Strengths of HFHI
Habitat for Humanity Humanity International (HFHI) involves a non-profit organization that primarily emphasizes volunteer work and utilizes practical approaches to give back to societies, specifically the less fortunate. This organization mainly develops homes for persons in desperate need. It simultaneously sells these homes to persons that are willing to be part of the organization and help to realize their set objectives. An increased amount of HFHI’s benefits is provided to the immediate society, making this organization considered a non-profit organization. The company has a relatively increased exposure level making it easy for individuals to invest most of their time and finances into a company that they know much about it. This demonstrates that the organization is trusted among most of the individuals in the community that it serves. Additionally, this organization emphasizes that societies desperately need help that increases their overall public image.
The reach of HFHI is expanded globally and presents individuals with home services for approximately four million individuals. The organization mainly relies on fundraisers, donations, and volunteers to raise finances. This approach has allowed the organization to gain a credible and trustworthy image. Therefore, this is among the most significant strengths that the organization has compared to other non-profit organizations in the region and across the nation. Considering that HFHI is a relatively progressive organization, it can easily obtain the much-needed resources to run its day-to-day services. This is mainly due to the funding that is provided to them by well-wishers, specifically helping the organization give back to the community when the need arises. This demonstrates that HFHI is committed to serving with reliable finances highlighting its leading strengths.
Strategic Challenges Faced by HFHI
A significant challenge that HFHI faces, considering its current situation, involves how to assess its overall success. This is a challenging concern for a non-profit entity specifically because the organization does not focus on obtaining profits. Most of its finances that are utilized to fund projects are sourced from fundraisers. Laidler‐Kylander et al. (2007) argue that obtaining finances from fundraises makes it difficult for most non-profit companies to evaluate their overall success effectively. This is the same case since HFHI relies on volunteers and donations compared to government involvement through subsidies. Most of the donations are often obtained during the holiday season because most individuals are often generous. Therefore, the organization does not receive donations during other seasons, making it a significant challenge for HFHI since it makes its resources deplete.
The organization faces completion from other non-profit organizations in the region and the nation at large. In the current era, several non-profit organizations emphasize raising sufficient capital to give back to their respective societies positively. A typical example of such an organization is the Red Cross, which attempts to obtain blood from several individuals worldwide. The donations are afterwards used to offer health benefits to persons that need the blood. This is similar to HFHI, making it vulnerable to competition from organizations like Red Cross and others. This challenge is also enhanced by the difficulty in finding persons that have similar values. More specifically, individuals who are unable to volunteer in the course of HFHI may consider shifting towards considering other options with the same objectives in mind. To address this challenge, this organization should consider investing more effort in their advertisement sector to reach out to more individuals and market HFHI.
Another significant challenge that HFHI faces is economics, which plays an essential role in the resources and donations that the organization obtains. For instance, a considerable decrease in the organization’s economy might make the entire company, as well as the employees, opt to save their money resulting in a sharp decline in disposable income. Factors like economic or personal aspects could initiate a decrease in volunteer engagement, leaving the company to fail to have a reliable personnel source. A practical consequence of this issue is the organization being forced to stop all operations. Donations are a crucial concern in the length and success of a non-profit organization, as well as its ability to function. In case fundraises stop, this organization will encounter challenges, particularly when attempting to maintain its potential in the current competitive environment. Therefore, unreliable funding and economic stability could jeopardize how the HFHI functions.
Valuation of HFHI
It is essential for any non-profit organization, irrespective of its size, to understand its brand value to allow them to compete favorably with other organizations. In most instances, the majority of the non-profit organizations tend to narrow down to private sectors to obtain financial support. HFHI considered this in mind, which led to its high valuation. The high valuation was mainly created to encourage increased investments from willing individuals and organizations. This enables HFHI to enhance the consumer’s support in influencing their investment. The high valuation was also a result of the consideration of total donation earnings because they have almost zero expenditure. The reading highlights that HFHI has more than eighty per cent revenue, which is regarded as a profit. These high-profit margins are beneficial since they drive the organization’s overall revenue.
Benefits and Risks of valuing an NGO Brand like HFHI
A significant benefit of valuing an NGO, including HFHI, is that it can yield increased profits. This benefit is mainly due to the idea that NGOs often work with the assumption that their donations tend to have minimal operation costs since they are based on volunteers. This intuition demonstrates that NGOs have an increased profit margin in every period. This is different with commercial organizations because they often have reduced profits due to increased overhead operations. The high profits in NGOs are mainly advanced by elements like tax benefits, a strong brand image, and a strong local influence in their communities. This shows that the ability of NGOs like HFHI to yield a high-profit margin is a crucial benefit.
Despite this benefit, a predominant risk associated with valuing NGOs involves the risk associated with losing the prior objective put forth by the company. The problem is commonly caused by the company focusing more on improving the brand’s value and other partnerships. Correspondingly, in case the organization is not aware of the valuations, there is a chance of the inability to absorb the full benefit that the organization has to operate and partner with other commercial companies that might be willing to join in. The risk involved in this case is that the NGO could jeopardize the existing trust between the donors and the volunteers, thus demonstrating a substantial risk.
Reference
Laidler‐Kylander, N., Quelch, J. A., & Simonin, B. L. (2007). Building and valuing global brands in the nonprofit sector. Nonprofit Management and Leadership, 17(3), 253-277.