“Salaam aalaikum, shohna ba hohna”

A R Z U S T U D I O H O P E A N N U A L R E P O R T 2 0 1 0

T A b L E O f c O N T E N T s

pg. 4-5 Core Programs

pg. 6-7 Sustainable Community Programs

pg. 8-9 Expeditionary Programs

pg. 10-11 Creative Design

pg. 12-13 Marketing & Communications

pg. 14-15 Rug Sales

pg. 16-17 2011 Highlight Initiatives

pg. 18-19 Peace Cord

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2010 has been a pivotal year for ARZU STUDIO

HOPE. Despite increased instability in Afghanistan

and a troubled economy in the West, ARZU

has persevered in its mission to address some

of the most pressing social ills in Afghanistan

while simultaneously proving out a model of

self-sustainability through the sale of a high-end

product in the U.S. and international market.

From a starting point of 30 weavers in 2004, ARZU

has since created over 1000 jobs and provided

direct social benefits to over 3,500 beneficiaries

in rural villages in Bamyan and Faryab Provinces

where little opportunity exists. The ripple effect

of ARZU’s work today impacts the lives of tens of

thousands of Afghans.

ARZU has become a learning laboratory

for expeditionary economics. In 2010 we

successfully piloted four new alternative livelihood

businesses for women to produce goods for

local consumption, including low-carbon fuel

briquettes, biosand water filters, dehydrated

foodstuffs, and a bakery. Our goal is to innovate

and validate replicable, turnkey protocols that

can be shared with and scaled by others. As

such, we are providing pro bono advise to the U.S

military, Task-Force Brinkley, and UNAMA and have

played an important role in the U.S. Embassy’s

greening initiative. We see sustainable community

development as the ultimate pathway to peace.

Marketed primarily in the U.S. under the brand

name ARZU STUDIO HOPE, our rugs have

garnered several international awards, including

Interior Design magazine’s “Best of 2009” in

the rug category, Editor’s Choice and Special

Innovation at NeoCon 2009. The commercial

design community has begun to commission

custom contract rugs for the offices of socially

responsible corporations. This year sales are up

29% from last year, despite a challenged economy.

ARZU STUDIO has been seen in over 240 media

CONNIE K. DUCKWORTH

A LETTER FROM OUR FOUNDER & CEO

PAGE 4

ARZU STUDIO HOPE AFGHANISTAN CORE PROGRAMS

PAGE 5

“In 2010, $60,000 was paid directly to 720 Afghan women weavers for the production of beautiful, hand woven artisan rugs.”

EDUCATION

Key to the ARZU weaving project is the social

contract that requires all women and children

under the age of fifteen attend school. In

2010, ARZU provided literacy classes for 515

women and children across seven villages

and two provinces.

After a rigorous evaluation process, ARZU

was approved to teach fifth grade, the only

non-governmental school given this privilege

in the entire Bamyan province.

Afghanistan has one of the highest maternal

mortality rates in the world, so one of the key

focus areas of the ARZU social program is

maternal health.

“Since 2004, zero women under ARZU’s care have died during childbirth.”

In 2010, ARZU transported 250 women to

clinics for antenatal, birth, and postnatal care

and provided vaccinations for 300 infants

and toddlers.

With the generous support of the non-

profit, Beyond the 11th, ARZU has been

able to support the higher education of five

women interested in attending college. Our

most recent scholarship recipient, Siema,

has completed her second year of medical

school in Mazar-e-Sharif. The daughter of a

widow, Siema hopes that her education will

allow her to provide for her mother, brothers,

and sisters while assisting other Afghan

women and children to live healthy lives.

HEALTHCARE SCHOLARSHIPS

ARZU’s flagship rug-weaving project sets a

standard for no child labor, fair-labor wages,

and quality control. >

EXPEDITIONARY ECONOMICS

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ARZU STUDIO HOPE AFGHANISTAN SUSTAINABLE COMMUNITY DEVELOPMENT

Completed in December 2009, the Women’s

Community Center in Dragon Valley, Bamyan

has is a beautiful, multi-room complex where

women and girls are able to : Attend literary

classes; Share cups of tea and small treats

baked in the on-site bakery; Wash clothes in

warm water; and perhaps most importantly,

This facility, which has received both national and

international notice, was made possible through the

contributions of Beyond the 11th, the Sunshine Lady

Foundation, and an anonymous donor.

establish the solid foundation of friendship to support each other through the trying hardships of Afghan life.

