Story Transcript
Founder: Leann Rhodes-Ickes Centreville, MD
Business Plan 2022
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TABLE OF CONTENTS Confidentiality Agreement................................................................................................................................4 1.
Executive Summary.........................................................................................................................7
2.
Financial and Strategic Planning ..................................................................................................9
2.1.
Keys to Success ............................................................................................................................. 10
2.2.
Mission ............................................................................................................................................ 11
2.3.
Vision .............................................................................................................................................. 11
2.4.
Values .............................................................................................................................................. 11
5.
Diversity, Equity, and Inclusion (DEI)..................................................................................... 12
5.6.
Organizational Objectives ........................................................................................................... 14
5.6.1.
Non-financial Objectives .................................................................................................... 14
5.7.
Risk Management ......................................................................................................................... 14
5.8.
Barriers To Entry........................................................................................................................... 15
3.
Business Model Outline............................................................................................................... 17
3.1.
Execution Strategy ........................................................................................................................ 18
4.
Company Summary ...................................................................................................................... 19
4.1.
Company Conceptualization ....................................................................................................... 19
4.2.
Target Market ................................................................................................................................ 19
4.3.
Service Description....................................................................................................................... 21
Necessities .................................................................................................................................................. 21 4.4.
Regulatory Requirements ............................................................................................................ 22
4.5.
Organization Structure ................................................................................................................. 24
4.6.
Management Team ....................................................................................................................... 24
5.
Market Research Summary ......................................................................................................... 25
Underserved and Disadvantaged Communities- An Overview ........................................................... 25 Adverse Experiences- An Overview ............................................................................................................ 26 Civic Organizations - an overview ............................................................................................................. 26 Community Food Services - an overview ................................................................................................ 31 5.1.
Competitive Analysis ................................................................................................................... 41
5.2.
SWOT Analysis ............................................................................................................................. 46
6.
Strategy and Implementation Summary ................................................................................... 48 2
6.1.
Competitive Strategy .................................................................................................................... 48
6.2.
Sales and Marketing Strategy ..................................................................................................... 48
6.3.
Evaluation ....................................................................................................................................... 49
6.4.
Volunteer Recruitment and Strategy ......................................................................................... 50
7.
Financial Summary ....................................................................................................................... 53
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CONFIDENTIALITY AGREEMENT 1. Definition of Confidentiality. As used in this Agreement, "Confidential Information" refers to any information which has commercial value and is either (I) technical information, including patent, copyright, trade secret, and other proprietary information, techniques, sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, algorithms, software programs, software source documents, and formulae related to the current, future and proposed products and services of Tides of Grace or (ii) non-technical information relating to Company's products, including without limitation pricing, margins, merchandising plans and strategies, finances, financial and accounting data and information, suppliers, customers, customer lists, purchasing data, sales and marketing plans, business plans and any other information which is proprietary and confidential to Company. 2. Nondisclosure and Non-use Obligations. The recipient(s) will maintain confidentiality and will not disclose, disseminate, or use any Confidential Information belonging to Tides of Grace, whether in written form. Recipient(s) agrees that he/she/they/them shall treat all Confidential Information of Tides of Grace with at least the same degree of care as he/she/they/them accords its own confidential information. If Recipient(s) is not an individual, Recipient(s) agrees that he/she/they/them shall disclose Confidential Information only to its employees who need to know such information and certify that such employees have previously signed a copy of this Agreement. 3. Survival. This Agreement shall govern all communications between the parties. Recipient(s) understands that its obligations under Paragraph 2 ("Nondisclosure and Non-use Obligations") shall survive the termination of any other relationship between the parties. Accordingly, upon the termination of any relationship between the parties, Recipient(s) will promptly deliver to Tides of Grace without retaining any copies, all documents and other materials furnished to Recipient (s) by Tides of Grace. 4. Governing Law. This Agreement shall be governed in all respects by the laws of the United States, as such laws are applied to agreements entered and to be performed entirely within United States residents. 5. Injunctive Relief. A breach of any of the promises or agreements contained herein will result in irreparable and continuing damage to Tides of Grace for which there will be no adequate remedy at law and Tides of Grace shall be entitled to injunctive relief and/or a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate). 4
6. Entire Agreement. This Agreement constitutes the entire agreement concerning the Confidential Information disclosed herein and supersedes all prior or contemporaneous oral or written agreements concerning such Confidential Information. This Agreement may only be changed by mutual agreement of authorized representatives of the parties in writing. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written below.
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ABSTRACT This Business Plan is written as a source of truth pertaining to the organizational activities of Tides of Grace coupled with highly substantiated strategies devised to propel its growth for years to come, while Tides of Grace seeks necessary funding to conduct its mission. Subsequently, all acquired funds or capital will be utilized for the operational component(s) of Tides of Grace. Also, Adequate market strategies will be incorporated to ensure that many target market(s) are informed about the benefits and uniqueness of Tides of Grace. Thus, resulting in a highly successful launch and continued funding for the organization's sustainability. Lastly, this document’s additional purpose is to provide a blueprint for Tides of Grace, details of its activities and implementation, and market insights to aid in its feasibility studies.
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1. EXECUTIVE SUMMARY Philanthropy can be broadly defined as the love for the positive welfare of others. It is derived from the Greek words "Philos," which means loving, and "Anthropos," which means humanity. Therefore, a person who practices philanthropy is called a philanthropist1. Its purpose is to improve the overall wellbeing of people by preventing and solving social problems and
providing opportunities to allow others to flourish, grow and develop. Philanthropy can go beyond a person, supporting projects and endeavors that may be too unpopular or underserved to gain the widespread support of the public or the government. For many people and organizations, the days of a tight-knit community seem like an eternity ago. Philanthropy fuels a person or organization's involvement in their community creating access and impacting change. Whether it is giving time, resources, knowledge, or money, philanthropy brings people and organizations together to support a cause that is bigger than themselves. In a society in which giving freely is common, there is a much stronger unity and sense of belonging2. Society is built from networks. Whether personal or business-oriented, networks are essential for success and happiness. Networking is a mutually beneficial system where people rely on each other and grow together. It is vital to society because governments cannot address the needs of all causes. Frequently, specific government budgets get slashed because of politics or a need to shift the money elsewhere which can leave gaps in areas where support is needed. Philanthropic individuals and businesses help fill the gaps by supporting causes and organizations that do not benefit from government funding. Without philanthropy, many needs in society would go unmet..
1 2
https://www.learningtogive.org/resources/philanthropy https://theimportantsite.com/10-reasons-why-philanthropy-is-important/
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Tides of Grace is a Centreville, Maryland-based nonprofit corporation that operates a food pantry to pass out food once a month to those in need. In addition, each month, Tides of Grace will be helping the community through different drives or service. This can include Toys, Easter Baskets, Bookbag/school supplies, Family photo sessions, free haircuts. Tides of Grace will do this by partnering with organizations, businesses, and neighbors to work together to provide ressources and support aimed to uplift those in need of a helping hand. Tides of Grace believes they can alleviate the negative outcomes endured by those in need of assistance, one resource at a time. Tides of Grace is optimistic that its values will help drive the organization to accomplish its mission. Without any doubt, there are a considerable number of alternatives. However, Tides of Grace will map out a unique model to help it gain acceptance and work its way to empowering people and eradicating adverse outcomes. In addition, Tides of Grace will champion an agencyto-agency and direct to participant strategy to reach potential participants. By utilizing this multichannel approach, Tides of Grace will be able to conduct its mission in its entirety and efficiently make strides towards its vision.
