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In June 2021, Kim T. Folsom, the founder and CEO of revenue-based financing firm Founders First Capital Partners (FFCP), must decide whether to issue another loan to OnShore Technology Group, an up-and-coming software validation company. FFCP provided revenue-based financing (RBF) to small businesses, with a particular focus on diverse entrepreneurs. OnShore Founder Valarie King-Bailey had previously taken an RBF loan, and had requested a second round of capital from FFCP. The case provides an overview of the advantages and disadvantages of RBF - specifically relative to bank loans and merchant cash advances - and challenges readers to decide whether a second RBF loan would be appropriate for OnShore.

Founded in 2008, EOS was a US-based nonprofit dedicated to using technology to improve livelihood in rural Nicaragua. Over the last ten years, EOS had developed a portfolio of tech products such as ovens or drip irrigation systems that impacted more than 400,000 inhabitants in rural Nicaragua. With a mix of funding strategies, EOS had been able to show steady annual growth in revenues, with roughly 80% coming from grants and donations and the other 20% from fees for services and products paid by its clients. In late 2018, Meier, cofounder, and Rodriguez, Nicaragua Director, found themselves pondering the direction the organization had taken. Running five different product lines was pulling the nonprofit in many directions, so they had to take a hard look at the best way to scale their impact. Should they keep this diversified multi-product approach, or should they narrow down their portfolio and become a one-solution organization? It was time to urgently make a decision to ensure they could maximize EOS' impact in the region and beyond. The 2018 political and civil unrest had severely impacted EOS revenues, and organizational survival was at stake.

Materiality assessments play an important role in helping firms to select the environmental, social, and governance (ESG) topics to include in their sustainability report. This article presents the six main steps of materiality assessments, the methods used, and how the complexity, uncertainty, and evaluative nature of sustainability issues complicate them. This article draws two conclusions: the selected materiality perspective influences how the other steps are conducted, and assessment results should not only focus on selecting win-win scenarios, but also on "tensioned topics," which indicate material societal impact but lack a business case.

Stichting Het Potentieel Pakken (HPP) was launched to solve a systemic problem in the Dutch Labor Market: gender inequity that was leading to a large number of women to work part-time in fields that were in desperately short supply of labor, like health care, child care and education. In the midst of the COVID-19 pandemic, Dutch Medical Care Minister Tamara van Ark announced that it would provide a large grant to HPP, a non-profit that aimed to help organizations-like hospitals-tap into the full potential of the Dutch labor market by helping them better manage their part-time workforce. HPP's President and Founder Wieteken Graven wondered how HPP could grow from an annual budget of €450,000 to more than four times that within months. Could her team scale this quickly and what would happen when the government funding ended?

New World Development (NWD) is a leading property developer in Hong Kong seeking innovative ways to solve Hong Kong's deep-rooted housing problems. NWD has gotten involved in several social housing projects to create shared value with the community, but NWD considers that these projects are not groundbreaking and innovative enough. To better tackle the housing problems, NWD has developed a not-for-profit organization, New World Build for Good, to bring in experts from different industries and policy areas to find more innovative solutions to solve Hong Kong's housing crisis. To facilitate students' discussions on possible innovative solutions, this case gives a comprehensive background of the housing industry in Hong Kong, such as its terrain restrictions and history. The case illustrates how the private and public housing markets work in Hong Kong, showing the housing challenges that young people, the "sandwich" class, and the elderly face. To give students a full picture of the housing challenges in Hong Kong, the case also reviews the government measures to tackle the housing issues over the past two decades. Moreover, the case also outlines the new proposals considered by New World Build for Good, which will inspire students to think of more innovative solutions. This case provides an opportunity for students to learn about the concept and process of social innovation, especially to understand the complications of social problems, identify the sources of innovation, and formulate innovative solutions. The case helps to raise students' awareness of ESG issues, especially in improving people's living conditions and quality of life. After studying this case, students will learn to identify potential areas for improvement, make innovative suggestions, and evaluate projects' feasibility.

Spreadsheet supplement for case 223004.

