Survival of the fittest

Survival of the fittest

ABSOLUTELY, POSITIVELY: Utilizing the FedEx business model of spreading costs, Society of St. Vincent de Paul CEO Michael Acaldo has seen store sales grow from $100,000 to $1.8 million a year. The organization wants more thrift stores to raise more money to help more people.

Monday, December 17, 2007

‘Our profit is our people” is the mantra guiding the Society of St. Vincent de Paul, but what gets thousands of donated items to the needy is an impressively sophisticated system involving the FedEx model, computerization and even pirates.

“You have to be strategic if you’re going to be successful,” CEO Michael Acaldo says. “You need to know what’s going on in your business environment.”

Long gone are the makeshift nonprofits that operated on a hit-or-miss basis.

In their place are organizations with highly creative and innovative strategies in a competitive business environment, says Melissa Flournoy, president and CEO of Louisiana Association of Nonprofits. Today’s nonprofit responds and diversifies to new opportunities in order to be more successful.

“We have to engage donors in new ways,” Flournoy says. “More and more donors and foundations want to see how a nonprofit is diversifying funding, assessing new partnerships and collaborations to be more strategic in their growth.”

For St. Vincent de Paul, the strategy involved pirates. They might be campy swashbucklers as portrayed by Johnny Depp, but they’ve successfully advertised the abounding treasures available at the nonprofit’s eight thrift stores.

“We brought the commercial to our national meeting and they literally applauded us,” Acaldo says. “It’s the most innovative commercial in the St. Vincent network, and it gets people’s attention. It’s different than our very serious reputation, but you have to do something different and innovative, and that’s about as different and innovative as you can get.”

They’re discovering innovation is a win-win situation.

Having grown store sales from $100,000 to $1.8 million a year has St. Vincent de Paul wanting more thrift stores to raise more money to help more people. Acaldo is applying his MBA from LSU toward doubling that figure in the next five years, which is no small feat in a world where every success is counted a penny at a time.

Utilizing strategies that would leave some businesses wincing, St. Vincent de Paul uses the FedEx model based on spreading cost. The more stores they have, the more efficient the operation. Also, it’s more effective because it calls for dropping off items at a central location, so the right items go to the right stores at less transportation cost. They also sell high-end donated items on eBay. Overall, the plan doesn’t just accommodate the 140-year-old organization’s growth; it is encouraged.

Aided by a grant, St. Vincent is working on its fifth store, replacing its antique registers with computer registers, bar-coding items and having all stores reporting to the central warehouse. A computerized inventory will take the guessing out of stocking stores.

“That’s what I call technology,” he says. “I doubt there are other thrift stores using bar codes to inventory and distribute.”

At Alzheimer’s Services of the Capital Area, Executive Director Beth Veazey says without question her organization would not have grown without being more strategic.

“There’s so many wonderful nonprofits and wonderful causes for people to support,” Veazey says. “For your cause to be known and supported, you want to find those individuals who are passionate. We find those who have an affinity to our organization, and they become lifelong donors.”

Alzheimer’s Services stabilized its budget and operations by establishing multigiving entities like the Rosemary Society (named after the herb of remembrance), in which members commit a minimum of $1,000 a year for five years. It also “diversified fund streams,” which means fundraising is spread over several events rather than just one or two major events.

Veazey says the organization also earned the state three-year Standards of Excellence Seal through LANO, a designation she believes the community will increasingly seek out in choosing causes.

According to Flournoy, nonprofits are increasingly seeking LANO’s training in grant-writing programs and the Standards of Excellence Seal to sharpen their competitive edge for limited dollars. LANO also is using a Pennington Foundation grant to work with an estimated dozen groups to assess the viability of them taking on a social enterprise.

For example, Susan Hymel, LANO’s director of social enterprise, says nonprofits are creating businesses or partnering with them to produce jobs. The St. Tammany Association of Retarded Citizens bought and operates a dry cleaning business to provide jobs for their clients.

A joint venture with the University of Louisiana at Lafayette’s School of Architecture and Acadiana Outreach has developed a business in Lafayette by turning old windows from houses damaged by Hurricane Rita into coffee tables and curio cabinets to create construction-related work that will help transition people into full-time construction jobs. She called the Junior League “the gurus of cookbook production in the U.S.,” turning cookbooks into dollars for significant causes through the years.

Mandeville jeweler Anne Dale created the “I Know What It Means to Love New Orleans” pin for first responders after Hurricane Katrina, Hymel says. Word spread about the pin and has since sold 60,000 of them and other New Orleans-related jewelry, Hymel says, adding her work has even lent to the new phrase “cause jewelry” and others have approached her to design items for their fundraising efforts.

“In reality, the 21st century nonprofit really is a business that has to be managed to a bottom line,” Flournoy says. “I do think we’re seeing a real transition in the nonprofit sector as organizations become more professional and accountable, widening their horizons for opportunities for service delivery and funding.”


Comments

Post a comment

(Requires free registration.)

Username:
Password: (Forgotten your password?)

Comment:

Story Extras

Poll

Have the high gas prices affected your Fourth of July weekend plans?

See Results | Archives



Click Here for Great Deals