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2. FINANCIAL AND STRATEGIC PLANNING Tides of Grace seeks initial contributions of $23,000 to cover the organization’s launch costs, as described below: Launch Costs Deposits and Prepaids Shelving and Fixtures Tables and Tents Supplies and Material
2,500 3,000 3,000 5,000
Professional Services and Fees Marketing and Branding Working Capital
1,500 2,500 5,500
Total Initial Costs
23,000
Tides of Grace will generate revenue through grants, sponsorships, donations, and fundraisers to fuel the organization to ensure sustainability. Below is a snapshot explaining the key assumptions made to ensure Tides of Grace’s success, impact, and sustainability. Year 1 represents the next fiscal year. Year 1 Sales Revenue Contributions Cost of Sales
Year 2 Sales Revenue Contributions Cost of Sales
12,000.00 130,000.00 4,800.00
Projection Basis:
8,000.00
Projection Basis:
Merchandise Sales Volume/Year Cost of Sales
$
Grants Sponsorships Donations/ In-Kind Fundraising Year 3 Sales Revenue Contributions Cost of Sales
20,000.00 190,000.00
20.00 600 40%
Merchandise Sales Volume/Year Cost of Sales
50,000.00 20,000.00 50,000.00 10,000.00
23,000 218,500 9,200
$
Grants Sponsorships Donations/ In-Kind Fundraising
Year 4 Sales Revenue Contributions Cost of Sales
25,300 240,350 10,120
20.00 1,000 40% 70,000.00 30,000.00 75,000.00 15,000.00
Year 5 Sales Revenue Contributions Cost of Sales
26,565 252,368 10,626
The below table highlights the organization’s projected operating and payroll expenses for the next five business years.
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Operating Expenses Branding
Occupancy
Administrative
Programming
Year 1
Marketing Video/Photography Public Relations Fundraising Events and Initiatives Facility Lease Utilities Insurance Business Insurance Software/Subscriptions (QuickBooks, Zoom, etc.) Telecommunications Website Domain & Hosting General Office Supplies Taxes and Licenses Professional Memberships Professional Services (Legal and Accounting) Monthly Drives/ Giveaways Travel Food Pantry Professional Development Program Evaluative Tools Volunteer/Staff Appreciation Donations & Charitable Giving Contractual Labor (Grant Writing, Consultants, etc.) Miscellaneous Expenses Total Annual Operating Expenses
Salaries and Wages Director/Administrator
Year 2
Year 3
5,000 2,500 1,000 3,500 21,600 2,400 1,020 1,250 500 2,400 350 1,200 800 300 2,000 42,000 3,000 36,000 1,000 500 1,000 1,500 3,500 2,500 136,820
Year 1
5,150 2,575 1,030 3,605 22,248 2,472 1,051 1,288 515 2,472 361 1,236 824 309 2,060 42,840 3,060 36,720 1,020 510 1,020 1,500 3,500 2,500 139,865
Year 2 -
Year 4 5,408 2,704 1,082 3,785 23,360 2,596 1,103 1,352 541 2,596 379 1,298 865 324 2,163 44,982 3,213 38,556 1,071 536 1,071 1,575 3,675 2,625 146,858
Year 3
Year 5 5,570 2,785 1,114 3,899 24,061 2,673 1,136 1,392 557 2,673 390 1,337 891 334 2,228 46,331 3,309 39,713 1,103 552 1,103 1,622 3,785 2,704 151,264
Year 4
5,737 2,868 1,147 4,016 24,783 2,754 1,170 1,434 574 2,754 402 1,377 918 344 2,295 47,721 3,409 40,904 1,136 568 1,136 1,671 3,899 2,785 155,801
Year 5
50,000
60,000
70,000
75,000
0% 0% 7% 0%
0% 0% 7% 0%
0% 0% 7% 2%
0% 0% 7% 2%
Benefits Medical Benefits Defined Contribution Taxes Other
Total Annual Payroll
0% 0% 7% 0%
-
53,500
64,200
76,300
81,750
2.1. KEYS TO SUCCESS •
Strategic Focus: Tides of Grace will exist as a nonprofit entity. The niche focus is providing resources tailored to lending a hand to others in need, regardless of the circumstance. By maintaining a strict focus on this niche, Tides of Grace will fulfill its mission.
•
Marketing: Tides of Grace will foster a direct and indirect marketing core, with an emphasis on organization-to-organization marketing. This approach allows for rapid growth by tapping into the existing needs of community organizations that interact with the target market Tides of Grace intends to serve.
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•
Positive Outcomes: By establishing a history amongst the community, Tides of Grace will influence others and positively position the organization as a change maker.
2.2. MISSION Tides of Grace’s mission is to lend a helping hand to those in need of food, services. and resources through giving by way of monthly drives.
2.3. VISION Tides of Grace envisions that nobody will ever feel like they did not have someone who cared enough to help during their time of need; that no family or child would be without food.
2.4. VALUES •
Accountability: Tides of Grace believes empowered people create better outcomes for themselves and those around them. Therefore, Tides of Grace strives to facilitate a culture of empowerment by imparting its programs, support, and services.
•
Consistency: Tides of Grace believes in the power of acceptance, owning individual truths, and respecting the truths of others. Therefore, Tides of Grace will foster an environment of unconditional acceptance.
•
Courage and Conviction: Tides of Grace values the power of self-esteem and the undeniable effect of propelling people forward in life.
•
Discipline: Tides of Grace acknowledges the power of a positive mental attitude and aims to foster positivity in everything they do.
•
Integrity: Tides of Grace believes in operating at an elevated level of honesty and transparency. Tides of Grace aims to be known as people of strong character, working for
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an organization that gives back in meaningful ways to the community and the people who need a helping hand. Tides of Grace strives to always communicate openly and honestly with the community, partners, donors, and volunteers. •
Impact: Tides of Grace is committed to going beyond to make the biggest impact possible on the lives of those served.
•
Inclusion: Tides of Grace believes in upholding the dignity of every human being and respecting every person’s right to be treated with compassion, regardless of their backgrounds or whether they have stable housing. Tides of Grace strives to build an inclusive and welcoming community centered on kindness, compassion, and nonjudgmental support.
•
Commitment: Tides of Grace remains committed to seeing and remembering the people who are easily forgotten by society. Tides of Grace believes that in a world full of pressures, people in transition have the greatest potential to thrive when they have the backing of people who see and care about offering them a little extra help as they find their way in life.
5.
DIVERSITY, EQUITY, AND INCLUSION (DEI) In addition to the organization’s values, Tides of Grace, is also committed to the
values of diversity, equity, and inclusion (DEI) in all aspects. Tides of Grace is interested in cultivating a diverse employee workforce where everyone feels able to bring their best selves to work each day. To accomplish this, the organization is in the process of identifying and implementing diversity recruiting best practices to help create a more inclusive workplace.
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Tides of Grace will continue to solidify its commitment to DEI at all levels (board of directors, leadership staff, direct services), with the goal of elucidating a deep understanding as to why the organization is engaging in this work together and why racial, gender, and cultural equity is central to Tides of Grace’s success and the success of its clients – youth and adults in the Baltimore metropolitan region. Strengthening diversity, equity, and inclusion is an ongoing process, as such the organization’s work in these areas continue to evolve and grow into new areas. Tides of Grace plans to commit to actions which infuse diversity, equity, and inclusion throughout its agency and internal systems such as: •
Learning about best practices for achieving diversity, equity, and inclusion, and sharing that knowledge with everyone at Tides of Grace.
