Priyank Arora, University of Massachusetts Amherst
Morvarid Rahmani, Georgia Institute of Technology
Karthik Ramachandran, Georgia Institute of Technology
Research Question Addressed
How should mission-driven NPOs that serve distressed individuals design their portfolio of services to maximize their social impact?
When NPOs that serve distressed individuals have limited funds, they should focus on delivering only a subset of services. Under certain scenarios, it turns out that an NPO could create a higher social impact by focusing on providing the less-demanding type of service. This is especially true when the clients experience severe agony while on the path to obtaining resolution for their needs.
In contrast, when NPOs have sufficient funds, they should offer a multitude of services; in addition, they should invest more in advising their clients to receive services that are best suited for their needs. This approach would lower the possibility of mismatches and maximize the NPO’s impact; it is even more effective when different types of clients are not evenly mixed in the population.
While earmarked funding for a specific service is better than no funding, it could crowd out the investment of the NPO’s resources in providing advisory services to its clients and thus potentially lead to higher rate of mismatches.