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Center for
Social Innovation

Center for Social Innovation

Economic Development

Rural Development Institute (A): Should It Tackle the Problem of the Landless Poor in India?

Academic Case Study by:
William F. Meehan III, Kim Jonker
Published: 2007
[photo - William F. Meehan III]

The Rural Defense Institute (RDI) was established in the early 1970s to alleviate poverty by securing land rights for the world’s rural poor. The organization had achieved impressive results through research, reform design, policy advocacy, and implementation. By 1999, it had benefited about 70,000 families in countries such as South Vietnam, the Philippines, Russia, and China.

In 1999, RDI considered establishing a presence in India. India had the largest population of poor in the world, with a strong link between poverty and landlessness. However, there were a number of problems in areas that RDI’s experience had shown to be prerequisites for success. 

The case describes RDI’s experience, including previous decisions it had made not to enter a country, and to exit a country. It describes the environment in India, including the challenges and opportunities when working with governments in developing countries.

Finally, it discusses the opportunities and challenges of entering India in order to work for land reform to address the problem of poverty.

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Case No: SM159A

Acumen Fund and WaterHealth International: The Role of Venture Philanthropy

Academic Case Study by:
William F. Meehan III, Jane Healey, David Hoyt
Published: 2007
[photo - William F. Meehan III]

Acumen Fund was founded in 2001 to provide modest amounts of capital, together with business expertise, to help build thriving enterprises that would serve large numbers of poor people.

In 2004, Acumen Fund invested in the Series B round of WaterHealth International (WHI), a company that was developing approaches for providing clean water to the poor worldwide.

In 2006, WHI planned to launch a major initiative in India. It also planned a new round of fundraising to support the company’s continued growth.

The case provides background information on venture philanthropy, and on Acumen Fund. It also describes the problems associated with safe drinking water in developing countries, and WHI’s approach to addressing those problems.

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Case No: SM158

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Note On Issues Facing Nongovernmental Organizations

Academic Case Study by:
William F. Meehan III, Sheila Bonini, Brian Tayan
Published: 2005
[photo - William F. Meehan III]

Nongovernmental organizations have become an increasingly important intermediary for international development.

This class note explains how the nongovernmental organization has evolved and the role it played in the early nineties as agencies and nonprofit organizations seeked to employ market strategies to bring development to poor nations.

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Case No: SM141

Acumen Fund and Mytry De-Fluoridation Filter Technologies

Academic Case Study by:
William F. Meehan III, Yasmina Zaidman
Published: 2005
[photo - William F. Meehan III]

Acumen Fund is an international venture philanthropy fund that has recently refined its strategy for providing management support to its investments.

The chief investment officer is reviewing the performance of a portfolio organization, and against the backdrop of Acumen Fund’s evolution and renewed focus on management support, he is trying to determine how much additional support to provide to an organization that has faced significant challenges.

The organization and its goals, performance, and management challenges are described. The company is a small start-up water filter manufacturer and distributor in rural India.

Acumen Fund’s approach to investment and management of philanthropic investments in developing countries is described in detail.

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Case No: SM139

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Grameen Bank

Academic Case Study by:
John McMillan, David Hanley
Published: 2003
[photo - John McMillan]

Grameen Bank was a microcredit bank in Bangladesh, annually lending hundreds of millions of dollars to its millions of poor entrepreneurs. The bank’s managing director, Muhammad Yunus, was faced with tremendous challenges brought about by the political upheavals and natural disasters common in this economically developing country.

Floods, elections, and party-backed unions have upset the natural flow of Grameen’s no-collateral lending process, and Yunus must decide how to extend needed aid without undermining the borrowers’ perception that Grameen is a bank, not an aid institution.

The case covers the history of the bank from 1975 to 1998, with a concentration on events in the mid-nineties.

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Case No: SM116

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Unitus (B): Microfinance 2.0 - Reinventing an Industry

Academic Case Study by:
James A. Phills, Lyn Denend
Published: 2007
[photo - James A. Phills]

This case is the companion to SI-87A.

The case reveals what decision Unitus leaders made regarding whether or not to create a debt or equity fund to expand the capital the company could provide to its microfinance partners. It also provides updated information regarding the company's results.

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Case No: SI87B

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Unitus (A): Microfinance 2.0 - Reinventing and Industry

Academic Case Study by:
James A. Phills, Lyn Denend
Published: 2007
[photo - James A. Phills]

Established in the mid-1970s, microfinance provided tiny loans to poor families to help them start to expand small businesses. Thirty years later, the practice had helped more than 80 million people lift themselves out of extreme poverty. The practice had grown into a global industry comprised of more than 3,000 microfinance institutions.

Early pioneers of microfinance, such as Muhammad Yunus of Grameen Bank, had become celebrities of sorts, receiving scores of humanitarian awards, including the the 2006 Nobel Peace Prize. Similarly, the microfinance movement itself had become so well-known that it invited comments from mainstream cultural icons such as Bono, lead singer of the band U2, who said: "Give a man a fish, he'll eat for a day. Give a women microcredit, she, her husband, her children, and her extended family will eat for a lifetime."

Despite these accolades, Geoff Davis and Mike Murray believed that while microfinance was an important social innovation, it was dramatically underperforming relative to its potential because it had yet to achieve adequate scale. They pointed out that less than 20 percent of the world’s demand for microfinance was being met. Murray observed, “Usually, an industry that had those dynamics would have been closed down.”

