Harvard Case - The Environment, Development and Participation: the Dilemmas of Asociacion Civil Labor
"The Environment, Development and Participation: the Dilemmas of Asociacion Civil Labor" Harvard business case study is written by Felipe Portocarrero, Cynthia Sanborn, Elsa Del Castillo, Martha Chavez. It deals with the challenges in the field of Social Enterprise. The case study is 18 page(s) long and it was first published on : Dec 6, 2007
At Fern Fort University, we recommend that Asociacion Civil Labor (ACL) adopt a hybrid organizational model that leverages the strengths of both nonprofit and social enterprise structures to achieve its mission of promoting environmental sustainability and community development. This approach will allow ACL to:
- Maximize financial sustainability through revenue-generating activities while maintaining its commitment to social impact.
- Increase operational efficiency by leveraging market-based solutions and fostering partnerships with businesses.
- Enhance its impact by scaling its initiatives through a combination of grant funding, social investment, and earned income.
2. Background
Asociacion Civil Labor is a non-profit organization in Peru dedicated to promoting environmental sustainability and community development in the Amazon rainforest. Founded by a group of passionate individuals, ACL works with local communities to implement sustainable agriculture practices, protect biodiversity, and improve access to education and healthcare.
The case study highlights the organization's struggles with financial sustainability and its desire to expand its impact. While ACL has secured grants and donations, these funds are often insufficient to meet the organization's growing needs. The organization is also grappling with the challenge of balancing its social mission with the need to generate revenue.
3. Analysis of the Case Study
Strategic Framework:
This case study can be analyzed through the lens of the Social Enterprise Canvas, which provides a framework for understanding and developing sustainable social enterprises. The canvas highlights key elements such as:
- Problem: Deforestation, poverty, and lack of access to education and healthcare in the Amazon region.
- Solution: Sustainable agriculture practices, biodiversity conservation, and community development initiatives.
- Target Beneficiary: Local communities in the Amazon rainforest.
- Revenue Model: A combination of grant funding, social investment, and earned income from sustainable products and services.
- Key Partnerships: Local communities, businesses, government agencies, and other NGOs.
- Key Activities: Training, capacity building, project implementation, and advocacy.
- Key Resources: Human capital, land, equipment, and technology.
- Value Proposition: Improved livelihoods, environmental protection, and community empowerment.
- Cost Structure: Personnel, operations, and program costs.
Financial Analysis:
ACL's financial challenges stem from its reliance on grants and donations, which are often unpredictable and insufficient to meet the organization's growing needs. This reliance on external funding limits the organization's ability to scale its operations and achieve long-term sustainability.
Marketing Analysis:
ACL's marketing efforts have primarily focused on raising awareness and securing funding. However, the organization can leverage its strong community relationships and environmental focus to develop a more robust marketing strategy that includes:
- Social marketing: Promoting sustainable products and services through social media and community events.
- Storytelling: Sharing compelling stories of impact to attract donors and investors.
- Partnerships: Collaborating with businesses and other organizations to reach a wider audience.
Operational Analysis:
ACL's operational efficiency can be improved by:
- Optimizing resource allocation: Prioritizing projects with the highest impact and leveraging technology to streamline operations.
- Developing a strong organizational structure: Establishing clear roles and responsibilities to ensure accountability and efficiency.
- Implementing performance monitoring systems: Tracking progress towards key objectives and making data-driven decisions.
4. Recommendations
Adopt a Hybrid Organizational Model: ACL should consider transitioning to a hybrid model that combines elements of both nonprofit and social enterprise structures. This model would allow the organization to generate revenue through sustainable business activities while maintaining its commitment to social impact.
Develop a Sustainable Business Model: ACL should identify and develop sustainable business activities that align with its mission and generate revenue. This could include:
- Producing and selling sustainable products: Organic coffee, cacao, or other rainforest products.
- Providing eco-tourism services: Offering guided tours and educational experiences in the rainforest.
