Social Entrepreneurship: Amos House WORKS

Social Enterprise & the Amos House Model Eileen Hayes, MSW President & CEO, Amos House November 10, 2010 Use Twitter Hashtag #npweb Special Thanks To Our Sponsors

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Today’s Speaker Eileen Hayes President and CEO of Amos House Hosting: Sam Frank, Synthesis Partnership

Social Enterprise and the Amos House Model Eileen Hayes, MSW President & CEO, Amos House

The Power of SE in RI   100+ Social Ventures   300+ Jobs, majority for those with barriers to employment   Decreased burden on social services   Talent recruitment and retention   RI’s statewide sector approach is unique

Sector Convergence Traditional Characteristics For Profit Not for Profit Competitive Collaborative Private Good Social Good Market Based Outside Market Financial Motivation Social Motivation Advantaged Disadvantaged Independent Dependent Individual Collective Risk-taking Risk-averse Create Wealth Distribute Wealth

Definition of Social Enterprise Social enterprises are mission driven initiatives that apply market-based strategies, and entrepreneurship to maximize social impact. The movement includes non-profit, for-profit and hybrid models. Social enterprises have been referred to as “Businesses with a heart”.

SE Impact on Organizations Source: Powering Social Change: Lessons for Community Wealth Generation for Nonprofit Sustainability, Community Wealth Ventures, 2003 Source: “Enterprising Nonprofits”, Yale School of Management – Goldman Sachs Foundation on Nonprofit Ventures

Timeline

Organizational Readiness   Board Buy In   One Champion   Full Disclosure/Understanding   Staff Buy In   Understanding of Different Skill Sets   Understanding of Compensation Difference   Capacity   Talent   Time   Resources

Social Enterprise Tips for Success Consider:   Life Cycle   Operations: Marketing, Pricing, HR, Finance   Internal Cultural Tensions – Mission vs. Margin   Engaging/managing multiple stakeholders   Policy/enabling environment   How best to incorporate   Succession Planning

Social Enterprise Tips for Success Develop:   Quality product   Strategic marketing process   Appropriate pricing structure   The right team:   Do-gooders vs. Good doers   industry expertise   create a “blended” workforce   don’t be afraid to fire non-performers

Plan:   Clearly define your core values   Focus: identify your niche   Obtain agreement and buy-in before launch   Define your “separation strategy”

Social Enterprise Tips for Success   Bankers are hesitant to secure loans with collateral that if a default and loss could jeopardize organization   Board is a tool to gain capital (social and financial) and financial expertise   Consider your size. Debt financing, investment capital and creation of for profit structures can be too complex for small organizations

Social Enterprise Tips for Success   Consider Capital Campaigns a source of growth capital   Understand tax laws and philanthropic tax credits   Loans are easily renewed. Grants have hidden costs.   Create alliances with business and lenders whenever possible

Social Enterprise Tips for Success   Capitalize on the power of word of mouth and personal selling   Fully utilize your social capital   Customer service can be a good value proposition. Can use the same approach the organization uses with clients   Fully leverage your PR capabilities

Social Enterprise Tips for Success   Hire good PR people (it is a good investment but also try for pro bono opportunity)   Recruit a spokesperson   Create strong relationships with journalists   Write your own ideal story   Focus on relevant media   Think about who is your audience and how best to target them   Press releases should include key terms (for search engines) and have long shelf life

Social Enterprise Tips for Success   Profit maximization not always best strategy for non-profits   Can’t afford to lose clients – negative mission impact   Loss of clients can have adverse affect on grants received because clients served often a metric   Sometimes appropriate pricing structure can’t cover costs but still could make sense if mission-related

Amos House WORKS More Than a Meal Amos House Builds Friendship Café Amos House Bakes

Amos House Works Overview of the Businesses Date Current Projected Projected Started Employees Revenues Deficit MTAM 2004/05 11 $555,000 $78,000 Spring ‘10 $196,000 $92,000 CAFE 7 Fall ‘09 $145,000 $32,000 AHB 6-7

More Than A Meal

More Than A Meal Plant & Equipment -- Crossroads Kitchen, 3 vans, 1 administrative office at Friendship Street Organization -- 1 Exec Chef, 1 Schools Coordinator, 1 Catering Assistant, 7 “externs,” new Business Manager Sales divisions -- Institutional and Catering (roughly 50/50 Institutional --Schools, camps and shelters. School revenue is about $245,000. Schools are Gordon, Bishop Connolly HS, Cornerstone, Community Prep, St. Lukes, Our Lady of Fatima, All Saints Academy, and South Providence Neighborhood Ministries. Catering -- Dominated by sales to non-profits ($135,000; almost 100 accounts). Weakest area is sales to corporate/ business customers (less than 20 accounts, and only 5 accounts over $1000/year)

Social Conscience

Friendship Café

Friendship Cafe   Purchased Café property in SWAP mixed-use development in late winter 2009/10; restaurant build-out financed by grants   “Soft” opening with limited hours in May   New Business Manager (Robb DeSimone) with extensive restaurant experience hired in June. Robb has initiated menu expansion, Amos House Bakes, weekend brunch hours, pharmaceutical rep orders.   Café traffic still far below initial estimates   Quality control, training and supervision still not at the right level, but improving

Multiple Bottom Lines Our Friendship Café has expanded on two levels: Amos House Bakes was created as a small subdivision of the Cafe and serves as part of our curriculum with interns learning baking skills as well as offering a new source of products for our breakfast sales.

Amos House Builds

Amos House Builds   Launched in Fall 2009, but put on hold because of high turnover and tough market conditions   Re-launched in May 2010 with Dean Martineau, an experienced local contractor   Sales have been steady at around $10,000 per month since June; mostly residential painting and carpentry repair work   Some initial turnover among trainees, but current crew of 5 men working well since July   Current assets include two trucks, a small supply of tools and ladders, and a storage bin of materials at Friendship Street

Stepping Stone Employment Amos House Builds, like our other businesses, hires graduates from our training programs into “stepping stone” positions. These positions help our graduates gain “real-world” experience on the job while still having full access to all of our support systems and additional training.

Success Eventually, graduates from our programs complete their time working for our businesses and move on to jobs with private companies and organizations, opening up positions in our businesses for new graduates. Some of our graduates are employed at high end restaurants, restaurant chains, construction companies, and landscape companies among other fields of employment. We consider them our success stories.

Social Enterprise and the Amos House Model

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Social Entrepreneurship: Amos House WORKS

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Social Entrepreneurship: Amos House WORKS — Presentation Transcript