PUAD 636 AU IPODERAC Social Objectives & Supporting Young Boys Case Study

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Please write 350 words comment in the case studies and the other reading that I attached only, you can answer some of the question in the assignment if you want.

and as i mention buddy please stay away from summery and be positive it should be your thought or opinion


Write 350 words comment in the case study and the reading:

Social Enterprise

Assignment: The Mexican charitable organization called the Puebla Institute for Rehabilitation (or IPODERAC) provides a home for street children and has gained many supporters in the U.S., largely due to Agustin Landa, the extraordinary nephew of the founder. Although it raises funds from individual contributions, corporations and government, most of its funds come from its social enterprises. So, let’s learn how that works. The first case describes the founding and movement towards social enterprise as both a fundraising and education model for the children. The follow-up case from 2012 concerns the impact of the H1N1 (also known as the “swine flu”) pandemic on this NGO’s sustainability – a situation that should resonate with us today. Questions to consider: What makes IPODERAC’s programs a “social enterprise”? What would you recommend to assure sustainability? Are there any concepts or facts in the assigned reading that help you understand the case?

The Reading:

1-IPODERAC (Puebla Institute for Rehabilitation)

Attached as PDF

2-IPODERAC: Finding the Path Towards Sustainability

Attached as PDF

3- Social Enterprise by Janelle Kerlin, Routledge Companion 2020

This chapter called “Social Enterprise,” by Janelle Kerlin, is Chapter 31 in the Routledge Companion to Nonprofit Management, edited by Helmut Anheier and Stefan Toepler (2020):

