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Describes the alliance between a private businessman in Chile and a municipality to manage the local public education system. Describes the institution of a performance-based culture, including the use of management tools to align visions and incentives among key stakeholders.

In just a few years the Forest Stewardship Council (FSC) made impressive progress toward its mission of promoting "environmentally appropriate, socially beneficial, and economically viable management of the world's forests." By 2001, 25.5 million hectares of forests in 66 countries had been certified as meeting FSC's standards for sustainable forestry. With members in 59 countries, the FSC had managed to bring forestry's mainstream close to its viewpoint, with 80% of the industry recognizing the need for third-party certification. However, by mid-2002, the formula that had brought success to the organization as a small start-up was proving inadequate to sustain the healthy growth of a global, mature, multistakeholder organization. Its management and staff were finding themselves lacking critical skills to take the organization to the next level. Some of its governing structures were paralyzing it. Serious imbalances between supply and demand of certified wood were threatening to break the organization. Moreover, competing certification schemes backed by powerful business groups were moving swiftly to capitalize on those imbalances and displace FSC as the global standard of choice for certification. Finally, the organization also suffered from a chronic financial weakness. In that context, Heiko Liedeker, FSC's executive director, is compelled to rethink the organization.

This disguised case is a vehicle for discussion of the financial situation facing the management of a US public (nonprofit) television station. "WBLT" is a Midwestern station which has matured from simply broadcasting programs produced elsewhere to the production and distribution (with a related income stream) of its own programming. The case tells the story of the station's evolution and provides, in the form of exhibits, detailed information about its financial situation. HKS Case Number 1675.0

Is your corporate law firm really acting in your company's best interests? Legal ethics scholar Susan Koniak advises managers to make sure their outside counsel understands that the goal is not to push the limits of the law. Then they should get their legal advice in writing, record all oral communications, and seek second opinions.

Starbucks, the world's leading specialty coffee company, developed a strategic alliance with Conservation International, a major international environmental nonprofit organization. The purpose of the alliance was to promote coffee-growing practices of small farms that would protect endangered habitats. The collaboration emerged from the company's corporate social responsibility policies and its coffee procurement strategy. The initial project was in the southern Mexican state of Chiapas and resulted in the incorporation of shade-grown coffee into the Starbucks product line, providing an attractive alternative market for the farmer cooperatives at a time when coffee producers were in economic crisis due to plummeting world prices. Simultaneously, the company had to deal with growing pressures from nonprofit organizations in the Fair Trade movement, demanding higher prices for farmers. Starbucks was reviewing the future of its alliance with Conservation International and its new coffee procurement guidelines aimed at promoting environmentally, socially, and economically sustainable coffee production. The nature of the industry puts the case in the global context from both the supply and demand sides.

Spreadsheet supplement for case 303-055.

This is an MIT Sloan Management Review article. In an article written well before Enron became a euphemism for corporate irresponsibility, the authors make the case that such misdeeds, so prevalent in recent months, are symptoms of a syndrome of selfishness that has taken hold of our business institutions, our societies, and our minds. Drawing on history, literature, philosophy, and management thinking, they argue that the syndrome is built on a series of half-truths--or fabrications--each of which has driven a debilitating wedge into society. Our narrow view of ourselves as "economic man" has driven a wedge of distrust between our individual wants and our social needs. A distorted view of shareholder value has driven a wedge of disengagement between those who create economic performance and those who harvest it. Our obsession with heroic leadership has created a wedge of disconnection between leaders and everyone else. The glorification of the lean and mean organization has driven a wedge of discontinuity between short-term and long-term goals. And the convenient, widely held notion that "a rising tide lifts all boats" has ratified a wedge of disparity between the prime beneficiaries of stock-price increases and the large numbers of people disadvantaged by the corresponding actions. The authors challenge and deconstruct each of these flawed premises and offer an alternative. Real prosperity, they say, combines economic development with social generosity--and that requires a new philosophy of social and managerial engagement.