•
Strengthening the organization’s ability to recruit and retain exemplary and diverse staff and volunteers.
•
Ensuring that people of all abilities can access and engage with Tides of Grace’s resources and information.
Tides of Grace believes every person’s voice adds value and strives to create balance in the face of power differences. Tides of Grace believes that no person can or should be called up on to represent an entire community.
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5.6. ORGANIZATIONAL OBJECTIVES 5.6.1. Non-financial Objectives •
Create an atmosphere consistent with the empowering nature of the vision of Tides of Grace. When clients interact with Tides of Grace, they will experience a noticeable feeling of love, warmth, and acceptance.
•
Function as a monthly one-stop food pantry.
•
Ensure individuals and families have access to basic living needs.
•
Conduct monthly drives and giveaways.
•
Ensure staff/volunteers will have first-hand knowledge and experience with issues that may be burdening the community.
5.6.2. Financial Objectives •
Secure necessary funding for working capital, programs, and services.
•
Generate positive net cash flows every year and maintain positive cash balance throughout existence.
•
Maintain YoY (Year over Year) revenue increases.
5.7. RISK MANAGEMENT Tides of Grace is not exempt from the risks to which every organization is exposed. With the emergence of the organization, the possible risks are not being able to achieve widespread acceptability as a viable substitute to similar organizations, not being able to ensure capital injection to launch and stabilize organizational growth, and a lack of support, clients, and recognition due to not having a strong marketing program. Different strategies will be put in place to ascertain that the risks to the organization are controlled or minimized. These strategies include:
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•
Investing sufficient funds into the organization to meet all required business operation requirements.
•
Adopting effective strategies to promote the brand and general services.
•
Minimizing overhead costs, which increases the organization’s sustainability.
•
Building strategic and symbiotic partnerships with necessary companies and organizations.
•
Providing a constant and effective communication link.
•
Onboarding competent and experienced volunteers.
5.8. BARRIERS TO ENTRY Tides of Grace recognizes that there are barriers that any business will face when entering the market. Below are the identified barriers to entry for Tides of Grace: •
Lack of resources: After maximizing the amount of money that goes to the development of the business, there is minimal cash left for reserves. Mitigation: The founder will inject equity into the organization, as needed, to maintain a positive net cash flow position over the projected period.
•
Lack of investment: Because there is minimal money to be gained from investing in nonprofits, minimal investment goes into improving the sector. Mitigation: The founder is open to equity financing but will equally explore debt financing to acquire the cash required for a successful launch. The founder also has access to non-traditional financing sources as a worst-case scenario.
•
Perceived lack of necessity: Community residents do not readily see the need and potential impact of the business.
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Mitigation: The founder will spend a minimum of $5,000 in marketing and advertising per year. These funds will ensure every effort is made to express value and purpose of the organization.
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3. BUSINESS MODEL OUTLINE Key Partners Key Partners: • Donors • Government organizations • Sponsors • Social Service agencies
Key Activities Value Proposition • • • •
Protect sensitive information of all clients and partners Maintain customer service Continued growth and engagement Continue hosting engaging, educational, and enrichment activities that support the selfsufficiency, personal development, and professional development of community members
Tides of Grace seeks to enhance the dignity and quality of life of individuals and families by strengthening communities, eliminating barriers to resources, and helping those in need by procuring resources that might help in a time of need to enhance the quality living during trying times..
Key Resources
Customer Customer Relationships Segments • • • • • •
App, chat, and engagement capabilities Participant feedback Educational enrichment and development Social media engagement Family events Community events
Channels Sales Channels: Social media, word of mouth, website, flyers, vehicle graphics, listing in directories, advertising on local industry related organizations’ websites, phone, mail, email, personal demonstration (workshops/seminars), partner with agents and brokers to promote services/products, speaking engagements
Financial: savings, bank loans, corporate partners, foundations, government Physical: Facilities, office space, educational resources, and supplies IP: Trade secrets, contracts, copyrights
Support Channels: Follow up calls, surveys
Human: Leadership, support staff, volunteers, governing board
Cost Structure
Revenue Streams
• • • •
• • • •
Development and maintenance of website Legal and administrative cost Advertising and marketing cost Resources and supplies
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Grants Sponsorships Fundraisers/Donations In-Kind
• • •
Organizationto-Organization Families Communities
3.1. EXECUTION STRATEGY Tides of Grace is in its program implementation phase. The organization has incorporated as a nonprofit corporation in Maryland. In addition, the organization has applied to obtain 501(c)3 tax exemption from the Internal Revenue Service (IRS). Finally, Tides of Grace will secure a domain name and office space. Below is a broad execution roadmap that walks Tides of Grace
from planning to launch, keeping in mind that many of the milestones will take place concurrently.
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4. COMPANY SUMMARY Legal Name of Organization: Tides of Grace, Inc. Founder: Leann Rhodes-Ickes
4.1. COMPANY CONCEPTUALIZATION Tides of Grace was birthed out of a passion for helping underserved individuals and families and creating change in underrepresented communities. The founder, having endured her own challenges, knows all too well the impact of a lending hand. Had she received just a little bit of support, her challenges could have bene a little less challenging. Specifically, four years ago Leann’s infant son was diagnosed with stage 4 cancer. While not low income at the time, her journey of hospital stay, medical bills, and simply caring for her infant son could have been a little less stressful of someone was there to support in even the smallest way. People have all levels of society and Tides of Grace want to be the organization that gives them grace without making them feel embarrassed or less than.
4.2. TARGET MARKET Tides of Grace will serve the following: •
•
•
Age Groups o Youth o Adults Socioeconomic Status o No-income o Low-Income o High-Income Gender o Male o Female o Fluid o Unidentified
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• •
Location o Maryland Additional Demographics o Struggling to meet basic living needs o Enduring adverse experiences o Temporary challenging circumstance
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4.3. SERVICE DESCRIPTION Tides of Grace focuses on positively impacting the lives of individuals and communities throughout Maryland. Founded upon self-sufficiency and community development principles, the organization’s customized impact-specific services are rooted in love and delivered with dignity, respect, integrity, and excellence. Tides of Grace believes everyone has a gift, and while sometimes gifts are not self-fulfilling, they can fulfill the needs of others in the community. Below is a brief overview of the support and resources provided:
Necessities Resource Sharing Each month, Tides of Grace passes out supplies and products as well as other items such as clothing, toys, and home goods to assist participants who are in vulnerable situations. This is not to enable the participants but to make life easier while they get on their feet or try to sustain a new way of life. The resources offered are collected from donations and sponsorships. Furthermore, external referrals will be shared to ensure participants receive adequate and professional support from reputable partners. Service Planning As the holidays and various milestones occur, such as Christmas and Back-to-school, various County-based organizations will be holding product drives to ensure children and families have the resources be it for need or just to smile a family’s faces. After the conclusion of each drive, monthly events will be planned to pass-out the accumulated goods to individuals and families showing up to receive them.
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Food Pantry Tides of Grace will maintain a community food-pantry nestled on the eastern shore of Maryland. The food pantry will serve to provide easy access to the community and will be housed inconspicuously to not make recipients feel as though they are going to a food bank. Everyone deserved grace without judgement. Volunteers are the main operators of the pantry operation with over 500 hours of work contributed each month. Volunteers unload cars, sort, and shelve food, prepare food orders, help clients carry food to cars and deliver food to shut ins. No one should have to be concerned about putting food on the table. The volunteer-run and operated food pantry supports families in meeting their basic food needs and connects them with other resources to help eliminate adverse experiences. One of the key ways in which the food pantry assists people is that it allows them to focus on steadying other areas of their lives. For many, the pantry will supplement what Food Stamps and WIC do not cover. For others, it simply helps to make ends meet when they must choose between paying rent or a heating bill or going to the grocery store for food. Most of the food donations are receive come from generous members of the community by way of food drives or monetary donations, and sponsors.
