The Center for
Creative Community
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Summary of a Conference,
with Some Suggested Readings and
Resource Organizations
Summary Prepared by Nancy Butler
for IDAHO VOLUNTEER @
@ -- permission for use-with-acknowledgment
Finding money to support their work is one
of the major concerns of non-profit organizations. Entrepreneurial ventures or private
businesses are one source of funds for these groups. In June of 1984, IDAHO VOLUNTEER and
Region X Office of Human Development Services of the Department of Health & Human
Services co-sponsored a conference in Boise, Idaho, to help non-profit organizations
evaluate their options in business. "Entrepreneurial" in non-profit organizations is a big word for fundraising,
according to Dorcas Hardy, Assistant Secretary of the Office of Human Development
Services, who was the keynote speaker. She said the real idea is to get more money into
volunteer organizations, whether it comes from selling snow cones, washing cars,
sponsoring charity balls, or operating full scale businesses like those run by Albertina
Kerr Centers for children. Business ventures can be custom designed to meet the needs of
the organization. David Johnson from Boise State University, Department of Social Work, in a 1982 study
of non-profit organizations in Idaho’s Ada County, found that government funds paid
for almost half of the responding groups’ (excluding hospitals and parochial schools)
expenditures. Dues, fees and charges accounted for 13.4 percent, religious organizations
10 percent, individual giving 8.3 percent, United Way 3.2 percent, with the remainder of
funds coming from various sources. Ada County relies much more heavily on government money
than the national average, according to the study. These government funds come from such
things as grants, service contracts, and subsidies. National figures show more reliance on
dues and fees among most non-profit organizations than in Ada County. Non-profit organizations are "in a squeeze" between an increasing demand for
services and a declining revenue base, according to Urban Institute report findings. This
"squeeze" makes business ventures necessary for some organizations and thus
creates a need for such conferences. Dr. David Bagley, Boise State University professor of Marketing on exchange from
England, as well as Jolene Dewald and Linda Pierce, of the Boise Junior League, outlined
the steps for starting a new business. The first step is an analysis of what the
organization’s goals are and what market is available for the goods or service to be
sold by the group. A gap in what is available doesn’t necessarily mean there is a
market; the present tea market was the example given by Dr. Bagley. There is a big market
for hot tea and a big market for cold tea, but not necessarily for lukewarm tea. The
question to ask is: "If your idea is so brilliant why didn’t anyone think of it
before or, if they did, why did they drop it?" He advised looking for a group’s
needs that are not being met. Planning is the second step. This involves doing market research to devise a product
which represents the needs of the people including: the product, price, promotion, and
place to be sold. Dr. Bagley said research can come from surveys of people, published
material from libraries, or the Department of Commerce. Dewald and Pierce added that
personal observation, experiments, focus groups, and test markets can also be used. The three panelists agreed that after a business is established there is a need for
continued evaluation or control to ensure that plans are staying on track and that the
business continues to be worthwhile. According to Dewald and Pierce, products have life cycles: introduction, growth,
maturity, and decline. Costs are highest during the introduction phase. During growth,
most of the energy is put into improving the product. Maturity makes it easy to be
complacent. Decline signals a need to renew or scrap the product. Most organizations need
projects at different stages to keep going, said Dewald and Pierce. The Children’s
Museum of Denver is an example of an organization with a number of projects including a
pet care activity guide for children, a children’s activity book for cross-country
airline flights, a parenting fair, and dessert parties. Al Ames, Idaho director of the Economic Development Administration (EDA), and Dennis
Clark, First Idaho Corporation, explained the ways their groups could help with raising
initial capital for business ventures. EDA uses their funds mostly to help remove
obstacles in the way of the economy and to help relieve unemployment. First Idaho
Corporation helps businesses to raise venture capital by making director loans, by making
investments, or issuing guarantees to banks. Clark said venture capital organizations look
for 150-175 percent collateral, personal guarantees, and a way of repayment when loaning
money to businesses. Tax and legal considerations of non-profit organizations were discussed by Carolyn
Woods, Exempt Organizational Specialist, Internal Revenue Service, Seattle, Washington.
Non-profit groups must meet several requirements to be tax-exempt in their business
ventures. Organizations having questions on exemptions should call their local IRS office
(see also, all readings except #4 listed at the end of this article). A panel, led by Jane Richardson, Albertina Kerr Centers, Portland, Oregon, with
representatives from Idaho Youth Ranch, Idaho Migrant Council, Eastern Idaho Special
Services, discussed their successful business venture projects. Idaho Youth Ranch operates a thrift store and a farm and cattle operation; it receives
funding from concerned individuals, contracts with placing agencies, and families making
private placements. The funds are used to support five community-based group homes and the
ranch, whose goal is to help youngsters become mature, responsible adults. Idaho Migrant Council is in the process of constructing El Mercado, a Caldwell shopping
center, which will include a restaurant, movie theatre, small shops, and a farmer’s
market, as well as the Council’s offices. El Mercado will provide business
opportunities for migrants and others. The council also supports programs for migrant
workers including food banks, housing, and employment training centers. Albertina Kerr Centers for Children sponsor foster care, adoption, and maternity
programs. Included are special facilities for handicapped children. These programs are
supported by funds earned in Albertina’s Restaurant, Kerr Gift Shop, and Kerr’s
Economy Jar and Annex. In these enterprises, the Old Kerr Nursery, opened in 1912, serves
a modern purpose. George Patterson, Local Initiatives Support Corporation, New York City, wrapped up the
convention with a challenge to participants to help organize a statewide foundation with
backing from corporations in Idaho and a 50% match for start-up from L.I.S.C. Planning is
underway to create such an entity in order to furnish capital for economic development
projects. The one-and-a-half day conference provided the opportunity for non-profits in Idaho to
share information and explore the possibilities and pitfalls of revenue-generating
ventures for non-profits. --------------------------------------------------------------------------------------------------------- SOME READINGS AND OTHER RESOURCES (List and Annotation Prepared by Ivan Scheier) 1. Enterprise in the Nonprofit Sector by James C. Crimmins and Mary Keil, Lib. Cong.
