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ROI for non profit which is losing money?

Aditya

Our client is a non profit considering investment in a new technology to prevent malaria in Africa. Should they invest in this new technology given the following information:

Every year malaria costs $100M to African Economy.

Current means used to prevent malaria 1: Mosquito nets- Annual Savings- $10 M, Annual Cost- $12M.

Current means used to prevent malaria 2: Mosquito spray- Annual savings- $15M, Annual cost $20M.

New Technology: Annual Savings- Don't Know, Annual Cost- $15M, One time setup cost- $25M.

Should our client invest in this new technology?

Francesco replied on 07/31/2017
Ex BCG | MBB Specialist | #1 Expert for meetings done (800+) and recommendation rate (100%)

Hi Aditya,

I would say you could structure the case with the following steps:

  1. Verify the objective: which is the target of the client? It is likely it will be either (i) maximize savings or (ii) maximize savings given a certain budget. This may create a critical difference on the best option
  2. Compute what is the saving of the new technology; it is likely the case will evolve as a market sizing one in order for you to compute such variable
  3. Find whether the third option is the most suitable to reach the objective identified in point (1)

Hope this helps,
Francesco

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