Prompted by their vision of microfinance’s potential they founded Unitus, Inc., a nonprofit focused on accelerating the growth of the microfinance industry so that vastly more people could gain access to the capital they needed to generate an income, raise their standard of living, and fulfill their basic needs. 

This case explores dynamics in the microfinance industry, describes the Unitus business model, and sets up an important decision facing the company: whether or not to expand the amount of capital it can provide to its microfinance partners through the creation of a debt or equity fund.

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Case No: SI87A

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Robin Hood

Academic Case Study by:
Laura K. Arrillaga, Victoria Chang
Published: 2001
[photo - Laura K. Arrillaga]

In 1988, Paul Jones, a 32-year old money manager, started the philanthropic foundation Robin Hood with $3 million and the objective to fight poverty in New York. He invited two of his close friends, Peter Borish and Glenn Dubin, to serve as cofounders and recruited David Saltzman to join the staff. From its inception, Robin Hood applied the investment orientation of its founders to focus on poverty prevention by “funding…the best community-based groups and partnering with them to maximize results.” The foundation focused on four core program areas: (1) early childhood and youth, (2) education, (3) jobs and economic security, and (4) survival. As an early innovator of venture philanthropy, Robin Hood emphasized rigorous due diligence, direct engagement with grantees, and social outcomes assessment. Robin Hood provided grantees with both financial contributions and management and technical assistance. The organization’s board members demonstrated their own commitment to high engagement philanthropy by contributing both time and money to supporting Robin Hood’s grantmaking and internal administration. The board covered all infrastructure costs, ensuring that 100 percent of external donations went directly to grantmaking. Robin Hood did not have an endowment, but maintained a reserve fund that could cover existing grantee costs for at least a year. By 2005, Robin Hood had become the largest private poverty-fighting organization in New York City, and its venture philanthropy model had inspired various foundations and funding intermediaries nationwide. Nonetheless, Robin Hood was committed to having an even greater impact and reaching the 1.7 million New Yorkers still living in poverty. To achieve this, the management team hoped to improve application of best practices and metrics to grantmaking decisions and to more proactively share its knowledge-base with grantees and the greater philanthropic community.

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Case No: SI86

Rubicon Program's Corporate Strategy

Academic Case Study by:
James A. Phills
Published: 2005
[photo - James A. Phills]

In response to the closure of California state psychiatric hospitals, Rubicon Programs was established in 1973 to provide social services for recently deinstitutionalized individuals suffering from mental illness. Located in Richmond, Calif., an area with great need and high unemployment, Rubicon quickly expanded to offer a wide range of programs and services addressing poverty and homelessness for people with barriers to employment.

By 2003, Rubicon Programs had grown into a large nonprofit organization with an international reputation for its success as a social enterprise. Aside from its two core programs of Integrated Services and Rubicon Housing, Rubicon operated three revenue generating business units that employed clients of its social programs: Rubicon Landscaping, Rubicon Bakery, and Rubicon HomeCare Consortium.

While the top management team agreed that Rubicon’s individual units were successful, the team wondered whether the social and economic value created by the whole was more than the sum of the parts.

The videocase explores Rubicon’s reflections and deliberations about their corporate strategy. In addition, it focuses on a decision about how to deal with the struggling home health care division. DVD, Total Run Time: 29:16 min.

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Case No: SI77V

The Annie E. Casey Foundation: Social Investing

Academic Case Study by:
Laura K. Arrillaga
Published: 2005

Jim Casey, one of the founders of United Parcel Service, established the Baltimore-based Annie E. Casey Foundation with his siblings in 1948. The foundation’s mission was “to build better futures for disadvantaged children and their families in the United States” and to “foster public policies, human service reforms, and community supports that more effectively meet the needs of today’s vulnerable children and families.”

As the foundation grew, it developed a grantmaking strategy that included making grants to organizations that focused on: (1) improving major systems serving disadvantaged children and families, (2) transforming neighborhoods, and (3) promoting accountability and innovation. In 1998, the foundation expanded its grantmaking strategy to include program-related investments (PRIs) and mission-related deposits (MRDs).

A PRI was an investment “made by foundations to support charitable activities that involved the potential return of capital within an established timeframe.” An example of a PRI made by the Annie E. Casey Foundation was an investment in Cascadia Revolving Fund’s Child Care Fund. The fund, in turn, loaned money to child care centers in Washington and Oregon.

An MRD was an investment into a financial institution with the goal of increasing the efficiency of the financial services industry in underserved minority and low-to-moderate income markets. An example of an MRD made by the foundation was a $250,000 deposit in the Louisville Community Development Bank.
In 2002, the Annie E. Casey Foundation hired a director of social investments to more fully develop the strategy and execution plan for its $20 million of PRI and MRD funding. By 2005, this number had been increased to $100 million (3 percent of the foundation’s total assets).

Challenges facing the director of social investments included how to enable the long-term sustainability of grantees, track financial and programmatic performance of PRIs and MRDs, and resolve the tension between social investment and programmatic strategies, particularly related to the foundation’s focus on showing impact in specific neighborhoods across the country.

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Case No: SI74

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