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VP and COO, Habitat for Humanity International
)Strategic Management Project

5-Year Plan - Making a Difference
As a member of the Strategic Management Project, I have been tasked to prepare a POA memo that will
include recommendations serving as a basis for our 5-Year Plan. The purpose of this memo, given our
unique structure, is (l) to identify the main problem our organization, (2) to evaluate the cost vs. -..
beneJ}!.of direction we may choose to take, and (3) to make specific recommendations on
next s.!9>s, layout a feasible implementation plan, and anticipate any internal or external resistance from
our stakeholders. As requested, the recommendations will be more practical than academic and will have
significant impact on Qur future growth prospects.
Situation Analysis
External Analysis - The details of the in Appendix 1 & 2.
From geographical expansion to entering to going 6eyond housing to partnering
with for sel'm choosing to be everything is
usually the quickest way to failure. Which opportunity we choose to take advantage of will have ditect
impact on Habitae s future success. <?n the other hand, Habitat is also facing serious threats that are beyond
its 2futtrol. Competition (from other NPOs and even between affiliates) is an important consideration when
deciQing what opportunities to E..ursl\e. In addition, the timjng and ability to get.funding could be
unpredictable and could easily handicap Habitat's ability to meet
Internal Analysis - Habitat's strengths can be grouped into 3 main 1 iate struc , and
like a regular for-profit company, one of our strengths is that
raised). This allows us to focus purely on achievin oIume an margin, and opens up for us a lot of
opportunities that would otherwise be unappealing to a nonnal company. Secondly, having grown our
number of affiliates from 330 in 1998 to 814 in 1992, we have proven that this is a rapidly scalable
structure with minimal startu th; is built 8rO!!nd is a
moti tl y elements, such as fund raising and v
i1mteer,s, that make Habitat possible.
Among these, the inexhaustible pool of volunteer labor can be considered Habitat's greatest asset and
potentially one of the greatest weaknesses - one might argue that we lack the disciplined operational
management of a for-profit corporation. Nevertheless, we do have a very high operating efficiency coming
from the free labor provided by our intrinsically motivated volunteers. For example, in 1992,
as a % ot
to speak,of, the combination of those listed on the SWOT analysis amount 0 a fiu e risk
==<- -
organizational structure may be able to support the growth targets that are being considered.
This is an issue we need to pay close attention to as we decide on our next course of actions.
Definition of Problem
The critical big picture problem Habitat faces can be described as but not
having enough anizational res u es to handle them." What it ultimately boils down to is a
matter of choice - betw en the various initiatives I strat;c directions (see Identification of
Strategic Options below); Habitat must select are
have the b!gq.est impact. choices will set the direction for the organization for years to
come and undoubtedly have significant impact on our performance, they must also be
accompanied by internal changes on an organization, compensation, and financial level.
Identification of Strategic Options
In tackling the problem identified above, we should focus on evaluating the following altert:J.ative
courses of action: (Note: these options are not mutually 'exclusive)
$ YGrowing to Projected Size
i2 into Urban Homelessness
Q - pA1efine Organization's Mission More Broadly
- Drive (Hurricanes, Environment)
- V"Restructure Affiliate System
Evaluation Criteria
To evaluate the diverse set of initiatives above, I focused on 4 main groups of criteria:
The ability for eac . .. . ve to meet or exceed the criteria will be an indication of how well they fit
our organizati : To eliminate poverty housing and homelessness gJ..o .. ball)' and to
increase people's awareness of the subject
Evaluation of Strategic Options
The chart in Appendix 3 clearly lays out the benefits and costs as well as the impacts each initiative
has on the organization and its stakeholders. For the purpose of provid' g an evaluation, I
have added to your worksheet a column comparing th enefi'
option. In addition, I have color-coded the boxes YeHow meaning So-So,
and _) to allow us to. visually determine the best alternatives. While each of the 5
strategic options have their merits, it is imperative that we to lack
of management the alternatives, Grow to Projected Size and Be Opportunity-
Driven appear to be best-aligned with our organization capabilities (Le. maximum benefit for
the mInImal organIzational disruptions).
- This is nothing more than meeting our stated goal. While hitting the
aggressive numbers of $lB / 30,000 houses would require a significant ramp up in headcount, # of
affiliates and amount of donations, all of which are risks, we have demonstrated the ability to grow
quickl evenue of $28M in 1998 growing to $10 1M in 1992). What we need to do is adjust the
utilize to
hitti an) calls for large one-time donations that are driven by Cj)
orts. option is that the periodic .
surge in HR demand could incapacitate our HQ for long periods of time, but it is absolutely 9:
necessaIT for meeting our aggressive goals.
--- .
Restructuring Affiliate System was coded yellow as an indication that this is a beneficial but risky
option. While exerting the affiliates could Habitat from deviatillg
from its mission (by en8..aging in all sorts of unrelated activiti)es) and help, minimize the
canuiba'gatiQn between affiliates (from overcrowding), the pressure to control them can ruin
the delicate structure and ultimately limit our ability to use the!'1 to grow.
Let:S be hOt;st, with alm6StJOO% uBOaid uWNers at 1M affiliates, fmancial independence,..and
:;:::::e ______ _
only 25 managers at HQI' <liSiliiifiial control do we ba.t:;over
and on the other
hand, represent a departure from our core competency and a lack of focus. simEly do
have the experience, eXlLertise, with the politics, zoning issues, and
regulations involved in the urban areas. Even if we decide to hire such expertise, there are serious
concerns as to whether our current organization will be able to (1) fund such expansion or (2) attract
such talent. If we had to do this, we should consider with NPOs specializing in urban
provide the funding, they provide the labor I expertise. While
may criticize us for ignoring opportunities by not pursuing these options, I would argue that there
are plenty of fish in the_sea - even with our success to we have only tOUCA1:lj>OB the very
surface of the homelessness problem in the rural areas.
Recommendation and Implementation Plan
Recommendation & Reasoning
After exploring the various criteria for each strategic option, as well as taking a
what is doable or not in our orga' tion, I recommend that Habitat focus on the Grow to Projecte
Size, B J]Jortunity-D' n lPpropriate Boundaries/or
Restructure Affiliates option) initiatives for the five-y Ignore the other two. In addition
to options are implementa.,hle, it is important to ensure that they are tied to
Habitat's objectives. A quick reference back to the originally stated objectives would indicate that
these ;commendations are a gocgd strategic fit :
Eliminate Poverty Housing & Increase Awareness of
Homelessness Problem
Grow to Projected Size

