign donor expectations means that they don’t appreciate the importance of transparency measures such as publishing annual reports or having a semi-professional website. As a result, these nonprofits are likely to be passed over by potential foreign major donors.

Advice for donors:

If you want to work with a small locally run non-profit located in a developing country, make sure you do your homework beforehand. You need to understand that your expectations may be different to what the nonprofit thinks they are so ensure from the start that you communicate your expectations clearly. You will need to ensure that the nonprofit is transparent and competent at reporting it’s expenses and how they use your donation. It is worth the effort collaborating with small foreign nonprofits as they are more likely to make a more community led and sustainable impact but you must also be patient and understanding of the nonprofit context too.

Challenge 3: Low Trust and High Corruption

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A general lack of trust in Latin American communities is extremely high due to historical, political and cultural factors. Public institutions are rife with corruption meaning that even services designed to protect citizens such as the police cannot be relied upon.

This hugely stifles nonprofit progress and growth. For example, “an idea arose to create a database to control and track drug cartels, but the lack of trust among officials rendered it inoperable because they could not find people to run the program.” This is another factor that translates into a low level of transparency and visibility regarding nonprofit income, for fear of extortion.

Advice for donors:

Bear this important culturally ingrained factor in mind when dealing with latin American nonprofits. Corruption within public bodies is one of the reasons why so many nonprofits exist in the first place so when involving yourself with public bodies, go in with your eyes wide open regarding the sad reality that they may let you and/the nonprofit down.

Challenge 4: Covering Operating Costs and low unrestricted funding sources

 A microfinance nonprofit helped this lady with the set up and initial operating costs to start a garment making business.

A microfinance nonprofit helped this lady with the set up and initial operating costs to start a garment making business.

Operations are large, essential costs that all nonprofits need help with and 48% of the nonprofits that Pionero Philanthropy represents said that staffing costs are what they most need funding for. This simple fact, typically puts off naive donors who prefer to see where their money goes such as towards material items rather than into unrestricted funds which can be used at the nonprofit’s discretion. Nevertheless, as Kevin Starr for the Stanford Social Innovation Review says; “Unrestricted money makes an organization work smoothly, enables innovation, and provides fuel for growth. It unlocks potential and allows people to get down to business”.  

Advice for donors:

Seriously consider having your donation cover essential running costs of the nonprofit. Think of it this way, when buying a cake, you wouldn’t stipulate that you pay only towards the eggs and sugar and another customer will have to pay for the electricity and staff salary. See this article for further elaboration on this point. There is no problem asking for an expenses and progress report regarding how your donation is being put to use however an element of trust also needs to exist when donating to operating costs. If you have any doubts regarding how your donation is being spent, rethink your nonprofit choice or employ a third party consultant on the ground to impartially verify that everything is going to plan.

If you keep these 4 factors in mind, there should be no surprises (well, fewer), if you choose to direct your Philanthropy towards the Latin America region. Even though giving locally or nationally may be an easier, more convenient option, the Latin America region only receives 6.3% of US Foundation Giving with a mere 0.6% going to Central America.

What does this mean? Well, there is a lot of impact to be made if Major Donors are informed and dedicated to long term change.

So, are you up for the challenge?  

Contact us today for a free consultation to get you started on your Philanthropy Journey in Latin America!

Stopping the Caravanas. Philanthropy’s role.

Here at Pionero Philanthropy, we want to make something clear about the Caravanas coming from Central America; simplistic reactionary measures such as increasing border law enforcement or cutting aid are simply, not credible or long-term solutions.

We are also not pretending that there are simple solutions either but by looking at some of the reasons why it is occurring, we hope, we can give some insight into some possible ways that philanthropists can help.

According to immigration lawyer Jennifer Harbury, who does pro bono work at the border for asylum seekers, “These people have the most horrifying stories I have ever heard”.

Most are fleeing for their lives, a situation that many in the developed world can not even begin to comprehend. See below video from the Washington Post to see a selection of these stories.