Card No. 83-60521, ISBN 0—941182-03-7. 1983, 141 pp., available for $7.00 from
Partners for Livable Places, 1429 21st St., N.W., Washington, D.C. 20036. Tel.
(202)887-5990. In my view, this is the primary written resource in the non-profit entrepreneurial
field. It is a readable, practical report on a study by the Center for Policy Research.
The book contains authoritative and extensive coverage of issues, principles, methods, and
case studies of success and failure. 2. Looking at Income-Generating Businesses for Small Non-Profit Organizations by
William A. Duncan, 1982, 25 pp., $3 a copy from The Center for Community Change, 1000
Wisconsin Ave., N.W., Washington, D.C. 20007. Tel. (202)338-3564. The first section in this community development-oriented guidebook is a distinctly
cautionary outline of issues a smaller nonprofit organization should consider before
starting a business. The second part describes an 11-step process for seeking and
selecting appropriate business opportunities. This is followed by some examples of types
of business opportunities for non-profits, and a final section on written and
organizational resources. 3. Business Ventures of Citizen Groups by Charles Gagnon, 1982, 51 pp., $5 a copy from
The Northern Rockies Action Group, 9 Placer Street, Helena, Montana 59601. This booklet includes a thorough analysis of what makes the difference between
successful and unsuccessful ventures, and a section on how to choose the appropriate
venture among a number of others (many of which are described). There are a dozen case
study profiles and a short resource section in a booklet which tends to be targeted
towards issue-oriented advocacy groups. 4. Earning Your Own Way by Ivan Scheier, 1982, 11 pp. Send $2 for copying to Ivan
Scheier, c/o Yellowfire Press, 1705 14th St., Suite 199, Boulder, CO 80302 A brief, somewhat optimistic introduction to concepts, issues and examples. Might be
good for initial orientation of your board or staff to the non-profit enterprise concept. 5. Profit-Making For Non-Profits. A two-part series in Jan./Feb. and March/April 1982
issues of the Grantsmanship Center News, 1031 South Grand Avenue, Los Angeles, CA 90015.
Tel (213)749-4721. $2.50 per reprint, plus $1.50 handling. Other articles in the subject area have regularly appeared in the Grantsmanship Center
News. 6. IRS Code, secs. 501, 509, 511, 514. These sections are on business ventures of non-profits. 7. Business Spinoffs: Planning the Organizational Structure of Business Activities. A
Manual for Not-for-Profit Organizations, 1982, University of Illinois at Chicago Circle,
Center fro Urban Economic Development. $12. Deals with fiscal, legal, and structural matters which can arise in developing
non-profit business enterprises. RESOURCE PEOPLE AND ORGANIZATIONS 1. Pro bono help form local attorneys, accountants, and business people is most
valuable. 2. Service Corps of Retired Executives (SCORE) or similar technical assistance
volunteer organizations. Ask your local Volunteer Center about these. 3. Some universities have "business assistance centers" or similar groups. 4. The Economic Development Administration (EDA), referred to in the Conference
Summary, is associated with the U.S. Dept. of Commerce, and has an office in every state
under that department heading. 5. The Local Initiatives Support Corporation, also mentioned in this Conference
Summary, is a non-profit corporation which matches grant funds from foundation monies for
local development. Inquire further of George Patterson, LISC, 666 Third Avenue, New York
City, NY 10017. 6. The Children’s Museum, 931 Bannock Street, Denver, CO 80204, Attn: Director of
Enterprise. A model non-profit enterprise program which also has how-to-do-it workshops
and publications. 7. The Grantsmanship Center, 1031 South Grand Avenue, Los Angeles, CA 90015. Tel.
(213)749-4721. 8. The Center for Community Change, 1000 Wisconsin Ave., N.W., Washington, D.C. 20007.
Tel. (202)338-3564. 9. Accountants for the Public Interest (API), 888 17th Street, N.W.,
Washington, D.C. 20006. Tel. (202)659-3797. Also has chapters in several states. ------------------------ A very relevant new publication from Yellowfire Press is "How Business Can Make
Money off Non-Profits and Vice Versa", $2.00.
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Ivan Scheier
Stillpoint
607 Marr
Truth or Consequences, New Mexico, 87901
Tel (505) 894-1340
Email: ivan@zianet.comFor comments and editing suggestions please contact Mary Lou McNatt mlmcnatt@indra.com
