Harvard Case - Progressive Education Network (PEN): Creating Social Impact in Pakistan
"Progressive Education Network (PEN): Creating Social Impact in Pakistan" Harvard business case study is written by Arif Butt, Shezeen Hemani. It deals with the challenges in the field of Social Enterprise. The case study is 16 page(s) long and it was first published on : Oct 1, 2012
At Fern Fort University, we recommend that PEN adopt a hybrid organizational structure that leverages the strengths of both for-profit and non-profit models to maximize its social impact and financial sustainability. This approach will involve establishing a separate for-profit entity, PEN Ventures, dedicated to delivering educational services and generating revenue, while PEN remains a non-profit organization focused on advocacy, research, and program development. This strategy will enable PEN to scale its impact, attract diverse funding sources, and build a sustainable business model.
2. Background
PEN is a non-profit organization dedicated to improving education in Pakistan. Founded by a group of passionate individuals, PEN has been working tirelessly to provide quality education to underprivileged children. Despite its impressive achievements, PEN faces challenges related to funding, scalability, and sustainability. The case study highlights the organization's desire to expand its reach and impact while ensuring its long-term viability.
The main protagonists of the case study are the founders of PEN, who are deeply committed to their mission but are grappling with the complexities of scaling a non-profit organization. They are seeking a sustainable solution that balances social impact with financial sustainability.
3. Analysis of the Case Study
To analyze PEN's situation, we can utilize the Social Enterprise Canvas, a framework that helps assess the key elements of a social enterprise, including:
- Value Proposition: PEN's value proposition is to provide quality education to underprivileged children in Pakistan, thereby contributing to their social mobility and contributing to a more equitable society.
- Customer Segments: PEN's target customers are underprivileged children and their families, as well as government institutions and potential donors.
- Channels: PEN utilizes various channels to reach its target customers, including community outreach programs, partnerships with local NGOs, and online platforms.
- Customer Relationships: PEN builds strong relationships with its customers through personalized support, community engagement, and ongoing communication.
- Revenue Streams: PEN currently relies on donations, grants, and fundraising events. The case study highlights the need to explore alternative revenue streams.
- Key Resources: PEN's key resources include its dedicated staff, educational materials, and partnerships with local communities.
- Key Activities: PEN's key activities include curriculum development, teacher training, community outreach, and program implementation.
- Key Partnerships: PEN collaborates with various stakeholders, including NGOs, government agencies, and educational institutions.
- Cost Structure: PEN's cost structure includes staff salaries, program expenses, and administrative overhead.
- Social Impact: PEN's social impact is measured through metrics like student performance, school enrollment rates, and community engagement.
Applying the Social Enterprise Canvas reveals the following key challenges:
- Limited Funding: PEN's reliance on donations and grants makes it vulnerable to funding fluctuations.
- Scalability Challenges: Expanding PEN's reach and impact requires significant financial resources and operational efficiency.
- Sustainability Concerns: PEN's long-term viability is threatened by its dependence on external funding.
4. Recommendations
To address these challenges, we recommend PEN implement the following strategic initiatives:
1. Establish PEN Ventures:
- Create a separate for-profit entity, PEN Ventures, dedicated to delivering educational services.
- PEN Ventures will offer a range of services, including tuition-based schools, online learning platforms, and vocational training programs.
- This will allow PEN to generate revenue and achieve financial sustainability.
2. Leverage Hybrid Organizational Structure:
- PEN will continue to operate as a non-profit organization, focusing on advocacy, research, and program development.
- PEN Ventures will operate as a for-profit entity, generating revenue through educational services.
- This hybrid structure will enable PEN to leverage the strengths of both models, maximizing its social impact and financial sustainability.
3. Implement a Triple Bottom Line Approach:
- PEN Ventures will prioritize social impact alongside financial performance.
- This will involve measuring and reporting on the social impact of its educational services.
- PEN Ventures will be committed to ethical business practices and environmental sustainability.
4. Explore Impact Investing:
- PEN will seek investment from impact investors who prioritize social impact alongside financial returns.
- This will provide PEN with access to capital and expertise, enabling it to scale its operations.
5. Develop a Sustainable Business Model:
- PEN Ventures will develop a sustainable business model that generates revenue through educational services.
- This will involve identifying and serving underserved market segments, offering competitive pricing, and achieving operational efficiency.