Eliminating = Increasing
Ho ele ..... ness Awareness...--
Be Y to build more Yes. events
- houses. will definitely increase
Set Appropriate Boundaries for
Yes. us
Neutral (/-/
Affdiates affiliates more effici t.
Implementation Plan
Actions Plan for Growing to 30,000 houses per year and $1 billion revenue by 2000
ds to 1992 from the target, I have determined that we will need to grow our
revenue y 33.3% ee Appendix 4 for calculations). To put this into perspective, that
means we ave to double our number ofHQ donors from 800K to 1.6M by 1997 (the end of our 5-
"'year plan). As an embedded assumption, I also assumed that we will have access to more
we will depend
owth assum e

\oi.LJ.....J.,.U...Llo-t::':ralJlU name and our s powerful relationships. As you
can see, this re-emphasizes the importance of pursuing our "Be Opportunity-Driven" and "Set
Appropriate Boundaries for Affiliates" objectives. On the cOQ.struction side of the equation,'in
order to build 30,000 houses by 2000, we will need to 21 % a year (from 814
to 3,843). As far as costs are c.oncemed, if we assume a cotfstant expenseto revenue ratio of
as in 1992, you can expect to see our expenses rise to $180M by 1997 (Appendix 4). Of the three
strategic options we are pursuing, this is clearly the most time serttJi!ive
immediately::-rntssing the target this year will have compounding impact on future years. I suggest
we start immediately by evaluating a ackIog of 300 affiliate applic . ons (and . ing the staff

would be yours O. I do not anticipate much resistance on this i,nitiative since it is
meeting r aggressive goal. It would, to get the signofflsupport of Mr. Fuller
orm the oar ur intentions. :::=t:7 - =
Actions P: to Become 0IlIlOrtunity-Driven
Whether we succeed in capturing these disaster relief opportunities depends on our ability to be
prepared. The very nature of the opportunities we are looking for requires a lot
could cripple us for months. As such, we need to
. make our organi
headquarter , more prepared from a jlUman resources point of
of demand, we should consider using paid outside consultants.
While cost could be .. a legitimate concern for us within the organization, the injection of
"professional expertise" will allow operations to be uninterrupted for the rest of our organization.
Plus, since the consultants are paid on a project basis, the cost will not be recurring during our down
time. This option is not as time-sensitive but I would suggest we start by approaching some of the
disaster recovery and municipal consulting firms (see Appendix 5 for a list). The ideal candidate to
take on this task is my current Strategic Management Project Team. Internally, we will also need to
obtain signoff from Mr. Fuller and the budget approval of Mr. Donaldson, the CFO, on this so that
we can act immediately as soon as an opportunity arises.
Actions Plan to Set Appropriate Boundaries for Affiliates
This initiative is more about the quality control of affiliates than actual control of them. The best
way to implement this quality control is to do it passively. Our relationship with the affiliate
closely actually resembles that of C\f.ranchise relationship (similar to MacDonalds). They are pretty
much financially independent from us, in fact, we usuall de end on them. The best way to
encourage them to be more productive is thr costs). These
r c mmunity. Rather than

can only qualify for if they V
............. This award system will hopefully
encourage the Affiliate to grow fast enough to meet our growth target and also serve as a good
indicator of Affiliate's success. This is a long-term effort which I do not believe anyone in our
HQ is eqnipped to handle We will have to get an experienced manager to take on the
of setting up and running these incentive programs. Since any changes that touches the affiliates are
_. ...
considered sensitive and are subject to resistance, I would suggest we recr it a
executive from one of our affiliates to be in charge of the pro
. who would better understand the affiliates than one of them?
Appendix 1. Situation Analysis
Everything is centered around a "Just
Cause" - motivation
Free labor from volunteers
Fund-raising capability of Fuller and
Highly scalable affiliate model
Great brand name
Unlike for-profit companies, we have
no trade-off between profitability and
market share. We grow as fast as
possible as long as we are breakeven.
Lack of professional staff at all levels
of the organization to support growth
Weak HR / IT infrastructure
Dependency on a few prominent
persuasive fund-raiser
Lack of control of affiliates
Globally un-unified
Lack of clear success-measurement
Geographical Expansion beyond US
Expansion into Urban areas
Expansion beyond housing into areas
like health care, drug prevention
Explore opportunities to work with
other NPOs in areas beyond Habitat's
Limited/unstable funding
Lose focus and ability to manage
Resources spread too thin leading to
disastrous project outcomes that could
ruin our brand name
Competition from other NPOs and own
affiliates (over-crowding)
Appendix 2/CS and 4Ps Analysis
Company ,
Experience at building low-income houses in rural areas
Non-Profit organization established to fight homelessness
Global capabilities / expertise
Not professionally run
Affiliate Structure
Invitationpbased expansion
Homeowners - Ultimate user of the products (houses). They qualify by making a
modest income enough to make minimal house payments
Donors - Detennines our revenue.
Note: The relationship between Homeowners and Donors is an interesting one. First of
all, both can be considered our "customers." While serving homeowners is the ultimate
goal of our organization, our ability to successfully do that depends on the donors.
Volunteers - retirees, college students, church volunteers, other habitat homeowners
Affiliates -1,050 by the end of 1993. Size ranges from building 1 to 40 houses a year.
Donors - Provides funding
Homeowners - They, in tum, must become volunteers too
Celebrities - Famous speakers (Ex. Pres. Carter)
Government - Potential fmancial and political help
j,t er NPOs competing for the same donation revenue
bitat's own affiliates - overcrowded
overnment-sponsored housing
Product .
ordable Housing (mainly in rural areas)
Intangible: floJ! ,a sense of accomplishment, employment assistance, a sense of
Loca alIa es responsible for identifying customers
Mainly Rural/Urban
Celebrity speakers - Famous speakers (Ex. Pres. Carter)
Publicity from major relief efforts
Direct Mail
Christian Church Networks
Depends on the country and type of houses
At Cost - Zero Profit, Zero Interest
- /'
,,_ . .....;
Appondlx 3 , Planning 'f'IOrkShoo,V1;ti

What Is tt ...... u;n I


(1) Grow to Projected
(2) Expand Into Urban
(3) Define lunclear. But eventually, we
Organization's get to a point where the Yes & No. We have always
Mission More Broadly Mission Is to broad to be tried to stretch" our Mission
..... ""' ..... oul
(4) Be Opportunity
DrIven (Hurricanes,
(5) Restructure
Affiliate System
OrganlzaUonal s
H IF: SlgnifICSnt Increase
each year to cope with a 33% Additional staff will need (0
annual levenue growth and a added at the HQ and
21 % growth In # of Affiliates Regionall.evel to support and
woridwide manage the growth
H : Increase. Depends on
F : Increase. Depends on
- Management resources will
be stretched
- Entities like Habitat for
Homeless Humanity may
need to be set up 10 deal with
Highly Risky as there Is no
- Expandlnllinio Urban will
match the lolalest of URBAN