According to Customs and Border Protection data, Guatemalans accounted for nearly half of all migrants who sought to enter the United States and having lived in this special country for over three years, I have a greater understanding about why people choose to make the heartbreaking decision to leave their families and risk the US crossing.

I see and hear the hardships, inequality, corruption and lawlessness as well as the sheer courage and determination of many earnest citizens to make things work. At Pionero Philanthopy too, we work with incredible people and nonprofits who are making daily efforts to help resolve complex issues from empowering women and making more nutritional corn, to providing affordable healthcare and education to the most impoverished.

However, don’t take my word for it, here are some figures to illustrate the situation:

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I could continue however when presented with these facts in addition to hearing horrifying stories by regular Guatemalan people, you realise that those who are trying to cross the border are not chancers, but desperate to survive because staying in their own country is less safe than fleeing. The Supreme Court ruled that out of 73,000 credible-fear claims, 76 percent were found to have a credible fear of return.

“But they aren’t our problem” I hear you cry. Well, as long as the US shares a land border with Mexico, migrants will continue to be an ongoing issue, wall or no wall, unless reasons and opportunities are created for Latinos to stay in their own countries.


Here’s a thought: Maybe it’s patriotic to direct aid and philanthropy efforts towards Latinamerica? If these efforts create jobs, opportunities and security, then central americans will want to stay in their own countries and not want to take the risk in leaving. Foreign aid actually protects US interests and as by Sen. Marco Rubio (R-Fla.) said;  "Our aid to #Honduras & #Guatemala isn’t charity. It helps us more than them," "By seizing drugs before they enter U.S. & kill Americans."

Foreign Government support is an important element in order to strengthen state systems and processes such as the The UN International Commission against Impunity in Guatemala which investigates and prosecutes serious crime in Guatemala. However, from a private Major Donor standpoint, there are some organizations that you can support that form part of the ecosystem of supportive civil society.

Here at Pionero Philanthropy, we have a comprehensive database of outstanding NPOs that play a key role in the community that help create opportunities and brighter futures for Guatemalans. Every organization has an important role to play from strengthening Women’s Rights education and representation so domestic violence sufferers are able to get the support they need, to after school education programs with at-risk youth which lowers the likelihood of gang violence, another reason why people leave for the border.

Contact us about your part for a brighter future for all Americans in both Central and North America.

 

What do Guatemala nonprofits most need funding for? You may not like the answer....

When asking philanthropists “how and where do you want to help?” many respond with “where it is most needed.”

However, despite this initial and well-meaning sentiment from donors, when we asked our nonprofit partners “where is funding most needed?” 48% responded with an answer that isn’t much to many philanthropists’ liking:

Operations and Overhead.

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These costs include utilities, supplies and rent however almost half of the most requested area of operations funding (48%) is for salaries and staffing (see left).

These costs are not tangible, not “Instagramable”, not something where you can see a clear before and after. As a result, many donors don’t get the same “buzz” out of funding these essential costs in comparison with, for example, handing over school books to 100 smiling kids.

This article wants to urge philanthropists to seriously think about directing their contributions towards this crucial area of much needed funding if they are serious about making a long-lasting, meaningful and sustainable impact.

It’s time to get real and accept that overheads and operations are the foundation for nonprofit (NPO) success and a funding area donors should be proud to support.

So why contribute towards Operations funding, and more specifically, staffing?

  1. People Power is everything in small nonprofits

  Our Services and Operations Manager in a nonprofit partner’s office in Xela, Guatemala

Our Services and Operations Manager in a nonprofit partner’s office in Xela, Guatemala

The lifeblood of nonprofits is its people. During our NPO evaluation visits here in Guatemala, Pionero staff travelled up and down the country and met individuals who hold together whole nonprofit operations on a shoestring.

