Feasibility Report

Table of Contents1 Introduction3Current Situation at the Orphanage3Problems3Solutions4Effects of Orphanage on the community42 SMART Objectives:42.1 Objective 1:42.2 Objective 2:43 Character Traits of Our Service54 Market Research55 Pricing and Promotions66 Operations Plan76.1 Organization Chart87 Financial Concerns8Government of UAE and the Orphanage9Financial Income Working Capital9Master Budget108 References18

1 Introduction

The UAE is an economic hub for individuals seeking employment and business opportunities from all countries of the world. Despite the boom in economic activity and the riches from abundant oil reserves, 19.5% people in the UAE live under the poverty line[footnoteRef:1]. The rulers and sultans of these states are beyond wealthy, but middle class and poor residents of the UAE have to face a number of social issues. Because of the availability of potentially wealthy donors, we thought it fit to start an orphanage for young children funded by the wealthy class of the country, aimed at improving living standards for orphans who do not have homes to live in. The social impact of this non-profit orphanage is bound to be massive, and will bring hope to the lives of many. We call our organization Hope Village. [1: The CIA World Factbook United Arab Emirates, Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/ae.html]

Current Situation at the OrphanageThe UAE government is in the phase of constructing orphanage for abandoned babies, victims of family abuse and others who have nowhere to go, and the orphanages in UAE are scarce at the moment (Nereim, 2012). The situation at the Hope Village is very critical at present and Hope Village requires support from the government and other donors to jump start its operations.ProblemsThe problems regarding orphanage in UAE are:1- Shortage of orphanage2- Increased gap between the rich and poor members of the society3- Abandoned babies4- Victims of Family abuse5- People without a home6- Financial support for the orphanageSolutionsUAE is an oil rich economy with influential citizens who are more than rich, therefore a lot of support could be received from donors and the government to support the orphanage. The increased gap between the rich and poor could be reduced by the support from the rich for orphans, by adopting these orphans the rick could help to provide home for abandoned babies, victims of family abuse and people without a home.Effects of Orphanage on the communityThe orphanage will have positive effects on the community by reducing the number of people present in the society. Also the social class differences will be reduced by supporting people without a home and providing future for orphans. The orphanage will also help to reduce the social issues in the community, without orphanage these homeless people are at the mercy of the world and may get involved in stealing or other crimes due to lack of resources, education, housing and food.2 SMART Objectives:2.1 Objective 1:To provide a shelter, free education and food to street orphans and underprivileged children of the UAE, by taking them in and empowering them with skills for a better future at a child-friendly center that focuses on making the lives of these orphans blissful. 2.2 Objective 2:To raise an amount of Dh 100,000 by the end of one year and doubling the amount by the end of the second through charity social events that invite potential donors from all professions of life.Since our business is a non-profit business primarily, the success factor of the business can be measured by looking at the enrollment and welfare of children that register themselves at the center. Therefore, once we house 500 children in our premises, itd be safe to say that our non-profit has done well. 3 Character Traits of Our Service

This project will serve underprivileged children and street orphans of different ages, by providing them a shelter, food and education; and a surrogate family too ideally in the state of Abu Dhabi. The mechanism of the plan will work on a system of adoption. Affluent families that can afford to pay for the living and educational expenses of a child can adopt an orphan from our center and pay for the expenses. They can then act as the childs surrogate family, visiting them at our premises often and also taking them to their homes on particular weekends. This will form a family like bond with their surrogate families, where young orphans will be able to live in actual families and experience actual relationships. The center will be built like a child friendly space, with recreation and sport activities available for the children. They will be placed in dormitory-like rooms and will be provided with meals in proper dining areas. In addition to regular activities, funds raised through charity events and donations will be used to provide these children with necessary computer skills and trainings in order for them to secure a bright future. Special scholarships will also be provided for bright students so that they can attend college and university at the expense of the center. 4 Market ResearchTo determine the importance of this orphanage, it is important that we conduct a market analysis and a proper marketing plan that would ensure the success of this social venture. The existing scenario of non-profits in the UAE is dominated by the agenda of different foundations that promote different causes. Some organizations are purely humanitarian, others are community-specific; some promote animal rights and others promote the stoppage of drug use. There are a few nonprofits in the UAE that work solely for the cause of protecting child rights and providing shelters for orphanages. A few organizations that work for the rights of children include Start UAE, Dubai Autism Center, Dubai Cares, Manzil Center for Challenged Individuals and Sharjah City for Humanitarian Services. Our idea of shelter provision and adoption presents a very child-centric cause and is thus bound to attract appreciation and funding from affluent families and potential donors from developed countries as well. There are a number of skills that can be taught to these children, and a number of professions to choose from given the economic activity of the UAE in general. From the funding point of view, we know that the per capita income of an average resident in the UAE is an overwhelming $49,000 per year[footnoteRef:2]. This implies that the people on average have the capacity to spend a portion of their money in donations and charity. The princes and rulers of these states are very affluent and powerful people and have contributed to the works of charity in the past as well. There is also a scope of raising funds through charity events such as a charity fashion show, because of the abundance on events that happen all year around, with participants from all over the world. [2: Ibid.]

