Social Venture Checklist

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This presentation was given at the Miami Philanthropy Forum FEB 2012. It helps social venture founders decide whether to choose non-profit, social entrepreneurship or entrepreneurship approaches. It …

This presentation was given at the Miami Philanthropy Forum FEB 2012. It helps social venture founders decide whether to choose non-profit, social entrepreneurship or entrepreneurship approaches. It is based on a class I taught at MIT Sloan School of Management JAN 2012.

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  • 1. LEADERSHIP FORUM FEBRUARY 16, 2012 ROBERT H. HACKER
  • 2. “Altruism has a credibility problem in an industry that thrives on intense commercial competition” Ivan Krstic TR35 Laureate“An ever growing number intend to fund their social ventures through commercially generated revenue rather than charitable donations….”Battilana and Lee HBS
  • 3. “What kind of a society isnt structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm.” —Milton Friedman, The Macmillan Book of Business and Economic Quotations
  • 4. TOPICS1. SOCIAL VENTURE CHECKLIST2. VALUE CREATION-VALUE CAPTURE3. FINANCIAL MODELING
  • 5. SOCIAL VENTURE CHECKLISTNON-PROFIT or FOR-PROFIT?
  • 6. COMPETITIVE ADVANTAGEBENEFITS OF NON-PROFIT?
  • 7. BENEFITS OF NON-PROFIT• ACCESS TO CAPITAL• LOWER COSTS THROUGH VOLUNTEER COMMUNITIES• PARTNERING-NGOS, GOV’T, MULTI-LATERALS, UNIVERSITIES• BRANDING
  • 8. FOR-PROFIT?SOCIAL ENTREPRENEURSHIP OR ENTREPRENEURSHIP?
  • 9. SOCIAL?• NORMATIVE• ECONOMIC
  • 10. ECONOMICSMAXIMIZE VALUE CREATION or MAXIMIZE VALUE CAPTURE
  • 11. VALUE CREATION-VALUE CAPTURE
  • 12. VALUE CREATION-VALUE CAPTURE
  • 13. VALUE CREATION-VALUE CAPTURE
  • 14. MODELING• ASSUMPTIONS=RISKS• SOCIAL AND ECONOMIC RISK
  • 15. FINANCIAL MODELING NON-PROFIT1. DONOR ACQUISITION2. ADMIN COSTS=FINANCIAL CONSIDERATION3. SOCIAL SERVICES=IMPLICIT COST DONOR VALUE INTRINSIC COST FINANCIAL CONSIDERATION NON-PROFIT
  • 16. DONOR ACQUISITION• TARGET DONOR LIST• $/DONOR• ACQUISITION COST/DONOR or• ACQUISITION COST/$ DONATED• DETAIL ACQUISITION COSTS BASED ON BUDGET OF ACQUISITION COST
  • 17. ADMIN COSTS• NON-DONOR AND NON-SOCIAL SERVICES COSTS• OVERHEAD – EXECUTIVES, SALARIES & BENEFITS – RENT – T&E EXECUTIVE – PROFESSIONAL FEES – IT, PHONE ETC.
  • 18. SOCIAL SERVICES• DOG RESCUE SHELTER – DOGS RESCUED PER WEEK, PER MONTH – NEW DOG HOMES and TEMPORARY DOG HOMES – CASH COSTS PER DOG – NON-CASH COSTS PER DOG (VOLUNTEERS/DONATIONS) • STAFF COSTS/HR or PER DOG • FOOD • MEDICAL (VETS, DRUGS, ETC.)
  • 19. DOG RESCUE KPIs• WEEKLY, MONTHLY YTD – DONOR $ – DONOR ACQ COST/$ DONATED (MONTHLY, YTD) – DOGS RESCUED – DOG HOMES – CASH OPERATING COSTS/DOG (MONTHLY, YTD)
  • 20. Robert H. Hacker rhhfla@gmail.com 305-742-8222 Skype: rhhflaIf I said anything you disagree with, think wasconfusing, stupid, or just plain wrong, pleasetell me. I won’t take offense – don’t sugar coatit – just tell me. Brad Feld