These heroes are fueled solely by exquisite Guatemalan coffee and their unwavering belief in their work despite the obstacles and weight of responsibility in their communities. They need investment, support and capacity building, without which the NPO would become inefficient, unstable and ultimately unsustainable.

We at Pionero believe that in order for NPOs to perform well in all 5 key pillars of sustainability, impact, efficiency, transparency and relevance, investment in additional, better trained or specialist staff is the foundation that needs fundamental maintenance in order for everything else to fall into place within the organization.

This may mean that Pionero makes it a condition of funding that philanthropists invest in nonprofit training in areas such as Strategic Planning, Monitoring and Evaluation and other key skills that the NPO fundamentally needs in order to give it a fighting chance at long-term stability and sustainability.

It may also mean that Pionero strongly urges recruitment. Too often, Pionero staff encountered overstretched staff heroically holding things together whose nonprofit would benefit most just from another person sharing the load.

2.) Just because Operations isn’t visibly satisfying, doesn’t mean it isn’t important

 Manual labourers at a reforestation NPO in Xela

Manual labourers at a reforestation NPO in Xela

Just because philanthropists may not physically see their contribution to Operations and staffing, doesn’t mean that the impact doesn’t exist or cannot be measured or expressed.

In this regard, it is the responsibility of those measuring and evaluating impact to convincingly express it in compelling ways. This reporting service is something that Pionero can provide to donors should the nonprofit not have the resources to do so.

To give a simple example, one animal welfare/rescue nonprofit we partner with desperately needs an administrator so that the directors can escape the back office and focus on their mission of raising awareness about animal welfare issues in the local community. In reflecting this impact, many quantitative and qualitative measures can be installed to fully reflect the sizable impact made to the donor.

For example, a time and opportunity cost analysis using attractive graphics could reflect how the directors were spending their time before and after employing the administrator. The directors would for example be able to increase the number of community education campaigns, neutering clinics and numbers of rescued animals. Mix these figures with photo evidence and you have a compelling impact report for the donor - and all this impact because they invested in an Operational cost.

3.) Many funds are “Restricted” and Operations Grants are extremely limited

 Medical supplies at a Health nonprofit is Sacatepequez, Guatemala

Medical supplies at a Health nonprofit is Sacatepequez, Guatemala

Many NPOs reported that a large proportion of their funds are restricted to very specific areas. For example, if an NPO runs a campaign to raise money for medication, any excess raised cannot legally go towards anything other than medication. Similarly and more importantly, Grant-making foundations prefer to fund specific projects and capital expenditures, rather than general overhead and operating expenses.

To give another example, one NPO education partner said they relatively easily found funding for large scale school construction projects. The problem they now face however, is how to sustainably employ staff to run the schools themselves. We challenge you to find a grant or donor that solely wants to fund day to day ongoing operational costs!

We at Pionero feel we have the responsibility to shed light on the findings of our NPO evaluation visits and to clearly communicate what our nonprofit partners truly need. Donor education and awareness raising regarding the importance of funding Operations is imperative if Pionero is to also stay true to its values.

So let's break the old fashioned notion that overhead is bad. Let’s be PROUD to fund essential bread and butter NPO operations that make nonprofits better fulfil their missions.

Contact Pionero to find out how you can support our outstanding nonprofits better serve their communities

Make a complementary consultation appointment with our friendly and passionate team!

Living our Values, Walking the Talk

Pionero Philanthropy has had an extremely positive, eventful and exciting month!

We welcomed a new Donor Relations Manager, Head Researcher and Communications Manager in addition to taking new client calls and making new Nonprofit partnerships in more remote areas of Guatemala.

With all these encouraging developments, I also felt it was time to take a moment, reassess, and revisit the strategic plan because “of all the contrasts between the successful and unsuccessful or between the leader and the follower, the single most important differentiating factor is strategy” (Olson and Currie 1992).

Furthermore, in addition to going through the Strategy process, I personally felt it was just as important to, as a team, reflect on ensuring that the company is walking its talk and living its values. It was time to hold a mirror up to Pionero and ensure it is meeting or exceeding the same high standards it expects of the NPOs it collaborates with.