6. Foster Strategic Partnerships:
- PEN will build strong partnerships with government agencies, educational institutions, and corporations.
- This will enable PEN to leverage resources, expertise, and access to new markets.
7. Embrace Social Innovation:
- PEN will actively explore and implement innovative approaches to education delivery.
- This will involve leveraging technology, developing new curriculum models, and fostering collaboration with other social enterprises.
5. Basis of Recommendations
These recommendations are grounded in the following considerations:
- Core Competencies and Consistency with Mission: The hybrid organizational structure aligns with PEN's core competencies and mission by enabling it to leverage its expertise in education while achieving financial sustainability.
- External Customers and Internal Clients: This approach caters to the needs of both external customers (students and their families) and internal clients (PEN staff) by ensuring access to quality education and a stable organizational environment.
- Competitors: By adopting a market-driven approach, PEN Ventures will be able to compete effectively with existing educational providers while offering a unique value proposition focused on social impact.
- Attractiveness ' Quantitative Measures: The hybrid model has the potential to increase revenue and achieve financial sustainability, leading to a positive return on investment (ROI) and a sustainable future for PEN.
- Assumptions: The effectiveness of this approach hinges on the successful implementation of PEN Ventures, the ability to attract impact investors, and the continued commitment to PEN's mission of social impact.
6. Conclusion
By adopting a hybrid organizational structure, PEN can unlock its full potential to create lasting social impact in Pakistan. This strategy will enable PEN to scale its operations, attract diverse funding sources, and build a sustainable business model that prioritizes both social impact and financial performance.
7. Discussion
Alternative Options:
- Merging with a Larger Organization: This option could provide access to resources and expertise but may compromise PEN's independence and mission.
- Focusing Solely on Fundraising: While this approach could secure funding, it may not be sustainable in the long term and could limit PEN's impact.
Risks and Key Assumptions:
- Risk of Financial Failure: The success of PEN Ventures depends on its ability to generate revenue and achieve financial sustainability.
- Risk of Losing Focus on Social Impact: The for-profit entity must remain committed to PEN's mission and prioritize social impact alongside financial performance.
- Assumption of Impact Investor Interest: Attracting impact investors requires a strong social impact story and a clear investment thesis.
Options Grid:
| Option | Advantages | Disadvantages | Risks | Assumptions |
|---|---|---|---|---|
| Hybrid Organizational Structure | Scalability, Financial Sustainability, Social Impact | Complexity, Potential for Conflict | Financial Failure, Loss of Focus on Social Impact | Impact Investor Interest, Successful Implementation of PEN Ventures |
| Merging with a Larger Organization | Access to Resources, Expertise | Loss of Independence, Potential Mission Compromise | Loss of Control, Cultural Clash | Alignment of Values and Missions |
| Focusing Solely on Fundraising | Secure Funding | Unsustainable in Long Term, Limited Impact | Funding Fluctuations, Dependence on External Sources | Continued Donor Support |
8. Next Steps
Timeline:
- Month 1-3: Develop a detailed business plan for PEN Ventures, including a comprehensive social impact assessment.
- Month 4-6: Secure funding from impact investors and philanthropic organizations.
- Month 7-9: Establish PEN Ventures as a separate legal entity and begin operations.
- Month 10-12: Develop and implement a marketing strategy for PEN Ventures, targeting underserved market segments.
Key Milestones:
- Secure $X million in funding from impact investors.
- Launch PEN Ventures with Y educational programs.
- Achieve Z% increase in student enrollment within the first year of operation.
By taking these steps, PEN can transform itself into a leading social enterprise that delivers quality education to underprivileged children in Pakistan while achieving financial sustainability and lasting social impact.
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Case Description
The case documents a board room scenario where the Directors of PEN, a not-for profit organization, have met to re-consider an important decision; either wait for the city government's approval regarding allotment of government schools or consider other options, such as building own schools. Having completed several rounds of unsuccessful negotiations with the City District Government of Lahore (CDGL) the founders are feeling agitated and disappointed. Hence, at this point, the members are considering the organizational models of CARE and TCF; two well-known NGOs of Pakistan, and aim to finalize the strategic decision, based on the assessment of the two organizational models, given PEN's mission, vision, organizational, human resource, and financial capabilities.
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