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Case
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Reference no. SI83
Subject category: Entrepreneurship
Published by:
Stanford Business School (2011)
Version:
19 January 2011
Length:
26 pages
Data source:
Field research

Abstract

In January, 2010 QuestBridge, a national leader in making college a reality for bright, motivated low-income students, was sixteen years old. Founder and President, Michael McCullough, was thinking about the organization’s future. In 2009, QuestBridge placed 1,500 high school seniors – with full, four-year scholarships – at 30 top colleges. In return, the organization received recruiting fees from the schools of $1.8 million; enough to cover more than 80 percent of its operating expenses and to put the organization on a path to self-sufficiency. Yet, the question of the organization’s future growth loomed large. While Quest had been successful, the problem it was founded to address – the fact that talented, high-achieving but low income students were grossly underrepresented both in the nation’s top colleges and in the ranks of the highly-skilled – persisted. An estimated 30,000 students with family incomes below $41,000 a year score higher than 1300 on the SATs; and yet only a small fraction of these students applied to four year colleges, much less top-flight schools. QuestBridge was contemplating two options for growth. The first was to expand more deeply into the existing pool of qualified talent. McCullough believed that the way to do this was to begin recruiting in the junior year with programs and scholarships to educate students about the application and financial-aid processes early and motivate them to apply. McCullough anticipated that Quest might be able to capitalize on a portion of the $1 billion scholarship management market in the process, by funding the junior year initiatives with ‘scholarship’ money and charging donors a management fee. The second path for QuestBridge’s future growth was on the other end of its service spectrum. Quest hoped to provide more and deeper programs for alumni, including a kind of ‘match’ to graduate school, internships and long-term employment opportunities. McCullough contended that there may be a graduate school market similar to the college market for low income talent, and that, further, companies will pay headhunter-type recruiting and placement fees for Quest alums. Here, too, the plan was to scale the organization and generate self-sustaining revenue in the process. By 2010, Quest had made programmatic progress along both growth trajectories, but was still sorting out exactly which path offered the most promising strategy in operational or financial terms.

Topics

Social enterprise; Social entrepreneur; Non-profit management; Social innovation; Social sector; Revenue generating model; QuestBridge; Social capital markets; Education
Location:
Other setting(s):
2011

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