ers/Affillates at the expense
of RURAL stakeholders
(eillng how far the re-<lefinilion U Is highly Inconceivable that
will go. Implications could ALL 4 stakeholders will be
range fTDm hiring a few more satrsfied at the same time.
people to revamping the Thele is bound to be some
entire organlzaUonal and conflict of Inlerest.
affiliate structure.
o : Yes. Mote clarity on whele
the money Is spent
V : No, they are the affiliate!
r ::y-RecommendaHon:
What Is the What Is the Do It? Don't Do It?
Doing It? of Doln ?
High. This Is our mission. High. There is nothing
If we want to eliminate more important than
global homelessness, we achieving our core
need to grow at a rate objective of providing
faster than the growth rate affordable housing
of homeless ness.
- We will never completely
eliminate global
homelessness - Addlesses major
'. However, we can always problems in the urban
use the capital and labor slums
somewhele else 10 build
other houses
We maybe missing out on
growth opportunities.
However, maintaining the
same mission will help
Habitat focus on current
objectives (in which it Is
already doing a good job)
As long as the
organization can support it,
expanding the Mission =
being more aggressive and
growing faster: helping
more homeless
Habitat may not be able 10 Raises our awareness
grow as fast as e)(pected - Great opportunity to raise
'. May miss out on gleat additional funding
fund.ralslng (levenue) - Could lead to
opportunitIes establishment of new
- Not much. Affiliates, self
sufficient and with self
deslle to grow, Is a
powerful advantage for
Habitat. Any major
restructuring effort to exert
control over this will
jeopardize this advantage.
More control over
affiliates will help keep
Habitat from deviating from
lis Mission
'. Minimize cannibalization
between affiliates (being
too close to each other)
'. More clearly define HO's
Some. We Should not
restructure affiliates to
have more ovef
them, but rather, we
need to have the ability
to Impose boundaries on
what Affiliates can or
cannot do
Appendix 4

5-Year Plan
199 1993 1994 1995 1996 1997 1998
1999 Co 2000
$55.7 $69.5 $86.2 $106.5 $130.6 $159.0 $191.9
122.9 168.5 230.9 316.2 432.6 591.4 808.1 .....
ue 100.6 134.1 JIB-6
,..,.. ...
422.6 563.2 f,'OOO':'O
, .... u.u

33.3% 33.3% 33.3%
_"l:1 '1

Ir v
Breakdown of Donations Source
Donations from Headquarters 35.2% 33.2% 31.2% 29.2% 27.2% 25.2% 23.2% 21.2% 19.2%
Donations from Affiliates 64.8% 66.8% 68.8% 70.8% 72.8% 74.8% 76.8% 78.8% 80.8%
Total Donations 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Breakdown of Donations
Large Donations 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0%
Regular Donations 90.0% 85.0% 80.0% 75.0% 70.0% 65.0% 60.0% 55.0%
Headquarters Required Donations $44.5 $55.7 $69.5 $86.2 $106.5 $130.6 $159.0 $191.9
Less: Large Donations @ HQ (4.4) (8.4) (13.9) (21.6) {31.9} (45.7) (63.6) (86.3)
Regular HQ Donations Required 40.0 47.4 55.6 64.7 74.5 84.9 95.4 105.5
Average Check Size $44.25 $44.25 $44.25 $44.25 $44.25 $44.25 $44.25 $44.25 $44.25
1# Donors from HQ Required 800,000 904,888 1,070,172 1,256,081 1,461,632 1,684,099 1,918,356 2,156,108 2,385,0571 v
1992 1993 1994 1995 1996 1997 1998 1999 2000
# Houses Built 6,355 7,716 9,367 11,373 13,808 16,764 20,353 24,710 30,000
Growth 21.4% 21.4% 21.4% 21.4% 21.4% 21.4% 21.4% 21.4%
Average # of Houses Built per Affiliate 7.8 7.8 7.8 7.8 7.8 7.8 7.8 7.8 7.8
1# Affiliates
814 988 1,200 1,457 1,769 2,147 2,607 3,165
Growth 21.4% 21.4% 21.4% 21.4% 21.4% 21.4% 21.4% 21.4% v
1992 1993 1994 1995 1996 1997 1998 1999 2000
Program Services Expense $17.2 $22.9 $30.5 $40.7 $54.2 $72.2 $96.3 $128.3 $170.9
As a % of Reven ue 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1% 17.1%
Supporting Services Expense 26.3 35.0 46.7 62.2 82.9 110.5 147.2 196.2 261.4
As a % of Reven ue 26.1% 26.1% 26.1% 26.1% 26.1% 26.1% 26.1% 26.1% 26.1%
ITotal Services Expense 43.5 58.0 77.2 102.9 137.1 182.7 243.5 324.5
As a % of Revenue 43.2% 43.2% 43.2% 43.2% 43.2% 43.2% 43.2% 43.2% 43.2%
Appendix 5. Examples of Disaster Recovery & Municipal Consulting Firms
Municipal Consulting Group -
Pacfic Municipal Consultants ~
Cullinan Engineering Municipal Consulting Services -
g ,.-'
To: Jeff Srlider, Executive VP and COOl Habitat for Humanity International
Subject: Five-year Plan for Habitat for Humanity International
Introduction )
Since inception in 1976. Habitat for Humanity International expede.nced significant growth
expanding from a t world-renown non-profit organization spanning
the globe in approxima I 850 locations in he United States and Cana6d
Over the past 17 arst the organization was for building I
more th ,000 Habitat driving an impressive compounded annual growth rate of
about 0" 5 years (Appendix 4b). In addition, Habitat and its advocates J
capitalized on i recognition and wer able to generate global revenues
estimated at $1 pendix 4a). Despite its

among pursuing various societal needs that stray from Habitat's historical focus on the
constructron of affordable housing in rural areas, and the necessary organization an
infrastructure may not-be- it I place to support these interests. As such, the purpose of thi
memo is to assist you in developing a five-year strategy by (1) providing a comprehensiv
situation analysis, (2) identifying possible alternative courses of action and evaluating the
on strategically important criteria, and (3) making a specific recommendation
appropriate strategy and laying out sible implementation plan.
e of the situation analysis are provided in Appendix 1. Th
able housin both in the domestic U.S. and in rnational market far exceed
the number of suppliers able to provide such a service. This shortage was further
exacerbated by recent natural disasters (J::ltJrtrcarle Andrew and Hurricane}-tbaLbave
left many homeless and in need of housing support. Habitat's typical practice to_ only
enter a community when invited. there is potential opportunity for growth and expansion into
- -
uncharted regions. Eudbermore, the Javorable-publkity an.cLlarge bacldog of 300 affiliate
applications further substantiate su rt for Habitat's services and recognition of the need to
address the is;me of po rty housing and homelessness. Despite the need and urgency to
address such pressing concerns. there is some anxiety that Habitat and its affiliates may
detract core objective and priorities_to provide affordable
communities given therecent surge in housing demand callsed by natural disasters as
mentioned abo"ve and increasin rban
a/ysis strength lies in its powerful 10 al name d
with prominent ures which has garnered the
organi ation Furthermore,
Habitat services have earned the organization a loyal following of supporters which include
and donors. I he backlog U 300 affiliate
volunteer corp IV participants and donor evident .
of such suppo . In ens9spirit and vision shared within the
crucial f6 -Habitat's successt the lack of formal :nd have resulted in
disarray wiU,i'l tile olgarlizatlon. Loose led to inconsistent
prioritie ,ave strayed from the organization's core objectives.
a I cien9ies stemming from a lack of
centralized organization internal rivalry has also developed as
headquarters and affiliates unknowin urces of funding. These
organizationa deficiencies impede Habjtat from fulfilling its core objectives effectively." In
addition, the lack of an appropriate compensation structure fails to motivate and drive
effi . Ion that is largely volunteer-based.
xhibit 2 and 3 detail the 4Cs and 4Ps