4.4. REGULATORY REQUIREMENTS Tides of Grace will secure all necessary permits and licenses as mandated to conduct its operations. As a United States-based 501(c)3 nonprofit, Tides of Grace will ensure the following requirements: Corporate: o Obtain charitable solicitation permit. 22
o File corporate annual reports in Maryland. o File annual 990 with the IRS. o Report address changes. •
Fundraising: o Obtain charitable solicitation permit. o Include written disclosure statements on all written solicitations to ensure transparency between Tides of Grace and donors. o Produce and publish on website, an annual report illustrating revenues and expenses, program outcomes, goals for the upcoming year, and an acknowledgment of contributors.
•
Operational: o Maintain a current copy of bylaws. o Ensure the bylaws are consistently being adhered to. o Conduct regular board meetings. o Be aware of conflicts of interest.
•
Accounting: o Ensure tax-exempt status is up to date. o Document unrelated business activities and income. o Stay current with grant reporting deadlines and requirements for any grants received. o Maintain accurate and up-to-date books.
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4.5. ORGANIZATION STRUCTURE Tides of Grace is organized in a way to streamline operations. With a lean structure the company can keep focus on its mission which in turn will foster growth. Given this structure, Tides of Grace will ensure that everyone becomes adept at handling whatever work comes their way.
4.6. MANAGEMENT TEAM
Founder
Board of Directors
Volunteers
Community Partners
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5. MARKET RESEARCH SUMMARY UNDERSERVED AND DISADVANTAGED COMMUNITIES- AN OVERVIEW Disadvantaged communities refer to the areas which most suffer from a combination of economic, health, and environmental burdens. These burdens include poverty, high unemployment, air and water pollution, presence of hazardous wastes as well as high incidence of asthma and heart disease. One theme across these areas of deep disadvantage is a long history of racial and environmental exploitation; historical context is important to acknowledge and understand when shaping strategies to alleviate poverty in these communities. While Tides of Grace’s initial focus is on Maryland, this is by far not an area of isolation, such areas of deep poverty and disadvantage continue to exist all over the country and the world. The below map illustrates the mass areas of disadvantage as characterized by the deeper shades.
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Adverse Experiences- An Overview CDC-Kaiser Permanente published a pioneering study that investigated the impact of ACEs on physical and mental health problems in over 17,000 adults. During the study, the adults were given a survey asking about ten distinct types of ACEs and if they had experienced them. The study showed a direct correlation between ACEs and future health complications. Sixty-one percent of adults in the United States had at least one ACE, and 16% had four or more types of ACEs3. Females and minorities were at greater risk for experiencing 4 or more ACEs. It should be understood, but the more ACEs experienced, the greater the risk for undesirable and negative outcomes in life.
CIVIC ORGANIZATIONS - AN OVERVIEW The Civic, Social, and Youth Organizations industry is composed of organizations that promote the civic and social interests of their members and includes social clubs, alumni
organizations, education societies, and professional associations. Organizations in this industry generate revenue through corporate partnerships, private donations, government grants, and membership fees. Over the five years to 2021, industry revenue has been supported by favorable
3
https://www.cdc.gov/vitalsigns/aces/index.html#:~:text=Adverse%20Childhood%20Experiences%20impact%20lifelo ng%20health%20and%20opportunities.,increased%20risk%20for%20health%20problems%20across%20the%20lifespan .
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economic conditions and growth in key markets. However, the industry has contended with the declining popularity of industry activities and increased competition from digital media, both of which have tempered revenue growth. Additionally, the COVID-19 (coronavirus) pandemic created significant barriers to industry activities, disrupting industry growth. Overall, revenue is expected to grow an annualized 1.2% to $19.6 billion over the five years to 2021, including a 4.6% increase in 2021 alone as the economy recovers from the coronavirus. During the period, membership rates for major industry organizations have continued to fall, following a trend that began before the current period. Time spent on leisure and sports has remained stagnant while digital forms of entertainment and socialization have grown in popularity, leaving industry participants to fight for an increasingly small market. The coronavirus accelerated these trends; stay-at-home orders significantly affected industry demand since most organizations rely on in-person events for participation and donations. Consequently, industry profit and revenue were hindered. Growth in the number of adults aged sixty-five and older, a key market for the industry, has supported revenue during the period. Over the five years to 2026, the industry's downward membership trend is projected to continue. Competition from other leisure activities and methods of engaging civically is expected to continue to reduce interest in organizations and limit revenue growth. However, the potential for increased participation of certain demographics, such as college students and baby boomers,
is expected to keep revenue steady through membership fees. In addition, growing corporate profit and a recovering economy will increase industry revenue from charitable donations, although economic scars from the pandemic could linger. IBISWorld projects industry revenue to increase at an annualized rate of 1.7% over the five years to 2026, totaling $21.3 billion.
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Key Statistics
Key External Drivers
% = 2016–21 Annual Growth
$19.6bn
3.0%
-2.4%
Revenue
Per capita disposable income
Corporate profit
0.2%
2.9%
Federal funding for social services
Number of adults aged 65 and older
Annual
Annual
Annual Growth
Growth
Growth
2016–2026
2016–2021
2021–2026
0.6%
0.1%
1.2%
1.7%
Time spent on leisure and sports
Number of college students
$763.6m
Industry Structure
Profit Annual
Annual Growth
POSITIVE IMPACT
Growth
2016–2021
2016–2021
Concentration Low
Regulation & Policy Light / Steady
-6.9%
Technology Change Low
Industry Globalization Low / Steady
3.9%
MIXED IMPACT
Profit Margin Annual
Annual Growth
Growth
2016–2021
Revenue Volatility Medium
Capital Intensity Medium
Industry Assistance Medium / Steady
2016–2021
-2.0pp NEGATIVE IMPACT Life Cycle Decline
39,685 Businesses Annual
Annual
Annual Growth
Growth
Growth
2016–2026
2016–2021
2021–2026
-1.6%
0.2%
Barriers to Entry Low / Steady
Competition High / Steady
Key Trends
234k Employment Annual
Annual
Annual Growth
Growth
Growth
2016–2026
2016–2021
2021–2026
-2.5%
0.9%
$5.5bn
•
Industry organizations have not been able to escape the overarching trend of declining membership rates
•
Social media sites have enabled people to experience a sense of a community
•
Declining membership is evident of a long-term trend for the industry
•
Annualized growth in corporate profit is anticipated to support industry revenue
•
The number of industry employees is anticipated to rise over the five years to 2026
•
Although membership is expected to fall overall, participation by certain demographics is expected to grow
•
Industry organizations have continued to experience declining membership over the past five years
Wages Annual
Annual
Annual Growth
Growth
Growth
2016–2026
2016–2021
2021–2026
-1.2%
1.1%
29
Market Segmentation Constituting the largest portion of this segment is membership services by civic and social organizations, which is estimated to account for 16.7% of industry revenue. Other organizations that contribute to this segment and generate revenue from membership services include labor unions and business and professional associations. Typically, membership fees are charged for a specified period and are expended on the provision of services and activities provided for
members throughout the year. This segment is directly driven by participation; an increase in participation increases this segment's share of the revenue. In addition, the rental of nonresidential space in buildings or other facilities is estimated to generate 1.3% of revenue for industry operators. Lastly, private contributions and grants are estimated to account for 21.5% of total industry revenue, while government grants and contributions are estimated to account for a much smaller portion of revenue, at 4.9%. In addition, program service revenue is estimated to
account for 14.4% of revenue for industry operators. All other sources of revenue are estimated to constitute 28.2% of total industry revenue.