5 Pricing and PromotionsThe adoption scheme of every child will work on a mechanism that will include the cost of food, shelter, clothing and education. The subsidized price per child will be set at around Dh 1000 per month. This will include his/her whole welfare package. Whatever his/her surrogate parents wish to give above the amount is according to their own will. The center will be promoted through the use of social media marketing, and internet marketing primarily. The centers website will have a donate option on its home page, on which people can click and donate amounts accordingly. Other promotions will be done through extensive networking with potential donors at charity and other events. 6 Operations PlanThe center will be like a home for underprivileged children, and everyone there will be kept in close proximity to each other. This will enable these children to feel like they are part of one big family while they stay at these homes. This is why school going children will be enrolled in a local school, and every morning, the administration will arrange for a van/bus that will take the children to school. Those children who are older and aspire to acquire skills will be given a choice to attend skills workshops at the center that will equip them will the necessary skills to build their future. The project coordinator, under the supervision of the board and the executive director will determine which skills workshops to offer at the center. Major management decisions will be taken by the board, while the director will execute these decisions. There will also be one social worker that will constantly overlook all social and charity-prone activities of the center including the fundraisers. He will be in charge of the childrens health, psychological development and educational needs overall. There are a few equipments that our operations will require, including office equipment like printers, fax machine, a few computers, internet, and office fixtures. With that, the center will need a few swings, indoor games and sports equipment on the side for the orphan children. 6.1 Organization Chart

7 Financial ConcernsThe startup costs and infrastructural development at the premises will be met with an endowment fund, supported by the board and one potentially affluent donor. We expect an endowment fund of Dh 500,000 through proper networking and startup donations. Most of the fund will go into establishing proper premises where children can feel safe and can be accommodated easily. Running costs and operation expenses will be managed with side investments using the endowment fund and other funds rose through fundraisers. The adoption money will also be utilized to pay revenue expenses of the non-profit and other major costs like salaries and wages of the employees. Government of UAE and the OrphanageThe government of UAE is very supportive for orphanage as the government is already constructing an orphanage to be completed in 2016. The government is providing performance based support for the orphanage to make sure that the budget gets spent on orphans. UAE has so many donors who also support social causes these donors could also be pushed by the government to support The Hope Village.Financial Income Working CapitalWorking capital is a complex issue for a not for profit organization like The Hope Village, therefore the orphanage is targeting the corporate world to provide advertisement opportunities and charge a fee in return. The orphanage will also run an awareness campaign seeking funds from donors to manage the working capital needs of The Hope Village. At the moment the Hope Village solely relies on the funds received by the government and other donors.

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Master Budget"The Hope Village" Master Budget for 20X3 & 20X4

The Hope VillageThe Hope Village

Opening Balance Sheet Balance Sheet

01-Jan-1301-Jan-14

Assets

Cash788400 764725

Accounts receivable 0 82500

Inventory 15000 0

Equipment80000 8000

Less accumulated depreciation0 80000 8007200

Total assets883400 854425

Liabilities and Equity

Liabilities

Accounts payable20000 0

Note payable to bank (12% per year)2400 22400 0

Long-term notes payable 6% interest per year500000 200000

Total liabilities522400 240928

Shareholders' equity

Ordinary shares361000 418500

Retained earnings0 361000 235925 654425

Total liabilities and equity883400 854425

Sales Budget

1st Qtr2nd Qtr3rd Qtr4th Qtr1st Qtr2nd Qtr3rd Qtr4th Qtr

Prior quarters Funds Received 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0

Funds Received from UAE Govt.100000 100000 100000 100000 100000 100000 100000 100000

