are you ready
i'm ready let's go all right
dr Allen proctor thank you so much for uh
for joining us today on the conversation
podcast with me your host luis ramirez
so dr Allen practor you're the president
and ceo
of social ventures located over here in
columbus ohio you have a phd in
economics
and forecasting from the university of
wisconsin in madison and you also wrote
two books
on money which it seems is called
mission to money
finance for non-profit leaders and more
than just
money those are the two books that you
wrote
so thank you so much for joining us
today and i know that uh i said that
those two books are about money but i'm
sure there's definitely more
to those two books is that is that
correct
um yes well i'm i'm i'm glad to be with
you today
um they're books about how often times
money becomes the uh the soul and focus
in a in a company a business or a
non-profit
and that we really have to really
refocus on the role
of of money in that so the finance
people
are really a um a way to help
a company think not the group of people
that make the decisions
there's a lot to chew in there huh
well it's it's the result of kind of
watching uh several decades
of what works in organizations and what
doesn't work
all right so you were basically behind
the scenes in those organizations of
what worked and what didn't work and
that was a product of these two books is
that correct
um that's right it's a combination of
the reason i actually wrote the books
when i did
was um it was becoming very clear
that um the hostility
towards uh the public sector and
frankly a growing hostility towards the
non-profit sector
um was needed to be
addressed and that those organizations
really needed to
revisit their basics um
and uh so i so i wrote those books
it it also was an outgrowth of my work
in in government and in the
government financial office association
where in the 1990s
we had a national uh working group that
put together best practices
in public budgeting uh because we were
seeing that the federal government was a
terrible example
of uh responsible uh budget practice
um so you said the hostility a couple
things that you said there what kind of
hostility that were you talking about
did you see well it started uh it
started out in the
in the late 90s with an organization
called charity navigator that created
this notion
that if a non-profit spent anything
except on program it was irresponsible
but so what that means is you can't pay
for your lights you can't pay for your
heat you can't pay for
any financial accountability um you
can't provide health care benefits you
can't
it's it's ridiculous so and people were
saying all our money
goes to to program well that's the key
to inefficiency and incompetence
no business would write itself and what
was happening was uh grantors and
government contractors
were starting to say they wouldn't pay
any overhead well
if you can't if you can't pay rent i
mean it's what we're going through in
the covid crisis right
if you can't pay rent if you can't pay
your utilities
you're out of business and that was the
trend that was starting
um in our in our in our society and it
was terrible
and frankly it was started here in
columbus ohio uh by the united way of
central ohio
um and the person who started it he
became
the head of the national uh united way
and it just spread it was called
effective philanthropy but it it
it sounded great it sucked me in until i
saw how it was playing itself
out it was um it was counterproductive
so for those that don't uh that are
listening to this charity navigator is a
company pretty much
we get to start there they're a company
that publishes uh
you know correct memorandum they're
public a company that publishes the data
regarding the nonprofit organizations
out there 501 cc
they rate they rate nonprofits they
write nonprofits
based on one single criteria and um
so this started in the late 90s and it
got to the point where thank goodness
five years ago charity navigator
published
uh an apology letter to the nonprofit
sector
for for the harm that it had caused
now what kind of harm was the financial
harm i assume the impact
from a financial standpoint right
because non-profits are our business
they're a business can you imagine
running a business where
you know your customers say well i like
your product but your
your price is including uh a profit it's
including
overhead i'm only going to pay your cost
of goods sold
listen i am yeah i started a nonprofit
organization in 2008 and that lasted for
like three or four years so
it's definitely it's definitely a number
one it's definitely a business uh and
the fact that it's titled a non-profit
you still have to make you have to have
to balance that right you have to make
some profits to be able to
give those services to the community
like you said so it is
it is a very unfortunate term um outside
the united states they call them uh
non-governmental organizations and geos
they're technically um 501 c 3
charitable organizations but
after that mouthful you know you need a
dream
so the uh the organization that you
started is called central venture
social ventures that's right we started
that in 2014
yep it was really the the result of i
had been
uh working as a consultant for
non-profits since 2001
and so i'd seen two recessions
and what they did to the nonprofit
sector and what
what what i observed was that
nonprofits were many nonprofits i should
say
were actually cutting back their