In the spring of 1998, nonprofit agencies known as "child-sponsorship" organizations found themselves on the defensive. The agencies-dedicated to raising charitable funds in the United States to support children and their communities in poor, developing countries-had been the subject of a scathing critique, a two-part series in the Chicago Tribune accusing them, in effect, of misleading donors. The series asserted that the organizations had not lived up to the promise implicit in fundraising advertisements: that specific children would benefit directly from the contributions of individual sponsors. The agencies mounted a spirited and largely successful public defense of their approach-one in which aid was targeted not only at individual children but at the communities in which they lived. At the same time, however, they sought new ways to reassure the public about their effectiveness. This case details the ensuing effort by a group of six child sponsorship agencies to agree on "industry" standards that would make their goals and methods clear. The case describes the differing situations of the various organizations so as to lay the groundwork for discussion about likely difficulties in reaching agreement on standards, as well as extrapolation as to what sort of standards could both command consensus among the agencies and satisfy public demands for "transparency." The case serves the broader purpose of framing the issues and dynamics of industry self-regulation more generally, particularly in a nonprofit context. See also, Part B (1665.0). HKS Case Number 1664.0

In the spring of 1998, nonprofit agencies known as "child-sponsorship" organizations found themselves on the defensive. The agencies-dedicated to raising charitable funds in the United States to support children and their communities in poor, developing countries-had been the subject of a scathing critique, a two-part series in the Chicago Tribune accusing them, in effect, of misleading donors. The series asserted that the organizations had not lived up to the promise implicit in fundraising advertisements: that specific children would benefit directly from the contributions of individual sponsors. The agencies mounted a spirited and largely successful public defense of their approach-one in which aid was targeted not only at individual children but at the communities in which they lived. At the same time, however, they sought new ways to reassure the public about their effectiveness. This case details the ensuing effort by a group of six child sponsorship agencies to agree on "industry" standards that would make their goals and methods clear. The case describes the differing situations of the various organizations so as to lay the groundwork for discussion about likely difficulties in reaching agreement on standards, as well as extrapolation as to what sort of standards could both command consensus among the agencies and satisfy public demands for "transparency." The case serves the broader purpose of framing the issues and dynamics of industry self-regulation more generally, particularly in a nonprofit context. See also, Part B (1665.0). HKS Case Number 1665.0

KaBOOM! is a nonprofit organization developing playgrounds in partnership with corporations and communities. It has grown since 1995 to a national organization that has built 338 playgrounds in partnerships with over 40 companies. This case deals with the nature of strategic alliances with corporations and poses choices for shifting strategies. These include emphasizing advocacy and public education and enabling communities to build playgrounds themselves. Further complicating the strategy was growing competition from nonprofits and for-profits engaged in playground development.

Nearly 30 years after it was first incorporated to help stabilize and improve older, declining parts of the city, Neighborhood Housing Services (NHS) of Chicago had become among the best-known and most-respected organizations of its kind. Its combination of low-interest lending to homebuyers and home renovators, as well as its neighborhood improvement efforts, had won it credit for helping to maintain or revive parts of Chicago during a time when the city was losing population and private financial institutions were loathe to make conventional loans in its poorer neighborhoods. But, in the late 1990s, NHS Chicago finds it is facing a struggle to survive. Poorer neighborhoods, long-starved of credit, find themselves flooded by lending offers from a new generation of so-called "subprime" lenders. NHS efforts to improve the nine Chicago neighborhoods in which it has offices are threatened both by mortgage foreclosures which result from such high-interest loans, and by a decline in NHS Chicago's own lending business, which has difficulty competing with well-advertised "subprimes". This case raises the question of what strategy NHS Chicago, under pressure from a major foundation which had historically helped support it, should adopt to right itself financially and whether and how it should continue the mission for which it was founded. Case discussion may include both an examination of data-including trends in its revenues and expenses-and of prospective long-term organizational strategies. HKS Case Number 1659.0

After more than 10 years of operation, the Women's Thrift Cooperatives (WTCs) in the impoverished Karimnagar and Warangal districts of Andhra Pradesh are an established part of the lives of their women members. As such they represent opportunities and challenges for the women and the non-governmental organization, the Cooperative Development Foundation (CDF), which planted the seed for their growth and has since supported them with technical assistance. The cooperatives are savings institutions that also lend money to their members and they rely solely on the spread between the interest they pay on the savings and the interest they earn on their loans to support their operations. In recent years the fund utilization of the thrifts has decreased, leading to some concern about their financial sustainability. The members and CDF are attempting to do something about this by starting a dairy cooperative to sell milk in the city of Warangal - the women will use the proceeds from loans from the thrifts to finance their milk purchases. There is also concern that the thrifts' accounting practices are disguising some loans in default, resulting in an overly rosy financial picture. CDF and the leadership of the cooperatives have to work out how to get the thrifts to recognize the losses that the defaults constitute without undermining their faith in the thrifts. And finally, there is pressure on the CDF from the leadership themselves to relax its rule, which the thrifts freely adopted, that prohibits leadership participation in electoral politics. The thrifts have provided a fertile training ground for women to become involved in the public life of the village, and they are now in demand as candidates for political office, given the early 1990s Indian constitutional amendments that set aside one-third of all local council seats for women. HKS Case Number 1656.0

Anyone who argues that "green" business makes economic sense is bending the truth, says the director of environmental affairs at Aspen Skiing Co. Sustainable business can't occur without a company mandate springing from ethics, not economics.

