South Africa is a very racially diverse nation. It has the largest population of people of Coloured (i.e., mixed racial background), White, and Indian communities in Africa. Black South Africans account for slightly less than 80% of the population. South Africa is often referred to as The Rainbow Nation - a term coined by Archbishop Desmond Tutu and later elaborated upon by then-President Nelson Mandela as a metaphor to describe the country's newly-developing multicultural diversity in the wake of segregationist apartheid ideology.

The Eastern Cape is the poorest province in terms of average on monthly expenditure, followed by Free State and the Northern Province according to the Statistics SA report: Measuring Poverty in South Africa. The Eastern Cape has the highest unemployment in the country, according to a 2006 state of report release by the South African Network agency. There is a direct link between the high unemployment rate and the low literacy levels (lowest literacy rate amongst all provinces at 72.3%) vs 96.4% for the Western Cape for example.

The low literacy rates and the mostly agricultural communities have conspired to dampen economic growth, the slowest amongst all provinces. An acute skills shortage is also one of the main reasons to the slow growth. Although no statistics exist to correlate the low literacy rates, economic growth and skills shortage, it is a factor that businesses have highlighted to every level of government.

Rainbow Kidz is in a prime position, based within an agricultural town, to assist with adult education, which has been earmarked (by several government research papers) as one of the keys to unlock the poverty trap that the people of Grahamstown are experiencing compared to the rest of South Africa.