United Church Housing Corporation
(8 pages of text)
The chairperson of the United Church Housing Corporation (UCHC) of Regina, Saskatchewan, received some information from an external consultant who was hired to assess the state of affairs of the UCHC. This non-profit organization had operated for over 50 years and had built accommodations for many seniors that were both affordable and offered personal independence. In 2005, the UCHC board approved a new four-storey assisted living facility, Wascana Wing, which was to be built in response to long waitlists. With this decision, the UCHC board had taken out a $3 million mortgage to finance the project. Since opening the new facility, UCHC had been plagued by high vacancy rates as new for-profit competitors entered the market for senior accommodations. The combination of high vacancy rates and UCHC's highly leveraged financial position were the source of losses from 2006 to the present. The board's break-even mentality was not working. UCHC was at a major crossroads - the housing situation of more than 100 seniors residing in assisted living apartments and cottages would need to be decided upon at the next meeting. The question was whether or not June, a retired nurse, would recommend that the board proceed with winding up UCHC or make suggestions that would call for major changes to the current business model.
The case is intended for use in undergraduate courses in not-for-profit (NFP) management, strategy, entrepreneurship, and business model evaluation. The case incorporates the challenges of balancing a social mission with financial sustainability, the inherent challenges associated with facilitating entrepreneurial behaviour with NFP organizations, and the dangers of growth in changing markets. More specifically, this case focuses on the contextual issues and financial realities relevant to developing new revenue streams as a means to fuel failing social mandates. Secondary objectives include learning basic financial analysis, evaluating business models, and understanding atypical real estate rental issues. There is a wide range of issues that may be considered:
- Relationship management and partnerships between NFP organizations and government agencies.
- The importance of board composition.
- The importance of environmental scanning, market dynamics, and changes within the seniors' housing industry
- The decision-making processes necessary for critically evaluating whether or not an NFP has exhausted its ability to serve a social mandate and should be shut down.
Accommodation & Food Services
Canada, Small, 2012
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