As we gear up for our 2013 build season, I thought I’d take some time out to address this question: “Can We Build More?” After all, there is certainly no lack of qualified families for us here in Rochester – our pool (or those families who have earned their first 250 hours of sweat equity and are waiting for us to start their house) is healthy and full. We have over 4,000 volunteers a year helping us to build houses with even more on waiting lists ready to help out. So then what holding us back? Here’s the third part of the story:
By definition funding for non-profits is discretionary and at any time an anticipated source of income may be reduced or disappear. Non-profits that offer social services are especially vulnerable when it comes to budget cutting at the local, state and national level as these services are often seen as discretionary. Although all non-profits are affected by economic downturns, those that have a number of sources of income are more likely to emerge relatively unscathed.
When Habitat for Humanity was founded 37 years ago no government money was allowed. Later, and this was the case for many years, affiliates we allowed to take government funds for ‘setting the stage’ for construction—the acquisition of land and the cost of infrastructure and site preparation. This being the case affiliates had to develop and rely on other sources of income from churches, individuals, foundations and businesses.
About six years ago Habitat for Humanity further relaxed funding restrictions and allowed affiliates to seek government funding as long as such funding did not become a major source of support. Flower City Habitat has successfully applied for gap funding from New York’s Affordable Housing Corporation and the Federal Home Loan Bank of New York. The former organization is funded through mortgage transfer taxes and the latter, a privately held wholesale bank, is funded through interest derived from member bank deposits. In both these cases application and oversight requirements require many hours of staff time.
Another way non-profits can diversify their funding sources is by establishing an income generating entity that compliments the mission of the organization. Foodlink’s organic farm (now closed) is a case in point, as are the clothing outlets run by Volunteers of America. In Flower City Habitat’s case our ReStore is potentially a source of significant income to support our work.
ReStores—basically home improvement centers taking donated items – were first established in the south and took time to gravitate north. Flower City Habitat’s ReStore was established six years ago in a small leased space at the Public Market. We then moved to 13,000 sq. ft. facility on Culver Road with the expectation that the bigger the store the more we would sell. However, Habitat is very good at building houses and has no expertise in running a retail outlet. Thus, the learning curve was very steep. After many wrong turns we now have a great staff, a wonderful group of volunteers, and an abundance of product. Our goal, which we hope to realize within a year is to derive income that will fund four new houses a year.