Hydrogenous, a UN-mandated NGO combating desertification, seeks guidance on selecting its next project. Three candidates exist: Combat Drought (water supply, 20-year payback), Nature Charm (nature preserve with ecotourism, 4-year payback), and Clean Air (reforestation, 2-year payback). Candidates must recommend which project best balances impact and financial sustainability.
Key Insights:
- Non-profit project selection requires simultaneous optimization of social impact and financial returns, not one at the expense of the other
- Payback period analysis must account for benefit realization timing and success rates—Project A has 80% success rate, extending actual payback from 4 to 5 years
- Revenue-generating models (ecotourism) differ fundamentally from cost-savings models in risk profile and long-term sustainability; Project B generates recurring revenue while A and C are savings-based
- Stakeholder scope matters: Project C benefits multiple nations while Project A serves 30,000 local residents, requiring different evaluation criteria
- Operational feasibility risks (construction quality, local acceptance, corruption) can significantly impact success rates and should be weighted alongside financial metrics