Elizabeth Farjardo Butler ’11Journal 1
This summer I will be working as a social venture consultant for Services for the UnderServed (SUS), a human services nonprofit based in New York City. For a nonprofit, SUS is rather large — it brings in revenues of $90 million annually. Ninety percent of this revenue is directed toward its mission to provide homes and treatment for homeless veterans and people with mental health and developmental disabilities.
The majority of SUS’s funding comes from Medicaid and other government contracts with only a small portion provided by private donors. This year, SUS wants to improve its funding model by developing a for-profit social venture. It believes that an independent social venture will make it less reliant on government money. Also, it believes that a social venture will make the organization more visible, thus increasing private donations.
My work with SUS this summer will consist of developing social venture ideas, doing feasibility studies, and ultimately providing the organization with a sustainable business plan. I am very excited to have the opportunity to work with such an important organization at a turning point in its history. SUS and other human services nonprofits are facing a five percent reduction in Medicaid this fiscal year, and New York State has indicated that there will be more cuts coming annually.
I began my brainstorming by looking at other human services nonprofits with social ventures, and examining which nonprofit ventures worked, which did not work, and the reasons for their success or failure. I also sought the advice of Professor Amy Houston who teaches High Functioning Nonprofits, a social enterprise course at Columbia Business School. She directed me toward useful research material, nonprofit sites, and successful models.
I am still in the brainstorming phase of the venture development with my supervisor and his team. But, I hope to have a concrete idea or two by the end of this week, so that I can spend the rest of the internship doing the feasibility study and developing a business plan. I spent my first couple of weeks learning about human services nonprofits in general and their role in New York State’s care plan. I also spent a few days on-site visiting our programs and speaking with our clients.
One of the most interesting moments so far has been speaking to a veteran who runs the employment program for SUS, a newly developed program aimed at job training for homeless female veterans. He told me that nearly 50 percent of the female veterans that come through the program have suffered some type of sexual abuse while serving in our military, and that almost all of these women have some degree of post-traumatic stress disorder (PTSD). Most of them need therapy first, which SUS also provides, before they can begin job training. Unfortunately, they no longer trust the military enough to ask for help or use its services. I felt naïve, because I didn’t know how hard reintegrating into society could be for these women. But I also felt proud to be a part of an organization that is trying to address such an enormous problem.
Journal 2
In week four of my internship at Services for the UnderServed (SUS), I presented ideas for a social venture to my supervisor. I spoke to a Columbia Business School alumnus at the Doe Fund and a senior vice-president at Housing Works — both successful social ventures — about what makes them successful. I learned that for an organization to launch a good social venture, they must have some expertise in the area of the proposed venture, and that the organization should be able to serve as its own client.
The list of the ideas I had been playing with from day one were:
- Bakery
- Recycling program
- Maintenance (Green cleaning service)
- Taco truck
- Healthy fast food lunch truck
- Pet cleaners
- Office print center
- Car wash and Auto-repair center
I did preliminary research on a few of the ideas, and I was excited to sit down with my boss to get his opinion on the list. He felt that restaurants and bakeries were not high-margin businesses and that the nonprofits that attempted them were largely unsuccessful. My research had confirmed his suspicions. Furthermore, he wasn’t excited about the rest of the ideas, so we found ourselves at an impasse.
However, SUS had been approached by another nonprofit and asked to provide training for that nonprofit’s staff, but my supervisor was unsure how SUS would price the service. The head trainer had been approached in the past year by New York’s Office of Mental Health to help turnaround other programs. I thought this would be the perfect venture, although not a social venture technically. Many nonprofits outsource their IT services, so why not training services?
My supervisor did like this idea, so I did some preliminary research and presented it to the senior staff at an executive meeting in week five. Everyone was excited about the possibility of SUS providing training services for a fee and we expanded the idea to include other nonprofit consulting services, such as grant writing and accreditation services. Going forward I will be working on a feasibility study and the business plan for this idea.
Journal 3
There were a couple major developments in the last few weeks of my internship. The first being that after doing a feasibility study for the SUS consulting and training services venture, I was unsure if this business could be successful. The second was a new venture that landed at our feet in the last two weeks.
After three weeks of market research and competitive analysis, I was confident that there was a place in the market for a small human services consulting firm, especially one directed at nonprofits. Because of the major changes in Medicaid being enacted by New York in the next couple of years, a lot of nonprofits will have to adjust their operations to be in full cooperation with the new laws. And most of these nonprofits, especially those with operational budgets under $20 million, will have a hard time adjusting to the new Medicaid conditions.
But, I was unsure if SUS was capable of sustaining focus and pursuing this idea after I left. In other words, while I think the organization is fully capable of human services consulting in terms of skill, I did not think it had the capacity to branch out from its current services. I explained this to my supervisor, who understood and instead asked me to attend a meeting with our CEO and his friends from Washington, DC, in which a new venture would be discussed.
In the meeting, the CEO and the CFO of Chimes International — another human services nonprofit with offices on the East Coast — explained how they had come to be such a large organization. They became a NISH provider for federal and state government office buildings in the early 1990s. Basically, NISH works with nonprofits to provide products and services for federal and state government contracts. The nonprofits in turn have to hire approximately 70 percent developmentally or mentally disabled persons to service the contract. Becoming a NISH provider had doubled Chimes International’s revenue in the past 20 years.
This opportunity was just what SUS had been looking for as SUS wants to expand its employment program and also wants to start a for-profit venture. I set to work in the last couple of weeks churning out a feasibility study and business plan for this idea before my internship ended. I managed to get it done, and when I presented it, my supervisor sent it to the CEO. The business plan will be presented to the SUS Board of Directors in September 2011.