WOMEN’S COMMUNITY CENTER

On a daily basis, 200-250 women pass through these doors to enjoy the amenities, read books in the library and attend classes.

PAGE 7

WOMEN’S COMMUNITY GARGEN

In May of 2010, ARZU piloted a Community

Garden and horticulture-training program in

Dragon Valley, Bamyan. Working the land in a

co-op fashion, women from the community

learned about soil cultivation, seed planting,

plot tending, and harvesting. Excess produce

was tested on the solar dehydrator as women

experimented with different techniques, times,

and best use of the machine.

48 women were employed as apprentices; over 600 pounds

of produce was harvested and distributed to families, and 300 bags

of dried fruit, herbs and produce were stored in the garden shed for

distribution and sale during the winter.

The community garden was made possible through contributions of the ABBOTT Foundation.

PAGE 8

ARZU STUDIO HOPE AFGHANISTAN EXPEDITIONARY ECONOMICS

BRIQUETTE PROGRAM

In partnership with Afghans4Tomorrow, ARZU has trained twelve

women apprentices in briquette production. Using “low-tech”

technology, the women press a mixture of recycled paper, sawdust,

and water to form the briquettes.

As of December 2010, apprentices at the ARZU Garden Center have created 70,800 briquettes. Briquettes are gathered into bags of 150 each for easy transport

and sold at the market as a substitute for scarce wood and

unhealthy alternatives.

BAKING PROGRAM

Under the tutelage of ARZU’s Director of Programs, apprentices learn

how to make various European-style products. Four apprentices from

various training sessions were selected to run the ARZU Bakery.

The baked goods are being sold to Bamyan-based NGOs, local

schools, and the regional government.

PAGE 9

WATER FILTER PROGRAM DEHYDRATION PROGRAMIn partnership with DACAAR, a Kabul-based NGO, ARZU trained twelve

women apprentices to make bio-sand water filter molds. In less than

two months, the women completed fifty molds and made kits for the

filters including a small sample of Dr. Bronner’s Soap - donated by the

company for the purpose of this program.

The filters are distributed to public facilities in Bamyan including schools, clinics and orphanages, as well as in the homes of the women apprentices.

ARZU has purchased a solar-powered dehydrator to preserve nutrient-

rich produce for the upcoming harsh winter. Women are trained as

they test various produce and fruits to determine the best use of

the dehydrator.

The dehydrated food will be stored in the ARZU Community Garden

storage room, where it will be doled-out during the wintertime to

supplement a meager diet of rice and naan.

PAGE 10

ARZU STUDIO HOPE U.S. OPERATIONS CREATIVE DESIGNThe Creative Department created two new rug collections to target both the contract and the high-end residential markets.

The first collection, geared towards the contract market, focuses on

simplified palettes and simple designs that range from modern to

geometric. All patterns allow for easy ordering and customization.

CONTRACT COLLECTION

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The high-end residential collection takes into account feedback from

various designers. High-end residential clients are looking for simplified

traditional patterns in neutral tones. Moroccan tiles, damask patterns, and

starry nights are some of the diverse motifs that inspired this collection.

HIGH-END RESIDENTIAL

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ARZU STUDIO HOPE U.S. OPERATIONS MARKETING & COMMUNICATIONS

2010 also marked the expansion of social media channels including the creation of

STIR blog by Founder and CEO Connie K. Duckworth.

T W I T T E R

F A C E B O O K

Y O U T U B E

V I M E O

In January 2010, ARZU STUDIO HOPE debuted a revitalized website, making a selection of rugs available for purchase online.

