The NonProfit Times - December 1, 2008 - (Page 10)

Executives: Require Youth To Perform Service BY MARK HRYWNA arely 1 in 10 nonprofits believe that government policies toward nonprofits have generally improved over the past two years, according to a survey new while the next federal administration should devote more attention to poverty and establish a universal health insurance system. “Nonprofit Policies for the New Administration” is based on The Johns Hopkins Nonprofit Listening Post Project by the Center for Civil Society Studies Institute for Policy Studies, which surveyed more than 1,000 nonprofits around the country. The survey was conducted during early September, before the federal rescue plan for the nation’s banks was approved and historic declines in the stock market. The survey already was signaling concerns, said said Lester Salamon, director of the Center for Civil Society Studies at Johns Hopkins. If it had been done later it might have been even more striking, he said. Only 12 percent of respondents said that government policies toward nonprofits in have generally improved during the past two years. Less than one-third agreed that the next administration should further expand support to faith-based nonprofits. Almost half of nonprofits surveyed agreed, and another third strongly agreed, that expensive energy prices are negatively affecting the ability to deliver programs and services. Three out of four executives agreed or strongly agreed that some type of public or community service should be required of all American youth as a condition of getting governmentsponsored or guaranteed college aid. Though the Listening Post Project survey does not include higher education or hospitals, it can provide timely feedback on pressing issues, said Salamon. “We felt this would be a useful way to give nonprofits a voice in this political process, something that’s been lacking in previous events of this sort,” he said. The survey results demonstrate just how much federal policy and budget decisions impact on the health and vitality of nonprofits, said Peter Goldberg, chair of the Advisory Committee of the Listening Post Project and president and chief executive officer of Alliance for Children and Families. More than ever before, it seems clear that budget and policy decisions impact different fields of nonprofits, he said. As a result of privatization during the past two decades, child and family services nonprofits deliver more services under government contracts, becoming public sector contractors, Goldberg said.The federal government treats contracts in human services very differently than contracts for federal defense or highway spending, with nonprofits in many cases subsidizing the delivery of public sector services, he added. “It’s clear that when it comes to contracting, we treat pavement differently than we treat people,” Goldberg said. ‘‘ Three out of four executives agreed or strongly agreed that some type of public or community service should be required of all American youth as a condition of getting government sponsored or guaranteed college aid people yearly in different programs both in house and throughout the community. “BCRC doesn’t see profits in the same way as individual franchise owners,” she said.“We use our business to demonstrate our motto,‘We teach work with work.’” BCRC runs a gift delivery system so the candy part fits into an existing delivery operation throughout Beaver County. “What appealed to us is the 15 different job tasks,” she said.“Not all our clients can handle every step so there might be people specializing in cutting or putting candy in the basket for example.” Costs have to work out to avoid hurt- Nonprofits also cited as major priorities of the next administration more federal dollars for their fields,expanding tax incentives for charitable giving, support for training and capacity building, and reforming Medicare and Medicaid reimbursement. Almost 80 percent of respondents in the survey said reinstatement and expansion of tax incentives for individual charitable giving would be “extremely useful,” with another 17 percent saying it would be “somewhat useful.” Restoration of the estate tax specifically garnered a 52 percent “extremely useful” response and 29 percent “somewhat” for a total 81 percent. Only about half of respondents said that a special legal category for “hybrid” organizations, such as social enterprises, would be extremely or somewhat useful, the lowest of any of response. While no one priority emerged with more than 20 percent of responses as the number one priority, it was clearer when nonprofit executives ranked their top three priorities: • Restoration and/or growth of funds for organization’s field in the federal budget (44 percent); • Reinstatement and expansion of tax incentives for individual charitable giving Service, page 12 FRANCHISES distance,” he said. Few in the home care sector had an awareness of this product, he explained. Many test callers to his agency thought his organization already had such equipment. “This was a necessity,” he said.