Women’s Community House and Mine 101: Is Social Enterprise Worth It?

WOMEN’S COMMUNITY HOUSE AND MINE 101: IS SOCIAL

ENTERPRISE WORTH IT?

This report is consistent with my signed Academic Integrity Form on file with the instructor.

Critical Issue

In order for Women’s Community House (WCH) to generate sufficient funds of %  to provide support for 733 abused women and children annually the next two years , Shelley Yeo must consider the following issues before May 2014:

• How to reduce the deficit of $181,996 so that WCH can continue to financially support their current programs.

• How to increase revenue by 33% so that WCH can reduce the reliance on government funding

• How to increase capacity so that WCH can can decrease the number of turned away women and children.

• How to determine whether Mine 101  can generate funds of $48,500 and continue to operate as a social enterprise so that it can support WCH’s mission and provide financial stability for the organization

Analysis

WCH is currently facing a deficit of approximately $181,996 (Exhibit 1- Benchmark-WCH Deficit 2013)  because of the high overall cost of operation specially the cost of providing shelters.  According to WCH’s income statement in 2012, Wellington and Clarke shelters expenses is $3,405,594 out of total expenses of $4,455,255 which is estimated at 77%. WCH doesn’t have the financial capability to cover the large demand for the shelter. (Exhibit # - SWOT Analysis). The demand of WCH services has increased due to the high violence against women which was resulted by the increase of unemployment rate. (Exhibit # - P.E.S.T Analysis). According to the market segmentation, the number of abused women will keep increasing as well as the need for the shelters (Exhibit # - Segmentation) . So WCH struggles to support their programs financially which lead them to consider whether to stop the operation of one of their programs such as the Mine 101. (Exhibit # - SWOT Analysis)

WCH is facing a threat of decreasing provincial government funding to their programs because of the weak economy situation ( Exhibit  P.E.S.T Analysis). Nevertheless, the government supports other 100 social communities in Ontario. According to the SWOT, WCH heavy reliance on the one year-to-year government funding is preventing WCH from achieving their long term goals and programs delivery. WCH receives government funds of $3,497,528 which is 82% of the total revenue and the rest %18 is generated from different sources such as fundraising and the Mine 101. To decrease reliance on government funding, WCH would require to generate an extra of 33% which is $1,154,184 from the other different sources (Exhibit- Reduced). WCH has an opportunity to increase earned income which would improve the organization overall financial situation when the government funding is reduced. (Exhibit # - SWOT Analysis)

The requirements to provide services such as WCH requires large amount of money and work which prevent other organizations from entering the industry (Exhibit # - Porter’s Five). WCH is facing an increase demand of  their services from abused women which led the organization to turn away 178 women due to the limited capacity (Exhibit # - Segmentation). The full operational capacity at WCH can house up to 555 women and children. In 2011 the demand for housing was 32%  beyond the organization actual capacity. The increase in demand was a result of the increase in unemployment rate in Ontario which led to an increase of violence against women (Exhibit # - P.E.S.T Analysis). Therefore, a large number of abused  women and children ended up not receiving WCH services.

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From 2012 to 2013 Mine101 experienced a 37.4% increase in revenue (Exhibit 3). The expense-to-revenue ratio decreased by 38%. This shows that there’s potential to generate income from operating Mine101. For used-merchandise stores that range in revenues from $30,000 to $215,000, rent accounted for 11.2% of revenues while Mine101’s ratio is currently at 30%. Mine101 can use the industry benchmark to align their ratios closer to the industry.

OPTIONS

Partnership

An option for WCH is to partner with organizations of similar interest of serving abused women and children so that they could facilitate for these women thereby not having to turn them away. Other organizations of similar interest would be Good Shelter Housing Apartments, Sandgate Women’s Shelter, London Abused Women's Shelter and Ingamo Homes ( Exhibit- partnership). This option would not cost WCH money as these organizations have the same ultimate goal of serving abused women and children. in the worst case scenario, In the worst case scenario, WCH will receive 20% of other partners services which will serve 80 women. And in the likely case scenario, WCH will receive about 35% help to cover about 139 abused women. The risk associated with this option is moderate because there is no guarantee from other partners of having enough capacity or availability of housing.     

Grants

One option is for WCH to apply for grants from Ontario Trillium Foundation (TF), Realtors Care Foundation (RC) and Walter J Blackburn Foundations. These are major foundations in London, Ontario that support non-profit organizations in their mandate towards human and social services. WCH has received funds from TF and RC previously and since these foundations support WCH’s cause, it’s likely that they will provide funding in the future. Calculating an average grant of $43,500, WCH may be able to receive grant amounts from $52,200 to $104,400 (Exhibit). The economic cost would include Yeo and Wiggin’s time to apply for the grants. This risk with this option is that WCH may not be approved to receive the grant. To mitigate this risk WCH can apply to other foundations instead of limiting itself to just the three mentioned above. These organizations are Alva Foundation, Canadian Women Foundation, Chez Cora Foundation and Clarity Foundations which support specifically women related issues. in this case WCH can receive funds ranging from $87000-$174000.

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