Financial Modeling for the Social Sector

Financial Modeling for the Social Sector

We believe that social sector leaders must connect their impact work with the right business model to achieve sustainability. With finite resources and limited staffing, organizations that are more focused on immediate needs rather than long-term sustainability can find developing the right business plan challenging.

The course, created in collaboration with Dr. Erik Simanis, is aimed to teach nonprofit organizations, social entrepreneurs, corporate entrepreneurs and social change leaders how to use financial modeling and creative approaches to market-based funding to scale the impact of their work. Erik has more than a decade of hands-on experience leading and advising social enterprises and major corporations in Africa, Asia and Latin America.

We believe this course to be valuable for organizations of all shapes and sizes, and particularly useful for those in the early stages of development.

You'll Love This Course If

  • You are interested in understanding how to use financial modeling and creative approaches to market-based funding to scale the impact of your work
  • You are curious to learn the basics of financial modeling as it applies to a new social venture or program initiative in its early stage of development

Our Course Instructor

Dr. Erik Simanis Financial ModelingIn developing this course, Acumen is excited to partner with Dr. Erik Simanis ( Erik is a Partner in the innovation consultancy, TIL Ventures, and core faculty of The Intrapreneur Lab. The former Head of Frontier Markets Initiative at Cornell University

He brings a combination of theoretical rigor with “P&L practicality” to his work, having guided start-ups, green-field ventures, and corporate new venture teams in Eastern Europe, Africa, South Asia, and Latin America over the past 20 years. Erik’s work is published in leading management journals, including the Harvard Business Review, The Wall Street Journal, Sloan Management Review, and the journal Innovations.

A frequent speaker on innovation, social entrepreneurship, and bottom-of-the-pyramid, Erik’s work is published in leading journals, including the Harvard Business Review, Sloan Management Review, and The Wall Street Journal. His chapter  “Needs, Needs Everywhere, But Not a BOP Market to Tap” appears alongside Acumen founder and CEO Jacqueline Novogratz’s chapter ‘Innovation for the BoP: The Patient Capital Approach’ in the book “Next Generation Business Strategies for the Base of the Pyramid: New Approaches for Building Mutual Value” edited by Ted London & Stuart Hart (2010).

What You'll Learn

By the end of this five-module course, you will:

  • Understand the distinction between an operational unit and a head office and the financial relationship between the two
  • Understand how to estimate the reach and size of your operational unit and identify what costs at scale means to your organization
  • Understand how to think about and calculate the funding requirements for building and maintaining a capacity that allows you to innovate, learn, and grow your organization

This is an introductory level course.  Basic financial literacy is recommended, but not necessary.

Course Outline

Module 1: Bottom-Up Financial Modeling Framework

  • Understand the importance of focusing on financial sustainability early-on in the development cycle of a venture or a programmatic initiative
  • Understand the difference between a business concept and a product/service
  • Understand what it means that the financial modeling framework presented in this course is taking a “bottom-up” approach
  • Identify a ‘Financial Challenge’ of your own – an early-stage business concept of a venture or an early-stage programmatic initiative idea – to which you would apply the key concepts covered in this course

Module 2: Bounding the Operational Unit

  • Understand the concept of a ‘Operational Unit’ and how it relates to the “Head Office”
  • Understand how to ‘bound’ your operational unit
  • Estimate the number of customers or beneficiaries served by the operational unit at ‘steady-state’

Module 3: Total Running Costs

  • Understand the concept of ‘whole-cost structure’
  • Identify the three main components of ‘total running costs’ and how to estimate them
  • Differentiate between ‘at-scale costs’ and ‘actual costs’ and their respective roles in financial modeling

Module 4: Total Investment Costs

  • Understand the two main components of ‘total investment costs’ and how to estimate them
  • Understand the concept of ‘required rate of return on investment’ and how that is calculated using the ‘risk-free rate’ and the ‘risk premium’

Module 5: Achieving Financial Sustainability

  • Identify how the financial model and tools learned in this course can ensure rigor and provide management focus as you move forward with your venture or program initiative

How The Course Works

There are no in-person teachers or facilitators for this course but you can ask questions on course forum.

You can take this course either in a team or on your own. You can either (1) invite your friends/colleagues to take this course with you or (2) Join and participate in the course platform to find other learners to be in your team (we will provide instructions in Module 1).

Course content will consist of a short video, readings and calculation exercises. It is important that you have a ‘Financial Challenge’ in mind — an early-stage business concept, a venture or a program initiative to which you can apply the modeling framework outlined in the course. If you do not have any example in mind, we can provide an example that you can use to go through the concepts.

Frequently Asked Questions

Will a certificate be awarded upon completion of the course?

To receive a Statement of Accomplishment, you will need to complete at least 3 out of the 5 assignments.

This course is now part of the Philanthropy University initiative that is sponsored by Philanthropy U, Inc., a non-profit registered in the U.S., and powered by Haas School of Business University of California Berkeley. Upon completing all of the 7 courses provided from Philanthropy University, you will receive a Certificate in Social Sector Leadership from Berkeley-Haas. For more details, please visit here.

If I take this course in a team, do my team members need to be in the same location?

We recommend signing up with a team that is all physically located in the same place. Much of the value of this course derives from the in-person, peer-to-peer learning that happens between team members. With that said, we have had teams cover many of the team discussions over Skype or Google+ hangouts so it is possible to have a remote team.

Remember, all members of your team need to individually register for this course.

What is the ideal size for my team?

We generally recommend a team of 2 to 5 individuals. If your team is too big, it can be more difficult to coordinate schedules and conduct team sessions together (to work on the assignment together) for all of the modules.

How much does it cost to take this course?

All +Acumen courses are free.

Are there any prerequisites for taking this course?

This is an introductory course and there are no prerequisites. For those who want to review the basics, please refer to this document: ‘7 financial terms every serious entrepreneur should know’ by VentureBeat (2013/6/8)

What are the technical requirements?

This course will be provided by a platform called NovoEd. Please review ‘NovoEd Technical Requirements and Browser Compatibility’. They have additional information on Mobile Compability and Low-Bandwidth Support.

You need a computer that allows you to watch videos through this platform, download our course materials (PDF reading) and the ability to upload your assignments.

More questions?

Please contact For Philanthropy University initiative related question (see above “Q: Will a certificate be awarded upon completion of the course?” for more), please contact 

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