In 2021, the HBS Impact Investment Fund student team met with entrepreneur Teresa Maynard, who had applied for a $25,000 impact investment loan. The students thought the former Harvard Data Scientist's bakery business, Sweet Teez Bakery, showed promise. Maynard had bootstrapped the business, growing it from a small-scale venture to a point where she now considered expanding her corporate clientele and possibly opening a brick-and-mortar location. Alas, funding for such small businesses had been sparse, and Maynard needed working capital to take her business to the next level. The student team was eager to evaluate her financials and submit a recommendation to the investment committee. However, Maynard had taken meticulous records of her financial transactions but had yet to compile them into comprehensive financial statements, meaning that Sweet Teez's financial health was difficult to parse. The HBS student team wondered: How could they best build a reliable financial model from the currently fragmented historical information?

In fall 2021, Aliana Piñeiro, impact director at Boston Impact Initiative (BII) discovered that an entrepreneur the organization was considering for an investment had failed to disclose pre-existing debt with another lender. Although the business scored highly on BII's criteria for investment, Piñeiro and her colleagues had to reevaluate its risk profile in light of the additional debt. They also had to decide how to manage their relationship with the entrepreneur. The BII team determined an entrepreneur's creditworthiness through a series of in-depth conversations rather than using a one-size-fits-all application form. They also did not perform criminal background checks or credit checks. Nevertheless, they were disappointed that the entrepreneur had not disclosed his previous debt, and wondered why he had failed to bring it up in their previous conversations. At the conclusion of the case, Piñeiro and her team must decide whether to move forward with the investment and if so, how to address the issue with the entrepreneur.

In 2021, the HBS Impact Investment Fund student team had found a promising impact investment in the co-operative trouser manufacturer, Southwick Social Ventures. Their 100% immigrant workforce sought to pave the road to transforming Lawrence, Massachusetts, a city that was once a manufacturing hub that had recently seen less economic investment than other U.S. cities. The student team was then charged with recommending a set of terms to their investment committee. They needed to determine how exactly to strike the right balance between providing an acceptable return to the fund while providing founder-friendly terms to Southwick Social Ventures.

In 2022, Manuel Wiechers, the CEO of Iluméxico, a for-profit social enterprise that provided off-grid solar energy services in rural Mexico, was finalizing his presentation for the company's upcoming board meeting. In the 12 years since Wiechers had co-founded Iluméxico, the company had scaled significantly largely due to government subsidies. However, the company's outlook changed drastically in recent years, as the government's programs that had supported Iluméxico's expansion and service delivery had been paused. Wiechers needed to decide what Iluméxico should do: should they double down on a new government bid that had unexpectedly resurfaced and borrow to finance the implementation of this potentially massive contract? Or should Iluméxico scrap the business-to-government (B2G) model altogether and focus on growing a profitable business-to-customer (B2C) business, perhaps by offering new services, like Internet access, to some of their existing customers? Or should they instead put Mexico on pause and expand in other countries where governments supported off-grid solar power? The future of his company was at stake, as was the energy access of tens of thousands of the most marginalized families in Mexico.

This (B) case examines the results of the HBS Impact Investment Fund student team's diligence on Neurologic Optimal Wellness Physical Therapy (NOW PT). After examining Springfield's demographics, anticipated PT demand, local competition, and NOW PT's financial statements, the students realized that NOW PT would be more successful if it opened a brick-and-mortar clinic. The case appendix provides the students' Investment Committee deck, which readers can reference as an example of a thorough due diligence process. The conclusion of the case reveals the students' investment recommendation and its results.

In fall 2021, a team of students from the HBS Impact Investing Fund considered Neurologic Optimal Wellness Physical Therapy (NOW PT) for a potential investment. Dr. Banks, the founder of NOW PT, drove to visit patients. She sought an investment from the fund to open a brick-and-mortar clinic. However, the students believed that Dr. Banks might be more successful if she continued providing mobile PT services. At the conclusion of the case, the students must perform due diligence to test their hypothesis. What should their priorities be as they begin the due diligence process?