Attached as PDF

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For the exclusive use of A. Alneel, 2020. S w W12064 IPODERAC: FINDING THE PATH TOWARDS SUSTAINABILITY Gerardo Lozano and Francisco Layrisse wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2012, Richard Ivey School of Business Foundation Version: 2012-08-16 On April 11, 2009, the first cases of so-called “swine flu” were detected in Mexico. Within a few weeks, the World Health Organization had labeled this disease as “Human Influenza Virus caused by H1N1, a subtype of influenza A. By that time, Mexico’s financial environment had already felt the negative effects of the global economic crisis, and the emergence of the influenza crisis made an already bad situation even worse. A few days after the first of the H1N1 victims had been declared, a national contingency plan led to the closure of virtually every public place, mainly in Mexico City. Initially, the closure included schools and public entertainment places, but subsequently, it extended to bars, nightclubs and restaurants. Marcelo Ebrard, head of the Federal District, announced that “Mexico City should be prepared to live with this virus for a long time. We must take extraordinary measures.” Meanwhile, in his office in Atlixco, Puebla, a small town in México, Francisco Jaimez Luengas,1 the executive director of the Rehabilitation Institute of Puebla, Civil Association (i.e., IPODERAC, by its Spanish initials) read the news in the local paper. Since his organization earned its revenues through the production and sale of gourmet cheeses, Luengas recognized that this decree would have a profound impact on IPODERAC, one that was unprecedented in the history of Mexico. Shortly after the news had been published, the sales of the organization’s gourmet cheeses began to decline sharply. Since Mexico City’s restaurants constituted IPODERAC’s main customers, the government closures resulted in a 40 per cent decrease in business for the organization in the months following the closure announcement, a situation that threatened IPODERAC’s financial sustainability. As the situation worsened, IPODERAC’s board asked Luengas to submit a plan to strengthen the sustainability model as a way to avoid similar crises in the future. Without having a clear idea on how he should deal with the current situation, Luengas wondered whether the diversification plan that had already 1 Francisco Javier Jaimez Luengas graduated in Philosophy and Social Sciences from ITESO Guadalajara, Master in Urban Management from the Universidad Iberoamericana Puebla. He also has further studies in fundraising from Procura AC and Social Leadership from the Instituto Tecnologico de Estudios Superiores de Monterrey. He has a 20-year career in NGOs of different kinds (indigenous, rural, migrant, vulnerable children), especially in the areas of productive projects. This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 2 9B12M066 been launched within the organization might serve as a reasonable plan of action. In order to comply with the board’s request, Luengas had to provide a response in less than a week, so he immediately started reviewing the organization’s financial data (see Exhibit 1). A Glimpse into Present IPODERAC More than four decades after its founding, IPODERAC, a home for street children, had managed to develop a solid educational model that aimed to educate boys. Abandoned and living in vulnerable circumstances, the members of this societal group required support and training in order to become selfsufficient.2 IPODERAC’s model, based on personal development through work,3 had proven to be successful, having achieved a high level of social reintegration among Mexico’s homeless young people. IPODERAC had achieved a financial sustainability strategy in which 75 per cent of the revenue came from its own internal production projects — primarily from the production of gourmet cheeses — which meant that the organization had to rely on donations and other fundraising activities for only 25 per cent of its income. However, accomplishing this self-sustainability model had not been an easy road. On the contrary, throughout its history, IPODERAC had experienced some highly difficult times amid its efforts to sustain the organization and realize the dream of Maria Elena Landa, one of the institute’s founders. On the road to financial sustainability, IPODERAC tried to develop countless productive projects, unfortunately with as many failures. Through trial and error, the organization accumulated a wealth of experience that was later used to achieve a turnaround of production activities. Luengas put it this way: The real change in IPODERAC was the result of a reflection process in which it was concluded that the purpose of the productive projects was not only to generate money, but to find a way to link the organization’s business to its educational model. This way, the productive activity would not only generate income, but also teach great lessons to the boys, develop their skills and prepare them for their future jobs. From that moment on, the institute developed business units to selfgenerate income. Each of these units became true social enterprises involving the youngsters and other people from the community, who provided their expertise, intelligence, skills and their desire to do things the right way. As the business side of the organization grew, the educational model was reinforced because it demanded greater efficiency. It was like a virtuous cycle: the business model reinforced the educational model and vice versa. The Social Issue in Mexico The problem of street children in Mexico was a very serious one. “The country had approximately 100,000 children in the streets, and, in the capital alone, there were approximately 18,000.”4 2 IPODERAC’s current mission states: “To guarantee help for street boys and abandoned boys, supporting other institutions with the same mission and organizations that decrease the generation of homeless and abandoned children, favouring selfsustainability, to construct a better future together.” 3 For more than a decade, IPODERAC has developed the “Training model by working” together with the international organization Terre des Hommes and the Centre for Educational Studies, AC (EEC). This model seeks to develop skills for life and for work. 4 El Universal, “Registran 100mil niños de la calle en México,” August 2004, www2.eluniversal.com.mx/pls/impreso/noticia.html?id_nota=241778&tabla=notas, accessed February 22, 2012. This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 3 9B12M066 Moreover, in a census made by UNICEF it stated that 70.17 per cent of children living on the streets had come from families consisting of five to 10 members; from that 70 per cent, 11.86 per cent of the families were made up of nine or more people. Moreover, 22 per cent of these families were sustained by the mother, in contrast with 13.98 per cent in which the father was the breadwinner; 9.68 per cent were economically supported by both parents, and 7.53 per cent of the households were supported by the stepmother or a stepfather. Among these groups, 13.98 per cent reported that “everyone looks out for himself or herself,” and 18.28 per cent said that the support of the house was divided “among all.”5 According to the descriptions in UNICEF’s census, once on the street, these children lived under extremely poor conditions: only 5.38 per cent ate meat, while 61.29 per cent consumed tacos, sandwiches, and cornbread, and 23.65 per cent ate junk food. Respiratory and gastrointestinal problems represented the major diseases in this group, and during a six-month period, 90.3 per cent of the children reported being ill. According to interviews done by UNICEF, seven out of 10 of these children abused substances such as thinners, cement, marijuana, alcohol and pills; 8.6 per cent had used drugs within the past year, 32.6 per cent had been users for one to two years, and 24.73 per cent for more than three years. Furthermore, sexual activity among these children started early: 43.02 per cent reported first having sex between the ages of seven and 14 years old. Almost half of the children (49.46 per cent) reported having an active sex life.6 IPODERAC’s Long Road to Success From the “boteo”7 activity to the procurement of more than 10 million pesos8 annually through productive projects, IPODERAC had lived out countless stories throughout its 45 years of existence. The original conception of the institute’s founders was to assist the prison inmates of Puebla. Realizing that their attempts to rehabilitate these individuals remained unsuccessful, the members did some research and discovered that more than two-thirds of the prisoners came from broken families and had been abused within the family circle and left on the street. After this discovery, the founders decided to shift the organization’s focus, instead devoting their efforts towards developing a home for street children, thereby attacking the problem by its root. In 1966, IPODERAC began its operations on nine hectares of land, and, at about the same time, the group’s production activities bagan. As a necessity, the organization used part of the fertile land for agriculture and livestock activities in order to grow and produce food for the children and staff. Simultaneously, the educational model for children was created, based on the same philosophy of the rules of street life in which work was necessary to live. The organization’s leaders discovered that homeless children developed great skills for survival, with begging representing their main “job.” As a result, the children learned useful tactics for convincing people to buy or give them the things they needed to survive. IPODERAC’s own organizational model was developed on this basis. The appointed educational team decided to use the children’s skills to their advantage. As before, the children had to work to obtain the necessities of life, but at IPODERAC, there was one fundamental 5 Infancia-Pobres Blogspot, “Estadísticas de los Niños de la Calle en México,” 2009, http://infanciapobres.blogspot.mx/2009_05_10_archive.html#6936487069396127631, accessed February 22, 2012. 6 Ibid. 7 Boteo: common fundraising activity in Mexico that consists of asking for donations at major traffic intersections in the city. The collection is made in cans or jars, which is why the practice is known as “boteo” (meaning “can” or “jar” in Spanish). 8 10 million pesos = US$770,000. As of the time of writing of the case, 13 Mexican pesos= one U.S. dollar. This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 4 9B12M066 change: the boys had to achieve their living through dignified employment. Additionally, IPODERAC felt that the best way to teach children was to lead by example. The educational director at IPODERAC, Ignacio Pérez Mondragón, said: This logic also influenced IPODERAC in its strategy to obtain resources to achieve its mission. To put it in simple words, if the philosophy behind the educational model is that the children must obtain their own resources to live with dignity, then the organization must do the same. Words may convince, but leading by example will achieve much better results. This is the reason why our educational and business models evolved at the same time. Under this premise, from its own farm production, IPODERAC began selling vegetable surpluses that had initially been designated for consumption on the farm itself, marketing any excess produce from the farm in the nearby towns. Shortly thereafter, in 1971, due to growth and to the admission of more children, the organization began to invest in production projects of greater scale. With technical and financial assistance from the government, IPODERAC embarked on a business venture to operate a major plantation of avocado trees, which were indigenous to the region. Atlixco, located 20 minutes from the city of Puebla, was an avocado-growing area, and the founders thought this new farming venture represented a logical and seemingly viable project. They proceeded to plant the trees and then waited for the usual five-year cycle to harvest the fruits of their investment. This waiting period brought unpredictable risks, a large investment, and, of course, delivered no income. Time passed, and by 1976, the trees bore fruit and the business started to generate an income. However, even though the boys living in IPODERAC assisted in the production tasks, the cost of running the new operation was extremely high. Additionally, after a while, increasing competition caused sharp fluctuations in prices, and the surrounding population’s constant theft of the fruit eventually made the operation unprofitable. The situation could not be salvaged, so a decision was made to cut down the trees. When the ground was cleared, vegetables were planted, always with the help of the youngsters who lived at the institution. As time passed, this project became more than simply a source of food for the staff or a source of income; it became a key component in the organization’s