PAGE 13

Founder and CEO Connie K. Duckworth was selected as ONE OF EIGHT INTERNATIONALLY ACCLAIMED ENTREPRENEURS

to highlight in a web documentary premiering in November

2010 called “Changer Le Monde” (“Changing the World)

produced by CAPA-TV.

ARZU STUDIO HOPE appeared in over 60 placements in 2010.

PAGE 14

ARZU STUDIO HOPE U.S. OPERATIONS RUG SALES

COMMUNITY SALES

ARZU STUDIO HOPE teamed up with three Texas-based contract

dealers in 2010 to facilitate sales in the A&D market, a target market

for the organization. Additionally, ARZU STUDIO HOPE is aggressively

reaching out to potential corporate clients capitalizing on the shift

towards Corporate Social Responsibility.

PARTNERSHIPS

In 2010, new distribution partner Environment Furniture extended

ARZU STUDIO HOPE’s market reach into key Los Angeles and New

York City markets.

Expanding upon successful sales of an exclusive collection of Tribal

rugs through Pottery Barn’s website, ARZU STUDIO HOPE will now

begin producing exclusive designs for Pottery Barn in 2011.

COLLECTIONS

In the fall of 2010, ARZU launched the h.line rug collection, which is

available exclusively online. This line of “affordable luxury” features

chic modern designs with prices starting as low as $250.

PAGE 15

In 2010, ARZU STUDIO HOPE experienced

an overall sales increase of 11% from 2009.

Contract Sales increased 105%In-Country Sales increased 87%

PROGRAM

SG&A

HISTORIC SALES REVENUE

AFGHAN EMPLOYEES

PROGRAM EXPENSES

Staff - 44

Micro-Enterprise - 267

Weavers - 716

PAGE 16

ARZU STUDIO HOPE 2011 HIGHLIGHT INITIATIVES

In 2011, ARZU will expand its maternal services and outreach with the construction of a women-centered birthing center.The mission of this center is to provide safe, compassionate, and

supportive births to Afghan women. Skilled midwives will staff the

center and trained medical professionals from Bamyan Regional

Hospital will be on hand in-case of emergency.

In-line with ARZU’s shift towards expeditionary economics, we plan to build a rug finishing center and learning laboratory in Shashpul, Bamyan. This will be a small “test center” for the greater

commercial industry in Afghanistan and which will support low-tech,

sustainable solutions for all stages of rug production and expanded

employment opportunities for the local villagers.

SOCIAL PROGRAMS

PAGE 17

ARZU STUDIO HOPE has partnered with four internationally acclaimed architects who have each donated rug designs for an exclusive collection to be launched in the second half of 2011. This collection will be introduced in a museum exhibit in early

2012 and will be available to our clients by custom-order only.

ARZU STUDIO HOPE celebrates and honors the traditional artisanship of Afghan weavers with the debut of the Turkmen Collection in 2011. The intricate designs of these rugs derive

mainly from various Turkmen tribes, such as the Yomut, Ersari, Saryk,

Salor, and Tekke. Various vegetable and other natural dyes are used

to produce the rich colors. This ARZU STUDIO HOPE collection

showcases many traditional tribal patterns, including the most typical

motif— the octagonal elephant’s foot known as Bukhara. U.S. OPERATIONS

“ARZU STUDIO HOPE celebrates and honors the traditional artisanship of Afghan weavers”

PAGE 18

PAGE 19

Peace CordTM bracelets are hand woven by women in Afghanistan using parachute cord and authentic military uniform buttons. Peace Cord™ is a collaboration of ARZU STUDIO HOPE and Spirit of

America, an organization that supports troops overseas in delivering

humanitarian assistance to communities in need. As of December 2010,

approximately 150 women were employed under this initiative and more

hires expected in 2011 as demand and sales increase. Proceeds from

the sale of the Peace Cord™ bracelets supports ARZU STUDIO HOPE’s

efforts to help Afghan women lift their families out of poverty and

provides funds to our troops helping to rebuild the country.

visit www.peacecord.org for more information

PEACE CORD

Officially launched in December 2010, Peace Cord is ARZU STUDIO HOPE’s new “product with a purpose.”

b A c k c O v E R