BrightStart Aid (BA) is an NGO that provides after-school tutoring for low-income students. BA operates independently from direct government control, although it receives grants. The fundraising manager uses the simple linear regression equation below to forecast monthly donations from social media posts.

Forecast donations in USD 000 = $4.2 + 0.85x$, where $x$ = number of social media posts per month.

BA has prepared the following forecast for next month.

Nima owns Seaside Stitch (SS), an unincorporated business that makes uniforms for local hotels and restaurants. SS has six employees and Nima makes all major decisions. SS has recently been offered a three-year contract to supply uniforms to a national hotel group. To meet the contract, SS would need to borrow money for new sewing machines and rent a larger workshop. Nima is proud of SS’s personal customer service and wants to keep control of designs and pricing. However, she is worried about the risk of business debts if the hotel contract fails. Nima is considering three options: remaining a sole trader, forming a partnership with her cousin who is an experienced accountant, or changing SS into a privately held company owned by Nima and selected family members.

Urban Roots Kitchen (URK) sells low-cost vegetarian meals made from surplus food collected from supermarkets. URK’s social purpose is to reduce food waste and provide training jobs for young people who have been unemployed for more than a year. URK is currently a private sector company owned by its two founders. Profits are reinvested into new kitchens, but the founders may also take dividends in future. URK’s employees and local suppliers argue that URK should become a cooperative so that they can have a vote in major decisions. The city government has offered finance if URK becomes a public sector company, but the government would appoint senior managers and require URK to supply meals to schools at very low prices. The founders want URK to grow while protecting its social mission.

CycleLoop (CL) is a private sector social enterprise that repairs and resells used bicycles using a circular business model. It is considering changing into a worker cooperative. The directors have prepared a decision tree summary for the first year after the change.

MediReach (MR) is a non-governmental organization (NGO) that provides mobile health clinics in remote communities. MR operates independently from direct government control and is funded by donations, grants and small charges for some services. MR does not distribute profit; any surplus is reinvested into clinics and training local nurses. A university has developed a low-cost diagnostic device that MR could distribute through its clinics. To finance production and distribution, MR is considering creating a separate for-profit social enterprise subsidiary to handle part of its operations while retaining its NGO status. Impact investors have offered capital, but they expect dividends and a role on the board. Alternatively, the national government has offered to make MR a public sector company, providing finance but requiring MR to follow government priorities. Some donors have warned that they may stop funding MR if its independence or non-profit status is weakened.

GridCycle Energy (GCE) is a private sector social enterprise company that installs battery-storage systems in apartment blocks. Its mission is to reduce energy costs for low-income households while earning a profit. The national government has offered to buy 70 percent of GCE and convert it into a public sector company. GCE’s founders would retain 30 percent ownership but would no longer have full control.

GCE’s managers use the following simple linear regression equation to forecast monthly installations:

Forecast monthly installations = $20 + 3s$

where $s$ is the government subsidy support score.

Forecast data for next year are shown below.

LoopHome (LH) – a circular cleaning-products social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

LoopHome (LH) is a private sector social enterprise founded by Amina as a sole trader. LH sells refillable household cleaning products from a small workshop and mobile refill van. Its social objectives are to reduce plastic waste and to provide paid work experience for unemployed young adults. LH currently reinvests most of its surplus in training and community refill events. Demand is increasing and Amina wants to open 10 neighbourhood refill hubs within three years.

Amina is considering three possible business entity choices: remain a sole trader, become a privately held company with two impact investors, or convert LH into a consumer-worker cooperative.

Resource 2 — Selected information on possible business entity choices

Resource 3 — Social-media statistic

LH’s recent “one bottle for one year” campaign received 620 000 views and created 8 400 expressions of interest in becoming cooperative members or volunteers.

Resource 4 — Quotation from Amina

“I need finance to scale up quickly, but I do not want LH to become a normal cleaning-products company that uses trainees and sustainability only as marketing.”

SafePath Mediation (SPM) – an NGO reducing youth reoffending

Read the resources and answer the questions that follow.

Resource 1 — Background

SafePath Mediation (SPM) is a non-profit social enterprise operating as an NGO. It provides mediation, counselling and work-readiness programmes for young people at risk of reoffending. SPM is independent from direct government control, although it receives some government grants and works with public schools and courts. SPM also earns income by selling conflict-resolution training to businesses.

A city government has proposed that SPM become a public sector company owned by the city. The city argues that this would allow SPM to expand to every district. A group of trustees prefers SPM to remain an NGO and create a small trading arm instead.

Resource 2 — Selected forecast information for next year

Resource 3 — Social-media statistic

A post by a former participant, “SPM listened when official agencies did not”, was shared 38 000 times and increased small online donations by 24 percent in one month.

Resource 4 — Quotation from a major donor

“We fund SPM because it is independent and trusted by young people. If it becomes part of the city government, we may redirect our donation to another NGO.”

BrightWeave Uniforms (BWU) – an inclusive textiles social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background

BrightWeave Uniforms (BWU) is a for-profit social enterprise that manufactures school and hospital uniforms from recycled fabric. BWU is a privately held company owned by its two founders and three impact investors. Its social mission is to provide stable employment and training for refugees and people with disabilities. BWU has limited liability and a separate legal identity from its shareholders.

BWU has won interest from large hospital groups, but it needs significant finance for new machinery and quality certification. The board is considering whether to remain privately held and sell more shares to selected impact investors, become a publicly held company by listing on a stock exchange, or create a worker-share ownership scheme while remaining privately held.

Resource 2 — Selected information on growth options

Resource 3 — Social-media statistic

BWU has 210 000 followers across social-media platforms; a video showing employees learning industrial sewing skills generated 31 000 comments, most praising BWU’s mission.

Resource 4 — Quotation from a potential stock-market investor

“BWU’s mission is attractive, but once listed it must deliver competitive dividends and fast growth like any other public company.”