educational model. Mondragón explained: When boys come to live at IPODERAC, we do not have ways to force them to stay here at the institution since the doors are always open for when they want to leave. This is where vegetable sowing plays an important role in the retention of the boys. On arrival, they are assigned each to a small plot of land, which is theirs and nobody else’s; they are solely responsible for its care. The boy might not be motivated to stay in the institution, but he feels a strong motivation to stay and to see the results of his work. Later on, he will be able to share the fruits of the earth with his peers. For many, this is the first time they have a sense of belonging. After the vegetable project became well established, in 1980, the staff at IPODERAC took a stab at quail production, which seemed a logical step because the area was a big producer of these birds. IPODERAC launched this initiative, but it ended in failure since the organization’s supplier of quail eggs became privatized and made the decision not to sell eggs to independent companies. Additionally, the overproduction of quails in the area lowered the price to a point where production simply became unjustifiable. This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 5 9B12M066 In spite of these failures, the entrepreneurial spirit remained strong at IPODERAC, and the organization pushed onward to launch another new initiative in 1984: the production of rabbits and, thereafter, a fur shop. The staff procured 2000 rabbits, but just as the operation began to take off, a rare disease overcame the fur industry, and although the IPODERAC farm was free of sickness, health authorities forced it to sacrifice the animals to prevent the illness from spreading. Once again, the staff began to search for yet another profitable business that could supplement IPODERAC’s revenues. Many arose, such as aquaculture, a pastry shop, a bakery, and a tortilla factory, among others, but given the fact that there were no key elements present — such as a basic market analysis, a business strategy, a clear direction, a business vision, professionalism, and, frankly, a bit of luck — each one of these business ideas fell apart, until finally the staff struck on goat breeding. IPODERAC’s director, Ms. Landa, contacted a friend who produced goat milk in the state of Queretaro and who was willing to donate a herd of goats to IPODERAC. The production of goat milk had certain advantages, primarily the daily cash flow derived from the sale of milk. Additionally, from the standpoint of the institution’s educational model, the animals tended to improve the youngsters’ progress in terms of helping them to achieve a work ethic through honest labour. However, as with all IPODERAC’s production projects, problems began to arise in the market. The sale of milk was a low-margin business with significant fluctuations in production. The business itself required the processing of milk into low quality cheese such as “panela cheese”9 among others. The competition was high, the demand was low, and the margins were small. With this ongoing series of misguided projects, a crisis eventually arose in IPODERAC, but along with it came an opportunity for the organization to redefine itself. In her late 80s, due to health problems, Ms. Landa decided to retire from IPODERAC in 1988. In her place, she appointed her 26-year-old nephew, Agustin Landa, as the organization’s new director. Alongside his college friend, Fernando Balla, Landa had worked for four summers as a volunteer on the farm, and both men had grown fond of the institution and its mission. Landa was a graduate engineer from Tecnológico de Monterrey,10 and he possessed a clear business vision; Balla was a doctor with humanistic inclinations. Both men agreed to split the main functions of the institution. Landa would take over the financial management, and Balla would oversee the children’s development. Thus, IPODERAC embarked on a new course, which led to developing the activity that finally guided the institution towards self-sufficiency: the production of gourmet cheeses (see Exhibit 2). Towards Professionalization Cheese production at IPODERAC began in a very rudimentary way. According to Landa: Imagine a cheese shop in a little room; we had to make a hole in the ground to have the required moisture level. Our cheeses were sold outside churches to anyone that we could convince... because, think about it for a minute: Cheeses made by street kids! I guess people bought it to help us, but who knows if they ate it. Shortly thereafter, in the early 1990s, Landa made a connection with a retired gentleman, Rafael Perler, who owned a gourmet shop in Puebla. Knowing that Perler was a master artisan cheesemaker who had worked for Nestle, Landa pressed for a meeting with him. He convinced Perler to contribute his cheese9 Fresh, unripe, low-flavoured cheese, handmade by many informal milk producers. Tecnológico de Monterrey is one of the most respected private universities in México. 10 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 6 9B12M066 making knowledge and expertise as a tool that could help IPODERAC achieve its goal of self-sufficiency. This new relationship was perhaps one of the most fortunate and important alliances for the organization. Perler began working as a consultant to the cheese shop, and as a result, the cheese quality immediately grew in an impressive way. IPODERAC stopped production of fresh cheese to make way for its newly introduced, highly differentiated, high-margin products. One of the organization’s prime cheeses even won third place in a contest held in Switzerland. The cheese shop thus began a phase of accelerated professionalization, and when Landa felt the products had reached a sufficient quality standard, he took his best samples to the director of The Mesoneros, a Mexico City business dedicated to organizing high-profile events, which was located only two hours away from Atlixco. The director tried the cheeses, and commented bluntly: “They’re good, but they lack a bit of salt.” A week later, Landa returned with a new sample. The director was pleased and congratulated him for his high-quality cheeses. As a way of contributing to IPODERAC’s efforts, the director personally called all his friends and business contacts to facilitate the organization’s entry into the market, a move that resulted in significant sales growth for IPODERAC and a major advance toward financial self-sustainability. Up to that point in time, Mexicans were familiar only with French or Swiss cheeses, and practically all of these products were imported. After all, the market for such products was not large enough in Mexico itself, so it was more profitable to bring them from abroad than to produce them locally. However, this high-end market had begun to grow in Mexico, and, as a result, an opportunity appeared for IPODERAC. The organization’s high-quality production and its attractive price/value ratio resulted in the successful positioning of the product in the market. Having great quality cheeses, a growing market, and a defined business model made it easy for IPODERAC to obtain the required resources for starting a high-level, hand-made cheese establishment. Luengas remarked: Our approach was focused on accountability and the creation of credibility. With this, we obtained the initial capital through corporations, foundations and individuals who believed in the project. It is much more comprehensible for companies when it is all about business because you just have to show them the numbers and tell them [your business plan]. For them, it is easier to give money to organizations like us because we speak the same language. About six years later, just entering the new millennia, the persistent growth in sales and the customer diversification process presented new challenges for the organization, so IPODERAC, along with a group of business partners, founded the company Villa Nolazco Wholesales. Luengas commented: This [move] took us to another level, and the wholesale business required a lot from us. We had to manage quality as usual, but many new areas arose, like distribution, customer relations, inventory management and having tighter control on all the highly trained personnel. This meant paying attention not only to the production area but also to the marketing section. The joint venture allowed the new company to grow significantly, virtually doubling its production every year. Additionally, starting in 2002, and for the four years that followed, MBA students from the University of California at Berkeley volunteered to provide consulting services to IPODERAC during the summer. These consultancies revealed that the potential market was huge and that, in the Cancun area This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 7 9B12M066 alone, IPODERAC could capture 11 per cent of a total market that represented 80 tons of cheese per year. Additionally they discovered other important tourist regions in Mexico that could be tapped for sales. By this time, IPODERAC was no longer just an organization; it was also a partner in a socially committed company with more than 30 people on its payroll. Strengthening the Educational Model The progress of the cheese shop ignited a positive pressure that demanded greater efficiency in the areas of life quality and education. By this time, IPODERAC had been operating for several years, with a current total of six houses (Saint John, Saint Peter, Saint Paul, Saint Luke, Saint Mark and Saint Joseph), each of which sheltered 12 children, a teacher and two volunteers. The house called Saint John hosted children from five to six years of age, Saint Peter from six to eight years of age and so on, up to Saint Joseph, which housed teenagers from age 16 and onwards.11 Approximately 50 per cent of the children living at IPODERAC were 12 years old or older. Among the daily activities performed by the children (see Exhibit 3), according to the guidelines of the International Labor Organization, a maximum of two hours a day could be spent working, and only after the children had attended school and participated in recreational activities. Regardless of age, each child had to pass a rigorous process, similar to getting a real job. Periodically, job fairs were held, wherein children had to bring their resume and apply to the position of their choice (i.e., working in the cheese factory or the carpentry shop, soap-making, goat care, agriculture and vegetables, and general maintenance of the farm). Like any other job, there were a limited number of openings, and the children had to be distributed accordingly (see Exhibit 4). Then, educators and area leaders (featured kids who are identified as leaders) determined whether the applicant was fit for employment or not, based on their behaviour and overall performance in daily activities, such as attending school and working at previous jobs. The educational model not only sought to teach job skills to the boys at IPODERAC, but it also gave them an opportunity to experience the reality of everyday life, which they would eventually have to face on their own. Fulfilling the mandate of IPODERAC’s educational model meant going through a series of evolutionary changes. The organization sought out important alliances, and from this search an important agreement emerged with an organization called Terre des Hommes,12 or, in English, Land of Men. In association with the Centre for Educational Studies (EEC),13 Terre des Hommes helped to document and refine the educational model, based on five major processes: homes, educational training, job training, human development and independent living (see Exhibit 5). Thus, IPODERAC consolidated an important phase in its existence. It had shifted towards process development, professionalism and the creation of a solid institution for both its production and educational areas. Due to its alliance with Land of Men and the volunteer help of Perler, IPODERAC published manuals, received public recognition and awards, and earned sufficient income to sustain the organization. 11 Ages that make up the houses are used as reference. Children do not necessarily go to the next house at a certain age, but rather when they have fulfilled certain stages or processes of education and maturation. 