- Developing sustainable infrastructure projects: Building solar-powered schools or community centers.
Seek Social Investment: ACL should explore opportunities for social investment from impact investors and foundations interested in supporting sustainable development initiatives. Social impact bonds and venture philanthropy could be viable options.
Strengthen Partnerships: ACL should actively seek partnerships with businesses, government agencies, and other NGOs to leverage resources, expertise, and market reach.
Develop a Robust Marketing Strategy: ACL should invest in a comprehensive marketing strategy that includes social marketing, storytelling, and strategic partnerships to increase awareness, attract donors, and promote its sustainable products and services.
Implement a Performance Monitoring System: ACL should establish a system for tracking progress towards key objectives and measuring the social and environmental impact of its initiatives.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The hybrid model and sustainable business activities align with ACL's mission of promoting environmental sustainability and community development.
- External Customers and Internal Clients: The recommendations address the needs of both local communities and potential investors by offering sustainable products and services while ensuring transparency and accountability.
- Competitors: The recommendations differentiate ACL by focusing on its unique value proposition of combining environmental sustainability with community development.
- Attractiveness: The recommendations are attractive to investors and donors because they offer the potential for both social and financial returns.
6. Conclusion
By adopting a hybrid organizational model, developing a sustainable business model, and seeking social investment, ACL can achieve its mission of promoting environmental sustainability and community development while ensuring its long-term financial sustainability.
7. Discussion
Alternatives:
- Remaining solely a nonprofit: This option would limit ACL's ability to scale its operations and generate revenue, potentially hindering its long-term impact.
- Becoming a fully-fledged for-profit social enterprise: This option could create conflicts of interest and potentially dilute the organization's social mission.
Risks and Key Assumptions:
- Market demand for sustainable products and services: The success of the hybrid model depends on the market demand for sustainable products and services.
- Ability to secure social investment: ACL's ability to attract social investors depends on its ability to demonstrate a strong social impact and a viable business model.
- Government policy and regulation: Changes in government policies and regulations could impact ACL's operations and revenue streams.
8. Next Steps
- Conduct a feasibility study: ACL should conduct a feasibility study to assess the market demand for its proposed sustainable products and services.
- Develop a business plan: ACL should develop a comprehensive business plan that outlines its revenue model, marketing strategy, and operational plan.
- Seek social investment: ACL should begin seeking social investment from impact investors and foundations.
- Implement a pilot project: ACL should implement a pilot project to test its sustainable business model and gather data on its effectiveness.
- Establish a performance monitoring system: ACL should establish a system for tracking progress towards key objectives and measuring the social and environmental impact of its initiatives.
By taking these steps, ACL can successfully transition to a hybrid organizational model and achieve its mission of promoting environmental sustainability and community development in the Amazon rainforest.
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Case Description
Asociacion Civil Labor is a private non-profit organization founded in 1981 in llo, a city located in an important mining and fishing region in southern Peru. Its original mission was to defend labor rights and promote leadership among workers in the mining industry, but during its first decade of operation this evolved into the defense of sustainable community development and the rights of communities affected by extractive activities. The labor case is particularly relevant for the analysis of some of the typical challenges faced by organizations whose institutional performance e is oriented toward advocacy and the defense of basic citizen rights. Over the years, Labor consolidated itself as an institution and had an important impact on the defense of the environment, the creation of greater awareness of the impact of the extractive activities, and the generation of public policy toward this sector in Peru. This case is particularly interesting because of the close relationship that the NGO maintained with the municipal government, which generated favorable results for the population of llo but also produced dilemmas with regard to the identity, mission, and autonomy of Labor. These dilemmas reached a critical point in 1997, when the proposal to build a new coal-fueled energy plant in an area zoned for tourism and recreation generated contrary opinions among the municipal authorities and the NGO staff, and divided the local population. The decisions that Labor made on this issue would have long term repercussions for the organization, which would have to redefine its relationship with a significant part of the population of llo as well as with municipal authorities and the NGO donors.
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