Asian Neighborhood Design
1998 | Case No. E44
The executive director of the Asian Neighborhood Design (AND) attempts to quantify the potential financial and social return for investors in his nonprofit enterprise. AND seeks to raise $2.27 million. However, as a nonprofit organization, it cannot offer potential equity investors a share of future earnings, and it is not eligible for loans. The Roberts Enterprise Development Fund encourages AND to apply for a grant, but requires that the organization demonstrate both that it is operating efficiently and achieving its social goals. Using innovative tools including a true cost accounting framework and a social return on investment analysis, the director attempts to capture the fund’s likely total return on investment. Teaching Purpose: Enables students to analyze the true financial position of a nonprofit enterprise and provides one potential method for quantifying the net social benefits. As the field of social enterprise continues to develop, such methods are increasingly important tools for managers and funders to measure real social and financial results.
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