Look for a marriage of mission and margin
Tod Marvin is president and CEO of Easterseals Central Texas. A 23-year veteran of nonprofit work, Tod joined Easterseals after filling various roles with the American Heart Association, the Blood Center of Wisconsin and the American Red Cross.
Here, MissionBox co-founder and CEO Kathryn Engelhardt-Cronk talks with Tod about the power of social enterprises for nonprofits.
What inspired you to develop a social enterprise model within your organization?
I've spent much of my nonprofit career in fundraising roles at the national, regional, state and local level, so I've got a clear understanding of the limitations of philanthropy. There are so many nonprofits going after the same philanthropic dollars, and it's a line of revenue that hasn't increased in several generations. Plus, philanthropy isn't necessarily built to provide revenue stability for everyday operational support. Once I started to scratch the surface of social enterprise, I got a sense of its power. That's really what started it. I don't have a background in for-profit entrepreneurial ventures, so the only thing I brought to the table was an open mind.
You started your social enterprise with a focus on residential landscaping. How did that come about?
The landscaping venture was a perfect marriage of mission and margin. For 30 years, Easterseals Central Texas has operated a paid job training program focused on lawn and landscaping services, with participants mowing grass along highways, intersections, parks and so on for local governments. But there's a limit to government contracts. Since we already had the equipment and the expertise, we decided to expand the government business into a residential lawn and landscaping company.
Our business plan included an expectation that we would operate at a loss for three years. We've had to pivot and iterate and change our approach along the way, but we were within 90 percent of our initial revenue targets at the end of year two and today we're on track to make a profit in year four.
Even better, we've seen growth in our government business as we've nurtured an entrepreneurial mindset through the residential business. We've become more sensitive to customer service and driving efficiency through the operation.
When you launch a product, you need to brand it, market it, acquire customers and so on. How have you handled these operational issues?
We've had varying levels of success, to be sure. Due to limited funds, the marketing and branding piece has been — and continues to be — our biggest challenge.
To help with the initial wave of customer acquisition for the residential venture, we partnered with a for-profit company that provides in-home maid services. They were looking to expand into residential lawn services and were able to help us acquire a customer base through their online expertise with search engine optimization and social media. It was amazing and challenging and messy and wonderful all at the same time.
Today, we're pivoting the model to focus more heavily on corporate clients. Although we want to maintain a foothold in the residential piece, we've learned that there's more margin on the corporate side and more flexibility with targeting customers in specific locations.
What cautions might you give someone considering a social enterprise?
First and foremost, set reasonable expectations. If you need $100,000 in the next 30 days, launching a social enterprise isn't going to help you. It's a marathon — not a sprint. It can take years to break even. Get ready for that!
It's also critical to prepare your board for what it takes to get a start-up off the ground. Big decisions about the enterprise may need to be made very quickly, and that's not always within a board's comfort zone. To help with this, we created a social venture board committee — including people with start-up expertise and background. These folks became our thought leaders with the board.
What about staff buy-in?
It's a process. When you're used to doing one thing one way for a long time, something new is going to be a challenge. In our case, though, being satisfied with the status quo wasn't enough. People with disabilities experience double the unemployment and poverty rates of the general population. To carry out our mission in the community, we had to try something new. We focused on learning and experimenting as a reflection of our organization's values.
You described an increase in your government business as you began thinking more like an entrepreneur. What other benefits have you noticed?
Our social enterprise opened doors in the philanthropic community, ironically enough. Because we came in through the social enterprise focus, we've been able to secure gifts and have conversations with folks in the community who wouldn't have chosen us before simply because they're not focused on people with disabilities. There's an inherent strength of positioning with any philanthropist or foundation if you're raising money to start a business that will support itself someday.
Would you do it again?
Absolutely! The social enterprise experience has been transformative. It's helped us embrace growth and further our mission in the community. It's opened us to new conversations and new relationships.
The next social enterprise we're considering is a high school and transition center for students with autism in central Texas. We're envisioning a high school along with a center that provides after-school activities, respite programs for parents and recreational opportunities for the whole family. So far, we've invested about a year of due diligence into the project. Is there truly a community need for the program? Who could we learn from? How could we use earned revenue to keep the program affordable? Who might step up as community partners? How long would it take for the program to become self-sustaining?
That's the passion — supported by a mountain of evidence that shows how a dollar invested in early childhood intervention returns six times over the child's lifetime.
Know another visionary leader or organization working for social good? Let us know! Email email@example.com.
Tod Marvin is president and CEO of Easterseals Central Texas. A 23-year veteran of nonprofit work, Tod joined Easterseals after filling various roles with the American Heart Association, the Blood Center of Wisconsin and the American Red Cross. Tod highly values creating opportunities for kids with disabilities so that they can pursue their hopes and dreams at any stage of life. He also loves to see the excitement that parents feel as they begin to see their children thrive and make progress. Tod received his bachelor's degree from Tennessee Temple University and his master's of public administration from the University of North Carolina at Charlotte.