e needs of its key customers thus far, in terms of providing affordable houses and more
building hope for the impoverished, which is the underlying value of its core
product. The organization's extensive enrollment of donors, affiliates and-vofonte-ersis-also
evident of Habitars success in generating to the global issue of
inadequate housing. Such awareness has also helped Habitat organize and build a diverse.
group" of collaborators. Though the influence of such collaborators is invaluable to
supporting Habitat's cause, it does not come without some detriment as each collaborator
may have varied interests that detract from the core objectjve. It is important
that Habitat drive consistency through its collaborator to maintain focus. This is crucial as

such coll(aborators also play a key roJe in promoting Habitat and its services. .______-
concentrate its efforts on driving focus and consistency both from within the

through its services and through collaborators in order to realize synergies, else promotional
r--- .
efforts will be diffused and stray from core objectives.
Definition of Problem
The current challenge we face)s IQ on the various
societal needs that have arisen and the organization and infrastructure necessary to pursue
---- '-
such opportunities. These challenges should be addressed in such a way that our action is
j c. .
consistent with our core objectives and competencies at this particular stage of growth, as
r------ --
well as the specific goal of b '
year 2000.
Identification of Alternatives
In addressing the challenges identified above, we should focus on evaluating the following
strategic alternatives:
(a) Adjust Habitat's goals to fit the organization (
(b) Adjust organization to meet Habitat's goals vi
(c) Pursue growth opportunities' in addressing needs such as urban homelessness
Evaluation Criteria
As a non profit organization focused on providing affordable housing and building global
. 's important that (1) Habita c 'nue to
and (2) coUaboratorS co nue to
We s ou Id evaluate the th ree
strategic alternatives based on the above identified criteria.
Evaluation of Alternatives-------
The pros and cons of each strategic alternative are assessed below:
(a) Ad'ust t th
Maintains status-.9.uo within the anization and guarantees
volunteers and affiliates entrenched in current system.
Cons .
require delFaetion away
Fun?amental not addressed and lead to similar
human resource Issues In the future.
(b) Adjust organization to meet Habitat's goals 4----.
Pros tofu!
Allows Habitat management to restructure 'I' ,
focus on core objective.

Effort to organization could be and expensive
global scope of organization.
Realignment of organization to may result in mismatch of objectives
with current volunteers and collaborators
and resistance which in fallout.
(c) Pursue growth opportunities in addressing societal needs such as urtianJ,omelessness - /l - : / ./..._
Pros 'f;f..f11 Ifill-'
... '
Societal issues reJating to urban homelessness garner more media attention which could
increase support in terms of donations and volunteer
labor. _._ .'
Invitation from urban centers indicates __
Allows would bring it closer to achieving its specific
goal of with revenues of $1 billion by the year
._ __ e:::::.-
Cons ... <
Habitat curren!!y has little experience in providing housing solutions in urban areas.
Urban homelessness often involve related societal issues such as unemployment, drug
=-::::::::::::. . ,
use and inadequate job training which Habitat is not trained to
Providing urban housing involve increased collaboration and interaction with government
and existing urban community development anization with which Habitat has no
Recommendation and Implementation Plan
Recommendation Based on the an ed that Habitat pursue
on alternative, that is to adjust the Habitat"t"s goal . Though the
e 0 pursing gro oppo Un! les In a ressing societal needs such as urban
homelessness is attractive, it requires an altogether different set of skills and resources------
wbi2b . I propose societal
need, the eme ncy housing initiative in rebuildin es in disaster-stricken areas as it
capitalizes on Habitat's competence in building homes from scratch and is beneficial in
arawing p-osltive publicity for volunteer enlistment and fundraising purposes.

Implementation Plan
1) Identify
The rong-term strategic goal should be clearly identified. In this ease, it is apt to
maintain Habitars goal statement "to eliminate poverty housing and hQmelessness
from the face of the earth [and] put the subject of inadequate housing
and minds of people"
Similarly, the

