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In down economy, nonprofits explore profit-making ventures

Summer Spencer, director of Community Wealth Ventures, leads a session during the Booz Allen Hamilton workshop aimed at helping nonprofits generate income by selling products and services. (Evy Mages/For Capital Business)

Nonprofits are not adorable, cute, little organizations that help the needy. At least that’s how chief executive of D.C. Central Kitchen Mike Curtin puts it when people try to shame his nonprofit’s earned-income ventures.

“We’re a business and if we don’t approach it that way, we’re not going to be successful,” Curtin said to nearly 60 nonprofit leaders at a recent conference hosted by Booz Allen Hamilton at its McLean headquarters.

The panel discussion is one in a series of conferences that Booz Allen has organized since 2007 to provide small nonprofits with management and fundraising insights.

Panel members spoke about their successes, failures and challenges with launching an earned-income venture, which is the sale of goods and services by a nonprofit.

It’s not a new concept. Girl Scouts sell cookies each year, Goodwill sets up retail stores and even the National Zoo sells its animal dung as a gourmet fertilizer called Zoo Doo. But with an economic downturn that had many local nonprofits searching for new revenue streams, some are finding promise in selling products and services related to their mission.

Manny Hidalgo, executive director of the Latino Economic Development Corporation, touts earned income ventures. (Evy Mages/For Capital Business)

“I like to think of us as pursuing capitalism with a human face,” said Manny Hidalgo, executive director of the Latino Economic Development Corp., a nonprofit that provides educational and financial resources to low- to moderate-income Latinos in the metropolitan region. In April, it sold its financial services center to a credit union in El Salvador for $30,000, maintaining a 10 percent stake valued at $10,000.

D.C. Central Kitchen, a nonprofit that redistributes wasted food and connects the homeless to food service jobs, makes more than half of its operating costs through its catering and distribution businesses and its street cart. In 2008, it decided to buy discounted, blemished produce from local farmers and resell them wholesale to local restaurants.

“It’s not for everyone,” said Summer Spencer, panel moderator and director of Community Wealth Ventures, a management consulting firm that specializes in nonprofit earned-income ventures. “There’s a lot that goes into it. You really have to do an assessment.”

Other panelists were Woody Woodroof, executive director of Red Wiggler Farm, which provides vocational training for adults with developmental disabilities, and Joe Youcha, executive director of Alexandria Seaport Foundation which provides youth development through boat building and recreation.

Booz Allen supports nearly 600 nonprofits each year. Though it gave $6.5 million to nonprofits last year, its corporate philanthropy centers around employee volunteerism. In addition to the nonprofit network series, it has an employee skills-based volunteer program and a Web site that invites nonprofits to post fundraising events and volunteering opportunities for Booz Allen employees.

Regla Armengol, executive director of Prospera Initiatives, left, at a seminar. (Evy Mages/For Capital Business)

Previous nonprofit conference topics include planned giving and how nonprofits should tell their story.

Vanessa Small covers philanthropy and nonprofits for Capital Business. She also spotlights newly appointed executives in the New at the Top column, which chronicles their journeys to the top. Small was raised in Orange County, Ca. and graduated from Howard University.
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