Chiloé is an island that is off the coast of Chile in the Pacific Ocean, about 1,000 kilometres south of the capital Santiago de Chile. The nearest large and important town on the mainland is the harbour town Puerto Montt, about 60 kilometres away. Chiloé is the largest of a total of 40 islands which form an Archipelago. 35 of the islands are inhabited; More than 9,000 km2, Chiloé is the second largest island in Latin America and has around 130,000 inhabitants. The island's landscape is characterised by its many bays, canals, gulfs, lakes and lagoons.

The town of Ancud is located in the far north of the island and has around 24,000 inhabitants. Its typical wooden houses and churches charm the visitor. The island's social situation is characterised by the poverty of its inhabitants. Employment is scarce on the island and poverty and high unemployment lead to an array of serious social problems such as alcoholism, violence and homelessness. The remoteness of the island makes communication and contact with mainland Chile difficult for the inhabitants and they are very few opportunities to get a sound education. The mainland is 40 minutes away and can only be reached by ferry; there are plans to build a bridge between the island and the mainland. SOS Children's Village Chiloé-Ancud is intended to contribute towards giving a new home to orphans or children who are no longer able to live with their parents, as well as improve the standard of life for the neighbouring population.

Construction work on Chile's thirteenth SOS Children's Village started in August 2002 and was carried out with great help from the population. Even before construction work began, the concept of SOS Children's Villages had been brought to life for the people thanks to local newspapers, radio and collections and people had been asked to help with the construction work. Donations were collected and machines, tools and workers were made available. Local donations almost exclusively made it possible to create the SOS Children's Village's gardens and park. It was officially opened on 19 October 2003 by the President of SOS-Kinderdorf International Helmut Kutin, in the presence of many guests of honour.

SOS Children's Village Chiloé-Ancud is in the Bellavista district on six hectares of land that gently slope down to the bay of Ancud. Twelve family houses were constructed which provide security for a total of 100 children and give them a chance to grow up in loving environment. The houses were built out of wood in accordance with the local style and are about 160 m2 large. They have four bedrooms, two bathrooms, a kitchen, a laundry room, dining room and living room. The village also includes the village director's house, an administration building, a multipurpose hall for parties and events, a house for family helpers ("SOS aunts," who help the SOS Mothers with their work) and store rooms.

There is also an SOS Kindergarten on the grounds of the SOS Children's Village. Here, three group rooms mean that up to 60 children between the ages of three and six from both the SOS Children's Village and the neighbourhood can be cared for.