12 For more information about the organization Terre des Hommes visit www.terredeshommes.org. 13 For more information about the organization Centre for Educational Studies visit www.cee.edu.mx. This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 8 9B12M066 Road to Diversification “Relying on a single product for revenue is like having a single donor. This [situation] is too risky, and ultimately, we lived out the consequences with the whole influenza problem,” said Luengas. A diversification process had been started years before the onset of the flu, but it was viewed as a way to strengthen the educational model more so than to generate income. The cheese production process could take up to six months to deliver a finished product, and while this timeframe offered a great advantage for many of the boys (i.e., because they could participate in a lengthy and complicated process that improved their self-esteem and provided them with an opportunity to develop long-term vision), for others, it was too difficult to visualize the end results of their work and their actual contribution to it. Hence, IPODERAC created a carpentry program in 2005, which enhanced the boys’ training by offering them a more easily visualized end-product. The goal of the carpentry program was to generate more jobs for a greater number of boys. IPODERAC began producing the kind of rustic furniture that was common in the area, but the arrival of similar furniture of Chinese origin hurt production, not only IPODERAC’s but that of the whole area. In 2009, with contributions from 13 donors, including a significant contribution made by IPODERAC itself, approximately two million pesos were invested to build a new and advanced carpentry shop. Shortly afterward, the organization received an order from Italy for the manufacturing of highly specialized rustic furniture. The first samples were sent for evaluation, but as of [January 2010], IPODERAC was still awaiting a firm response. The organization’s search for diversification activities continued, and, to provide an outlet for goat-milk surpluses during times of low demand for cheese, IPODERAC started a small soap factory in 2006. Through a personal friend of Landa, the organization contacted a man in Canada who had a recipe for goat-milk soap that dated back 200 years. Just as Perler, the Swiss cheesemaker, had done, the Canadian soap maker volunteered to come to Atlixco to teach his process to the staff and residents at IPODERAC. He spent two weeks with them, and the organization took two years afterwards to master the production process. From an educational point of view, this initiative was of great value. IPODERAC’s education principal, Mondragón, said: We assigned students who had concentration problems to this area. [Soap making] is a repetitive and consistent work, and the boys do not have to make big decisions at the time of production. Once they have conquered this process, they are transferred to other areas that require greater skills. About 80 per cent of the total production of soap was exported to the United States through Villa Nolazco USA, a retailer that was established in 2001 by a former volunteer of the IPODERAC organization. Villa Nolazco was not a very sophisticated business; sales were made from home using the Internet.14 The goat-milk soap business was the first initiative that resulted from a market study conducted by Berkeley MBA students. The students developed a customer profile and segmented the current market. Goat-milk soap was a very expensive product approximately three times the price of regular soap — which required the organization to be very careful with its production. The consultancy from the students bore many suggestions. For example, IPODERAC had to offer more promotions for bigger profit-margin soaps, improve its soap quality in order to have more consistency in colour and texture, and improve its 14 Sandy Graham, “Mile high soap opera: importer finds buyers for http://findarticles.com/p/articles/mi_hb6416/is_7_29/ai_n28930120/, accessed February 22, 2012. hand-crafted bars,” This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 9 9B12M066 packaging and product labeling. Like the cheese shop, the soap factory started very small, but after a while, it experienced significant growth, with an average production of 2,500 bars of soap monthly. In mid-2008, IPODERAC’s soap business received a large order from a major Canadian company for 140,000 soaps, with the advantage that the product did not require special permits to be imported into Canada. This order required the staff to multiply its current production by 30, which constituted an immense increase in the operation. The Canadian company had placed the same order with other similar soap producers, but only IPODERAC had been willing to accept it. To meet the commitment, IPODERAC had to hire 12 new workers from the community, who were then trained by the staff who worked in the soap-making area. These changes required a realignment of everyone’s efforts within the organization and resulted in a tight style of teamwork that had never before existed in the organization. The new process involved clockwork precision across all departments, since the goat farm supplied milk to the soap production area, and the carpentry shop provided the packaging for the soap product. The production manager remarked that the new process was a matter of great pride for the team at IPODERAC, but the real climax came in October, when the order was shipped. Director Luengas commented: A truck left, loaded with 12 tons of soap, and it was a joyful day. The pride of having fulfilled the commitment was something rarely felt in the organization. Being able to accomplish this task allowed us to rediscover ourselves as an organization/company. The challenge was huge, but we finally achieved it. We realized we had enormous capacity for growing and adapting to harsh circumstances. In addition, we integrated the production areas: the milk production area supplied the soaps unit; and the carpentry area manufactured packaging — of course, very rustic but very nice in order to give the product a Mexican touch, but, more importantly, to demonstrate that this soap had been manufactured in a place where street kids are taken care of. I think the ultimate consequences of this large order have yet to be seen. Each bar of soap was identified with an IPODERAC label, and each package included a note explaining the origin of the product. It may open more doors. Who knows? Luengas claimed that without the partnerships the institution had formed throughout its history, little could have been achieved. IPODERAC developed natural alliances with all its donor institutions, from government agencies to corporate foundations. The organization had a huge advantage over companies, since, as Luengas put it, “Companies cannot receive grants.” The Ministry of Social Development and the National Lottery represented very important resources for IPODERAC because they contributed large donations that were invested mainly in the production area. However, other companies such as Volkswagen (VW) Mexico, which was established in Puebla; Benteler, a provider of VW; and American Express (AMEX) also became important allies. IPODERAC soon realized that companies could donate more than money; they could also provide priceless knowledge. The organization approached many companies and asked, for example, VW to advise it on how to systematize production processes and logistics functions; IPODERAC also asked AMEX to teach the organization how to excel at customer service. In these ways, a much deeper relationship was formed with the various partnering companies, “Otherwise, it would have taken years to reach the level that we are right now,” confessed Luengas. IPODERAC learned from other companies how to secure its own installations and, very importantly, how to take care of its information. Many times, people tried to steal the organization’s cheese recipes and, as a result, the information was divided and saved in segments. This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 10 9B12M066 Another important alliance was made with the Popular Autonomous University of Puebla (UPAEP by its Spanish initials). The government had begun to install greenhouses in various parts of the region, but after a while, this project had been abandoned. IPODERAC owned a portion of unused land that also had the advantage of having a reliable water supply. The staff installed one of these government-sponsored greenhouses so that UPAEP students could use the facility to gain practical experience. This relationship delivered two advantages: IPODERAC earned extra income for the rental of the facilities, but more importantly, the children themselves could be trained on intensive production techniques. Towards the Future Recalling the soap production achievement, Luengas thought about IPODERAC’s future and wondered where the organization was heading. At the council’s last meeting, the members had discussed many possible alternatives: installing a seventh house, starting a new home for girls, or opening another branch in another region of the country. With these things in mind, and with the intention of evaluating the existing diversification process, Luengas continued to review the financial statements and studied Mondragón’s notes on the involvement of children in the various business units. As Luengas took a piece of bread with Camembert cheese, his favorite one from Villa Nolazco, several questions that needed to be answer for tomorrows board meeting circulated in his mind: What business unit represented the best investment option, in terms of generating income and providing a role model for the boys? Would it be better to continue investing in the dairy unit, but making and selling other types of cheeses, or should IPODERAC expand its sales territory and move into other regions? This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 11 9B12M066 Exhibit 1 IPODERAC’S FINANCIAL INFORMATION INCOMES BY AREAS AND ACTIVITIES Additional Funding Sources National Financial Campaign Foreign Financial Campaign Events SUB TOTAL 2006 $3,261,385 $987,077 $456,302 $4,704,764 2007 $974,951 $1,453,467 $879,800 $3,308,218 2008 $725,276 $1,433,208 $868,524 $3,027,008 Productive Activities Cheese Sales Carpentry Soaps Goats Greenhouses (vegetables) SUB TOTAL GRAND TOTAL 2006 $5,537,114 $78,457 $121,789 $156,734 $5,894,094 $10,598,858 2007 $6,770,409 $365,789 $404,376 $254,800 $88,765 $7,884,139 $11,192,357 2008 $7,446,227 $404,574 $1,830,251 $378,690 $147,491 $10,207,233 $13,234,241 2006 43,200 812 2007 47,250 2,695 2008 53,400 12,200 Productive Activities Cheese Shop Carpentry Soaps Goats Greenhouse SUB TOTAL 2007 $3,932,665 $338,270 $287,607 $583,764 $22,350 $5,166,663 2008 $4,449,979 $240,094 $621,624 $444,222 $29,232 $5,787,160 Activities of the organization Teaching Administration/Management Development and Funds Procurement SUB TOTAL GRAND TOTAL 2007 $3,454,170 $825,345 $402,867 $4,682,382 $9,847,037 2008 $3,820,989 $795,145 $391,014 $5,007,148 $10,792,299 Productive Activities (In Kilograms) Cheese Sales Soaps Expenses by areas and activities Source: Created by authors from IPODERAC’s given financial Statements Note: In Mexican pesos. As of 2009, the Mexican peso was worth about 13 Mexican pesos per U.S. dollar. This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 12 9B12M066 Exhibit 2 PHOTO GALLERY Vegetable production Goat Herd Carpentry Soap Shop Cheese Shop Products from the carpentry Source: photographs taken on site by authors. This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 13 9B12M066 Exhibit 3 TYPICAL DAY OF AN IPODERAC CHILD 05:30 a.m. 06:30 a.m. 07:00 a.m. 02:00 p.m. 02:30 p.m. 03:00 p.m. 06:30 a.m. 07:00 a.m. 02:00 p.m. 02:30 p.m. 03:00 p.m. 03:30 p.m. 03:30 p.m. 05:30 p.m. 05:30 p.m. 06:45 p.m. 06:45 p.m. 07:45 p.m. 08:45 p.m. 07:45 p.m. 08:45 p.m. 09:15 p.m. Get up, take a shower, eat breakfast Go to school School Arrive from school, children in charge of food distribution Lunch Clean different house areas Workshops in different work areas. (Working time varies according to age, stage of process, capacity and level of responsibility in each workshop. At the same time, several children have counseling and therapeutic hours scheduled.) Homework, study, advisory in different courses. (At the same time, several children have computing and/or English courses scheduled.) Sports and/or artistic activities Dinner (there might also be group meetings for different topics discussions). Television, go to sleep Source: Created by authors based on Interview with Ignacio Pérez Mondragón, educational director of IPODERAC Note 1: It is difficult to encompass all IPODERAC’s youngsters in a single schedule, as several of them go to technical schools in Puebla or are already working part time in a business outside IPODERAC, or participate in sports or arts groups, as well as in special classes. Note 2: In the same way, because of the educational structure, young people can become apprentices, assistants or leaders at work or at home; these activities also change the schedule of each child.. Besides, each one has a specific schedule of therapeutic or psychological care. Exhibit 4 AVERAGE DISTRIBUTION OF THE CHILDREN IN THE DIFFERENT WORK AREAS Various animals Goats Carpentry Kitchen Vegetables Soaps Eastern garden Western garden Teaching areas maintenance Productive areas maintenance Cheese shop TOTAL 2 10 11 3 9 11 5 5 6 6 4* 72 Source: IPODERAC files. Note: These quantities might vary depending on the work cycle and on the educational and productive necessities. This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Page 14 9B12M066 Exhibit 5 IPODERAC’S EDUCATIONAL MODEL Educational Director Mondragón tells us in his own words about the educational model at IPODERAC: “An essential feature of the model is its integral hinge, as it requires that all processes work in harmony to achieve your goal. The following five processes make up the model. 