The team spent 4 days in Antigua, Guatemala, at Pionero HQ revisiting and fine-tuning our values, vision and mission and making a Strategy Map which broke down these bigger picture elements into goals, objectives, measures, targets, and actions with deadlines.

So what did we decide in order for Pionero to deliver maximum Impact, Efficiency, Transparency, Sustainability and Relevance? How can we lead by example and be true to our expectations of others? Below is a selection of the objectives we committed to put into action for 2018/2019 based on the 5 pillars we evaluate our NPOs on.

1.)    Transparency

  • We shall publish comprehensive Annual Reports that shall be published online which go into more detail than what is required.

  • We shall publish our 2019 Strategic Plan online.

  • We shall always be open and honest in our communications to both NPOs and Donors in order to keep both parties satisfied.

2.)    Impact

  • We shall publish comprehensive Impact Reports using a variety of Monitoring and Evaluation tools for each collaboration and project we are involved with.

  • We shall increase impact year on year as we grow and collaborate with more donors and NPOs

  • We shall incorporate as a 501c3 Nonprofit in the USA so donor funds can be sent to (typically smaller) NPOs that aren’t registered in the US via the Pionero 501c3. This will ensure greater overall impact for NPOs and the wider community because it means that smaller NPOs won’t be overlooked because the US donor is unable to get a tax benefit

3.)     Efficiency

  • We shall incorporate a new CRM system and processes for efficient working and communications.

4.)    Need/Relevance

  • We shall evaluate how Pionero can be of greater assistance to NPOs and communities by carrying out a Needs Assessment of different Latin American countries in order to make the most informed decision regarding additional country expansion.

  • We shall be carrying out Feedback and Satisfaction surveys to both NPOs and donors to ensure that our services are relevant and exceeding expectations.

5.)    Sustainability

  • For sustainable operations, we are focussing on slow and steady expansion of the company going into 2019.

  • We have committed to dedicate 2019 to verifying all processes and systems so that they are water tight, efficient and effective before scaling up to the next country expansion in Latin America.

 

Stay tuned for us putting these objectives in action soon!

The Objective vs. Subjective Process of Selecting the “Best” Non-profits for Donors

Pionero is continuously improving, reassessing and updating its evaluation methods of nonprofit organizations (NPOs). This is, after all, the core of Pionero’s mission to promote the most outstanding NPOs and present them to the donors who are seeking them.

 Our Programs Coordinator, Isabela carrying out Stakeholder analysis of a small NPO

Our Programs Coordinator, Isabela carrying out Stakeholder analysis of a small NPO

It is however, not so simple to get a truly accurate reflection of an NPO in all our 5 criteria areas; Impact, Efficiency, Sustainability, Need/Relevance, Transparency.  In areas such as Efficiency and Transparency, it is somewhat more straightforward as we can analyse data sets such as annual reports and operational budgets to get a clearer picture. However, in other areas such as Impact and Need, some would argue that it is impossible to give a definitive answer given the subjectivity of factors at play.

Nevertheless, Pionero is committed to creating systems that accurately and impartially reflect NPO strengths and improvement areas whilst also being open and transparent regarding subjective areas. There is a delicate balance to be struck when advising donors between giving the accurate impartial facts and the subjective pros and cons regarding an NPO.  What Pionero therefore strives for, is a very comprehensive insight into each individual donor’s values, beliefs and philanthropy goals afterwhich Pionero will then present a shortlist of appropriate NPOs that are in line with the information provided by the donor. Ultimately however, Pionero leaves it up to the donor when making the final decision regarding which NPO to support.