400000 400000

2013 1st Qtr2014 1st Qtr

0 0

0 0

0 0

30 30

0 0

Purchases Budget

1st Qtr2nd Qtr3rd Qtr4th Qtr1st Qtr2nd Qtr3rd Qtr4th Qtr

0 0 0 0 0 0 0 0

25%25%25%25%25%25%25%25%

0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0

12 12 12 12 12 12 12 12

0 0 0 0 0 0 0 0

Budgeted cost of goods sold

1st Qtr2nd Qtr3rd Qtr4th Qtr1st Qtr2nd Qtr3rd Qtr4th Qtr

This quarter's unit sales 0 0 0 0 0 0 0 0

Budgeted $ cost per unit (multiply)12 12 12 12 12 12 12 12

Projected cost of goods sold0 0 0 0 0 0 0 0

Cost of goods sold for the year0 0

Budgeted inventory for December 31st

Units 0 0

Cost per unit - $ (multiply)12 12

Total0 0

Working Capital Budget

1st Qtr2nd Qtr3rd Qtr4th Qtr1st Qtr2nd Qtr3rd Qtr4th Qtr

Budgeted Cost of operations100000 100000 100000 100000 100000 100000 100000 100000

Upper Management and staff7000070000700007000070000700007000070000

General and Administrative Expenses Budget

1st Qtr2nd Qtr3rd Qtr4th Qtr1st Qtr2nd Qtr3rd Qtr4th Qtr

Administrative Salaries3000030000300003000030000300003000030000

Depreciation80008000800080008000800080008000

Interest on long-term notes - 0.5% monthly30003000300030003000300030003000

Interest on short-term notes - 1% monthly750000000

Totals4107541000410004100041000410004100041000

General and admin expenses yearly total164075164000

Expected Funds

1st Qtr2nd Qtr3rd Qtr4th Qtr1st Qtr2nd Qtr3rd Qtr4th Qtr

Funds Received 100000100000100000100000100000100000100000100000

75%75%75%75%75%75%75%75%

Ending accounts receivable - 75% (multiply)75%7500075000750007500075000750007500075000

Cash receipts

Cash Budget

1st Qtr2nd Qtr3rd Qtr4th Qtr1st Qtr2nd Qtr3rd Qtr4th Qtr

Beginning cash balance78840066292555992545692535392525092514792544925

Cash receipts 00000000

Equipment sales

Shares issue

Total cash available 78840066292555992545692535392525092514792544925

Cash payments

Payments for merchandise 200000000000

Sales delivery expense00000000

Salaries

Funds7000070000700007000070000700007000070000

Administrative 3000030000300003000030000300003000030000

Interest on long-term notes 30003000300030003000300030003000

Dividends

Interest on short-term notes3%750000000

Total cash payments123075103000103000103000103000103000103000103000

Preliminary balance (Total cash available - Total cash payments)66532555992545692535392525092514792544925-58075

Additional loan (min cash balance 40,000) (add)000000098075

Amount Available for loan repayment if any62532551992541692531392521092510792549250

Loan repayment (minus)24000000000

Ending cash balance (4th quarter balance appears in balance sheet)6629255599254569253539252509251479254492540000

Budgeted Income Statement

Funds Received400000400000

Cost of goods sold (minus) 00

Gross profit400000400000

Operating expenses

Sales expenses00

General and administration 164075164000

Total operating expenses164075164000

Net income (Loss)235925236000

Budgeted Statement of Retained Earnings

Beginning retained earnings (given)0235925

Net income 235925236000

Funds available for distribution235925471925

Less cash dividends 00

Ending retained earnings235925471925

Budgeted Balance Sheet

AACoAACo

Budgeted Balance Sheet Budgeted Balance Sheet

31 Dec 20X331 Dec 20X4

Assets

Cash764725 589125

Accounts receivable 82500 82500

Inventory 0 0

Equipment8000 450000

Less accumulated depreciation (depreciation in opening balance sheet plus depreciation expense for the year)8007200 -31200418800

Total assets854425 1090425

Liabilities and Equity

Liabilities

Accounts payable0 0

Note payable to bank0 0 00

Long-term notes payable200000 200000

Total liabilities200000 200000

Shareholders' equity

Ordinary shares418500 418500

Retained earnings235925 654425 471925890425

Total liabilities and equity854425 1090425

8 References

Araboo, UAE Social Organizations, 2013. Web. Retrieved 24th March 2013.The Central Intelligence Agency , World Factbook, United Arab Emirates, 2013. Web Retrieved 24th March 2013Immostreet, All property listings for al-Marakaziyah, 2013. Web. Retrieved 24th March 2013.Nereim, V. (2012, December 25). Orphanage for UAE's abandoned babies to open in 2016. Retrieved April 18, 2013, from The National: http://www.thenational.ae/news/uae-news/orphanage-for-uaes-abandoned-babies-to-open-in-2016