1) Households: This process has the function to take the house where children live as a central axis where they will learn matters of structure and coexistence. They learn that there are times for different activities and that it is essential to respect themselves for their own benefit. The house also represents a safety shaft for the children, as they have the support of a responsible adult accompanying them all the time. 2) Training at Work: The aim of this process is not for children to work; is that the kids develop skills through work actions such as psychomotor skills, socialization, teamwork and quality awareness in the workplace. 3) Academic Background: This process is an option for growth and personal development, as the children arrive with impressive academic gaps that are filled in school. Through the services of the psychology area, each child will perform a series of tests to form a diagnosis from which a plan is designed for individual work will that gradually reach the child’s corresponding academic level. 4) Human development: This process focuses on the child achieving a reconciliation of his present with his past in order to aspire to a stronger future — safer and more humane. To achieve it, the children receive psychotherapy, and the therapist works with them in humanizing processes such as personal development for community living in an atmosphere of respect, solidarity and spirituality. Because of the personal background of each child, they have to learn to forgive, because the only thing that will set them free from their resentment towards life is forgiveness. 5) Independent living: A stage for young people who have stayed for several years in IPODERAC. This stage begins with an assessment of skills and vocational guidance. The therapists responsible for this area apply different psychometric tests to determine the youngster’s real skills, their career orientation and the academic tools required to achieve their labour goals. With the results of the diagnosis they go back to work with the young man who is now building a decision that allows him to advance to the next step: his life plan. This instrument records the definition of the young man’s objectives, activities and offers the correct timing. After that, the young man executes his life plan, and the educational team accompanies him through this transition until it is time to leave the institute. The closing process starts in IPODERAC because leaving causes grief; the staff works with the young men to transform this pain into triumph. The educational team accompanies the young man for a while, until it is certain that he is fully responsible for his actions. Finally, the young man leaves the institute, having a living space and a decent job and with the assurance that IPODERAC will always be his family. “ Source: Created by authors based on an interview with Ignacio Pérez Mondragón, educational director of IPODERAC. This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. Harvard Business School 9-399-016 Rev. October 13, 1999 IPODERAC For the first time in our thirty-two year history the possibility of achieving financial self-sufficiency is within our grasp. We must determine how to achieve and solidify this goal. This is a critical juncture for us. In June 1998, Agustín Landa, the director of this Mexican civic association that housed and cared for abandoned street children, was optimistic but anxious about IPODERAC’s future. Origins and Evolution IPODERAC, Instituto Poblano de Readaptación, A.C. (Puebla Institute of Rehabilitation), was founded in 1966 by María Elena Landa, María Elena Gomez, and a few other colleagues who had decided, according to Señora Landa, “to not waste their lives in daily routines and to make a contribution to the community.” They began providing volunteer social counseling to male inmates at the prison in Puebla, a city of 2.5 million people located 80 miles east of Mexico City. They discovered that over two-thirds of the prisoners came from broken families, were abused as children, and abandoned to a life in the streets. Many had been in youth correctional institutions in deplorable conditions that fostered further delinquency rather than rehabilitation. Professor James Austin, Wendy Bermudez, and Gustavo Escobar prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 1998 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 1 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. 399-016 IPODERAC The founding group decided to turn their efforts toward setting up a home for abandoned boys. They determined that it would be in a rural setting to avoid the temptations of the streets but near a small town so that services and public education would be available. With a bank loan they purchased a nine-hectare site outside of Atlixco on a highway about 25 miles from Puebla. They named the site “Villa Nolasco” in honor of the founder of the Catholic Order of Mercy, whose members had encouraged and advised the founders. Servicing the loan was a constant struggle, as Sra. Landa explained, “ In the beginning we went out in the streets with collection cans to ask for money. It was embarrassing but none of us had a cent. Nonetheless, we fought for this goal. We pawned personal belongings and made other collections. It was a very difficult task, the results didn’t appear as fast as we had hoped, and many who had been helping abandoned the effort. People give money and effort when they see something done. We only had a piece of land full of rocks. Slowly the founders continued soliciting donations, and in 1969 the first house for eight boys in Villa Nolasco was inaugurated by the State Governor. In 1971 a second house was added with funding from the Mary Street Jenkins Foundation. A third house was financed by the president of Mexico in 1972. Funding from the Puebla Municipal Board of Moral, Civic, and Material Betterment enabled the construction of the fourth house and a sports field in 1974. Funds raised by the IPODERAC board of trustees and friends provided the house furnishings. The fifth house was added in 1981 with another major private donation from a Catholic religious organization in Germany. By 1988 Villa Nolasco housed 60 boys whose average age was 8.3 years. In 1991 the Dutch embassy donated a health clinic. In 1992 IPODERAC was awarded the Luis Elizondo Humanitarian Prize in recognition of its social contribution. The boys remained at Villa Nolasco on average 10 years until their late teens, so a sixth house was added for older youth in 1994. In 1998 there were 72 boys ranging in age from 5 to 20 with the average being 14.6 years. A total of 550 boys had grown up under the care and guidance of IPODERAC. (See Exhibit 6 for photos of the facilities at Villa Nolasco.) Children’s Care and Development IPODERAC’s initial mission was the personal and social rehabilitation of children from poor and disintegrated families. Street children are often sent out or abandoned by their parents to beg or even rob as part of their struggle to eke out an existence. The children are often abused and have little formal education. Their situation leads to frustration, low self-esteem, skepticism, mistrust, insecurity, independence, and aggressiveness. IPODERAC’s aim was to provide a family environment with education and a moral orientation that would foster personal identity, self esteem, and habits of cleanliness, order, discipline, and work. IPODERAC operated on the following premises: street children need considerable help in gradually adapting themselves to society; they have the right to special attention and protection by the community; and they and their families are capable of communicating and deciding their own development and are not objects of charity. These premises led to an open-door policy whereby boys would enter Villa Nolasco under their own volition and were also free to leave. Children were referred to IPODERAC by other social or governmental agencies who worked with street children and juvenile delinquents. Applicants would visit Villa Nolasco and learn about the community before deciding to enter. By living together in groups of 12, the boys had a “substitute family” environment. They attended public schools in the nearby town, thereby being integrated into a community as part of their educational and developmental process. In 1993-94 over 90% of the boys passed their yearly exams and 10% finished in the top three places in their classes. Manual work was also seen as an integral part of the children’s development. The principle was that the children should contribute to their own maintenance and the goal was to inculcate them with an attitude that work was dignified and educational, that it builds character, and that you earn through effort. 2 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. IPODERAC 399-016 The original model for the children’s houses came from a conference on caring for abandoned and orphaned children in Chile sponsored by the Order of Mercy, and attended by Sra. Landa. At Villa Nolasco each two-story house had four bedrooms with three children in each, a dining and living area, common bathroom, kitchen, and a bedroom for the Educator, who served as the primary caregiver. Each of the six houses corresponded to a specific age group, with the children moving into new houses as they reached the next age category. The Educators were the backbone of IPODERAC’s care giving system. They had to be over 25 years of age, single, and high school graduates. They lived with the children and had primary responsibility and authority. An Educational Director, Dr. Fernando Ballí who also ran the health clinic, supervised the six Educators. They received training on their duties, although the care giving procedures and cumulative knowledge at Villa Nolasco were never documented in any manuals. The Educators stay, on average, about 3.5 years. Recruiting replacements is a difficult task because the work is very demanding. Most are found by word of mouth, and indicate that they are motivated by the joy of caring for the children and by the pay, although it is very modest. The Educators stated that it was difficult to balance being a friend to the children while also being the authority. The Educators’ and the children’s days began at 5:00 a.m. and ended at 8:30 p.m. (see Exhibit 1). The Educators received 2 days off every two weeks and 30 days of vacation annually. The house with the oldest youth did not have a resident educator in order to transfer greater responsibility and independence to them in preparation for their forthcoming graduation. In its early years IPODERAC had a psychologist and a priest who provided counseling and support services but these positions did not currently exist. The combined living, working, and educational experience was aimed at creating a transformation process: developing values, attitudes, and behaviors that would enable the children to become independent, productive, and responsible members of society (see Exhibit 2 for the developmental model). Production Activities From its inception, Villa Nolasco engaged in farming both to provide food and revenues as well as to engage the boys in structured work activities. The children were compensated for their work at the minimum wage rate. From their savings accounts, the boys could draw out money for personal expenditures. At the beginning of the school year, the children are provided by IPODERAC their school supplies. Previously, the children could also get replacements for these supplies, but when it was discovered that they were selling them to their classmates at school, the children were required to replace any “lost” supplies from their savings accounts. The various agricultural undertakings at Villa Nolasco met with mixed success. From the beginning they planted vegetables to feed the children, with surpluses being sold in the nearby town. In 1974 they planted 1,100 avocado trees with technical and financial assistance from the government, including the installation of a drip irrigation system, a farming innovation that attracted considerable attention in the region. Avocado sales generated significant revenues, covering nearly half of Villa Nolasco’s operating costs by the late 1980s. However, increasing supplies from other producing areas and theft of the fruit at night made the operation unprofitable. The farm started raising rabbits to eat and sell for skins and meat, primarily to the cafeteria in the Volkswagen plant in Puebla. A disease threat led to a governmental embargo on rabbit sales, thereby ruining the business. Quails were raised for sale to nearby restaurants from eggs provided by a government incubator. However, when this government operation was privatized, the new owners stopped supplying outsiders with eggs, thus ending the quail operation. A similar experience occurred with ducks. The farm also raised a small number of cows and goats for milk for its own consumption. To feed them they tried to use a system of hydroponics but the resultant grass was not sufficiently nutritious. The lack of animal husbandry skills led to poor health and low productivity. They also produced small quantities of cheese for sale, but there appeared to be little demand. The disappointing efforts to 3 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. 