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Case
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Reference no. E372
Subject category: Entrepreneurship
Published by: Stanford Business School
Originally published in: 2009
Version: 8 December 2009
Notes: This item is part of a free case collection. For terms & conditions go to www.thecasecentre.org/freecaseterms

Abstract

Dr Kalpana Sankar, CEO of Hand in Hand (HiH), was exhausted after an all-day meeting of the organization's executive team at its headquarters in Kanchipuram, India. As she prepared for a drive to Chennai, she dreaded the traffic she would face. However, the long trip would afford her time to think through the strategic decisions Hand in Hand would need to make in the coming months. Hand in Hand was a non-profit organization focused on holistic community development. The organization's approach included five inter-related initiatives that spanned education, Citizens' Centers, health, the environment, and microfinance. Sankar's most challenging decisions were with respect to the microfinance group, which was soon to be operated through a for-profit, non-banking financial company. The organization's goal was to make HiH microfinance operationally sustainable within a year by charging higher interest rates, increasing loan sizes, and billing clients for business training and mentoring services. Sankar wondered if Hand in Hand's clients could manage the larger loans and afford the higher interest rates and fees for services that had traditionally been provided for free. These unanswered questions underscored the inherent conflict between building a sustainable organization that could scale its operation to reach even more people, and the ability to continue providing the individualized, pro bono development services that had helped drive the organization's growth. Beyond the microfinance program, HiH faced other challenges. In all four of its other program areas, the organization generated revenue from the provision of its services. Should HiH also seek to run these programs on a for-profit basis to reduce its dependence on donations? Sankar further wrestled with how to allocate scarce resources across these programs and how to compare the relative impact of the organization's services in such diverse areas. This case is part of the Stanford Graduate School of Business free case collection (visit www.thecasecentre.org/stanfordfreecases for more information on the collection).
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Abstract

Dr Kalpana Sankar, CEO of Hand in Hand (HiH), was exhausted after an all-day meeting of the organization's executive team at its headquarters in Kanchipuram, India. As she prepared for a drive to Chennai, she dreaded the traffic she would face. However, the long trip would afford her time to think through the strategic decisions Hand in Hand would need to make in the coming months. Hand in Hand was a non-profit organization focused on holistic community development. The organization's approach included five inter-related initiatives that spanned education, Citizens' Centers, health, the environment, and microfinance. Sankar's most challenging decisions were with respect to the microfinance group, which was soon to be operated through a for-profit, non-banking financial company. The organization's goal was to make HiH microfinance operationally sustainable within a year by charging higher interest rates, increasing loan sizes, and billing clients for business training and mentoring services. Sankar wondered if Hand in Hand's clients could manage the larger loans and afford the higher interest rates and fees for services that had traditionally been provided for free. These unanswered questions underscored the inherent conflict between building a sustainable organization that could scale its operation to reach even more people, and the ability to continue providing the individualized, pro bono development services that had helped drive the organization's growth. Beyond the microfinance program, HiH faced other challenges. In all four of its other program areas, the organization generated revenue from the provision of its services. Should HiH also seek to run these programs on a for-profit basis to reduce its dependence on donations? Sankar further wrestled with how to allocate scarce resources across these programs and how to compare the relative impact of the organization's services in such diverse areas. This case is part of the Stanford Graduate School of Business free case collection (visit www.thecasecentre.org/stanfordfreecases for more information on the collection).

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