should clearly communicated.
Habitat has committed itself to building 30,000 houses per year with revenues of
, '
$1 billion by year 2000. As this-is a fairly ambitious goal, Habitat should also identify
'--- ""- ...:-::.
short-term tactical targets on a yearly basis leading up to year 2000 that will aid in....---
..-:-- .........
progressing towards this medium-term goal.
2) Identify measurements for success and develop corresponding incentive structure
To drive clarity of goals and promote accountability within the
measure.rn.e.Ats fer success and correspondmg IncentiVeS to feward success should
be identified and developed.
To illustrate an example
achieving short-term tactical targets in number of houses
built and funds raised would earn f
behavter within the organization consistent witffthe organization's goals.
3) Layout and execute organizational, restructuring plan to achieve long-term goals ana
short-term targets
A key issue with the current struct original core
objective. One way to overcome this is
principles, to sontinuaUy remind affiliates and volunteers alike of
Ha b itat' s m iSjJ' OR-affiEt-Vla1t:tes.._
e common core objectives. This 'will also prevent detraction
from the organization's
Habitat' 0 the success of the organization.
4) Manage resistance
Pa) Board of Directors and management
- - It is important to support the board of management
consistency and unity at the top will promote consistency throughout the
b) Supp organization
::- size ant! scale of Habitat's organization
immense, a possible strategy to build consensus and manage resistance within
r- -- :::::..
the supporting organization is to start with convincing a small group of strong and
influential supporters and deploy this group as agents to communicate and
influence others within the organization.
Year 4 and 5
Years 1 Jhougb 3 shouls be focused 011 execution of the above plan. Following this period,
years 4 and 5 is an appropriate time to evaluate results and assess suitability of short- and
t ________ __
medium .. t-erm-goals--and to mak-e-aajl:fStmeRts-if necessary. It is also imperative to review
performance and results against long-term strategic goals to ensure alignment.
Appendix 1. Situation Analysis
P werful name recognition with
enormous fundMraising capabilities
Extensive global presence with
homes built in 850 locations in the
United States, Canada and 40
countries around the world.
Continued recognition and support
from political and prominent
Strong support from local grassroots
Or ization driven only by intense
spirit and vision of founder, and lacking
any formal structure.
Loose autonomy given to affiliates
resulting in lack of
organization and inconsistent priorities.
Unconsolidated fund raising efforts
resulting in unnecessary rivalry and
anxiety over the same sources of
Over-simplistic and lack of organized
systems resulting in operational
Decentralized organization resulting in
redundancies and inflated operating
costs (Le. unnecessarily large
administrative staff).
Needs-based compensation structure
fails to:
o Attract and retain appropriate
management talent (Le. leadership
position for HPW and HSS division
still vacant).
o Drive accountability, motivate
employees and improve
prod uctivity.
Treme a s growth and support in
terms affiliate applications
Expa sion into areas where Habitat
for Humanity has not yet been invited
Existing demand for low-income
housing far exceed supply of Habitat
houses (e.g. 30-40 Habitat houses in
a neighborhood versus in
need of adequate housing in Atlanta)
ss of focus in core mission of
constructing affordable housing in rural
Situation distractions such as current
societal issues and emergencies strain
organizational resources and draw
attention away from core objective.
Fragmented strategies resulting in
inconsistent priorities and tactical
operations among affiliates and
N -profit affordable housing
construction organization founded in
1976 from grassroots efforts based on
the concept of partnership housing.
Strong track record in homebuilding
(More than 20
OOO homes built over a
17 -year period since its inception)
Estimated worldwide revenues of
$110 million (1993)
Large active volunteer corps (200,000
artici nts
Su Idized low-income government
Other non-profit low-income housing
firms (e.g. Progressive
Redevelopment, Inc in anta)
A endix 3. 4Ps fA I sis
Affordable homes for people in need.
Underlying value:
o Hope for homeless and poverty-
stricken community
o Awareness of global issue of
inadequate housing.
Ful er)
Direct mail campaign
promotion by
supporters and Habitat homeowners
Public endorsements of Habitat
projects by political and prominent
Public visibility of Habitat projects

Habitat homeowners
Local community and volunteers

Political and prominent spokespeople
Commercial Donors (housing
construction suppliers)
Private Donors

___ and VOlun
Houses are sold at zero profit with
long-term zero interest mortgages
(Average: $35,000 (US); $2,000
(developing countries)
Homeowners contribute "sweat equity"
on the construction of their homes as
well as other homes.
Houses are largely subsidized by other
homeowner payments, donations and
additional funds raised by organization.
mouth and public
Direct mail
News coverage
Online website
Appendix 4a. Habitat for Historical Growth and Growth Projections (Revenue)
1988 1989 1990 1991
Revenue (in $millions):
% Change
45% $14.8
65% $29.1
58% $43.9
% Change
40% $ 20.7
27% $ 37.0
31% $ 57.7
$1,200.0 :" ."
% Change
19% $24.6
49% $55.0
38% $79.6
$800.0 _,


.. ..
1998 1989 1990 1991 1992 1993 1994 1995 1996. 1997 1998 1999 2000
I-+- Total Revenues I
Historical Performance: / ----
Total Revenue CAGR 32%
Total Revenue CAGR (1993-2Q
(a) Projected figures.
% Change
1993P(a) 2000G(b)
% Change % Change
$ 35.4 7% $ 37.8 na na
$ 65.2 10% $ 72.0 na na
$100.6 9% $109.8 811% $1,000.0

Appendix 4b. for Humanity's Historical Growth and Growth Projections (Number of Houses built)
Number of houses builts:
United States
I ..:.
iOOO c:
a 1000
o I" ,. .........--
1998 1989 1990
1988 1989 1990 1991 1992
1993P(a) - 2600G(b)
1991 1992
.' ...... ....
: '.... ....
. . '. . ...
.. . .................... -.
-_ .. ., ....... .
....... '!!
1993 1994 1995 1996 1997 1998 1999 2000
-+- United States
227%) 9000 (e)
3030/0 20000 (c)
Historical Performance:
Total number of houses built CAGR (1988-1993) _____
Goal: . _____
Total number of houses built CAGR
(a) Projected figures.
(1)) Goals that Habitat had committed to.
(c) Habitat has commi ed to the following goals:
Total . hous) ction reaches
Total house production
(in developing countries) 1/:::( -
Snider, Executive VP and COO, Habitat for Humanity al

Habitat for Humanity InternationalS Year Plan
for Humanity has reached a cross roads in its development. Whilst the rapid growth in revenue and
houses built over the last 3-5 years has certainly aimed us in the direction of achieving our organizational goals of
(i) revenues of $1 billion and the building of 30,000 houses per year and by the year 2000, (ii)
equivalent to that of the Boy Scouts, (iii) self sustainability globally, and (iv) the