399-016 IPODERAC generate earned income led to a rethinking of the traditional approach, which coincided with an unexpected change in the leadership of IPODERAC. Leadership Change In 1988, Sra. Landa, after serving 16 years as the director, suffered a deterioration in her health which led to her retirement. Finding a successor with the same deep level of commitment and energy as this founder was a major challenge for IPODERAC’s Board of Trustees. Fortunately, Sra. Landa had recruited her nephew, Agustín Landa, an agronomist, to come to Villa Nolasco in 1987 to be in charge of the agricultural operations. When Sra. Landa was hospitalized and resigned, Agustín was named as the new director at the age of 26. Agustín was exposed to IPODERAC as a child when his family would visit his aunt. When he was 19 he brought the first goats to Villa Nolasco and was so deeply touched by the children and the mission that he recruited fellow university students to work as volunteers during the following four summers. He then decided in 1986 to leave his position as manager of his family’s farm in Monterrey and come to Villa Nolasco full time, with the idea of learning about vegetable and flower production for two years and then returning to Monterrey. When Sra. Landa resigned, Agustín decided, “This effort was very important and nobody other than the founder and I knew the internal system of education for the children and the basic principles that they wished to attain. So I decided to stay for two more years.” In 1990 Agustín faced another crossroads. His father offered to give him the family ranch worth over a million dollars, if he would return home to run it. This would be an opportunity to provide economic security to his young family and he consulted his wife, who responded, “ You said to me that God will provide for us if we concern ourselves with His realm, so what do you need the ranch for?” Agustín thanked his father and recommitted his energies to IPODERAC. His father sold the ranch. Agustín lived with his family in a modest house next to the children’s houses. His $600 a month salary was many times less than what he could earn outside. To help out, an IPODERAC supporter committed himself to financing the education of the older of Landa’s two children in private schools in Puebla. Agustín reflected, “There have been many other times that we have asked ourselves if we should leave or have thought that it was the moment for others to carry on, but we have always concluded that a better life we still could not find.” As director, Agustín was deeply involved in all aspects of the operation from administration to production and marketing to the boys’ education to external relations and fundraising. The staff was very small and dedicated, but it was difficult to attract highly talented people due to the low salaries and rural setting. Exhibit 3 presents the formal organizational chart, but Agustín’s reality was that “at times I have to do some of everything.” The organization’s limited administrative resources also meant that only recently had they begun to develop formal and systematic management record keeping and procedures. The 23 paid staff members were supplemented by volunteers and outside organizations, both local and international, who would primarily assist in activities with the students, such as tutoring, educational trips, and recreational activities. In 1997, 17 volunteers worked at Villa Nolasco between 15 days and a full year, providing an estimated 160 person-days of labor. Among the outside organizations sending volunteers was the British GAP and various local and overseas universities. A few corporations also provided volunteers, for example, 70 employees of General Electric Mexico spent a day painting the IPODERAC houses and interacting with the children on other occasions. Other companies provided summer internships for some of the youth, over half of whom were between the ages of 15 and 19. Various professionals provided special educational services to the children. IPODERAC had on-going operational relations with 25 suppliers and financial or assistance relationships with 2 civic, 9 governmental, 10 philanthropic, 2 religious, and 69 business 4 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. IPODERAC 399-016 organizations (with the majority of the latter being individual donors using funds from their businesses). Twelve of these various organizations were international. Agustín was the primary person in charge of these external relationships. He was continually developing other contacts, generating new ideas, and starting projects aimed at generating funds or mobilizing resources in a constant search for solutions to IPODERAC’s problems and needs. However, the follow-through for many of these activities often was impeded due to the lack of time, organization, and staff capacity. New Path toward Self-sufficiency From its inception IPODERAC depended primarily on donations in money or in-kind. The principal function of the 15-person Board of Trustees was fundraising. Their main event was an annual raffle in November of a new car, but a variety of other activities also were used from time to time. In 1997 the raffle produced a net contribution to IPODERAC of 308,000 pesos. In 1994 Agustín, with the assistance of a General Electric executive and another Mexican colleague, created The Mexico City Group consisting of 17 professionals from various fields to assist IPODERAC in fundraising, public relations, planning, mentorships, and internships. The director also raised funds directly from foundations, corporations, government entities, and individuals, amounting to 614,000 pesos in 1997. Donations were tax deductible. IPODERAC had obtained donations from a few multinational corporations and several large Mexican companies. Some firms provided in-kind donations, e.g., Hewlett Packard donated computers for the children, others gave foodstuffs, clothing, toys, and school supplies. Agustín indicated that the key to all donors was establishing a personal relationship, so much of his fundraising time was spent in finding someone who could provide the personal contact within the donor organization. For corporate, foundation, or civic organizations the personal relationship was more important than the nature of the project. In contrast, donations from foreign governments through their local embassy depended more on the nature and merits of the specific project, although having access to someone in the embassy was important. Donations from the Mexican government during the early years were very dependent on personal contacts and relationships. In recent years, however, federal government funding through the Social Conversion Fund was based on a proposal competition. Three times IPODERAC had won a 100,000-peso award. Agustín indicated that these competitions required only about three person days to prepare the project proposal. However, they did not pursue this in 1998 because it was an election year and Agustín feared being used for political purposes. IPODERAC also had created a Sponsor-A-Child program whereby for $150 per month individuals or organizations could fund the living expenses of a specific child and have a personal relationship with him. As of mid-1998, 8 of the 72 children were sponsored, but up to 30 had been sponsored in the past. Exhibit 4 provides financial statements for recent years. The cheese opportunity Soon after Agustín assumed the leadership, he and the Board decided to make a more concerted and focused effort to generate earned income. They concentrated on cheese production and marketing for several reasons. Agustín’s professional training was in agriculture and he was particularly interested in the goats. The market for goat cheese in Mexico expanded when the country’s trade liberalization brought significant increases in imported goat cheese, which sparked demand. When Mexico’s economy went into crisis in 1994, imports fell, leaving a supply void in the recently expanded market for goat cheese. A retired Swiss executive from Nestle volunteered his pro bono services to IPODERAC and provided the technical knowledge for making various types of highquality goat and cow cheese. In 1988 the small goatherd was increased, partially with donations from the Canadian government and a major Mexican company. Unfortunately, 16 of these new breeding quality goats were stolen, slowing down the expansion, but by 1998 the herd had reached 148 producing milk or 5 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. 399-016 IPODERAC pregnant and 115 in development. One of the members of the Mexico City Group conceived of and launched in 1995 an “Adopt-A-Goat” program. For $125 individuals or groups could name a goat, receive a certificate of adoption with a photo and a milk production report every six months for two years, at which time the adoption could be renewed. Thirty-two goats had been adopted. The avocado plantation was replaced by alfalfa to provide feed for the goats. A new, small cheese fabricating facility with a pasteurizer, hand processing equipment, and refrigeration was developed with a $25,000 donation that came from the General Electric Foundation in Connecticut through the G.E. Mexico subsidiary. G.E. had selected IPODERAC as a recipient of its charitable donations only after surveying many other candidate nonprofit organizations. One of the G.E. executives also knew Agustín. Marketing Finding customers for the cheeses was a major challenge for Agustín. There was limited knowledge among food establishments about French-style goat cheese. He put his cheeses in an ice chest and headed off in the microbus to visit a few restaurants in Puebla, using contacts made through friends. Later he tried to penetrate the prime market of Mexico City by approaching the classiest restaurants, again using personal contacts. To the manager of Maxim’s, instead of trying to sell, he asked, “Tell me what’s wrong with our cheeses.” With this advice and the Swiss volunteer’s expertise, IPODERAC made corrections in quality and packaging. Maxim’s became a customer and the manager also referred Agustín to a restaurant wine and food distributor of which he was part owner. The distributor facilitated their access to various other quality restaurants. In 1997 the Villa Nolasco cheeses were sold to the following clients in order of importance: 1. Unilac—A distributor of cold meats and cheeses, IPODERAC sells this cheese unbranded and Unilac sells it under its own name, mainly to supermarkets; 2. Ferrer & Associates—This wine distributor sells Villa Nolasco brand cheeses to French restaurants, Price Club, and Carrefour Supermarkets; 3. Restaurants—IPODERAC sells directly to a few high class restaurants in Mexico City, Puebla, and Cancún; 4. Supermarkets—Direct sales to HEBS, a Texan supermarket chain with two stores in Monterrey, and Soriana, a Mexican supermarket in Monterrey. In addition to imports, Agustín cited three main competitors with brands, plus numerous small producers. Although he had little quantitative data on market size and growth, he pointed to imports as being over a million dollars in the first semester of 1994. Additionally, he indicated that he even had U.S. buyers interested. Agustín pointed to the quality of the Villa Nolasco cheeses as competitively important and to his policy of pricing slightly below competition, stating that “we believe in quality before charity. It’s important that people come back and buy the cheese more than once.”1 The food and beverage buyer at the Four Seasons restaurant in Mexico City commented, “I can buy imported French cheeses for less money but IPODERAC cheeses are such good products, I buy from them instead.”2 Agustín added, “Another competitive advantage is our character as a charitable organization. This makes the sale easier and the customer more receptive toward our conditions, such as only 15 days credit and no merchandise returns. My clients know that if they don’t pay me on time, it is the children who will not eat.” The Villa Nolasco label stated that “100% of the profits to the producer from the sale of this cheese is destined to the care, education, and development of abandoned children of our country.” 