30
COMMUNITY FOOD SERVICES - AN OVERVIEW The Community Food Services industry has expanded over the five years to 2022. Industry operators gather, prepare, and deliver food to low-income individuals and those in need throughout the country. Due to growing per capita disposable income, increased donations have been given to industry operators during the period. This has led to a greater supply for the industry's food aid and social services, enabling industry organizations to meet demand from those in need. Moreover, due to the COVID-19 outbreak, many low-income individuals were subject to food insecurity, thereby increasing the need for industry services. However, the poverty rate is expected to decline to the record-low level in 2022 as the unemployment rate decreases. Consequently, the Community Food Services industry grew at an annualized rate of 7.5% to $18.9 billion over the five years to 2022, including an estimated 1.1% growth in 2022. Most organizations are not motivated by profit and many smaller operators have entered the industry to meet growing demand. Accordingly, the number of enterprises is estimated to increase an annualized 2.0% over the five years to 2022. Moreover, industry operators have also benefited from a rising number of volunteers. Despite government funding for social services,
including various nutritional assistance programs, the industry has been threatened by budget concerns. However, industry profit margins have improved during the period. Over the next five years to 2027, corporate and individual contributions to this industry are projected to decrease as the pandemic slows down. This will decrease the need for industry services and, thus, for funding from private sources. Per capita disposable income is expected to rise at an annualized rate of 0.8% over the five years to 2027, translating to a growing tax base. However, industry revenue growth is expected to subside as private donors scale back on donation amounts after the pandemic is contained. As a result, despite the expansion in the
customer base, industry revenue is expected to increase at a slower annualized rate of 2.4% to $21.3 billion over the five years to 2027.
31
Key Drivers: Per capita disposable income When disposable income rises, so does the potential for donations to industry operators. However, rising income can also decrease food insecurity, causing demand for industry services and related federal funding to fall. Per capita disposable income is expected to decrease in 2022.
Federal funding for social services Government funding provides an important and stable revenue stream for industry operators. An increase in funding for social services, which include nutritional assistance programs, boosts available revenue for industry operators in the form of government aid. In 2022, federal funding for social services is expected to increase. However, fluctuations in the level of federal funding for social services pose a potential threat to the industry.
Poverty rate The US poverty rate measures the share of the population living in households with income levels below the poverty threshold. Growth in the poverty rate increases demand for industry services because lower-income families and individuals may lack the funds necessary to
32
purchase food. Typically, government funding and private donations to industry operators increase when the poverty rate rises. In 2022, the poverty rate is expected to decrease.
Consumer price index Growth in the consumer price index (CPI) indicates an increase in the average price of a basket of consumer goods and services, including food and beverages. An increasing CPI indicates that food prices are rising, which makes it more expensive for individuals and families to purchase food. As a result, increases in the CPI bolster demand for industry services. Federal nutrition supplement programs are often linked to the CPI, leading to more funding for industry operators. The consumer price index is expected to increase in 2022, representing a potential opportunity for this industry.
Food Insecurity Access to food is dependent on the level and stability of household income. Rates of food insecurity, which measure the proportion of the population that experiences hunger, have been historically stable in the United States. Over most of the past five years, unemployment and poverty rates fell significantly as the economy expanded, making it less difficult for some
33
individuals to afford food. However, some unemployed individuals who do not fall below the poverty line can still experience food insecurity. Thus, the poverty line may be an insufficient indicator of food security in an environment of rising food prices. In fact, food insecurity has risen, resulting in increased demand for community food services. In early 2020, the COVID-19 pandemic caused many industry locations to be temporarily closed as industry operators tried to curb the spread of the coronavirus. For instance, 19 food pantries in Silicon Valley and 30 food pantries in San Francisco closed after coronavirus reached California. These closures effectively created further food shortages for the industry's customers as they now experience restricted access to community food services. As a result, many industry operators opted to distribute food via pop-up food pantries in parking lots, while others enabled customers to place an order online and pick up food at a drive-through location, minimizing contact between employees and customers. For customers who are unable to drive, some operators offered to deliver pre-packaged and ready-to-eat foods to their homes. Additionally, the coronavirus poses another challenge to the industry as the number of food-insecure individuals has been increasing since the start of the outbreak. According to Feeding America, an estimated 45 million people are food insecure in 2020. Specifically, airline, hospitality and other recreational services industries announced major job cuts and unpaid leave in response to plummeting demand. This proves especially problematic because starting April 2020, the United States Department of Agriculture requires all individuals aged between 18 and 49 with no children to work at least 20 hours to qualify for SNAP benefits. Therefore, individuals who lost jobs due to the coronavirus outbreak could also lose access to their SNAP benefits, exposing more households to food insecurity. Consequently, the federal government passed the Families First Coronavirus Response Act, which provides $400.0 million in funding
34
to local food banks under the Emergency Food Assistance Program (TEFAP). As the pandemic subsides and the employment rate starts to pick up in 2021, demand for community food services is expected to slow as fewer people are food insecure. However, food insecurity will continue to persist, supporting industry demand. Growing Costs Industry operators have experienced higher operating costs over the past five years due to expanded services and rising input costs; in particular, establishments have expanded budgets for food purchases. In 2022, rises in fuel prices, labor shortage and supply chain disruptions have collectively driven up food prices in the United States, placing pressure on the consumers that industry operators serve. In June, food prices soared 10.4% compared to the previous year, according to data from the US Bureau of Labor Statistics (BLS). This spike in food prices is considered the biggest increase in the last 40 years, marking the first time US food prices to rise over 10.0% since 1981. Besides, according to Gothamist, industry operator, City meals on Wheels reported that its fuel expenses have doubled in the last fiscal year, further depressing industry profit. Moreover, profitability for the small number of for-profit organizations in this industry has been markedly volatile. In general, profit falls when demand for aid services is high because industry organizations must purchase additional food and materials to serve individuals in need. Due to the largely non-profit nature of industry services, profit margins are not the primary concern of industry operators. Most operators spend nearly as much revenue as they generate, which means even the industry's largest operators have low-profit margins. As input costs soar, average industry profit margins (measured as earnings before interest and profit) are projected to fall to 4.9% of revenue in 2022.
35
Since the industry has minimal barriers to entry and many industry organizations are nonemployers, the number of organizations has increased at an estimated annualized rate of 2.0% to 6,130 over the five years to 2022. These companies represent the small, low-revenue and typically volunteer-led efforts of individuals who are often compelled to take up operations by the emergence or increase of food insecurity in a local underserved region. Nevertheless, a significant number of industry locations were temporarily shuttered amid the coronavirus outbreak in 2020. Following suit, employment has increased at an annualized rate of 5.7% to 58,977 employees to meet the growing demand for food services over the five years to 2022. Industry organizations have further stocked their workforce with volunteer labor. Many small, local organizations can be operated almost entirely by volunteers. However, considering the coronavirus outbreak, many industry operators experienced volunteer shortages in early 2020. Particularly, senior citizens make up a large share of industry volunteers. Since this demographic is vulnerable to the coronavirus, many volunteers decided to stay home to limit public contact. Over the five years to 2027, as the pandemic has slowed down due to the mass immunization efforts, revenue growth for the Community Food Services industry is expected to decelerate, rising at an annualized rate of 2.4% to $21.3 billion.