 NPO evaluation of medium sized NPO, Niños de Guatemala

NPO evaluation of medium sized NPO, Niños de Guatemala

To give an example of the subjective nature of choosing the “best” NPO for the donor, given the choice between a small and a medium-sized NPO, both organizations’ merits and shortcomings may be seen differently depending on the donor. A larger NPO will likely have higher transparency levels but higher administration costs compared to a smaller NPO. The smaller NPO is more likely to send a higher donation percentage directly to the project and have closer community links but on the other hand, may have less transparent reporting structures due to lower staffing capacity. No NPO is perfect therefore it is ultimately up to the donor to use the detailed and impartial information gathered by Pionero to make the final decision.

Nevertheless, no matter what NPO is chosen, any of the NPOs on Pionero’s approved database is verified and meets the strict criteria set out by Pionero. Pionero has a selection of both small and medium-sized NPOs within the same thematic area. This is because even though the same issue area may be dealt with by several NPOs, each NPO will have its own solution style and approach to solve similar problems of which can be tackled in numerous ways.

To find out more about our 5 pillars criteria click here

To find out more about our services click here

For a FREE no-obligation consultation, click here

Disaster Relief Philanthropy in Guatemala Volcano Crisis

 Source: National Police of Guatemala

Source: National Police of Guatemala

On June 3rd, Guatemala witnessed the worst eruption from Fuego (“fire”) volcano ever recorded. 70 fatalities have been recorded[1] and 192 are missing[2]. These numbers are sure to increase over the coming days.

Pionero Philanthropy’s base is in Antigua, approximately 9 miles from Fuego and we have seen a large variety of Philanthropic efforts taking place on a local, national and international scale.

When searching for “Guatemala Volcano” on www.gofundme.com, a staggering 545 campaigns appear. One page has raised over $70,000 and the majority, at least a few thousand dollars. Some of these pages are raising funds that will be transferred to reputable non-profit organizations (NPOs), whilst others are using the money to buy supplies such as medicines, food and clothing to carry out their own efforts.

 The village of El Rodeo before and after the eruption. A whole village wiped out. Source: Meteorología GT

The village of El Rodeo before and after the eruption. A whole village wiped out. Source: Meteorología GT

Other actors include local and national companies, from cafes and hotels to nationwide Pharmacies and chains setting up Donation drop off points whose items are distributed through intermediary NPOs.

Local NPOs, including those whose expertise isn’t in disaster response, are utilizing their local networks to coordinate the distribution of materials and their broader network and donor bases abroad for monetary support through Social Media channels.

Given that Pionero’s mission is to connect donors to outstanding causes and that we are here on the ground, we felt it necessary to provide some reflections and pointers on what we believe every donor needs to keep in mind in order to best support Guatemala at this tragic time.

Pionero’s 5 pillars for selecting the most impactful NPOs are; Impact, Sustainability, Efficiency, Relevance/Need and Transparency and although we are currently in this period of great uncertainty regarding which NPOs are fulfiling these criteria best, there are regardless some key questions every donor needs to consider:

 

 Local volunteers forming human chains to distribute material donations

Local volunteers forming human chains to distribute material donations

1.) Material or Monetary donations?

This depends on where you are located. If located abroad, then money is indisputably the best method of supporting aid efforts.

There is no point sending, shipping or travelling to Guatemala.

There is no postal system, private couriers are expensive, and carry on luggage and plane tickets are an inefficient use of funds. Your money goes further by donating to a reputable and effective NPO who can source products at the best price in-country. Furthermore, the flow of money supports the local economy rather than adding to international couriers and airlines' bottom lines. If you are a local resident of the area affected, material items, so long as they are relevant and given to a responsible NPO is another possible option.

2.) Do your due diligence before donating.

Donate to organizations that have a good reputation in the local and international community. Unfortunately, during times of crisis and goodwill, there are also people who take advantage and set up fundraising pages and campaigns that are fraudulent.

 Locals, volunteers and first responders at Alotenango where survivors take refuge. Fuego volcano smoking in the background.

Locals, volunteers and first responders at Alotenango where survivors take refuge. Fuego volcano smoking in the background.

