Case Detail

Case Summary

The Cradle Dilemma: Investing in Adoption Learning Partners

Case Number: 5-310-501, Year Published: 2010

HBS Number: KEL511

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Authors: Marianne Woodward; Kathryn Bauer; Scott Whitaker

Key Concepts

Online Learning, Adoption E-Learning, Social Entrepreneurship, Adoptive Parents, Distance Learning, Word of Mouth, Viral Marketing, International Adoption, Inter-Country Adoption, Post-Adoption Education

Abstract

As CEO of not-for-profit adoption agency The Cradle, Julie Tye had taken the organization from the brink of dissolution in 1992 to a position of financial stability and health by 2007. One of the innovative steps Tye took in 2002 was to introduce an online learning venture that provided education for families preparing to adopt. The Cradle launched Adoption Learning Partners (ALP), using donated funds and government grants when possible and subsidizing the rest.

The income generated by ALP grew from zero in 2002 to approximately $50,000 per month in 2007. But ALP’s major market (parents preparing to adopt internationally) was forecasted to decline 50% over the next three years; the Web site was outdated; and new competitors were entering the market. ALP had built a reputation as a pioneer in adoption e-learning by providing high-quality, effective online courses. But without the infusion of at least $400,000, ALP risked losing its leadership position and, possibly, its viability.

ALP needed a significant investment of time, talent, and funding. Tye had an MBA, a keen business sense, and fourteen years of experience in healthcare administration and the social services field. Even with her leadership, did The Cradle have the appetite to take on such a demanding strategy? In the end, would it be worth the investment?

Learning Objectives

Students will:

  • Learn quantitative techniques for valuing a social enterprise, which includes both economic and social value
  • Learn alternative legal structures available to social enterprises and evaluate which structures make sense relative to various capital structures
  • Identify sources of capital available to social enterprises and evaluate their appropriate usage
  • Number of Pages: 12

    Extended Case Information

    Teaching Areas: Entrepreneurship, Finance, Management, Non Profit, Strategy, Technology

    Teaching Note Available: Yes

    Geographic: Evanston, Illinois, United States

    Industry: Nonprofit Adoption Services

    Organization Name: The Cradle

    Organization Department: Adoption Learning Partners

    Organization Size: Small

    Decision Maker Position: Chief Executive Officer

    Decision Maker Gender: Female

    Year of Case: 2007