Pallotta Team Works is a for-profit, privately owned company that produces multiday fundraising events for nonprofit organizations. Dan Pallotta, the 40-year-old CEO, founded the enterprise in 1992. The company has grown rapidly, having raised over $200 million for charities. As the boundaries between the for-profit and nonprofit sectors blur, this case provides an example of how a for-profit entrepreneurial approach and the market test where the lines between the two sectors are drawn. Pallotta and the company's aggressive style, plus the basic business model, generate a significant amount of controversy among nonprofit organizations and the press. Pallotta is outspoken about the merits of his business model, the appropriateness of his salary, and his company's marketing approach. He wants to increase total philanthropy in the United States. "How many ads for charity did you see on the Super Bowl this year," exclaims Pallotta.

Provides an overview of cause-related marketing (CRM), including recent trends. Uses various examples to discuss the potential benefits of CRM as well as potential pitfalls.

Describes the entrepreneurial process through which the September 11th Fund was created, developed, and operated, focusing primarily on the furst seven weeks of the fund. This case details the genesis of the fund as a partnership between the United Way of New York City (NWNYC) and the New York Community Trust, New York City's largest funders-to its development/fundraising efforts and operations with pro bono consulting from a team of McKinsey consultants. Describes how the social entrepreneurial process was facilitated by key leaders from McKinsey, who were instrumental in initiating and executing McKinseys involvement in the fund development and operation. Discusses how the UWNYC executive staff and the McKinsey team worked to maximize giving to the fund, develop the infrastructure to process donations, and create an early distribution strategy highlighting how the McKinsey team and United Way staff adapted to respond to this crisis.

The FBI indicates that three purchasing agents are suspected recipients of bribes. After an inconclusive investigation, the agents leave. The superiors are unsure what to do. A rewritten version of an earlier case.

Executives who want to make their organizations better corporate citizens face many obstacles: If they undertake costly initiatives that their rivals don't embrace, they risk eroding their company's competitive position. If they invite government oversight, they may be hampered by costly regulations. And if they adopt wage scales and working conditions that prevail in the wealthiest democracies, they may drive jobs to countries with less stringent standards. Such dilemmas call for clear, hard thinking. To aid in that undertaking, Roger Martin introduces the virtue matrix--a tool to help executives analyze corporate responsibility by viewing it as a product or service. The author uses real-life examples to explore the forms and degrees of corporate virtue. Martin uses the virtue matrix to examine why the public clamor for more responsible corporate conduct never seems to abate. Another issue the author confronts is anxiety over globalization. Finally, Martin applies the virtue matrix to two crucial questions: What are the barriers to increasing the supply of corporate virtue? And what can companies do to remove those barriers?

Ethical considerations aside, U.S. companies damage their long-term business interests when they turn a blind eye to the "dirty money" that flows through their coffers. Policy strategist Raymond Baker explains why.

When Anthony Williams is elected mayor of Washington, DC in November 1998, he inherits a city that had been close to insolvency. Although its financial picture has improved, it has historically lacked the equipment and systems to deliver high-quality city services. Williams had won a convincing victory at the polls in part by emphasizing the need for improved service and accountability. He faces two challenges: both to improve the quality of city services and to devise a way to ensure voters are aware of the extent of the improvement. With both in mind, Williams and his top aides develop a new system to guide city government. The comprehensive performance measurement system requires all city departments to set measurable "scorecard" goals for improving the services they deliver-and to report regularly on their progress in meeting them. This case describes the design and implementation of the DC performance measurement system, with particular focus on several specific departments. The case is designed, specifically, to help students understand the difference between outputs and outcomes, a distinction reinforced by a review and assessment of the goals set by the city departments featured in the case. Data provided in exhibits provides a vehicle for reinforcing the output/outcome distinction-and the tendency of public sector agencies to see outputs as an end in themselves. HKS Case Number 1647.0