3.) Donate to Natural Disaster NPOs or trusted NPOs you have confidence in

Although the country hasn’t experienced such an event with this volcano for over a century, you ideally want to donate to organizations that already have experience and processes in place for effectively distributing the resources. In times of crisis when the situation is constantly changing, you want to trust organizations that have tried and tested processes in place and networks with important actors such as government agencies so that distribution of resources can reach those most in need in the shortest time.

However, we aren’t living in an ideal world here in Guatemala and other than the Red Cross that is working with CONRED (Guatemala’s national civil protection authority in disaster management), it seems that there are very few to no specialized NPOs operating in disaster relief at the time of writing. There are however, many other NPOs who specialize in other areas such as health and housing who are utilizing their networks and resources to take action. If a donor has trust in a particular NPO with whom they feel confident, then donating to these NPOs could be an effective and fast-acting option.

 San Miguel Los Lotes, a village in the path of the Piroclastic flows. Source: Getty Images

San Miguel Los Lotes, a village in the path of the Piroclastic flows. Source: Getty Images

4.) Think about HOW you want to help – long term or short term?

Sure, everyone’s knee-jerk reaction is to donate items for immediate relief, but what happens once the media circus leaves town? Think about whether you want your funds to be used for the short term or the long term. For example, once communities move out of temporary refuges, they will need help with housing, roads and ongoing health care. It doesn't matter within which area you want to help, but at least bear in mind that natural disasters, although quick to take place, take years, if not decades to recover from.

 

We hope this blog entry has shed some light on the unique situation that is happening here In Guatemala and leads donors to think a little more before they donate. It is definitely worth it if you want to make the biggest difference possible.

 

[1] https://www.bbc.com/news/world-latin-america-44369461

[2] https://abcnews.go.com/International/wireStory/latest-guatemala-volcano-rumbling-spewing-ash-55658054?cid=social_fb_abcn

Field Work Fun

The team has been visiting and evaluating a variety of incredible small to medium sized NPOs these last few weeks in the Sacatepequez region of Guatemala and what an interesting and mission affirming time it has been for Pionero!

 Isabela (Guatemala Program Coordinator) and Harriette (Director) carrying out their NPO evaluation with NPO Niños con Bendición.

Isabela (Guatemala Program Coordinator) and Harriette (Director) carrying out their NPO evaluation with NPO Niños con Bendición.

 Evaluating awesome Education NPO, Niños de Guatemala.

Evaluating awesome Education NPO, Niños de Guatemala.

We have visited causes related to education, youth leadership, women's rights, skills acquisition and even a project that takes vulnerable mothers and their children out of dangerous situations in order to rehabilitate and prevent them from putting the children into orphanages.

As expected, we have met some impressive NPOs doing incredible work on the ground but who need a little helping hand with promotion and cheerleading to prospective donors abroad! Well, that’s where Pionero comes in!

So how do we decide what NPOs to evaluate and visit? What process are we using to ensure that we are selecting the most impactful, efficient, relevant, transparent and sustainable NPOs? Here is the process:

  1. First we investigate what NPOs to consider by building an initial list. We ask contacts of ours, stakeholder groups, government records of registered NPOs and specific NPO websites that advertise NPO information.
  2. We send a preliminary email to the NPOs with a short questionaire to ensure that they meet minimum standards such as registration, constitution, accounting practices etc
  3. We organise NPO visits where we meet directors, stakeholders and beneficiaries. We ask targeted questions and seek further information regarding our 5 pillars; Impact, Need/Relevance, Efficiency, Transparency, Sustainability.
  4. We make a final report based on our findings that is signed off by the NPO for accuracy. This report is presented to targeted donors who are seeking NPOs that meet their requirements.

Stay tuned for the next instalment from us as we continue our visits going into the Lake Atitlan region this week!

 Tuc Tuc Transport.... somewhere in the Sacatepequez region!

Tuc Tuc Transport.... somewhere in the Sacatepequez region!