Created in 1971, DePaul Industries was a social venture ran as one organization (and for brief called DePaul Industries) but legally enrolled as two 501(c) (3) not-for-profit organizations (DePaul Industries and DePaul Services). DePaul's assignment was to generate employment chances for individuals with disabilities. DePaul performed in three industries that shared three features: these industries were employment focused, they had paper-thin margins, and were cash-thirsty. DePaul derived the majority of the funds to finance its operations from revenue from these businesses but had yet to turn a profit.
Previously, banks were interested to lend DePaul with funding (mortgages, credit lines, and factoring loans), but it'd always been challenging and it appeared to be increasingly so. Dave Shaffer, DePaul's CEO, had started to explore other options, namely social investors, but with little success to date. Considering DePaul's increasing issues to recognize acceptable funding, Shaffer had begun questioning whether these issues were linked with financer’s lack of understanding and sympathy towards DePaul’s social circumstances or the matter was something else –eroded DePaul’s net assets linked to recent business losses (mainly derived from its contract packaging company).
PUBLICATION DATE: February 14, 2015 PRODUCT #: NA0325-HCB-ENG
This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE
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