Making Nonprofit Work in a For-Profit World

[Publishers Note: This is an excerpt from a longer version of the same article published and © copyright by Home Energy magazine.  For the full version click here.]

The American Recovery and Reinvestment Act (ARRA) low-income weatherization funds are now winding down. In some states, like Idaho, that have spent all of their funds, agencies are looking for ways to keep their new, and seasoned, weatherization staff and contractors employed.

As Congress continues to argue over national budget funding levels (and at present they don't look very favorable for our weatherization network), many agency executive directors and weatherization managers are looking for ways to continue funding weatherization for low-income households across the United States.

For the most part, our industry has very little control over Congress as to how much federal money DOE's Weatherization Assistance Program (WAP) will receive. However, at one time or another, we have all faced the decision to move forward or to pass on a new project. Usually moving forward when oppor-tunity knocks means stepping out of our comfort zone to start a new adventure. And that's exactly what happened in 2005, when the South Central Community Action Partnership (SCCAP) decided to create a for-profit limited-liability corporation, Home Energy Management, LLC (HEM), to help support our nonprofit low-income weatherization program.

Since 2005, SCCAP has adopted social enterprise as a model of management, which has allowed our nonprofit organization to generate nonfederal resources to support SCCAP's mission. That mission is to retain trained weatherization staff, especially with the loss of ARRA weatherization funding, and to continue providing energy conservation services to homes and businesses. HEM is based in Twin Falls, Idaho, which has a population of less than 50,000. In the surrounding communities of the eight counties where we provide low-income services, population ranges from 300 to 20,000 residents.

Our opportunity knocked in the spring of 2005, when we were approached by Susan White of ACKCO, Incorporated, to participate in a special project she was managing funded by the U.S. Department of Health and Human Services Administration for Native Americans. Based in Phoenix, Arizona, ACKCO, Incorporated, is a professional services company that is American Indian — owned and operated. Since 1972, the company has successfully managed more than 300 federal and state agency projects, teaching sound business practices, flexible management systems, and controlled fiscal accounting systems.

Susan White is nationally recognized as DOE's primary financial trainer on fiscal management and procurement for WAP projects. These projects follow federal regulations for states and agencies that receive weatherization funding through DOE.

The special project we were presented with — called the Indian Social Entrepreneur's Guides — was designed to develop the four phases of business planning. The guides are entitled Developing a Marketing Plan, Performing a Preliminary Feasibility Study, Preparing a Business Plan, and Securing Financing.

SCCAP participated in the development of the third guide, Preparing a Business Plan.

When Susan contacted me, she was aware that SCCAP had contemplated creating a for-profit company through our nonprofit organization for several years. Several factors had kept us from moving forward with our for-profit business. These factors included several unknown risks, extra workload, and not knowing what it would take to start a fee-for-service company after operating a nonprofit, federally funded weatherization program since 1979.

But when the opportunity came knocking, I didn't hesitate to agree. Susan White is known as one of the best financial management advisers in the nation. And I would be following through on a dream I'd had for many years — the dream of creating a for-profit energy conservation company.