Over the next five years, an improvement in per capita disposable income is expected to help prevent significant increases in the poverty rate. However, the poverty rate is anticipated to rise steadily as the unemployment rate is projected to increase during the outlook period. Specifically, the poverty rate is expected to increase at an annualized rate of 1.1% over the five years to 2027, increasing demand for industry services.
36
Rises in the price of consumer goods, particularly food, will likely maintain the need for industry services despite a generally improving economy. Likewise, rising food and commodity prices will continue to weigh on industry profit over the next five years. Nonetheless, private donations are expected to continue increasing during the outlook period as consumers are expected to have more disposable income. And corporate charitable contributions are anticipated to rise as corporate profit continues to grow, providing a stable revenue stream for industry operators. The economy is forecast to recover, leading to an increase in tax revenue for the federal government. However, concerns about the size of the deficit, especially after the coronavirus pandemic, are expected to dominate in the short run. This is expected to continue constraining federal agencies such as the US Department of Agriculture (USDA). Federal Funding Federal funding for social services is rarely cut and is expected to continue to exhibit strong growth over the five years ahead. As unemployment begins to approach pre-pandemic levels, however, the proportion of the population that needs these services will likely decline to similar lows. However, immense spending during the pandemic may spur continued concerns in the current Congress to make budget deficit reduction a priority, which may pressure funding for social services programs. Nevertheless, federal funding for social services is expected to continue to expand at an estimated annualized rate of 4.1% over the five years to 2027. However, the Farm Bill of 2018 is expected to significantly affect industry operations over the next five years. For example, the law includes provisions clarifying eligibility rules, such as ensuring that lottery winners are ineligible to receive benefits from SNAP. To the detriment of the industry, the bill also makes substantial cuts to SNAP over the long term. According to the
37
Congressional Budget Office, SNAP benefits are expected to fall significantly over the next 10 years, reducing benefits for more than 850,000 households. Nevertheless, the 2018 Farm Bill is expected to improve the long-term sustainability of the program. Industry Expansion In 2022, nearly 70.0% of industry revenue is expected to flow through large-scale food collection and distribution facilities. While local food pantries and soup kitchens provide direct service to low-income individuals, collection facilities comprise larger establishments that collect, sort and warehouse food commodities donated from public and private sources. During the outlook period, industry operators are expected to grow amid the rising price of food, which is expected to become more burdensome for many low-income families. Overall, IBISWorld expects the number of industry establishments to grow at an annualized rate of 2.5% to 8,660 locations over the five years to 2027. Similarly, industry employment is expected to increase an annualized 2.9% to 68,199 paid workers during the same five-year period. Despite this growth, the industry is projected to continue relying on volunteer labor to minimize costs. As growth in fuel prices is expected to cool down during the outlook period, IBISWorld estimates that profit margins, measured as earnings before interest and taxes, will account for 5.9% of revenue in 2027. Life Cycle: The Community Food Services industry is in the mature stage of its life cycle, however, its contribution to the overall economy, as measured by its industry value added (IVA), has grown modestly. Over the 10 years to 2027, IVA is anticipated to increase at an annualized rate of 5.4%. During the same 10-year period, US GDP is forecast to grow at an annualized rate of
38
1.8%. Typically, this industry demonstrates some degree of counter-cyclicality because it provides services to individuals when the overall economy is performing poorly. Industry services are clearly defined and segmented. Industry operators provide food services through soup kitchens, food banks and meal delivery services. There has been very minimal product development over the past five years. Technological developments have only improved warehouse and fundraising management systems, which bolsters an organization's operating efficiency. The number of organizations in this industry has also increased. Over the 10 years to 2027, the number of enterprises will increase at an annualized 2.2%. There has been minimal consolidation and acquisitions in this industry, as most industry operators are non-profit organizations and lack the financial incentives to merge. Low barriers to entry also enable new operators to enter and serve communities in need. Most importantly, the industry has a very well-established role in the US economy. Since hunger has adverse consequences for the health, strength and productivity of the population, the country generally benefits if the government provides a minimum level of food security for at-risk populations. This way, the industry not only serves a humanitarian role but also promotes the stability of the US economy.
39
40
5.1. COMPETITIVE ANALYSIS Some organizations that offer similar services are as follows: •
Healthy Talbots
o Since its launch, the Maryland Food Bank – Eastern Shore Branch has grown its distribution significantly. In the last few years, the branch has expanded the Maryland Food Bank’s School Pantry Program, which distributes food to children and families in need throughout the school year to eighteen pantries. The Maryland Food Bank – Eastern Shore Branch currently provides food to more than 252 distribution and community-based partners in the region. •
Eastern Shore Wellness
o Eastern Shore Wellness Solutions, Inc. (ESWS) – a nonprofit, community based, health education and training organization which focuses on closing the racial and health disparities gaps in six (6) Eastern Shore Counties (Dorchester, Caroline, and Talbot, Queen Anne’s, Kent, and Wicomico). With a targeted and primary population service area within Dorchester County; Eastern Shore Wellness’ work is implemented through the Community Health Workers (CHW) providing programs inclusive of Minority Outreach and Technical Assistance (MOTA), 41
HIV/AIDS Awareness, Pregnancy, Youth and Retailer Tobacco Education Programs, Epilepsy Awareness, Food Insecurity Awareness and the Chronic Disease Prevention and Management Programs, where we touch more than 200,000 individual per year. These organizations have established a reputation and positive representation over the years. Many of them have been serving a similar mission for a long time and may be regarded as one of the leading organizations in the industry; however, Tides of Grace has taken all of this into proper consideration and has concluded that no organization possesses the scale and focus of Tides of Grace. To come close to the direct and focused approach of Tides of Grace, one would have to combine a couple of the above-named organizations. Nevertheless, Tides of Grace will observe where these organizations may have faltered and improve its capabilities to develop and maintain positioning in the sector.
Market Concentration: The Community Food Services industry is characterized by a low level of concentration due to the local nature of its services. In general, operators depend on local business communities, including supermarkets and restaurants, for donations. This system limits food waste for givers and transit costs for industry operators but also constrains the potential for
market share concentration in this industry. This industry also has many small, independent operators that have no employees. Feeding America is the only major player in this industry; the organization operates by partnering with food banks and food service providers across the country, enabling it to serve individuals nationally. Overall, the top four companies are expected to account for less than 30.0% of industry revenue in 2022. Although most industry
42
organizations are independently funded and operated, national organizations are significant in terms of their ability to conduct policy-relevant research, increase public awareness of industry issues and enable member organizations to take advantage of economies of scale in fundraising. Furthermore, national organizations assist members in securing access to federal commodity assistance programs through the US Department of Agriculture (USDA) and coordinate with corporate givers. While industry organizations receive most of their food inputs from the private sector, USDA food contributions represent a large, stable source of donations. As a result, national organizations are critical to the success of the overall industry, although they have limited effects on market share concentration.