1 Food Arts, June 1997 2 Ibid. 6 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. IPODERAC 399-016 The sales of cheese had grown to the point in mid-1998 that demand exceeded IPODERAC’s production capacity. Agustín exclaimed, “Last week I sold 50,000 pesos of cheese but could not fill orders for another 12,000 pesos due to the lack of milk.”3 This situation focused attention on Villa Nolasco’s goat milk production. Production Agustín had increased the size and quality of the herd from 30 to 263 through purchases, breeding, and artificial insemination, using semen imported from France. A goat begins milk production at 16 months and continues for 60 months. Each goat gave birth on average, to 1.8 offspring, of which 45% are female. The males are consumed or sold. During its 305 days of lactation per year, the goat produces on average 2.5 liters per day or 750 liters annually, compared to national averages of 400 liters in Mexico or 900 in France. The expanding herd required increasingly careful attention in feeding, hygiene, and milking. The goats are fed alfalfa cut fresh daily from the farm’s own fields; the climate allows ten harvests per year. Six acres can produce enough to feed 250 goats for a year. Additionally, purchased feed concentrate is fed to the goats (three kilos for every kilo of milk produced) while they are being milked in the milking stalls. The boys carried out these husbandry tasks under the supervision of one employee, an outside veterinarian, and Agustín. The growing demands of the operation led one of the Educators to remark, “Here the goats are most important. They are capturing all of Agustín’s attention.” To offset the shortage of milk from the farm, Agustín purchased goat milk from two nearby farmers whose operations were less technologically advanced than Villa Nolasco but still yielded an acceptable quality of raw milk. Other quality suppliers of goat milk had not been found. He also bought cow milk, which was readily available. The purchased goat milk cost about US$0.36/liter [3.10 pesos], which Agustín estimated to be slightly more than Villa Nolasco’s cost of production and about $0.05 more than cow’s milk. In 1997 IPODERAC purchased 59,068 liters of goat milk and 43,062 liters of cow milk. Agustín believed that being able to offer the scarcer goat cheese is what enabled him to also sell the cow cheese. Processing The cheese production was done in a 170-square-meter building next to the farm’s garage and near the bakery which produced the farm’s bread. An expansion of the cheesery in March of 1998 gave it capacity to process 3,000 liters per day. Currently, the operation processed daily an average of 350 liters of goat milk and 250 liters of cow milk to produce about 400 units of cheese. These included five types of goat cheese: Boursin (multiple flavors), Selles-sur-cher, SaintMaure (aged and fresh), Valancay (with or without ash), and Feta; four types of cow cheese: Camembert, Fromage Blanc, Brie, and Reblochon; and two types of mixed goat and cow cheese: Tomme de Chevre and Flor de Atlixco. The cheese was made using French handmade techniques that did not use artificial colors or aromatics or chemical preservatives. Milk production was seasonal, peaking in July and August and lowest in November and December when demand was highest. To offset these cycles, the product could be stored in freezers until needed. Quality control was handled through tasting by the Swiss expert and Agustín as needed but not on a regularly scheduled basis. The workforce in the processing facility was seven paid employees and only two boys, as the growing quality requirements and working hours no longer coincided with the children’s abilities and schedule. One of the employees was an alumnus of IPODERAC who learned the cheese making business at Villa Nolasco and returned to work there after graduating. 3 Exchange rate in May 1998 US$1.00 = 8.5 pesos 7 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. 399-016 IPODERAC Challenges Agustín was greatly encouraged by the progress made in the first four months of 1998 (see Exhibit 5, “1998 Partial Income Statement”), but he saw several operating and strategic challenges. Milk supply To overcome the shortage of raw milk, Agustín formulated a proposal aimed at expanding the herd size at Villa Nolasco to 500. This herd would yield a daily production of 1,200 liters. This project also would promote the development of goat milking herds among small farmers in the area. The Villa Nolasco herd would be able to supply farmers annually 100 females aged 3 to 7 months and 43 males for breeding to create three herds of about 45 head. The concept was for Villa Nolasco to act as a provider of animals and technical assistance to small farmers wishing to start or improve their goatherds and generate a new source of income. In the past, many farmers had visited the farm to learn informally about goat raising and milk production. Agustín explained that in general goats were “the poor man’s cows.” They often served as a “savings account,” with a few being purchased young and raised and grazed in a rudimentary fashion by family members. The goats would be sold when there was a need for cash or butchered on special occasions. Generally they were not milked. In the proposed project, Villa Nolasco would donate the goats to a local development agency that would select and finance the small farmers, who would “pay” for the goats over five years with new goats bred from their herds. These goats, in turn, would serve to create milking herds for other farmers. Villa Nolasco would promise to buy the milk production of these new farmers at the prevailing market price, if they wished to sell to them. To finance the project Agustín planned to submit a request to the Mexican Foundation for Rural Development. The costs were estimated as follows: 1. Expansion of the corrals, food storage area, and watchman’s room 2. Alfalfa for 250 additional goats for one year 8,000 3. Feed grain for 7 months until birthing and lactation (0.3kg./day/goat = 21 tons @ $235/ton) 5,000 4. Goats—250 nine month’s old @ $165 Total $15,000 42,000 $70,000 Marketing Agustín was encouraged by the positive reception of his cheeses and by the strong demand. However, he was concerned by the potential competitive threat posed by the possible entrance of very large dairy products processors such as Nestle and Alpura, who, Agustín believed, had made studies of the goat cheese market. In addition, he had just learned that Normex, a company in northern Mexico producing 10,000 liters of goat milk daily, had contracted a French specialist in goat cheese processing. He wondered what he should do to strengthen Villa Nolasco’s market position. He also wondered whether or not he should pursue the export market in the United States. Organization IPODERAC’s expanding commercial operations stretched even further Agustin’s time. The growing demands also led him to express doubts about the adequacy of his managerial knowledge, in spite of his continuous process of self-education through reading and practice. He wondered what staff configuration and organizational structure would best equip IPODERAC for the future and what it would take to attract and retain talented and committed people. He also wondered what, if anything, he should do with IPODERAC’s Board of Trustees. The Board ran the annual raffle and some other fundraising events and met formally once a year. It basically went along with whatever the administration wanted to do. Most of the 15 trustees had served for over 10 years and several since the inception. Agustín indicated that most of the trustees 8 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. IPODERAC 399-016 feel that IPODERAC is quite successful and do not see any need for significant changes. However, one trustee who had been on the board for four years stated, “The board needs to be restructured; it needs younger people.” Mission and vision The improving financial prospects of IPODERAC led Agustín and other staff members to engage in a collective reflection on IPODERAC’s mission and vision. This led Agustín to propose the following possible mission definition: “Our mission is to help the most unprotected children in our country and the organizations that assist them so that they have opportunities for a life of dignity and the capacity to improve their life conditions.” This would be achieved through the following programs: 1. Villa Nolasco 2. Financing and developing projects that care for street and abandoned children 3. Financing projects that prevent children from turning to the streets 4. Direct help to organizations that work with rural people to enable them to remain in the countryside Agustín thought that it was now important to indicate that IPODERAC had a mission larger than Villa Nolasco. However, the organization had to consider carefully the merits and feasibility of the strategic issue of whether to expand the number of boys cared for at Villa Nolasco or to set up similar centers elsewhere or to help others do that. Agustín knew that the decisions and actions taken now would fundamentally shape the direction and viability of IPODERAC as it entered the next century. 9 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. 399-016 IPODERAC Exhibit 1 Daily Schedule (Monday-Friday) of Children 5:00-5:15 rise, make bed, get dressed [four youth rise at 4:30 to milk goats] 5:15-5:30 wash, comb 5:30-6:00 breakfast 6:00-6:45 brush teeth, clean house 7:00-8:30 transport to school (departure time varies by age) 8:30-9:00 staff meeting 8:30-1:45 attendance at school 1:45-3:00 return from school, wash, change clothes, lunch 3:00-3:50 clean up dining room, kitchen, bathroom 3:50-6:00 study, workshops, or assigned work activities (e.g., goat care, gardening) 6:00-7:00 games on the sports field or in the houses 7:00-7:30 bath 7:30-8:00 dinner 8:00-8:20 clean up 8:20 to bed Exhibit 2 IPODERAC Transformation Process for Adolescent Development TRANSFORMATION STAGES ----------------------- ! Values Affirmed in Each Stage alum follow-up connection with community graduation---- ! adulthood preparation for independence - ! self-esteem, capability, liberty participative responsibility ------! service, co-responsibility facing up to past ---------------------! pardon, hope, faith, love work ------------------------------------------------- ! responsibility, self-esteem schooling------------------------------------------- ! responsibility, friendship personal habits----------------------------------------! responsibility acceptance that “I am here”-------------------! community entry and initial adaptation ------------------------------ ! friendship, community, self-esteem, happiness, respect CHILDRENS’ TIME IN VILLA NOLASCO --------- ! 10 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. IPODERAC Exhibit 3 399-016 IPODERAC Organization Chart BOARD OF TRUSTEES [15A] Legal [1A] Other Advisors[5A] Directora [1A] Director of Education [1A] Development Services: –Educators [6A] –Food [1A] –Spiritual [5A] –HouseCare [3A, 15Cb] Office Staff [3A] Cheesery Mgr. [7A, 2C] Farm Mgr. [2A, 50C] Volunteer Coordinator [1A, 8 vols.] –Drivers [2A] Note: Bracketed figures indicate numbers of adults [A] and children[C] working in each activity. aIn addition to supervising all the above direct reports, the director had primary responsibility for sales, fundraising, personnel administration, and public relations bYounger children engage in the cleanup of the common areas in the houses. In addition to the above, 2 adults and 20 older children work in the various construction projects when they arise; e.g., corral, building repairs. 11 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. 399-016 IPODERAC Exhibit 4A IPODERAC (in thousands of US$) Financial Statements—Profit and Loss Statement Exchange Rate 6.17 7.57 7.88 INCOME 1995 1996 1997 13 13 2 28 0.4 35 -36 0.3 39 -39 19 30 1 16 58 -7 0 130 46 1 23 1 22 8 25 0 128 20 15 1 23 -18 -78 5 4 5 1 61 0 77 7 20 -7 139 0 173 a a -9 253 3 265 Other income -- -- 1 Interest income 9 4 2 244 340 386 1995 1996 1997 8 1 5 2 17 2 1 5 3 -6 5 1 3 2 38 3 2 9 8 -16 10 1 5 4 28 4 2 3 11 -8 Income generated by Board Scholarships Events (annual raffle) In-kind donations Income generated by Management Scholarships Donations for the Cheesery Donations for fixed assets FAPRODE Other donations Donations for goatherd In-kind donations Other income Self-earned Income Alfalfa for goats (internal) Milk for Cheesery (internal) Milk for children (internal) Sales of goats Cheese sales Other income, production TOTAL INCOME EXPENSES Production Expenses Alfalfa & Vegetables: Children wages Depreciation and amortization Others Goats Children wages Salaries and benefits, others Alfalfa Ipoderac External feed Depreciation and amortization Others 12 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. IPODERAC 399-016 Exhibit 4A (continued) EXPENSES (continued) 1995 1996 1997 39 3 -20 0 16 -1 65 77 2 1 48 1 24 5 3 128 99 2 6 50 0 41 -1 138 Administration Salaries and benefits 30 16 30 14 42 17 Children Salaries and benefits Allowances 107 13 21 140 20 30 159 22 34 Annual event Other expenses --137 5 14 189 --201 TOTAL EXPENSES 202 317 339 42 23 47 Cheseery Children wages Salaries and benefits, others Milk Depreciation and amortization Others Carpentry Humus (Californian worms) Operation Expenses NET INCOME (LOSS) aNet income from these internal sales unregistered in 1997. Exhibit 4B Abridged Balance Sheet as of 12/31/97 (US$000) Current Assets Cash and bank Accounts receivable Other Subtotal Current Liabilities 41 20 14 74 Net Fixed Assets Land and equipment Office equipment Buildings and furnishings Cheesery Other Subtotal Total Assets Accounts payable Taxes payable Subtotal 12 1 13 Capital 22 28 84 13 10 157 231 Original patrimony Retained surpluses Current period surplus Subtotal Total Liabilities & Capital 60 111 47 218 231 13 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. 