services in a recession
uh and uh which is actually the worst
time for a non-profit to cut back
because that's when they're most needed
and um from my years in um
government the nonprofit sector i'd come
to the conclusion
that uh the most
important thing for a provider of
services
is to be reliable because people are
building their lives
around your being there and um
exactly when the recession happened and
people needed it
they disappeared and
uh the nonprofits that were able to
sustain
themselves were ones that had been able
to build
a solid-based earned revenues
for example one of my
clients was kosai and cosi was basically
in
financial difficulty it's a local
science museum
it was in financial difficulty because
it moved to a very very large facility
and um that it really couldn't support
and i worked with them
on building uh their earned revenues
and in the 10 years since then
they were able to double their size
without increasing their fundraising at
all
and become a fairly strong organization
um at least until covet hit and uh
i decided that what we needed was not a
consultant working with three or four
nonprofits to help
make them reliable what we needed to do
is to build an ecosystem
that could sustain a substantial growth
in social enterprises initially
social enterprises run by non-profits
but ultimately what's played out in
columbus
is it's now almost evenly split between
for-profit and non-profit social
enterprises
and uh they are now i'm thrilled to say
uh the largest job creator for
ex-offenders
recovering addicts survivors of human
trafficking
people on the autism spectrum in the
chronically homeless state
without any government money or
philanthropic money they're doing more
than
all the government put together it's
amazing
you know uh nancy there's a story uh
that you have on your on your report
2019 report
and when i opened the report i realized
that there's 98 different
companies or partners that you have uh
part of this
ecosystem but in this report you
highlight 11 different companies uh
within the state of ohio believe that
that pretty much make an impact
and the secret sauce that you speak
about is people and
on the side on the second page i see
nancy the story of nancy with human
trafficking i believe it was
and how she she converted herself into a
confident
team leader and i was sucked in
immediately but then as i turned the
pages there was
stories upon stories and stories of more
people looking at that right yes sir yes
sir exactly
so when i looked at her at that picture
and her and then i continued looking on
and on and on by the time i got to the
end of the page
that that is the nucleus how you know
the people that you're
helping with the challenges they had in
the past and now they're
basically changing so kudos to to you
and social ventures were doing that
so maybe you could elaborate on you know
how
the process of all that how does that
really happen
the magic well well let me let me
first answer uh your question at the
micro level
um nancy works for an organization
called clean turn clean turn is a social
enterprise for-profit social enterprise
that focuses primarily on uh
providing employment to people who
are have been caught up in the
justice system um that usually
that sometimes includes all the
complications
where uh being incarcerated is the
result
it could be um people who have
tremendous challenges with uh freeing
themselves from drugs
could be people who have been in such
broken homes that they've been homeless
and such
but the concept of those social
enterprises which makes them so
different than another business
is they call it supportive employment
so in a in a typical business if a
person comes in late chronically you
fire them
in a typical business if someone starts
lipping off
at their boss you fire them in a
supportive employment environment
you basically uh say okay they're late
because they're having transportation
difficulties
i'll deal with the transportation issue
they're very stressed and angry because
they're having
housing and budget problems i'll work
with them on housing
i'll help teach them about budgeting
i'll i'll make sure that they
know about how to use a bank account and
how when you get the paycheck at the
beginning of the month you have to save
some for the end of the month because
they've never
had that experience you know um if
someone comes in and they don't look
very productive instead of
yelling at them you basically say well
they know enough about joe to say joe
what's what's happening today you're not
like this
um it's a it's a totally different
approach to employment where
instead of i'm hiring this person
because i need a job done and if they
don't do it
you know i'll get somebody else it's i'm
creating this job to help
their life be better let me do that now
obviously you can't help everybody and
some people
might be so challenging you can't
make it work and you can't let your
company be brought down
by that but um indeed they find
there's a lot of peer enforcement on
people who are having challenges
and it it works and that's what
nancy is talking about is she has an
employer that
understands her challenges his health is
sympathetic with her challenges
um tough love is probably a fair term
and has turned her life around our job
at social ventures
is to create an environment for
companies like cleantern can
thrive so our job is to make people
aware
of social enterprise aware that when you
buy
