Nonprofits find new funding in tough economy

For the past decade, Grapevine Relief and Community Exchange has operated two successful resale shops that net more than $200,000 per year.

The recession has doubled the demand for assistance from the nonprofit relief agency, which serves about 1,200 families a year in Grapevine, Colleyville and Southlake.

But tough economic times also have put the skids on donations of clothing, food and household items – as well as some other funding – and that has GRACE’s Executive Director Shonda Schaefer seeking relief.

“Resale is the most solid donation we have, and like other nonprofits we’re seeing a huge drop in donations,” Schaefer said. “We’ve seen a 40 percent drop in donations from last year in cash gifts and other donations of goods. We’ve put our resale program as our highest priority.”

Relief has arrived for SchaeferÂ’s organization and three others serving Tarrant County, All Church Home for Children, Cancer Care Services and Helping Restore Ability.

The four nonprofits – a total of eight North Texas agencies were selected to participate – are part of the $1.5 million North Texas Community Wealth Collaborative, a partnership between Washington, D.C.-based social enterprise consulting firm Community Wealth Ventures Inc. and the Center for Nonprofit Management. The idea behind CWV, which was founded in 1997, is that organizations can increase their social impact by building on internal assets while reducing their dependency on fund raising.

Now in its second year of a three-year initiative, the partnership is funded by The Meadows Foundation, the Amon G. Carter Foundation, the Harold Simmons Foundation, the Citi Foundation and several anonymous sources. The collaborative involves an intensive, 11-month business planning process that teaches nonprofit agencies successful techniques to grow and develop high-performing earned income ventures. Organizations become self-sustaining after learning how to take a market-based approach to generating income through social services.

“Social enterprise,” as the money-making practice is called, is a trend sweeping the nonprofit world as competition for corporate and government funding increases and donations plummet along with the economy. More nonprofits are looking to diversify their funding base and develop new ideas to generate greater unrestricted income, according to Cynthia B. Nunn, president of the Center for Nonprofit Management. Eventually, she said, nonprofits that create for-profit subsidiaries will be able to apply more resources toward community needs.

For Schaefer, who describes the process as a “mini-MBA course” on how to grow a business and reap a profit, the assistance could not have come at a better time.

“This is perfect timing for us. Like every nonprofit, we’re on pins and needles on corporate sponsors. We don’t know if our longstanding sponsors will continue,” Schaefer said. “We knew we wanted to expand but we didn’t know how to go about it. This is a unique process that will help us develop a business plan for the next major step in our expansion plans.”

Schaefer said she is looking at applying the process across the board for her agency.

Social enterprises also are attractive revenue-raising alternatives to Wayne Carson, CEO of All Church Home for Children. The 94-year-old agency – one of Fort Worth’s oldest human service organizations – is working on a $12 million historic renovation project of the former Masonic Home and School of Texas on the city’s southeast side. The agency plans to move to its new, expanded 19-acre home in 2010 and launch what is hoped will be several different social ventures.

“The process we’re involved in with CWV improves our skills and understanding of how successful business plans are developed and implemented,” he said.

The collaborative is helping CarsonÂ’s organization develop a business plan to open a nondenominational wedding chapel and reception/meeting facility on its new Wichita Campus. ACH plans to update the interior of the 1954 stone-cut chapel and add a 4,000-square-foot wedding garden adjacent to the building for pictures and outdoor weddings and receptions. 

“We see this as a win-win-win situation for ACH. The business will support ACH’s ability to serve more children and families by generating income to provide additional scholarships for children and families needing our services,” Carson said.

Helping Restore Ability in Arlington is focusing on developing a non-medical homecare business for people with disabilities. Vicki Niedemayer, HRA’s chief executive, said the process will “help us continue to do what we already do” and will help generate profit to cover other parts of the agency’s programs.

“We hope it will spin off enough profit so it will make our nonprofit services healthier,” said Niedemayer.

Social enterprise is not for everyone, said Niedemayer, but is the kind of planned growth her 30-year-old agency has been researching.

“It is planned growth we can control ourselves,” she said.