399-016 Exhibit 5 IPODERAC IPODERAC Financial Results, January-April 1998 Pesos US$ INCOME DONATIONS: Board fundraising 57,995 Director fundraising 40,436 98,431 11,580 773,627 91,015 872,058 102,590 338,695 39,846 458,110 53,895 139,427 936,232b 16,403 110,144b (64,174) (7,550) PRODUCTION REVENUES: Cheese salesa Goat sales 770,582 3,045 Total Income COSTS PRODUCTION: Alfalfa and vegetables 43,046 Animals 68,218 Cheesery 227,430 CHILDREN: Educators, housing, food, health, schooling ADMINISTRATION: Salaries, taxes, office, depreciation Total Costs SURPLUS/(DEFICIT) aUnits of cheese sold—32,096 at an average price of 24.27 pesos. Liters of milk processed—Goat: 20,519, Cow: 50,829. bTotal costs includes depreciation charges of 101,439 pesos 14 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. IPODERAC Exhibit 6 399-016 Vistas of Villa Nolasco One of Boys’ Houses Boys’ Bedroom 15 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. 399-016 IPODERAC Exhibit 6 (continued) Boys’ Computer Room Library; Volunteers with Boys 16 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. IPODERAC 399-016 Exhibit 6 (continued) Vegetable Garden Goatherd 17 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. 399-016 IPODERAC Exhibit 6 (continued) Augustín Landa with Boys Tending Goat Goat Milking Stalls 18 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. For the exclusive use of A. Alneel, 2020. IPODERAC 399-016 Exhibit 6 (continued) Cheese-processing Operations Finished Cheese Products 19 This document is authorized for use only by Asma Alneel in PUAD 636 NGO Policy and Management Fall 2020 taught by Char Mollison, George Mason University from Aug 2020 to Jan 2021. THE ROUTLEDGE COMPANION TO NONPROFIT MANAGEMENT Over the past three decades or so, the nonprofit, voluntary, or third sector has undergone a major transformation from a small cottage industry to a major economic force in virtually every part of the developed world as well as elsewhere around the globe. Nonprofit organizations are now major providers of public services working in close cooperation with governments at all levels and increasingly find themselves in competition with commercial firms across various social marketplaces. This transformation has come with ever-increasing demands for enhancing the organizational capacities and professionalizing the management of nonprofit institutions. The Routledge Companion to Nonprofit Management is the first internationally focused effort to capture the full breadth of current nonprofit management research and knowledge that has arisen in response to these developments. With newly commissioned contributions from an international set of scholars at the forefront of nonprofit management research, this volume provides a thorough overview of the most current management thinking in this field. It contextualizes nonprofit management globally, provides an extensive introduction to key management functions, core revenue sources and the emerging social enterprise space, and raises a number of emerging topics and issues that will shape nonprofit management in future decades. As graduate programs continue to evolve to serve the training needs in the field, The Routledge Companion to Nonprofit Management is an essential reference and resource for graduate students, researchers, and practitioners interested in a deeper understanding of the operation of the nonprofit sector. Helmut K. Anheier is a Professor at the Hertie School of Governance, Berlin, Germany, and the Luskin School of Public Affairs at UCLA. His most recent books include Nonprofit Organizations: Theory, Management, and Policy, Performance Measurement in Philanthropic Foundations: The Ambiguity of Success and Failure, Social Innovation – Comparative Perspectives, and Governance Indicators: Approaches, Progress, Promise. Currently, he co-edits the International Encyclopedia of Civil Society. Stefan Toepler is Professor of Nonprofit Studies and Director of the Master of Public Administration Program in the Schar School of Policy and Government, George Mason University, Arlington, VA. He has written broadly on nonprofit management and policy, philanthropy and global civil society. Among other books, he co-edited Legitimacy of Philanthropic Foundations: United States and European Perspectives and also co-edits the International Encyclopedia of Civil Society. ROUTLEDGE COMPANIONS IN BUSINESS, MANAGEMENT AND ACCOUNTING Routledge Companions in Business, Management and Accounting are prestige reference works providing an overview of a whole subject area or sub-discipline. These books survey the state of the discipline including emerging and cutting-edge areas. Providing a comprehensive, up to date, definitive work of reference, Routledge Companions can be cited as an authoritative source on the subject. A key aspect of these Routledge Companions is their international scope and relevance. Edited by an array of highly regarded scholars, these volumes also benefit from teams of contributors which reflect an international range of perspectives. Individually, Routledge Companions in Business, Management and Accounting provide an impactful one-stop-shop resource for each theme covered. Collectively, they represent a comprehensive learning and research resource for researchers, postgraduate students and practitioners. Published titles in this series include: The Routledge Companion to Critical Marketing Edited by Mark Tadajewski, Matthew Higgins, Janice Denegri Knott and Rohit Varman The Routledge Companion to the History of Retailing Edited by Jon Stobart and Vicki Howard The Routledge Companion to Innovation Management Edited by Jin Chen, Alexander Brem, Eric Viardot and Poh Kam Wong The Routledge Companion to the Makers of Global Business Edited by Teresa da Silva Lopes, Christina Lubinski and Heidi J.S. Tworek The Routledge Companion to Accounting in Emerging Economies Edited by Pauline Weetman and Ioannis Tsalavoutas The Routledge Companion to Career Studies Edited by Hugh Gunz, Mila Lazarova andWolfgang Mayrhofer The Routledge Companion to Nonprofit Management Edited by Helmut K. Anheier and Stefan Toepler The Routledge Companion to Inclusive Leadership Edited by Joan Marques For more information about this series, please visit: www.routledge.com/Routledge-Companionsin-Business-Management-and-Accounting/book-series/RCBMA THE ROUTLEDGE COMPANION TO NONPROFIT MANAGEMENT Edited by Helmut K. Anheier and Stefan Toepler First published 2020 by Routledge 2 Park Square, Milton Park,Abingdon, Oxon OX14 4RN and by Routledge 52 Vanderbilt Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2020 selection and editorial matter, Helmut K. Anheier and Stefan Toepler; individual chapters, the contributors The right of Helmut K. Anheier and Stefan Toepler to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names:Anheier, Helmut K., 1954– editor. | Toepler, Stefan, editor. Title:The Routledge companion to nonprofit management / edited by Helmut K.Anheier and Stefan Toepler. Description: First Edition. | New York : Routledge, 2020. | Series: Routledge companions in business, management and accounting | Includes bibliographical references and index. | Identifiers: LCCN 2019046836 (print) | LCCN 2019046837 (ebook) | ISBN 9781138744462 (hardback) | ISBN 9781315181011 (ebook) Subjects: LCSH: Nonprofit organizations—Management. Classification: LCC HD62.6 .R688 2020 (print) | LCC HD62.6 (ebook) | DDC 658/.048—dc23 LC record available at https://lccn.loc.gov/2019046836 LC ebook record available at https://lccn.loc.gov/2019046837 ISBN: 978-1-138-74446-2 (hbk) ISBN: 978-1-315-18101-1 (ebk) Typeset in Bembo by Apex CoVantage, LLC Cover Art by Emilia Birlo. CONTENTS List of contributors ix 1 Nonprofit management: Introduction and overview Stefan Toepler and Helmut K. Anheier 1 PART I Management context 9 2 A changing management context: The US, UK, Canada and Australia Susan D. Phillips 11 3 Nonprofit management context: Continental Europe and Scandinavia Georg von Schnurbein and Alice Hengevoss 28 4 Nonprofit management context: Central and Eastern Europe Peter Vandor, Clara Moder, and Michaela Neumayr 44 5 Nonprofit management context: Russia and the FSU Lev Jakobson, Irina Mersianova, and Natalya Ivanova 60 6 Nonprofit management in Asia Tamaki Onishi and Naoto Yamauchi 73 7 Nonprofit management context: The Middle East and North Africa Omar Bortolazzi 91 8 Nonprofit management context: Africa Jacob Mwathi Mati v 103 Contents 9 The Latin American context: The challenge of managing advocacy and impact inclusion Urs Jäger, Felipe Symmes, and Roberto Gutiérrez 119 PART II Leading and planning 137 10 Composition of nonprofit boards: Summary of factors that account for who governs nonprofits William A. Brown 139 11 Leadership Ruth Simsa 152 12 Beyond codes: Values, virtues, and nonprofit ethics Ki Joo Choi and Roseanne Mirabella 165 13 Strategic management Michael Meyer 177 PART III Managing internally 195 14 Evaluation and performance measurement Lehn M. Benjamin and David A. Campbell 197 15 Budgeting and financial management: A multi-year budgeting approach Marcus Lam and Bob Beatty 213 16 The essential nature of internal controls Nathan J. Grasse and Daniel Gordon Neely 234 17 Information and communications technology management John McNutt 249 18 Nonprofit human resource management Allison R. Russell, Marlene Walk, and Femida Handy 263 19 Volunteer management and the psychological contract Mark A. Hager and Kathy T. Renfro 278 20 Co-production Taco Brandsen,Trui Steen, and Bram Verschuere 291 vi Contents 21 Association and membership management Mary Tschirhart 301 PART IV Managing externally 315 22 Collaborations and networks David Suárez and Hokyu Hwang 317 23 Advocacy and lobbying Jennifer E. Mosley,Tadeo Weiner-Davis, and Theresa Anasti 335 24 Nonprofits and political participation Kelly LeRoux and Mary K. Feeney 349 25 Nonprofit marketing and branding Jane Hudson 361 26 Relationship fundraising 2.0: Lessons from social psychology Adrian Sargeant and Ian MacQuillin 377 PART V Funding sources 389 27 Individual giving and philanthropy Beth Breeze 391 28 The nonprofit sector’s ‘rich relations’? Foundations and their grantmaking activities Tobias Jung 410 29 Corporate philanthropy Lonneke Roza and Lucas C.P.M. Meijs 426 30 Government funding Michaela Neumayr and Astrid Pennerstorfer 438 PART VI The social enterprise space 455 31 Social enterprise Janelle A. Kerlin 457 vii Contents 32 Social innovation: What it is, why it matters and how it can be studied Gorgi Krlev and Georg Mildenberger 33 Social finance for nonprofits: Impact investing, social impact bonds, and crowdfunding Jun Han,Wendy Chen, and Stefan Toepler 467 482 34 Hybridity: Origins and effects Gorgi Krlev and Helmut K. Anheier 494 35 New legal forms for hybrid organizations Alan J. Abramson and Kara C. Billings 513 Index 531 viii CONTRIBUTORS Alan J. Abramson, Professor of Government and Politics, Schar School of Policy and Government, George Mason University, Arlington, VA, USA Theresa Anasti, Assistant Professor, Department of Sociology, Anthropology, Social Work, and Criminal Justice, Oakland University, Rochester, MI, USA Helmut K. Anheier, Professor, Hertie School of Governance, Berlin, Germany, and Luskin School of Public Affairs at UCLA, CA, USA Bob Beatty, Adjunct Faculty, University of San Diego, School of Leadership and Education Sciences, Department of Leadership Studies, San Diego, CA, USA Lehn M. Benjamin, Associate Professor, The Lilly Family School of Philanthropy, Indiana University-Purdue University-Indianapolis, Indianapolis, IN, USA Kara C. Billings, Graduate Research Assistant, Schar School of Policy and Government, George Mason University, Arlington, VA, USA Omar Bortolazzi, Assistant Professor of International Studies, School of Arts & Sciences, American University in Dubai, Dubai, United Arab Emirates Taco Brandsen, Professor, Institute for Management Research,...
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IPODERAC Case Study
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IPODERAC CASE STUDY
Based on the given case, the Puebla Institute for Rehabilitation (IPODERAC) had
excellent business ideas that were not only aimed at financially supporting the organization but
also so to instill knowledge to the boys for them to financially support themselves in future.
Given the various projects that IPODERAC engaged in, it is evident that the organization had a
social objective that served its primary purpose ...


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