applications, and on top of this there are increasing demands from our affiliates in both the US and overseas, to
actively tackle the issues other
Now is the time for Habitat to thus reassess its mission and goals, and the organizational resources neede to
achieve them. This memo is meant to provide a basis for the laying out of the five year plan to address these
----- Situation Analysis
The details of the situation analysis are provided in Appendix 1. 4Cs and 4Ps analyses are summarized in
Appendix 2. Major Operating Principles are listed in Appendix 3.
Habitat has been ve successful in building affordable housing for people in need. This success stems from two
to people i'1.need, who are willing to work, and can afford to pay for their
ses are sold at zero profit and long term zero interest - not given away as charity. The
prospective home owner is expected to put in several hundred hours of sweat equity in exchange. In uttin their
"sweat equity'" new Habitat homeowners gain a sense of ownership, purpose, pride and com unity. Secondly,
Habitat's success in building houses and showing make a difference in transforming com ", as been
instrumental in attracting support from celebrity figures such as President Carter, which in turn attracts more
revenue from donations, as well as attracting more volunteers wishing to participate in local affiliates. As such
have snowballed to n $110 million and the number of to
However, with this success comes increasl ressure to maintain this growth rate, illld expand into
as tackling housing issues in urban areas, the offering of additional services to the poor,
and support for disaster relief. In addition, in order to maintain its growth, success rate, and headquarter
infrastructure. Habitat relies on conti In tI ubli' 0 attract donation revenues and volunteers to affiliate
organizations, which in turn places increasin pressure on Habitat to focus on high publicity areas such as urban
housing problems and disaster relief. Furthermore, as Habitat grows I it will also bring it into conflict with other
non-Reofit aid and charity which also rely on extensive donations from the public.
Internally. Habitat is based upon a strong culture of volunteerism and local gr:assr6'Ots growth, supported by a
..... --:.
loose decentralized organizational structure, with few systems in place. Once set-up and running, the affiliates
often operate almost fully independen..Lo.f..l::tQ...ln the past, this was very successful, but as Habitat continues to
grow, this organizational structure has struggled to cope. In addition to the large number of affiliate backlogs,
friction is appearing between the affiliates and HQ.aver fund raising issues, and in some areas affiliate coverage
is begloning to.Q.erlap. Furthermore, the culture goes against hiring experienced managers
and employees to with some of the organizational issues. Moreover. the more or:ganizational-struGtbJre
Habitat takes on, the more it is seen as an "institution" which conflicts with its loca! "grassroots!! va
,s. Finally, a
large centralized organization len un s 0 s,uppo raised la;; year, morJ(
than M ' 'onal expenses. Should revenues fall for some reason. additional expenses l {7 l
will place a drain on the revenues avallabletosupport overseas projects, placing pressure on affiliates to meet the { j
shortfall. Compounding all of this are issues related to attracting and motivating staft, and well as making them
more accountable for the work they do.
Definition of Problem
Thus given the current situation and organizational goals stated above, challenges facing Habitat can be
broken into 4 areas:
growt/J....Q.bjedives-with Habitat's mission and culture
the right opportunities for growtb (particularly the issues of dealing with urban homelessness, other
non-housing issues of the poor, and emergency relief housing)
human resources to eet the organizational requi rements
(4)defining a role for headquarters in all of the
Identification of .Alternatives
In tackling the challenges identified above. we should focus on evaluating the following two alternative courses of
Evaluation Criteria
Evaluating these two courses of action will decide the course that Habitat takes for the next five years at least,
and in doing so help provide answers to the types of growth opportunities that Habitat should target, the resources
required, and the role of head uarters in all of this. Evaluation should be based upon:
(i) the fit Ith the core model
(ii) the fit with __
Evaluation of Alternatives
The pros and cons of each alternative are assessed below.
[.kits with decentralized m?S1ei;g;ving high to local affiliates
with grass roots volunteerism q1ture (as opposed to bureaucratic "institution" image)
CiVlaintains existing organizational structu with few additional costs
lower growth rate (a rox iDoA ich is perhaps more replistic ..
l1'orecasted lower revenue intake reduces possibility of friction with other aid and charity organizations.
must put a brake on the of approved (Qannot and the
collecting friction between HQ and of_af_g)
c..batkof resources means Habitat must focus fn core move into the urban
t as well as actively deal with some or all of the issues V
listed above (disaster relief, urban h , or other programs to programs to help the
V Slower growth focused on mainly rural areas and small city areas, may mean a V
which in turn leads to a reduction in revenues, and a reduction in the number of volunteers participating in
the local affiliates.
. organizational.issue &staff shortages, accountability,metivatioll, etc .
nd ba lances system over the affiliates (misa ppropriation , etc.)
(B) Adjust the organization to fit the goals.
Aims the organization in the direction of its target of 30
gOO houses per year and revenues of $1 Billion by
?900, as well as the other stated goals of name ( nI n e uivalent taJhat of the Boy Scouts, self
and elimination of poverty hou.s.inij:.
Allows the organization to immediately address staff shortage Appendix 5 for proposed
Revenue growth should outweigh additional 4,5 & 6; note these
numbers are based upon $200 M in revenues and not $1 Billion)

Additional resources can be usedJ9 put in place databases an':: financial control to manage
()/ more efficiently the list of donors, as well as redUCing affiliate related expenses (see Appendix 4,5, & 6).
Also reduces misappropriation risks and associated "bad press
V'" salaries with some of the motivation and accountability issues.
Additl,rulal resources can be used to size to get a reduction in material costs, and
reduce the cost of housing, which in turn benefits those recipients who currently cannot afford
Habitat housing.
Bigger volume<Ould also mean more standardiZe? designs l(!bJetlcould help reduce the
V amount of time required for building houses, allowing more houses to be built. ,f f 01- 5 {A t .
Additional revenues can be put towards addressing that Habitat has not been equipped to deGlI
(......./ with in the past (urban housing issues other disaster relief). (Everiif Habitat does not
the skill itself for some of these projects, it could partner with other agencies that do).
Habitat to take on more projects
- .
GroW!h. and To achieve revenues of $1 ?bY the Year 2000
[ Ires. aintaining a growth rate of appro Imately 37% a nn n bers of houses built will
need to increase at a ('elle of 23%. /iAUW hA4
. affiliate activi!Ywn ove ap more and more, resulting in revenue cannibalization.
.J In reased revenue may cause friction with other aid and charity organizations that rely on donations. 'tV!,
order to achieve forecast, may need to actiely which /ttAt-
against organizational cuUure and self-sustainability goal. tf )I
To be effective will require paying market salaries to attract staff with management expertise and .JiII.tI )
which goes against Aabitat's volunteer-orientated culture, and against the views key board ""'f f
members-such as Chairman Stoesz.
resources for staff, IT and finance systems etc., seen by many to be turning 'the organization

into a bureaucratic lIinstitution".
reason there was a significant drop in a larger organization significant fixed
(salaries etc.) would drain resources that are needed for projects elsewhere_
1AaVrequire moving HQ to be closer to donors, resources, and international operations
controls may alienate local grassroots affiliate organizations, causing volunteers to leave.
:he revenue and associated pressure to take on more non-traditional projects, pushes Habitat
away from its core house building model, and increases the risk of not achieving the same levels
of success in helping the needy. Any resulting negative press or claims from other organizations that they
can do better, may lea9 to a reduction in donor support, and in the number of volunteers joining affiliates.
Based upon the above analysis Habitat should take a middle path by adjusting both the goals and the
I.n particular:
(I( The set goals whilst idealistic are unrealistic.
unfortunately the elimination of poverty housing is be to doublin the
revenue to approxirT) y $200MM and t e number of houses to 14,000 b