Business leaders have increasingly committed to redefining corporate purpose in terms of corporate social responsibility (CSR). The challenge now is to enact this commitment. This article argues that to do so, managers must adopt a new cognitive frame (or mental lens). Specifically, managers must disengage from their existing instrumental frames, under which they consider CSR only instrumentally as a means to drive profit and pay only peripheral attention to external stakeholder goals, and instead engage with an integrative frame, in which CSR goals are intrinsic to business plans and are considered equivalent to, and simultaneously with, the firm's financial goals. To enable managerial transition from the established instrumental frame to a novel, challenging, integrative frame, this article presents a transformative learning experience (TLE). In the TLE, managers first are immersed in a business initiative explicitly designed to expose the inadequacies of the instrumental frame for the redefined corporate purpose. This activates disorienting dilemmas in which the instrumental frame no longer applies but a new frame is not yet apparent. In the second phase, firms provide managers with heuristics such as metaphorical reasoning to enable experimentation with an integrative frame. This article provides guidelines for the structure in which this process should be embedded, how this process can be activated, and the process and learning outcomes to measure.

This case traces the development of Canyou Group over 22 years, starting from its origins as a small computer interest club in 1997 to an organization consisting of a foundation, 14 non-for-profit firms, and 42 for-profit companies, two of which are listed. As Canyou developed, the mission of the founder, Weining Zheng, remained crucial to decision-making. He wanted to prove the worth of disabled persons by showing that they can create value and gain approval from the market. Canyou faced three critical strategic decisions during its formation, which were key to determining this social enterprise's development. By making decisions in line with its mission, Canyou showed how it evolved to find success utilizing disabled employees to create value for the firm. In understanding Canyou's success, the firm has built complementary assets focused on its employees. Specifically, it developed a unique human resource system that captures the needs of employees and a corporate culture that supports them. Moreover, it designed a supporting structure with its "Three-in-One" model to help Canyou support the disabled while generating profits and contributing to its mission, resulting in a virtuous cycle. This case provides an opportunity to analyze Canyou's decisions during its development. Specifically, the case allows students to consider both the external and internal activities that a firm with this unique mission should explore and, more importantly, what activities it should reject. After discussing these decisions, the case provides an opportunity to analyze how the mission created complementary assets geared towards disabled employees, leading to a source of sustained competitive advantage. Finally, this case discusses Canyou's future challenges. While the case protagonist Weining Zheng understood that Canyou had a solid foundation, he needed to consider how it could build on disabled people's value while increasing its success after he left the firm (and this world).

This case describes a group of neighboring small coffee farmers in Costa Rica led informally by Elías Hernández. In August 2021, the group is weighing a decision to remain part of a large agricultural cooperative (roughly 1,000 members) or form a smaller, more local cooperative with only a dozen or so neighbors as members. They would like to make a decision before the next harvest in October, 2022. The fictionalized CobruCoop is typical of large coffee cooperatives: vertically integrated, staffed by professionals (accounting, marketing, etc.), and generally in the business of bulk/commodity production. The alternative micro-mill cooperative model leaves more processing-and freedom to add value by specialized production-to the growers themselves and has become increasingly common in recent years. Either way, like the majority of smallholding agricultural producers in Costa Rica and elsewhere, these growers have farms that are too small for them to each own the processing equipment themselves. The case is designed to help students understand how cooperative enterprises benefit member-owners and evaluate why members might prefer one cooperative form over another.

Considerable resources are invested in producing sustainability reports, yet few organizations reap the transparency benefits they promise. This article explores the way ten leading global fashion companies use a combination of data visualization and placement, stakeholder-driven interactive content, and multi-media and immersive content to build the trust necessary to improve their reporting and transparency. While few organizations have the resources of the global fashion giants, this article proposes a four-stage framework that guides managers through a step-change of systematic and targeted improvement.