Internal Competition: Internal competition for funding requires that operators put all resources to quantifiably good use with minimal administrative overhead. Since the largest sources of revenue, corporate giving and government grants, are limited in any given year by the budgetary decisions of institutional givers, industry operators compete for a finite pool of funds, grants and in-kind donations. In awarding such grants and donations, institutional donors consult quantitative performance metrics, as well as intangibles such as reputation, to ensure that their money is put to good use. Numerical performance metrics are used to evaluate the efficiency of operations, quantified as the ratios of various expenses, including program expenses, administrative, expenses, fundraising expenses, to revenue. Transparency metrics include the presence of
43
independent voting board members, conflict of interest and whistleblower policies, the public availability of board meeting minutes, CEO compensation data and the presentation of audited External Competition: To the extent that a community food services organization receives federal funding, it is affected by competition between federal agencies. The USDA (under which many nutritional assistance programs are administered) competes for discretionary spending with other federal agencies, including the Department of Health and Human Services and the Department of Housing and Urban Development. In general, however, the share of the federal budget devoted to each agency does not vary greatly from year to year. Whereas government agencies remain relatively stable in their cross-industry allocation of funding, private donors, including corporations may decide to sponsor a different cause each year. As a result, industry operators compete for contributions with organizations focused on other charitable causes, such as international relief, environmental and child welfare organizations.
44
45
5.2. SWOT ANALYSIS Strengths
SUPERIOR QUALITIES
• • •
Founder’s knowledge and personal experience Established network and connections in the community Central location
CORE COMPETENCIES
• • •
Organizing drives High-quality food and good distribution The founder is well versed in servicing and supporting at-risk populations
• •
Consistent demand for services from individuals and organizations Can source-specific needs to partner organizations
• •
New organization Limited funding/capital
OVERALL ADVANTAGES
OVERALL DISADVANTAGES
Weaknesses INCOMPETENCIES
• •
Limited experience in marketing Limited experience in running a nonprofit
HUMAN RESOURCES
•
Need for a dedicated team of staff, volunteers, and partners
• • • •
Organization Method of procuring partners and sponsors Method of procuring donors Method of procuring grants
AREAS OF IMPROVEMENT
Opportunities TECHNOLOGICAL ADVANCEMENTS
• •
Virtual platforms Streamlined participant processes
46
EVOLVING CLIENT NEEDS
FAVORABLE TRENDS
• • •
Greater need for temporary support Desire to partner with local support organizations Lack of resources in marginalized communities
• •
Growing affiliate relationships Ability to partner with businesses, schools, colleges, community organizations Threats
OBSTACLES
AREAS OF VULNERABILITY
• • • •
Economic downturn State funding guidelines Barrier to entry State-funded resources
• • •
Long wait time for grant funding Changes in governmental regulation Other organizations can establish a presence quickly
47
6. STRATEGY AND IMPLEMENTATION SUMMARY 6.1. COMPETITIVE STRATEGY The factors that differentiate Tides of Grace from competitors currently existing or those that may emerge in the future are as follows: •
Unique and direct services providing immediate impact
•
Values
•
Independent food pantry
•
Support for all people, regardless of socioeconomic status
6.2. SALES AND MARKETING STRATEGY Tides of Grace will adopt the following marketing techniques to promote the organization: Captivating Web Portal Tides of Grace considers the attractiveness of its website, regarding services and general portal architecture, as the core of its marketing strategy. A well laid out and user-friendly site can influence the degree of user’s attention and affect the amount of time spent on site and trust in the organization. Therefore, the website will be Tides of Grace of all marketing efforts so that the website will be well-structured, captivating, engaging, and clean. In addition, Tides of Grace will be up-to-date, trend-savvy, and mobile-friendly. Leverage on the Internet •
Utilize Search Engine Marketing and Optimization (SEO): Tides of Grace will utilize search engine marketing and optimization to develop a robust online presence by
48
allowing the brand to appear on a list of search engine results whenever a keyword search is done on major search engines. With a strong SEO strategy, the company’s website will become associated with the keywords used to find services. •
Press Releases: This strategy aims to position the brand as a trusted network through formal publicity.
•
Maintain a Strong Social Media Presence: Tides of Grace will employ a social media strategy to consistently engage and interact with the community. More than that, the social media sites will serve as a place to share bits of information, connect with people, and receive authentic feedback.
Social Services •
Tides of Grace will present a strong presence at various governmental and social service meetings related to philanthropy.
6.3. EVALUATION Program evaluation will be the responsibility of the founder, Leann Rhodes-Ickes , and consist of a formal evaluative strategy. Formative Evaluation - Primarily qualitative in nature, the formative evaluation will be conducted through interviews and open-ended questionnaires. Clients and community
partners will be asked about the day-to-day operation of Tides of Grace, the support provided, its impact, and other questions to provide feedback for the ongoing improvement of the operation of the Program. Leann Rhodes-Ickes will meet regularly with the organization's staff to share the formative evaluation effort findings. Periodic reports will be prepared that identify the significant findings of the formative evaluation and how they have been used to improve operations. 49
Summative Evaluation - Primarily quantitative in nature, the summative evaluation will begin with establishing baseline data at the beginning of the Project and then be conducted at 6-month intervals. There will be two important measures for the program: •
Number of individuals/families served each year and
•
Number of community partners/volunteers acquired each year.
The program will also collect pre-program data to include: •
Participant demographics (age, ethnicity gender),
•
Participation in support services, and
A yearly report will be issued that presents the formative and summative findings.
6.4. VOLUNTEER RECRUITMENT AND STRATEGY No nonprofit, specifically, a new nonprofit, with a lack of ongoing, consistent funding and human resources can thrive and become sustainable without the effective recruitment and support of volunteers. Tides of Grace will implement the following volunteer plan. •
Volunteer Plan: The successful involvement of volunteers will both help meet staffing needs and provide opportunities for community members to be more engaged with Tides of Grace.
•
Volunteer Needs: All staff will be engaged to identify work areas that will benefit from volunteers, and a volunteer program will be developed. Potential volunteer positions include Coordinators, Admin support, Outreach, and Events support.
•
Model: Tides of Grace will employ a model that involves both episodic and recurring volunteers. Recurring volunteers are those who provide regular, ongoing support, or who lead and plan for the involvement of others. They are given significant authority and
50
responsibility. Episodic volunteers are those who sign up to participate for a brief period, for a specific event or activity, and work under the supervision of staff or a recurring volunteer. •
Volunteer Recruitment: It will be the responsibility of the founder to position Tides of Grace as a premier place to volunteer. This positioning will be crucial to recruiting competent, committed individuals. It requires that every volunteer be treated as the asset they are, acknowledged regularly, and provided with special rewards. o The founder will undertake a variety of recruitment strategies to fill volunteer positions. These strategies include: o Advertising in free and low-cost print and digital media, including Tides of Grace’s e-newsletter, o Posting in online forums, o Meeting with constituents to recruit their involvement and request their assistance in identifying other prospective volunteers, and o Interviewing prospective volunteers to ensure a good fit with the position.
•
Volunteer Management: Volunteer policies will be completed, and all volunteers will be provided with a copy upon beginning their work with Tides of Grace. The founder will supervise the volunteers and apply the policies consistently. Volunteers will be required to sign in and out each time they volunteer and will receive a formal appraisal of their work at least once annually.
51
•
Volunteer Retention: Keeping good volunteers is a priority of Tides of Grace. The following strategies will be employed to increase volunteer retention rates. o Staff will verbally thank volunteers at least once each time they volunteer. o Written notes of appreciation, including accomplishments made possible by the volunteer’s help, will be sent following any significant event or hallmark (such as a year of volunteerism completed). o Appreciations will be included in Tides of Grace e-newsletter and on the website. o A special annual volunteer appreciation event will be held annually, providing recognition for the work of volunteers and an opportunity to socialize outside of the usual work times.