from cleantern you're actually creating
an impact
because what most of us are familiar
with
and and what was certainly true in
columbus until
you know just 10 years ago was if you
wanted to
make impact in your community you had
two choices
you volunteered or you wrote a
charitable contribution
what happens with the introduction of
social enterprises
yes you can still volunteer yes you can
still make charitable contributions if
it happens to be organized as a 501c3
but by what you buy can make a
difference
you can buy a candle and help provide
jobs for survivor trafficking
you can buy a cup of coffee and provide
money to the food bank you can buy hot
sauce
i mean it's um it's a whole new concept
and of course since they're businesses
you can invest in these businesses and
create
impact you know it's not like buying
stock in ibm will you do it just to make
money
you can invest in these companies and
make a difference
it's it's like four legs of a stool i
it's really exciting
i i so we're trying to make people more
aware of that whole notion
of of consumption obviously what we're
also doing is
because there were only 18 of these
social enterprises
when we started in 2014-15 and
we're actually at 105 today okay
we might be back down again we've lost
three in the last
two weeks um uh
we we need to provide some kind of
training mentorship
and support because they're they're new
to business
many of them um and the third thing is
we have to connect them to capital
because you can't build a business
without money
and uh starting a business on your own
credit card only takes you so far
you know uh i was getting really excited
when i started getting
ready for this conversation because i i
i learned that
you're an economist uh you have a phd in
economy
and economy and also forecasting and i
want to hear your thoughts on because
you mentioned a couple things that i uh
i wanted to circle back on
uh where as a non-profit and trust me
like i said before i was a founder of a
nonprofit so i get the
importance uh in the impact that any
nonprofit has
pre-covered your job in your social
ventures
program uh was definitely important and
when people pulled back you mentioned
the two recessions that you've
uh you've experienced before and that
kind of led you to start social ventures
and now you mentioned that uh you are
one of five three other companies pulled
back
a lot there's a lot of information there
to un unpacked in that in in the context
of what i'm trying to bring up but the
question is basically
what is your forecast now that the covet
is here
and the impact to uh to the nonprofit
sector not just in columbus not just in
ohio
but uh in the you know we could take it
in the macro level micro level
uh we could take it from any type of uh
economist
point of view but from your perspective
what is what is going to be the impact
to
your program per se now that you know
we're talking about the
uh economic crisis and you know people
losing their jobs and like you said
right here with the story with uh with
nancy as just one example
we could talk we could probably spend
multiple podcasts talking about other
examples but
people have a need right for
transportation for housing budgeting
banking
there's going to be a huge void there
what what are your thoughts for
forecasting i guess
for the outcome well you know i mean the
only honest answer to say is i don't
know
for sure um for sure but i can speculate
um i think the real the real the real
challenge in
kohed is those people
and those businesses that made a living
through contact with other people um
have basically um stopped
for the moment the
question is how long will it last um
one of the realities for our social
enterprises
is they're small and it's become very
clear already
that the um so-called small business
loan program is being hosted by
have been hustled by the large companies
and the large companies are getting the
money um
the lines get 25 billion and who in
columbus got anything
wait are you talking about the cares act
or the pvp
well the cares act had the ppp in it
okay um
the ppp most of our social enterprises
have
fewer than 10 employees um
i i would love to see when this is over
how many of them
got anything um as opposed to
um large restaurant chains that had
smart lawyers who
who quickly uh um
created subsidiaries of under 500
employees and um have gotten
tens of millions of dollars um how many
uh social enterprises that employ ten or
fewer people
or even small businesses mom-and-pop
businesses that
employ a few family members how many of
them got anything
um it um
it's unfortunate um
the i think what the real challenge is
how
how this will open up um
if it opens up by those companies
that are highly visible
then i think we will lose a lot of our
small businesses
um the uh restaurants
um many are small restaurants as opposed
to the large chains
um will people when will people be
comfortable being in the crowd
um it's it's
it's unpredictable actually the
companies that i worry about the most
are the ones that
were prepared and had strong balance
sheets
because the um all the money is going to
those who were not prepared
and are in crisis and and those that
aren't in crisis because they
saved for a rainy day come september
they will probably be out of cash and
will there still be
enough of a focus to help them
so i i in fact we've been
obviously calling our social enterprises
and many of them their biggest worries
are about 2021.
