SOS Charity for Children - Essay Example

CHARITY NAME: SOS CHARITY FOR CHILDREN http://www.soschildrensvillages.org.uk/ SOS is the leading charity operating in the United Kingdom. It is working for the betterment of children on all fronts of the society. The main purpose of this charity, however, is to support the orphans in the country. The charity is operating in around 124 countries and has established around 500 children villages providing excellent childcare facilities to orphans with the help of bountiful donors. The mission statement of this charity is to become “World’s largest children charity”. Keeping this mind the charity has worked really hard and is now recognised as one of the most respected charitable organisation all over the world. In order to become the biggest children charity, the scale of operations of this charity are not limited to the UK, but around 124 other countries are also well served by this chartiy. I have chosen to support this charity because they are in immediate need of funds due to the recent Haiti Earthquake. There are a lot of children who are orphaned as an earthquake hit Haiti, measuring 7.0 on richter scale. This charity, therefore, is in immediate need of funds and therefore, I decided to support them by making a money management investment plan for them. The charity sector in the UK is very competitive where organisations are competing with each other to attract donors towards their charities. The nation of United Kingdom is also very benolevent and helping towards those in needs. UK’s charities incomerose around 33% from the year 1995. There has been a exponential growth ever since. The charity sector is also known as the voluntary sector, the voluntary and community sector (VCS) and the third sector and it exists between the private and public sectors. The charity industry continues to grow significantly; there has been a 26% increase in the amount of employees over the last decade. It also has a third of degree holders which is a higher proportion than both the public and the private sectors. The charity sector’s income is just under £28billion and just over a third of this comes from statutory sources. (The UK Voluntary Sector Almanac, National Council for Voluntary Organizations (NCVO)) The business model that I plan to follow for this charity is the same plan that was used after Tsunami. We will held a concert in the UK’s Wembley stadium which can hold upto around 70,000 people. This event will be advertised through national newspaper through out the UK. The unique sellpoint for our event will be that we are doing it for children. The main motive of our plan will be “Let’s Sing for Children”. This is to let people know, they will not only be enjoying a day in the concert, but by doing that they will be helping poor and orphan children of Haiti. This is also invoke in people, the spirit of helping other and donating for those in need. Another important business step will be mass scale advertising that needs to be done. We acknowledge the this need for the success of the business and we will craft a subtle strategy to enhace our consumer disposition funnel to make sure that maximum number of people are aware of the event and most them also attend the event. We are going to use shotgun approach of advertising that is advertising through TVs and Radios. Although, this will be expensive, but it is going to be vital for the success of the business. In order to provide the funds for the advertising cost we are going to run down our past reserves as no interest will have to be paid on this source of finance and will be very beneficial for SOS Children Village. Another important step that we are going to do is that we will make sure that the event is covered and gets coverage in all the countries where SOS children village operates. This can be done by selling TVrights which are going to sell well due to involvement of some big stars in the concert. The additional revenue that can be gained for selling the The T.V rights will be €100,000 which in the ned is going to be spent in the good cause, helping the children of Haiti. Each ticket will be sold for €200. Assuming that all the seats in the stadium will be occupied. Our revenue will be: €1400,00,00. The reason behind chosing this price for the tickets is that it should cover all the expenses of the concert as well as making sure that some residuals amount is left bhind in order to earn profit for the development projects of SOS Village in Haiti/ Similarly, we can invite mix of some proffesional famous artists and some local bands in order to make sure that our costs are lower than our revenue. This strategy is crafted to make sure that costs do not rise too much and on the other hand to make sure that audience and target audience do not lose interest in the concert as it is imperative for the success of the business. According to Wembley’s website, it charges €25/person for the event. This money is charged by the stadium to cover the administration and maintainence costs and to provide for the depleting of resources owned by Wembley. The staffing costs will include a reputable event management company, which will deploy people at the right places and in right department. Generally, these companies charge around €20/ person in a big event. Which means that all the setup will be done in €140,000. The logic behind hiring an Event Management company is to make sure that all the resources are efficiently used and no wastage takes place. The staffing and resource setup done by the event management company is deemed to be lower than if the company attempts to do these jobs itself, as it is a charitable organisation and has no experience or competency in managing proffesional events like these; Apart from that we need to arrange for singers. Some singers will be famous personalities like Shakira and Britney Spears, who charge around €10,000 per show. This will mean that we have a lot of money left for other artists. Suppose, that we invite 10 famous artists, our costs will around €100,000. Similarly, we can also invite some not so famous brands and singers as time fillers. Supposing, that €50,000 will be counted as this expenditiure. (Excel file summarises the all the the calculations) : Revenue 14000000 Costs: Stadium 1750000 Singers (A category) 1000000 Singers B 50,000 Event Managers 1400000 Estimated Adv Cost 25,000   Total Cost   4225000 Operating Profit   9775000 Additional Revenue   100,000 Profit 9,875,000 ALL FIGURES ARE IN POUND STERLING We expect to make a profit of €9875000, which is pretty handy in the times of need. However, the biggest problem to the plan could be of raising of funds. As this charity might not have enough cash flows to cover the costs of the event. However, if this charity has a good credibility it can obtain the loan from line of credit with banks, which at maximum charges the interest rate of around 4%. This is not much considering the heavy returns that can be made with this money, which is around 100% of the money invested, and hence the plan should be given a go ahead. Similarly, the interest expenses cannot be reduced further by running down our past profit reserves which is going to make sure that our expenses remain low, whereas highest possible profit is earned. After the event, this profit can be invested into troublesome areas of Haiti, development projects in Haiti and most importantly in order to help the poor children of Haiti. This can be used to build at least two SOS children villages (According to SOS’s Official Site, 2010). This means that almost 1000 orphans of Haiti can get into these villages, which supports their education, daily expenses and strives to improve the quality of their lives. Thus, this concert is cornerstone, not only for the organization itself, but also for Haiti and many other prosperous nations of the world can also be asked to actively contribute in the fund in order to improve the welfare of children of Haiti and hence leading them to better present and flourishing future. References: 1. Wachowicz and Horne. (2003). Fundamentals of Financial Management. Prentice Hall 2. Matz and Usury. (2003). Cost Accounting. Southwestern Publishing 3. Richard L. Daft. (1994). Management. The Dryden Publishing Read More