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Harvard Case - Dealing with a Changing Environment: Fundacion Peruana para la Conservacion de la Naturaleza (A)

"Dealing with a Changing Environment: Fundacion Peruana para la Conservacion de la Naturaleza (A)" Harvard business case study is written by Howard Husock, Christine W. Letts, Henry Lee. It deals with the challenges in the field of Social Enterprise. The case study is 14 page(s) long and it was first published on : Jan 1, 1997

At Fern Fort University, we recommend that Fundacion Peruana para la Conservacion de la Naturaleza (FPCN) adopt a hybrid organizational model that leverages its strong nonprofit foundation with elements of social entrepreneurship. This approach will enable FPCN to scale its impact while maintaining its core mission of environmental sustainability in Peru.

2. Background

This case study focuses on FPCN, a Peruvian non-profit organization dedicated to conserving Peru's natural heritage. Facing increasing threats to biodiversity and limited funding, FPCN seeks to expand its reach and impact. The organization is considering various strategies, including social entrepreneurship, to achieve its goals.

The main protagonists are:

  • Dr. Luis Suarez, FPCN's Executive Director, a passionate conservationist seeking to find innovative ways to protect Peru's natural resources.
  • The FPCN Board of Directors, responsible for guiding the organization's strategic direction and ensuring financial sustainability.
  • The local communities, who are both the beneficiaries and potential partners in FPCN's conservation efforts.

3. Analysis of the Case Study

FPCN faces a complex situation. While its nonprofit mission is clear, it needs to adapt to a changing environment characterized by:

  • Limited government funding: Traditional reliance on government grants is becoming increasingly unreliable.
  • Growing environmental threats: Deforestation, pollution, and climate change are intensifying, demanding urgent action.
  • Increased demand for sustainable solutions: Businesses and consumers are increasingly seeking environmentally responsible products and services.

To address these challenges, FPCN must consider a strategic framework that encompasses:

1. Strategic Planning:

  • Mission and Vision: Revisit and refine FPCN's mission and vision to reflect the evolving environmental challenges and opportunities.
  • Target Audience: Identify key stakeholders, including local communities, businesses, and government agencies, and tailor strategies to engage them effectively.
  • Sustainable Business Models: Explore and develop sustainable business models that generate revenue while supporting conservation efforts.

2. Social Entrepreneurship:

  • Triple Bottom Line: FPCN should adopt a triple bottom line approach, considering environmental, social, and financial impacts in all its ventures.
  • Impact Investing: Seek investment from impact investors who prioritize social and environmental returns alongside financial returns.
  • B Corporations: Consider becoming a B Corporation, demonstrating commitment to social and environmental responsibility through rigorous third-party certification.

3. Organizational Structure and Design:

  • Hybrid Organization: Create a hybrid organizational structure that combines the strengths of a nonprofit with the agility and innovation of a social enterprise.
  • Strategic Alliances: Form strategic alliances with businesses, NGOs, and government agencies to leverage resources and expertise.
  • Partnerships: Develop partnerships with local communities to ensure sustainable conservation practices and empower local ownership.

4. Recommendations

1. Develop a Hybrid Organizational Model:

  • Establish a Social Enterprise Division: Create a separate division within FPCN dedicated to developing and managing social enterprises.
  • Define Clear Roles and Responsibilities: Establish clear roles and responsibilities for both the nonprofit and social enterprise divisions.
  • Maintain Transparency and Accountability: Ensure transparency and accountability in all activities, including financial management and impact measurement.

2. Identify and Develop Sustainable Business Models:

  • Ecotourism: Develop sustainable ecotourism ventures that generate revenue while promoting environmental awareness and conservation.
  • Community-Based Conservation: Partner with local communities to develop and manage sustainable forest management programs that generate income through carbon offsetting or sustainable forestry products.
  • Eco-Friendly Products and Services: Develop and market eco-friendly products and services, such as organic agriculture, sustainable crafts, or eco-friendly building materials.

