Self-Generated Income: A Path to Sustainability? Executive Fund Development Leadership Program January 15, 2013
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1 Self-Generated Income: A Path to Sustainability? Executive Fund Development Leadership Program January 15, 2013
2 Who We Are The Cara Program prepares and inspires motivated individuals to break the cycle of homelessness and poverty, transform their lives, strengthen our communities, and forge paths to real and lasting success.
3 What We Do
4 Results
5 Financial Returns
6 Social Enterprise #1 Initial Venture
7 A Little History It all started in 2005 Goldman Sachs Managing Director, Mark Carroll, was awarded a one year fellowship. Mark chose to work with The Cara Program(TCP) to launch a social enterprise. Cleanslate(CLSL), a neighborhood beautification business, was conceived to provide transitional jobs to participants from TCP who faced high obstacles to employment. June CLSL launched in its first community, Auburn Gresham, with sidewalk sweeping. This was only the beginning
8 Graffiti Removal Pressure Washing Snow Removal Landscaping Litter Abatement & Recycling
9 Community Expansion
10 Growing Revenue $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $ * includes revenue from property preservation which spun off to 180 Properties in 2011
11 2011 Funding Sources *Grant revenue is for transitional job wage subsidy related to TCP program
12 While CLSL experience significant growth in clientele and transitional job opportunities, CLSL was serving as an extension of the program and was not sustainable as a stand alone business. In 2011, the Cleanslate Remix was implemented to strike a balance between mission and margin. The Remix provided CLSL more autonomy and flexibility to grow as a social enterprise and move toward sustainability. Expanded lines of service and geographical presence Began sourcing interns directly from community referrals Updated staff salary and benefits to be in line with market norms for this line of work rather than NPO s
13 Remix: the early results Sustainability CLSL has turned the corner in moving toward sustainability. Fiscal year 2011 was the first profitable year since CLSL inception in Growth CLSL has increased client base and lines of business
14 What s Next? CLSL will continue to be the primary provider of transitional jobs for TCP. CLSL will strengthen its recycling initiative. CLSL plans to grow to $3 million in annual revenue over the next 5 years by: expanding its geographic reach adding additional service lines.
15 Takeaways Identify seed capital TCP secured $200k of unrestricted seed funding to launch Cleanslate Leverage business guidance & expertise CLSL had guidance of Mark Carroll Secure buy-in of NPO sponsor from top to bottom TCP leadership, administrative staff and operations staff provided critical support to get CLSL started and running Prepare your labor force All interns at CLSL were sourced from The Cara Program. As CLSL grew, the majority of Cleanslate staff came from the intern pool Pre- launch Customers CLSL secure Auburn Gresham Special Service Area before launch
16 Social Enterprise #2: A Joint Venture
17 Built on Success In December 2008, Mercy Housing Lakefront (MHL) approached The Cara Program about creating a joint venture to address the foreclosure crisis through a property preservation business. TCP brought a reputation of quality training and placement programs for at-risk population. CLSL brought a successful business model with neighborhood beautification and working with high obstacle labor. MHL brought an expertise in housing, contacts within the potential customer base and a strong understating of the needs of property preservation. In September 2009, 180 Properties completed its first work order.
18 The Early Days Significant growth capital provided by banks and foundations. Customers were made up of banks that were looking for a regional provider with a community presence Initially, 180 Properties was a shell organization and the property preservation work was completely done through CLSL as a sub contractor. Property preservation became a new line of business for CLSL and it took off rapidly CLSL began to struggle to focus on the core neighborhood beautification line of business as well as handle the influx of property preservation work orders. The unpredictability of property preservation required us to review if it could be utilized for the same purpose as neighborhood beautification. Work orders were sporadic and emergency services required immediate response. Technical skillsets were need to complete tasks The work was not conducive to transitional jobs and needed to be staffed by permanent crews.
19 Rapid Growth Needs To meet the growing needs of property preservation, the decision was made to restructure 180 Properties to a fully functioning entity with its own infrastructure 180 Properties would become a permanent job provider and focus only on property preservation. In Jan 2011, 180 properties became a fully functioning entity and began to expand client and service base. With this flexibility to grow, 180 Properties has now grown to a regional company operating in Illinois, Indiana, and Wisconsin.
20 Takeaways Joint venture Partners bring unique, but necessary components - CLSL, TCP, and MHL leadership were leveraged in the planning, growth, and management phases. Clients Leverage existing relationships to jumpstart revenue. Infrastructure Have a solid platform to build on - CLSL infrastructure of staff and equipment was used in initial operations to complete jobs and CLSL s Operations Center was the initial home to 180 Properties. Labor Pool Have a solid pool of labor to get business started used CLSL s workforce of interns to assist with this new business launch and the pool of interns became the place where 180 is finding their permanent staff. It is like building house. It takes longer and costs more than expected.
21 Social Enterprise #3: Taking Advantage of Future Trends
22 Why Staffing? TCP Staffing was initially created to manage the risks associated with placing TCP students in transitional jobs (TJ s) at CLSL, as well as with other external partners. Once the infrastructure was in place, it made sense to think beyond risk management and use as chance to expand job opportunities for students at The Cara Program. Adapt to the changing needs of employers. The labor market has moved more towards transitional and temporary jobs.
23 Where are we going? We are building off of current client relationships and opportunities already in queue: Habitat, 180 Properties, Chase, MHL, LISC, and many others. TCP Staffing offers temp-to-perm, part-time to full-time and direct placement to meet this new need. Each placement through TCP Staffing also includes the added value of TCP s aggressive screening process, comprehensive training and critical support services.
24 Future expectations Goals over the next year Add 7-10 new clients Complete a minimum of 200 job orders Convert 10% of total temporary assignments to permanent jobs. Forecasting $650k in revenue for FY 2013 Next 5 years Build reputation as solid temporary service provider Grow to $2 million in annual revenue
25 Takeaways Sound Infrastructure is Critical Utilized TCP Human Resources & Finance staff, as well as existing office space at TCP to start. Need Initial Client Base to Launch Business Cleanslate was a start up client and gave opportunity to see needs and fulfill those needs before taking on larger client base Initiate Client Pipeline Relationships with TCP and Cleanslate contacts gave a jumpstart to building client list. Provide Strong Product We have a quality product job applicants who are screened and trained and motivated to succeed.
26 Thank you! For questions (or to swing by for a visit), please feel free to contact us: Eric Weinheimer, eweinheimer@thecaraprogram.org Brady Gott, bgott@cleanslatechicago.org
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