The NonProfit Times - December 1, 2008 - (Page 8)

FRANCHISES Continued from page 1 ally within five years – roughly one-third of the organization’s current $9-million annual budget. CMARC serves more than 300 disabled people a day with vocational programs. Money Mailer deals with nearly 300 franchise locations nationwide. “Money is tight. We haven’t received a cost of living increase in Massachusetts in 19 years,” said Sheri McCann, CEO and president of CMARC. “We work with fundraising and are really having a difficult time meeting our needs, so we’re looking for other options.” The advertising function is somewhat related to CMARC’s mission. The organization provides job opportunities for disabled citizens in the community.The link is helping local businesses grow. “The function fits into our profile,” McCann said. CMARC already works with local restaurants, dry cleaners, and other businesses. The new effort assesses the goals of that business and determines which direct marketing approach would help, whether it is coupons in the mail, individual post cards, or interactive strategies with cell phones. Money Mailer provides the editorial work and printing while the nonprofit sells the concepts. “CMARC is entrenched in the Woburn community, so that helps our franchise services,”said Dennis Jenkins,vice president of franchise licensing for Money Mailer.“They develop the campaign, and send the order to us while we do the stuffing, Internet placement, and truck the mailings to the post office. The nonprofit doesn’t have to work beyond the selling aspect.” Social Franchise Ventures, LLC, in Washington, D.C., brought the two parties together.While there is an estimated 900,000 franchise opportunities,Ventures lists fewer than 100 nonprofit-owned franchises. “We believe partnering with a franchise brand that leverages a nonprofit’s strengths and assets is paramount to a successful social franchise venture,” said Doug Sudell, CFE, of Social Franchise Ventures.“It is of the utmost importance that a nonprofit use a highly disciplined approach when selecting a brand because that can significantly increase their likelihood of success.” Figures show that franchised businesses provide more than 11 million jobs, or 8.1 percent of the national private-sector workforce with an annual payroll of $278.6 billion, or 5.3 percent of all private-sector payrolls in the United States. The Evergreen Commons Senior Center, in Holland, Mich., is trying to tie into some of that potential. Evergreen is teaming with American Ramp Systems, a national provider of wheelchair ramps and portable roll-in wheelchair showers. Evergreen will evaluate requests for the items and install the ramp.American Ramp Systems is headquartered in South Boston, Mass. Evergreen hasn’t turned a profit at this point, but Larry Erlandson, the organization’s president, said it might bring in $20,000 this year. He believes $100,000 a year is a realistic goal. “We’ve seen a significant growth in the third year,” Erlandson said. “We had to work up to that goal. Our other business took three years before producing $25,000, and then $50,000.” The key factors in coordinating a franchise is a link to the organization’s activities and the costs of activity or goods compared to potential income. “Our nonprofit has a large in-home care service,” Erlandson said.“We saw that we could have a product that was in demand and could connect it to our already existing activities.” Evergreen contacts rehab centers, veteran administration facilities, and hospitals. When patients require a ramp, Evergreen does a home evaluation. “We make calls on patients, while American Ramp performs national advertising and offers an 800 number,” he said.“They direct calls to us and do prescreening.” Evergreen set up a separate limited liability corporation (LLC) with a general manager. “Our attorneys believed that keeping the business separate helps the parent organization because it creates a Franchises, page 10 Shirley Person and her father Ed Erlandson, age 85, of Iron Mountain, Mich., utilize a ramp installed by the franchise of nonprofit The Evergreen Commons Senior Center. To Franchise Or Not To Franchise The Evergreen Commons Senior Center, in Holland, Mich., never worked with a franchise before inking a deal four years ago with American Ramp Systems in South Boston, Mass. The operation differs from the public health club the nonprofit purchased nine years ago. “Part of the decision to have the franchise comes from the uniqueness of the product,” said Larry Erlandson, president of Evergreen. “We determined that the product was very good and they offered services like a call center and marketing for support.” Evergreen runs an in-home care service that could rival other such franchise operations. So taking on a franchise in that sector would not make sense, according to Erlandson. The health club requires no special support, so the ownership of that does not require a franchise arrangement. “We saw the ramp product at a conference a few years ago,” he said. “We couldn’t recreate that product on our own and it was worth the franchise fee.” Evergreen contacts rehab centers along with veteran administration facilities, and hospitals. In dealings with those groups, Erlandson saw that a product was in demand and could connect that to Evergreen’s already existing activities. Deciding on having a franchise could depend on several factors. One could be the timing of your budget needs. Not every organization has the right capital and division for different types of operations or the ability to manage the activity. The organization also needs a board that gets behind the effort 100 percent. “A danger exists with many nonprofits when they look at a business venture and overestimate how fast they can find a return,” he said. “Franchises are not a quick fix.” Does the organization have a high-risk capability? “You have a risk when you start any business,” he said. What will the community think of the organization? “We had some donors question our activity, saying this was creeping away from our mission,” he said. Franchises do offer another option beyond fundraising: “As a nonprofit, we regularly keep our eyes open for a business venture to help the organization,” he said. Fees for service, membership dues, and program fees are just some ways to obtain revenue. Grants and fundraising are others. “Business ventures further add a diversity in revenue,” he said. “This helps the nonprofit avoid depending on any one stream.” “We’re trying to have a diverse revenue base,” he said. “The franchise offers a potential for a greater return than sticking the investment into an endowment fund.” – Tom Pope VOLUNTEERS John Bridgeland Continued from page 6 jobs.” Khazei lauded Bridgeland’s foresight in coming up with the concept and Stengel’s continued dedication to the service movement. Stengel echoed each of the executives in deeming Gregorian a “guardian angel” of the service movement. Nunn brought the broader volunteer networks to the dance. The real key was that everyone sat at the table to serve something larger than their own organization, Brown said.“In the field of service, there had already been many years of people coming together. In 2003, when AmeriCorps funding was cut by 80 percent, that really led to a lot of people coming together for the sake of the movement rather than individual efforts.They didn’t want this movement that had been building for 20 years to be seriously damaged.” So the built-in group that had learned to work together did it again. “There’s also a very strong sense in the country that we need to move forward by calling on citizens to directly engage the problems of the country. I think it’s palpable. It’s not partisan and it is part of the spirit of the country. As members of service organizations, we have to model the idea that there’s something larger than ourselves,” said Brown. It was also a movement that was percolating and came to a boil at the right time, Khazei said. “People in the service movement could feel it,” he added.“We wanted the presidential nominees there but we were also hearing from the presidential nominees that this was important. They both made it an issue in their respective campaigns. It was thrilling to see how people worked together and spent the time in a collaborative and inclusive process.” Nunn agreed that it seemed like the “perfect storm” for this opportunity and looked ahead at the future beyond this year’s ServiceNation Summit.“I think the key will be to see if we can keep the momentum going and continue to advocate for legislative change, which was at the heart of the ServiceNation agenda,” Nunn said. “Hopefully this call to action will help create the resources at the federal Richard Stengel level and in the private sector and that we’ll continue to strengthen the infrastructure so we’re ready to receive those resources. I think that ServiceNation served a terrific purpose in and of itself, but it’s true success will be judged by the future success of a legislative agenda and this coalition.” NPT 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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