um because those who who have scaled
back
or have cash and maintained their
employees such as social ventures we're
maintaining all of our employees
um but will will
business be back by the fourth quarter
will it be at the level that it used to
be
will people have a whole different
attitude about
public events i worry the most
actually about our performing arts
institutions
there's nothing you sit that's as close
as you can be next to person whether
you're when you're in a theater or an
auditorium
sure and um almost all of their
uh almost all of their musicians or
actors
or dancers are uh
contract 1099 employees who can't even
get unemployment um so
what's they're actually the worst in in
the worst
situation of all um they uh
they probably can't they probably made
money by teaching students
can't do that yeah yeah zoom does not
work
that way yeah they're not able to do any
performances
there's a lot of press on them kind of
playing outdoors and
that's keeping their chops going and
keeping them busy but
it's not making them any money and our
our whole system is not set up for them
what about the uber drivers
you know they can't get anything that's
true um
so are we going to step up uh on
you know are our government programs
geared towards these small
individuals the answer is no are they
going to become
geared i don't know um
we'll just have to see how it how it
plays out
i don't know what it's going to be on
the other side we
we have a lot of high contact programs
our biggest our biggest program of the
year is august 4th
we have hundreds of people in a room to
celebrate social enterprise
are people going to be comfortable or
will be be allowed
to have it and that's in august um
they've rescheduled the gay pride parade
for october will they allow a million
people to be on this
of course i don't know um
it's i think the hardest thing in in
predicting the future
is this is so unprecedented
you can't do you can't make it out i've
i've seen two major collapses
one was the 1987 stock market crash
um things were basically it was mostly
financial
it was uh a decade where there were a
lot of rolling recessions in the u.s
and um things didn't get back to normal
until 1994.
wow that was seven years and what was
the second one
second one uh was 2008. that's what i
i said and that that was uh
that had a lot of bankruptcies but
financially
it was a financial collapse the
government at that point was
was able to step in quickly and smartly
um and uh the stock market was back
within nine
months and uh
the part that went wrong was by focusing
just
on the financial markets we
never really got
growth well established and in this
crisis
the government's in the worst possible
position it could have been in
fiscal policy is we already had a
trillion dollar deficit we should have
been running surpluses
um the last eight years and the
government has
no money so now we're going to have a
two trillion dollar deficit
um that
is not not a good formula for the young
professionals future
it isn't and uh a couple things there
that you mentioned were
consumer confidence right the consumer
confidence both for the
for the business side but also for the
consumer side
you know if you don't have that how how
uh it's going to be a huge
uh hurdle there's also a lot of momentum
a lot of a lot of consumption
practices your habits um
every friday night you went out are you
going to go out every friday night again
when is that habit going to come back
well after work we went out for drinks
is that habit when it comes back or um
you know you um you subscribed for a a
concert season or a theater season well
you don't even know if there's going to
be a season
um you know or you know you regularly
uh went out to the mall to shop now
you're
you're doing everything online um are
you going to go back
you met people in coffee shops um
now you're doing it on zoom are you
gonna stay on zoom
um it it it's interesting
i think about our own organization
everything's on zoom now
um everything uh um
are we going to have events or people
going to be interested in events
um it's it's kind of a fascinating
time um so i'm looking back
how to forecast i said i i i really
don't know
no listen i i know we're all learning
through this but i i as a phd
uh uh major that you as a phd expert
i wanted to as an economist i wanted to
ask you that question because i think
you may uh
you have you have some good insight uh
especially because when you said 1987
i was just i was just a young little boy
right so at that time from 87 to 94
uh i was in no way obviously i was uh
already in the workforce so i got to
experience that
so what what lessons did you learn from
87 to 94 and then that
that other period from to in 2008 are
there any lessons that you learned
yourself there that you could probably
apply not today nor tomorrow for
probably
q4 or into 2021
well the lessons i learned which feeds
into the
the book linking mission to money and in
when i was in government we we used the
term structural balance
is is what we learned is you
absolutely must
think in terms of several years you
can't just say what am i going to do