Building on Nobel Prize-winning research, nearly a decade of experience investing in impact funds, and a lifetime of social and economic justice advocacy, Daryn Dodson's Illumen Capital, an impact investment fund-of-funds, was at a critical juncture. Prior to founding Illumen in 2017, Dodson struggled with finding a way to transfer the success he had experienced in building awareness across teams at institutional asset allocators on topics of diversity, equity, and inclusion to long-term organizational change. Instead, he observed that the investment teams-those with the most power and leverage-rarely engaged in the work, and many investments were underperforming from both a return and impact perspective because of racial and gender biases. Indeed, research consistently showed that diverse managers offered alpha enhancements for investors-not just because diversity at the general partner level led to better investment decision-making and differentiated deal flow, but because diverse managers drove diversity at the portfolio company level as well. This meant a staggering missed opportunity considering that just 1.4 percent of the $82 trillion of the asset management industry was overseen by firms owned by women and people of color. Through Illumen's proprietary bias reduction programming, and because of its powerful fund-of-funds structure, Dodson was well positioned to reduce bias and unlock impact and returns. Specifically, the 10-year curriculum was a means of spurring long-term institutional change beyond one-off trainings; however, Dodson knew that changing one firm in an entire ecosystem was not enough. To elicit lasting change, he would have to enlist many firms working together to create field transformation and capitalize those firms with specific plans to reduce bias. Further, the fund-of-funds structure was a leverage point in the system; its top-down effect allowed 10 times more impact than investing at the company level.

In December 2021, more than a decade after its founding, Goldman Sachs's 10,000 Small Businesses program was still going strong - and the firm now needed to evaluate potential program modifications to reach a wider group of small business owners. Launched in the aftermath of the Global Financial Crisis, 10,000 Small Businesses provided business education, a wide network, and access to capital to U.S. small business owners through more than a dozen city- and state-based program and a National Cohort model. By 2020, Goldman Sachs achieved its goal of graduating 10,000 small business owners from the program, and the firm decided to renew the program with the goal of reaching another 10,000. Against the backdrop of the COVID-19 pandemic, which placed unprecedented strain on small business owners across the U.S., the 10,000 Small Businesses program office team expanded the program's efforts to organize a collective voice for small business owners in U.S. politics, support an internship program that paired community college students with local small businesses, and admit owners of smaller businesses than had previously been accepted into the program. In late 2021, the team considered how to approach its latest effort: supporting Black women business owners in line with the firm's broader One Million Black Women initiative. As 10,000 Small Businesses expanded its reach to smaller businesses and sole proprietors, what modifications did the team need to make? In what ways did Goldman Sachs need to rethink its work to render its One Million Black Women initiative effective?

Set up in 2008, VidyaGyan was a residential school for children in grades 6-12 from low-income rural families in Uttar Pradesh in northern India. It was the brainchild of Shiv Nadar and Cabinet Secretary T.S.R. Subramanian, who recognized the enormous potential hidden in the poverty-stricken districts of this state. Nadar and his daughter Roshni hoped that the VidyaGyan effect would self-multiply; that students would inspire not just their family, but their street, their village, and their entire community - creating "spirals of inspiration" that would transform rural India. Regardless of their future career plans, the foundation had decided to fund the college education of any student who scored above 93% in their grade 12 exams and many students received offers from universities in the US and other countries. Having opened the door to the world, Nadar and Roshni wondered was it fair to ask the students to turn their backs on the opportunities in front of them and return home to the rural countryside?

After building the oil and gas distribution company UBI Group in her native Ghana and then selling a majority stake to an international investor, Salma Okonkwo turned her attention to solar power. As the pace of industrialization in Africa accelerates, she wants to make sure that political and corporate leaders don't repeat the mistakes that their Western and Chinese peers made as they pursued development and economic growth. That's why, in 2018, she created Blue Power Energy. It's still early days for the company, which has 20 employees and hasn't yet started generating revenues. But it's currently building two solar farms in Ghana with the goal of eight more by 2028 and has signed contracts to supply 3 million customers with 140 megawatts of clean energy by the end of 2023. Okonkwo's hope is that she can apply the lessons she learned launching and building UBI to her new venture so that it not only becomes just as successful but also makes a more positive impact on the world.