6). This is a growth rate
reduced revenue targets reduce the threat of creating fnctian with ather aid and charity organizations.
- r
of Habitat and the issue of housing for the needy.. will grow overtime by maintaining success in
the core house buildin . it. IS does not require setting very high growth targets. The most important
thing is to show that the work Habitat is doing continues to greatly benefit the communities that Habitat works
;:;; t reason, Habit s qtrll'fi1Ottake "'for which it h " ,:;
--- .. ---
. main within its model of pr I r the needy in exchange for "sweat equity", There are plenti' of
other aid organizations who do have the expertise to tackle the issues of urban homelessness, non-housing
............ """":>
issues of the poor, and disaster relief. Trying to deal with issues such as these only increases the chances of
bad if indeed Habitat is seen to be failing in its mission. Given that Habitat does have significant fund
raising expertise, there is no reason why and charity organizations who
can deal with these issues.
(iv) Continued success means that to receive as such a steady
of revenues from donations, volunteers wishing to join local affiliates. The organization has
{,Already reached $11 0 and nari60t afford any IIbad press
from issues of miSappropriation of
donated revenue (however unlikely). The organization must put in place financial controls whid+-will prevent
'2! " donor. l,i st.;g!!O 0 ,000 Qitat should be_employing a SQPJ:l.istiGatea-aatabase sy5teffl-t6--
nage requests for donatfons. % increasJ' revenues to proper management would bring in an extra
$5MM per year, and the benefits S ould more than adequately cover the costs (see Appendix In addition,
proper donor list management Will reduce friction with affiliates due to requesting donations from the .. same
and also lead to a better relationship with the contributor (no' overlapping donation-requests, and
a more individualized relationship with the contributor based upon his profile).
can also expect a redlJf!!.on in communication and travel costs. tt.JfGtJh-tfte-t:tse-..Gfmaii and on-line
conferencing. In total, as can be seen in Appendix 4, it is estimated that the benefits considerably outweigh
the costs of introducing a proper network system.
(vii) The organization is the current demands placed upon it. There is no choice but to
o can provide valuably needed expertise. Whilst this may seem to go against the
IC" of the organization, these individuals can provide significant support to our local grass-
roots organizations, through coordination of activities, leveraging our size to reduce building material costs,
-.............. ,.-.
promotion of standardized designs, etc., which in the end results in cheaper houses that are quicker to build.
This of course is directly benefits the needy recipients of Habitat's SllppOrt. Salary incentives should also add
a measure of accountability and motivation to staff, which can only improve the services that we do provide at
head quarters for our affiliates.
the volunteers that Habitat relies on to support the activities I
___ r
maintaining a decentralized organization, with most of the staff additions and decision making in relation to
local affiliate activity placed at the State level (and country level outside of the approvals fOl new
affiliates done at the state level, this will free up resources at headquarters to tackle other pressing issues.
""-- r
State managers will be able to respond quicker to an issues which may develop at the local affiliate level,
than having somebody respond from HQ .
(ix) all revenues for local evel bank
aC,9ount State office should be resp . or paying of building re a ea bills. This allows the
affiliates..t.Q.CQQcentrate on core activities, such as raising funds, selecting families construction,
col ments, without having to worry about accounting issues. Althou h this removes ,fi .
y, th a lliates are still in control of all other decisions needed support their activnies, which !
)"f)}tt(;B any resentment which may develop. In the end, the local affiliates will still be able to provide thel
same or a better level of service to the needy recipients of Habitat housing. For Habitat 7s an organization
""---- "-
however, it will provide a greater assurance that there are nq issue with fund mi . . nj,-..Moreover., it
also ensures that collected funds are being used for core home building activities, nd not other activiti

however well-meaning these particular activities may well be.
tiltut- J
into the 5 Ve /
.......... ue, the reQommended soliliioo, and benefits..
Start with points that MiJlard is sure to agree with, such as core roots I
ho se buildin I. From there work outwards to dealing with non-core competency issues, followed by the
re staff and increased controls (Jeff Snider) ,...
Arrange private me!iDg.s.with sympathetic board members who would be receptive to this proposal, and seek
their support. Request that they begin one on one discussions with Millard Fuller and other members in
regards to some of the proposals. Request calling of Board Meeting for end of May (or early June) 'to discuss the
(Jeff Snider) .
E d of May/Early JupEf1993. Presentation to Habitat Board of recommendations and
.ac:; ......
Appendix Situation Analysis
Active Volunteer Corps of 200,000
Affiliates in the us (850+ globally)
(;20,000 houses built since founding in 1976,
with further 7,700 planned for 1993.
\ J>ne of the 20 largest home builders in the
VUS. Soon to be Number 1.
revenues of $11 0 million
(HQ $35M, Affiliates $65) based upon own
fund raising efforts (no gov't funds or loans)
successful direct mail fund-raising
orong culture based upon volunteerism and
grassroots growth
, ?reat model in providing low cost housing at
V zero profit & no interest (not charity) to the
needy in return for IIsweat equityll.

make a gifference in transforming
communities gives it access to large financial
resources. Leverage of this success to
high growth
kro shortage of needy recipients
of organization size/number of
ouses built for cheaper housing
material.s/standard knockdown designs
into non traditional areas:
- urban areas?
- other services for the poor?
- Emergency housing?
Weakness s
Very loose decentralized organizational structure
tp{J8ic cOr:!}.pu1er systems only at HQ. Not networked.
tBacklog affiliate applications already 300
organization with few checks and
rer .. resistance to modernizing financial and
Information systems
of staff with managerial expertise & experience.
with accountability and motivation.
A 'cus HQ is 10 atep far from-Atlanta
international organizations)
.p9ue to culture, difficult to make changes tpat
adds organizational structure (fear of becpming an
"institution") or violates the spirit of volunteerism
(such as paying workers)
culturel difficultly for some to say
no to any opportunity for Habitat to grow still bigger
vPiffi'Ct:tlt with current organizational size and structure
to meet growth goals and ad.{1itional demands for
zntlY 140
Threats ?
pressure to maintain growth & success
and expanct into other areas whilst not having
sufficient infrastructure, support, or experience.
Due "good" publicity
Cfb'maintain high donation revenues, & high numbers
of volunteers, canlt afford "bad press" due to
L misappropriation of funds etc., at !ocallevel, or
program seen to be unsuccessful
Conflicts with other charity & aid organi2ations reliant
on public donations
expe+lSSS draining revenues available for
projects, putting pressure on affiliates to
revenue requirements
Will existing model work if Habitat expands into non-
traditional areas?
Appendix 2. 4Cs an,d 4Ps Analysis
Est. 1976. Georgia USA
3 (Habitat Worldwide); HEM (Habitat Education Ministries); HSS (Habitat Support
organizational structure with only basic systems
staff with managerial expertise.
& long tenn volunteers supplementing administrative staff. 25 senior staff earning an average
of $30,000 per year, SO administrative staff earning an average of $18,000 per year, and 100 volunteers who
receive a weekly stipend:
Loosely defined job assignments and assignments. Infrequent formal evaluations. Few salary
adjustments. System designed to enable staff to pay bills only.
Supplies affiliate with the use of Habitat's name, non-profit status, training, technical support, information
...... m ..... e donated materials and donor lists when requested, affiliate HELP line.