3. Engage in Impact Investing:

  • Develop a Compelling Investment Proposal: Create a compelling investment proposal that highlights the potential financial and social returns of FPCN's social enterprises.
  • Target Impact Investors: Identify and engage with impact investors who align with FPCN's mission and are interested in supporting sustainable development.
  • Measure and Report Social Impact: Develop robust social impact measurement frameworks to track and report on the social and environmental outcomes of FPCN's ventures.

4. Build Strong Partnerships:

  • Engage with Local Communities: Involve local communities in the design, implementation, and management of all conservation initiatives.
  • Collaborate with Businesses: Partner with businesses to develop sustainable supply chains and promote eco-friendly products and services.
  • Work with Government Agencies: Collaborate with government agencies to leverage resources, promote policy changes, and ensure effective implementation of conservation programs.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core Competencies and Consistency with Mission: The recommendations align with FPCN's core mission of environmental conservation and leverage its existing expertise in biodiversity protection and community engagement.
  • External Customers and Internal Clients: The recommendations address the needs of both external stakeholders, such as businesses and local communities, and internal stakeholders, such as FPCN's staff and board members.
  • Competitors: The recommendations consider the competitive landscape, including other NGOs, businesses, and government agencies, and aim to differentiate FPCN through its focus on sustainable business models and community-based conservation.
  • Attractiveness: The recommendations are expected to generate positive financial returns while delivering significant social and environmental impact, making them attractive to investors and stakeholders.

6. Conclusion

By adopting a hybrid organizational model, FPCN can leverage the strengths of both nonprofit and social enterprise approaches. This will enable the organization to expand its reach, generate sustainable revenue streams, and achieve greater impact in protecting Peru's natural heritage.

7. Discussion

Alternatives:

  • Focusing solely on traditional fundraising: This option would limit FPCN's ability to scale its impact and could lead to dependence on unreliable government funding.
  • Merging with a larger organization: While this could provide access to resources, it could also compromise FPCN's independence and mission.

Risks and Key Assumptions:

  • Risk of losing focus on the core mission: FPCN must ensure that its social enterprises remain aligned with its environmental conservation mission.
  • Risk of financial instability: FPCN must carefully manage its finances and ensure that its social enterprises are financially sustainable.
  • Assumption of market demand for sustainable products and services: The success of FPCN's social enterprises depends on the willingness of consumers and businesses to support sustainable solutions.

Options Grid:

OptionStrengthsWeaknessesRisks
Hybrid Organizational ModelScalability, financial sustainability, impactComplexity, potential for conflictLoss of focus, financial instability
Traditional FundraisingSimplicity, focus on missionLimited scalability, dependence on governmentFinancial instability, limited impact
Merging with a Larger OrganizationAccess to resources, increased reachLoss of independence, potential mission compromiseLoss of control, cultural clashes

8. Next Steps

Timeline:

  • Year 1: Develop a detailed business plan for the social enterprise division, identify potential business models, and secure initial funding.
  • Year 2: Launch the first social enterprise, build partnerships with local communities and businesses, and implement impact measurement frameworks.
  • Year 3: Expand the social enterprise portfolio, refine business models based on learnings, and seek additional investment.

Key Milestones:

  • Develop a comprehensive impact measurement framework.
  • Secure funding from impact investors.
  • Establish strong partnerships with local communities and businesses.
  • Launch at least one successful social enterprise.

By taking these steps, FPCN can effectively navigate the changing environment and achieve its ambitious goals of protecting Peru's natural heritage for generations to come.

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Case Description

At a time, in the early 1980s, when Peru is wracked by leftist terrorism and hampered by weak central government, the Foundation for the Protection of the Environment (FPCN), founded by a group of Peru's leading biologists, becomes a vehicle through which international environmental organizations act to protect the diverse and unspoiled world of Peruvian Amazonia. FPCN convinces a government troubled by more immediate threats that this non-governmental organization should effectively take on the management of many of the country's more than 40 protected areas. But when a new Peruvian government, led by President Alberto Fujimori, makes clear that it wants to take back such traditional public roles, FPCN must find a new role for itself. Its task is complicated by a lack of overhead funds from its donors which has led to a substantial deficit. Its leadership examines its board structure and membership as part of the strategic planning which it undertakes. HKS Case Number 1375.0

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