not-for-profit

Making Medicine Count: The DecisionTools Suite Bolsters Efficacy of Humanitarian Programs

Linksbridge_CaseStudyGetting life-saving drugs to under-served people in developing countries is a driving goal for many non-profit organizations. However, well-intentioned efforts like these can fall short of their desired impact due to poor understanding of market uncertainty and risks associated with pharmaceutical manufacturing.

Linskbridge, SPC, a consulting firm that advises international development organizations in determining what efforts have the highest impact along with the best value for money spent, recently used @RISK, RISKOptimizer, and PrecisionTree to help determine the best method of introducing a life-saving medicine in developing countries. The process requires analytical forecasting of both demand and supply of the drug, as well as a detailed market analysis. With the aid of Palisade’s DecisionTools Suite software, the consultancy has been able to offer clients sound advice on which ventures have both humanitarian impact and fiscal soundness.

Khatuna Giorgadze, an associate with Linksbridge SPC, was able to take complex data from multiple sources and translate it into clear and comprehensive information. For example, she used @RISK to create a demand forecasting model, which included both static inputs like population data from United Nations Population Division, country census data, and World Health Organization coverage data, as well as probability distributions for highly uncertain inputs that represent a range of possible values.  Thus she was better able to predict the demand for a drug or medical treatment in developing countries. She was also able to forecast supply.  This step “is even more uncertain than demand,” Giorgadze says, “so we use @RISK to a great extent to assess manufacturing risks and supplier’s plans in the market.” With supply and demand established, Giorgadze then used @RISK, RISKOptimizer, and PrecisionTree to do a thorough market analysis. She then investigated different investment options for the company, determining the potential benefits and risks of each.

All this information was then presented to clients looking to make sound and cost-effective investment and policy decisions to meet public health objectives. Palisade’s products helped make this process all the more efficient and effective. “Palisade’s DecisionTools Suite is a very important component to our work,” says Giorgadze. “Since 2011, it has enabled us to do the required market and investment analysis and make decisions. It’s easy to use, and its compatibility with Excel makes it all the more appealing. We’re very happy with how this software has enhanced our work.”

Read the complete case study here.

Non-Profits None too Confident When it Comes to Risk Management

A few days ago, we discussed how major for-profit corporations admitted they aren’t doing all they can to manage their business risks. Turns out, non-profits aren’t confident they’re doing much better.

According to a June 2014 survey of 150 U.S. nonprofit foundations and endowments conducted by SEI’s Institutional Group, 44% of them are not confident that they are spending enough time assessing the impact of potential market shocks, and 49% don’t believe that their investment committee has identified all key portfolio risks. Nearly a quarter (24%) said they lack confidence that the committee is provided with enough information to conduct substantial risk analysis.

However, these nonprofits are recognizing the importance of risk management; 46% of those surveyed said “they place greater value on positive risk-adjusted returns than on overall portfolio returns when evaluating investment success,” and that “Managing the risk/reward balance is a huge priority.”

Non-profits can use software tools such as @RISK to quantify the magnitude and probability of risks in funding streams, and enhance risk management in portfolios. Risk analysis helps non-profits develop effective strategic contingency plans, and communicate challenges to board members and other stakeholders.