. 50+ globally, 838 in US expected to increase to 1050 by year end. (Other locations: Canada,
la, New Zealand, Poland, Hungary, UK)
;/ -7 Sign Affiliate Covenant agreeing to operate according to Habitat's operating principles
-7 Responsible for all elements of Habitat mission including raising their own funds, selecting families,
completing construction, collecting payments.
-7 Composed of volunteers, and in some cases fulltime staff (usually an executive director and often a
construction manager)
-7 Ave size 320 volunteers, 15 board members
Actual work only on Saturdays over 8 to 12 week period.
-7 Various degrees of sophistication: some with own accounting system; others out of living room of founding
-7 Expected to contribute 10% of money raised to overseas projects.
In US, 15 regions with regional director reporting to one of two area directors.
Regional offices schedule conferences, provide assistance to new affiliates, review affiliate operations,
coordinate affiliate activities.
Culture: Strong culture based upon (i) Volunteerism andJii)
------- -----------
-7 Adding organizational structure, paying employees, accepting government funds and loans, etc., seen as
violating the volunteerism values, and changing the organization into an "institution"
-7 Due to volunteerism culture, difficultly for some to say no to any opportunity for Habitat to grow still bigger

V Af:f.iH !ocal"grassroots" volunteer organizations.
(President Jimmy Cater)
... "

organizations (often retirees) but also college students, church volunteers, and others
from-thi"'Community) ,
Donors - approx 800,000
Other Organizations Competing for Donations:

( [tiFf
If ft
Product .
housing for people in need.
r ...
Habitat provides a appropriate housing structures, which affiliates modify to suit local needs
Houses sold at zero profit wit -term zero interest mortgages (not given away). Average house costs
35,000 in the veloping countries.
based upon need, willingness to work, and capability to pay for their houses
/'Homeowners required to put in 5C!.0 hours of IIsweat equitt' (construction of own houses and other houses)
,. /omeowner payments go int? a "Fund for are recycled to help for new houses in the
community. A portion of this is set aside for the construction of houses in the Third World, where local
communities cannot totany fund Habitat projects independently.
{t.{f-t'i-'tt--tbf .
small cities and rural where there is available land, a lack of zoning and other
government regulations; areas conducive to independent work promotin a natural fit with Habitat's principles.

All Habitat "grassroots" y peopleln the . Habitat never enters a
community uninvited
Two thirC!. (either through local affiliates or through sponsored projects from money
raised in the US)
CName recognition through President Jimmy Carter (board member), and other celebrities including President
Clinton, Vice President AI Gore, Paul Newman, etc.
raising activities - 800,000 donors
HQ (direct mail, and personal appeals by Fuller.)
Affiliates (local fund raising activities)
Appendix 3. Operating Principles:
/' 1. The building of affordable housing for people in need.
Houses s o l ~ at zero profit with long-term zero interest mortgages (not given away).
Future homeowners required to put in hundreds of hours of IIsweat equity" (construction of own houses and
other houses).
3 Homeowner payments go into a "Fund for Humanity" which are recycled to help for new houses in the
community. A portion of this is set aside for the construction of houses in the Third World, where local
communities cannot totally fund Habitat projects independently.
All Habitat projects are originated at a "grassroots" level by people in the community. Habitat never enters a
community uninvited.
Habitat homeowners are selected at the local level based upon need, willingness to work, ~ n d capability 10
pay for their houses.
Habitat accomplished much of its work through partnership with others. A majority of labor is donated from
e community, as is an increasing percentage of the building materials. All funds for housing construction
and operating expenses are privately donated.
7. Habitat is an ecumenical Christian organization, but welcomes everyone to partiCipate in its ministry
Appendix 4.
of Donors, associated computer network wit

(i) Allows easy access and of donor list: approximately.B..Q.O,OOO people
/ (given due to better management)
OJ) Email, Conferencing over the network will reduce communication cqis Current travel, utilities &
telephooe, .RQstage & treight charges amount to approximately $2MM.
(given 10% decrease in costs) (0.77% overall).

in affiliate expenses due to better financial controls

. ---------------
affiliate reven.ues)
Gional Expense::J .
(i) Computer hardware & related infrastructure, database software.
(initial) (estimate, requires further detailed investigation)
MM for maintenance etc.
(ii),Additional Staff (10 IT, and 10 Finance)
V$1 MM (estimate based upon $50K per person)
(iii) Additional Cost associated with corresponding increase in salaries for existing staff
(estimate 20% based upon $5.4MM salary expense)
Total Benefit:
annually, based upon current revenue levels
Appendix 5. Cost of additional personnel to support recommended state organization structure

Divided in State-based (US) and Country-based organizations (Elsewhere)
All local
revenues to be placed in central state bank account, and managed at the state level. Payments for building
expenses, etc . made from State office. Affiliates are thus able to concentrate on core activities,
such as raising funds, selecting families, completing construction, collecting payments, and donlt have to
worry about accounting issues.
ttal-t(JelU:ul:tte<" J\ffiliate annual growth forQ
Total mber of Affiliates expected to double to Year 2000
Overall Revenues Year 2000 '
1 Manager per ponsible for overall affiliate coordination
-7 Salary $50K est.
1 Office Administrator with accounting skills reporting to the State Manager
-7 Salary $30K est.
Small Office
-7 Lease: $200K est.
-7 Office Related Expenses: $50K est.

Total Cost: $330K x 50 States = $16.5MM
In Millions of Dollars
Number of
(10% groVllth) Y
Number of Houses Built
Affiliate Revenue grovlJ'th
(additional affiliates) (10
HQ Revenue
(growth: 6%)
Add Rev due to database
management (5
Total Revenue
Year on year Revenue
(groVlfth (SOlo))
New Computer Netw'ork &
Database (& maintenance)
(Communication related)
Reduction in Affiliate
Expenses (5% of revenue)
Cost of Additional Staff &
Salary Increases
Cost of State Office
Actual Forecast "'Note 1883 forecast modified to reflect lower grolMh rate

1993* 1994 1995 1996 1997

1,000 1,100 1,210 1,331 1,464
6,355 7,300 8,030 8,833 8,716 10,688
$65.21 $70.0 $77.0 $84.7 $93.2 $102.5
$35.41 $37.8 $40.1 $42.5 $45.0 $47.7
$5.8 $6.4 $6.8 $7.5
$107.8 $122.9 $133.5 $145.1 $157.7

$7.2 $15.1 $10.6 $11.6 $12.6
$26.3 $27.9 $29.6 $31.3 $33.2 $35.2
$1.0 $0.1 $0.1 $0.1
-$0.2 -$0.2 -$0.3 -$0.3
-$3.9 -$4.2 -$4.7 -$5.1
$2.0 $2.1 $2.2 $2.4
'11 ,757


'\ I)
$124.0 $'136.4
$53.6 $56.8
$186 ______ ", ...
$15.0 $16.4
$39.5 $41.8
$0.1 $0.'1
-$0.3 -$0.3
-$6.2 -$6.8
$2.7 $2.8

Organization I $16.51 $17.51 $'18.51 $18.71 $20.81 $22.11 $23A
Total Expense $27.9 $45.0 $46.6 $49.21 $51.91 $54.81 $4 2----
Year on year Expense
Increase $1.6 $17.1 $1.6 $2.6 $2.8 $2.9 $3.1 $3.2