“Outside of hiring a carpenter to build a winch ramp, no steel ramp was available. This was an opportunity to be on the leading edge of a new product.” To reach the potential $100,000 annual figure, Erlandson had to plan on a series of costs.The goods sold was one cost, while the general manager’s salary was another. An installer was hired on a commission basis.The organization must pay a royalty, advertising, and bookkeeping fee. Evergreen had to rent warehouse space and a van to haul the product. Initially, the franchise fee was approximately $44,250 for a territory of 1 million people. When CMARC researched the arrangement with Money Mailer, McCann found initial franchise fees existed in a wide ranged between six and seven figures. She opted for Money Mailer for around $40,000.“It’s a low initial investment and we don’t need a storefront for the direct mail operation,” she said. Money Mailer’s Jenkins explained that a franchise includes a number of households in a given location.The cost of producing ads varies. Those costs include printing and artwork for an ad going to 10,000 people of around $116. The nonprofit could conceivably charge $400. Extra equipment isn’t necessary.CMARC needed only a computer, a spot in the office,and a Windows XP Professional System. Gaining income might be secondary to some goals. For the New Brighton, Pa.based Beaver County Rehabilitation Center (BCRC) Inc., an arrangement with Candy Bouquet brings extra tasks to the workers the nonprofit aims to train. “Our primary concern is offering work for our mission,” said Pat Healey, director of business development. “Our primary goal when we purchased the Candy Bouquet franchise was to serve our mission by offering work tasks to further individual vocational independence and growth for our clients.” BCRC has around 160 people a day in an employment program that involves inhouse packaging, mailing, and small assembly. The organization serves 400 ing the nonprofit.The initial franchise fee was around $20,000 with some donation of items from the Little Rock, Ark.-based Candy Bouquet International, Inc. The company offers either an association fee or a commission. BCRC pays the association fee, which could be $3,000 a year. Candy Bouquet doesn’t charge royalties, and the association fee is based on the size of the franchise determined by the number of people in a ZIP code. BCRC bought all the ZIP codes in Beaver County for around $170 a month. Funds are generated through sales and treated as a floral and market business. “We don’t put a lot of money into marketing because the basket generates sales through word of mouth.” BCRC also reaches out with flyers, newsletters, and contacts through the local Chamber of Commerce. “We’ve grown the business in a different way,” she said.“Most people market the store as retail, while we have a small area in our administration center for display that’s not a typical storefront.” Costs depend, in part, on the price of gasoline needed to deliver the assembled items. “We used to offer a flat $5 fee within the county,” she said.“Now that has gone to $8 within Beaver County.” Franchises can also help offset lapses in other areas of income, according to CMARC’s McCann. “We’re trying to overcome the challenge many nonprofits face in raising funds for social services,” she said.“This goes beyond government funding, foundation grants, and other sources of restricted revenue.” NPT Tom Pope, a New York City-based journalist, writes about management issues. Franchise Flexibility Nonprofits should seek flexibility from the franchisor, according to Pat Healey, director of business development for the Beaver County Rehabilitation Center (BCRC), Inc. in New Brighton, Pa. When Healey wanted to run a market study to see whether the basket from the Little Rock, Ark.-based Candy Bouquet International, Inc., was right, she hit a snag. “We couldn’t get the Styrofoam for the floral arrangements,” she said. “That was one of their specialized items we needed to purchase from them.” Healey needed to conduct a market study to present to the organization’s board of directors as part of the business plan. Healey bought one bouquet so the nonprofit could come up with a homemade version and then located a grocer to help display the item. “The parent company allowed us do our own version with an alternate Styrofoam,” she said. “They were agreeable for our test even though their brand contains secrets. They wanted us to be successful.” While Healey now is required to buy the Styrofoam and stems from the franchisor, the nonprofit can get the candies from elsewhere. The parent company stresses the franchisee must use certain items for quality control. “You need a company you can work with in a flexible way,” she said. – Tom Pope DECEMBER 1, 2008 THE NONPROFIT TIMES www.nptimes.com http://www.nptimes.com

Table of Contents Feed for the Digital Edition of The NonProfit Times - December 1, 2008

The NonProfit Times - December 1, 2008 Contents A Nation of Volunteers Nonprofits Start Franchising Page 4 Tidings Of Good Cheer Donor-Restricted Endowments Membership Revenue Isn’t Free Divining A Skills Set Special Report: 2008 The Year in Review The Revised 990 Giving And The Economy Annual Buyers Guide Advertiser Index NPT Jobs Resource Directory

The NonProfit Times - December 1, 2008

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