52
7. FINANCIAL SUMMARY The following section contains the financial information for Tides of Grace Tables and charts show annual pro forma for the next five business years. Breakeven
Financial Snapshot
25,000 20,000
1
300,000
1
250,000
1
200,000
1
150,000
0
100,000
0
50,000
15,000 10,000 5,000 -
1
2
3
4
-
5
1
Monthly Breakeven Dollars
Net Surplus/ Deficit 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 -
2
Total Income
3
Total Payroll Expenses
4
5
Total Operating Expenses
ENDING CASH BALANCE 16%
16% 14%
18%
180,000
16%
160,000
14%
156,067
140,000
12% 10%
10%
6%
100,000
6%
80,000
4%
60,000
2%
40,000
0% 1
2 Operating Income
3
4
5
120,000
8%
111,143
69,422 34,824
20,000
13,480
-
Operating Margin
1
53
2
3
4
5
Financial Activities: Year 1
Year 2
Year 3
Year 4
Year 5
Income Contributions Sales Total Income
130,000
190,000
218,500
240,350
12,000
20,000
23,000
25,300
26,565
142,000
210,000
241,500
265,650
278,933
252,368
Cost of Sales Merchandise
4,800
Total COS
$ Gross Profit Gross Profit %
4,800
8,000 $
137,200 97%
8,000
9,200 $
202,000 96%
9,200
10,120 $
232,300 96%
10,120
10,626 $
255,530 96%
10,626 268,307
96%
Payroll Employee Expenses
-
3,500
4,200
6,300
6,750
Salaries & Wages
-
50,000
60,000
70,000
75,000
-
53,500
64,200
76,300
81,750
Total Payroll Expenses Operating Expenses Marketing
5,000
5,150
5,408
5,570
5,737
Video/Photography
2,500
2,575
2,704
2,785
2,868
Public Relations
5,000
1,030
1,082
1,114
1,147
Fundraising Events and Initiatives
3,500
3,605
3,785
3,899
4,016
21,600
22,248
23,360
24,061
24,783
Utilities
2,400
2,472
2,596
2,673
2,754
Insurance
1,020
1,051
1,103
1,136
1,170
Professional Memberships
3,000
3,090
3,245
3,342
3,442
Business Insurance
1,250
1,288
1,352
1,392
1,434
500
515
541
557
574
2,400
2,472
2,596
2,673
2,754
Facility Lease
Software/Subscriptions (QuickBooks, Zoom, etc.) Telecommunications Website Domain & Hosting
350
361
379
390
402
General Office Supplies
1,200
1,236
1,298
1,337
1,377
Taxes and Licenses
2,000
918
824
865
891
-
-
-
-
-
42,000
42,840
44,982
46,331
47,721
Travel
3,000
3,060
3,213
3,309
3,409
Professional Services (Legal and Accounting)
6,000
6,180
6,489
6,684
6,884
Community Mental Health Awareness & Education Events
5,000
5,150
5,408
5,570
5,737
Professional Development
1,000
1,020
1,071
1,103
1,136
500
510
536
552
568
15,000
15,450
16,223
16,709
17,210
Volunteer/Staff Appreciation
1,000
1,030
1,071
1,103
1,136
Donations & Charitable Giving
1,500
1,500
1,575
1,622
1,671
Miscellaneous Expenses
2,500
2,500
2,625
2,704
2,785
129,220
127,156
133,503
137,508
141,633
0 Monthly Drives/ Giveaways
Program Evaluative Tools Contractual Labor (Grant Writing, Consultants, etc)
Total Operating Expenses % of Revenue
91%
Operating Income
61% 7,980
Operating Margin
6% Net Surplus/ Deficit Margin
55% 21,344
10% 7,980 6%
54
52% 34,597
14% 21,344 10%
51% 41,722
16% 34,597 14%
44,923 16%
41,722 16%
44,923 16%
Cash Flow: Year 1 Beginning Balance
Year 2
Year 3
Year 4
Year 5
5,500
13,480
34,824
69,422
111,143
137,200
202,000
232,300
255,530
268,307
137,200
202,000
232,300
255,530
268,307
Cash Inflows Revenue Total Cash Inflows Cash Outflows Procurement Activities Purchases
-
-
-
-
-
Operating Activities Payroll
-
Operating Expenses Total Cash Outflows
53,500
64,200
76,300
81,750
129,220
127,156
133,503
137,508
141,633
129,220
180,656
197,703
213,808
223,383
Net Cash Flows
7,980
21,344
34,597
41,722
44,923
Operating Cash Balance
7,980
21,344
34,597
41,722
44,923
13,480
34,824
69,422
111,143
156,067
Ending Cash Balance
Cash Flow $60,000 $50,000 $41,722
$40,000 $30,000 $34,597
$20,000 $10,000
$21,344
$0
55
$44,923
Operational Analysis: Operational Analysis
Cash Flow
Total Income
$60,000
300,000
$50,000
250,000 $44,923
$41,722
$40,000
200,000 150,000
$30,000
100,000
$34,597
$20,000
50,000 $10,000
$21,344
-
Year 2
$0
Year 3 Sales Revenue
Cash Flow
Year 1
Year 2
Year 3
Year 4
Year 5
7,980
21,344
34,597
41,722
44,923
Net Cash Flow
Spending Detail
Year 4
Year 5
Contributions
Funding Breakdown
Marketing Vide o/P hotograp hy
Pub lic Relations Fundra isin g E ven ts and Ini tiatives Facility Lease Utili ties
Insu rance Busine ss Insuran ce
8%
Softwa re/S ubscri ptio ns (Qu ickBoo ks, Zoom, etc.) Telecommunicati ons
Website Domain & Hosting
37%
Gen eral Office Supp lies Taxes and Licen ses
Grants
Sponsorships Donations/ In-Kind
Pro fessional Memberships
39%
Pro fessional Services (L egal and Accounting)
Fundraising
Monthly Drives/ Giveaways Travel
*The breakdown of contributions 16% is based on year 2. The assumed initial steady-state
Food Pantry Pro fessional Development Pro gram E val uative Tools Volu nte er/Sta ff A ppreciation
Donations & Cha rita ble Giving Contractua l L abor (Gran t Writi ng, Consultants, etc.) Tota l A nnual Ope rating Expenses
Cash Burn Analysis Income Operating Expenses Payroll
Operations to Contributions Payroll to Contributions
Year 1
Year 2
Year 3
Year 4
Year 5
142,000
210,000
241,500
265,650
278,933
129,220 -
127,156 53,500 61% 25%
133,503 64,200 55% 27%
137,508 76,300 52% 29%
141,633 81,750 51% 29%
91% 0%
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Breakeven: Breakeven Analysis Gross Margin % of Funding
Year 1
Year 2
Year 3
Year 4
Year 5
Gross Margin
137,200
202,000
232,300
255,530
268,307
Total Funding
142,000
210,000
241,500
265,650
278,933
96.6%
96.2%
96.2%
96.2%
96.2%
Gross Margin/Total Funding Total Fixed Expenses
-
53,500
64,200
76,300
81,750
Operating Expenses
129,220
127,156
133,503
137,508
141,633
Operating + Payroll
129,220
180,656
197,703
213,808
223,383
96.6%
96.2%
96.2%
96.2%
96.2%
Payroll
Breakeven Funding Gross Margin % of Funding Total Fixed Expenses
129,220
180,656
197,703
213,808
223,383
Yearly Breakeven Amount
133,741
187,810
205,533
222,276
232,230
Monthly Breakeven Dollars
11,146
15,651
17,128
18,523
19,352
57