this year or what's my budget for this
year
because the reality of life is the
business cycle
and uh our our economy forgot about the
business cycle
and the kovid is um in many ways
timely because when we hit
2019
we ended the first decade in a hundred
and fifty years
without a recession well koved came
three months later and now we have a
recession
did you see that as a risk at that point
sorry to interrupt you do you see a
that is a risk for it yeah we've been
we've been um
we've been tuning our horns uh since
2010
that um anybody who's smart
needs to start studying aside any
business that's smart
has to start building up its balance
sheet saving if you will
because another recession is going to
come and we were really
talking to a lot of non-profits is
you've got to set up social enterprises
to get some earned revenues
right now because there's going to be a
recession
and what always happens in recessions is
philanthropy drops off
your government contracts get cancelled
and you're going to be in trouble
and here we are
and unfortunately or fortunately
depending on your perspective
almost all the philanthropic emergency
funds
are going to those who did not prepare
for a recession
um did you remember the esop's
story about the ant and the grasshopper
no
uh you have to enlighten me what so it's
a nisab's fable um
it's in the summer there's an ant and a
grasshopper the the ant is busily
gathering food and storing it away and
the grasshopper is
just eating away and partying and
saying life is good and then winter
comes
and the the ant is in a cozy house with
plenty of food and very comfortable
and grasshopper is outside the aunt's
door
freezing to death and starving wells and
esop is fable so
they're always had unhappy endings so
the answers to the grasshopper tough you
know and the grasshopper passes away and
so the lesson is you need to prepare
for the winter and um what's happening
right now is
people are paying all their attention to
the grasshopper and they're ignoring
the ants and the ants will run out of
food by september
and then will the crisis be over and
they'll start dying we won't step up to
help them
it's kind of a moral dilemma yeah
do you help those that help themselves
um
be nice if you could help both um but um
right now that's not happening so uh
from my understanding we're talking
about re reactive
versus uh proactiveness right and uh in
a way
so so i see i see one of the books that
you have uh mission to money
finance to uh for nonprofit leaders you
talk about setting priorities
is this what you're is this what you're
learning to there about setting those
priorities
i mean the book covers two things at one
that talks about business cycles and it
talks about
some of the dilemmas that the
time when you when uh when a nonprofit
really has to say no
to um to expanding services
is when times are good because if you
over expand
you're going to have to cut back more
for example
in 2001
just before 2001 we had a lot of
homeless shelters that expanded
tremendously
just make up some numbers let's say they
went from
a 100 beds to 150 beds
okay well when the recession had they
couldn't support 150 beds they cut back
to 75.
wow okay would have been better if
they'd stayed at a hundred
of course taken that extra cash and used
it to
avoid a cutback well there's a lot of
problems in our society because
if if that's if that shelter
had set aside the money would donors had
said well you don't need our help
anymore you've got extra money
um would the shelter have been
patient enough looking ahead enough to
basically say well
actually we think there's probably going
to be a recession coming
we know that's when we're most needed we
need to really
set it up interestingly enough this has
become routine in the government sector
they're called rainy day funds
but there's still a tremendous amount of
resistance
um to uh to this in the
philanthropic community so walk me
through that because uh i see that
one of the things that your social
ventures does is that you you work in
with community resources right uh to
make an impact in the community whether
it's art education employment job
training health
hunger to name a few uh
how does that process work and we if we
stay with a hundred bed
going up to 150 and then it reduces back
to 75.
throughout that throughout the same
transaction do you go in and try to
assist to
mitigate reducing to 75 or
do you step in after they've gone into
75 how does that
process work well um
what we do at social ventures is try to
have that not happen in the first place
and the decrease correct to really try
to educate people
i think we've made a lot of progress in
the
philanthropic community um
uh in the last uh seven years more and
more of our large
corporate foundations they're making um
uh
unrestricted operating support donations
which means yes you can spend money on
utilities yes you can build your balance
sheet
they used to just do program loans
program grants where you essentially
lost money
from performing a grant so we've made
progress in that front
the
getting an organization to be uh
multi-year planning oriented
is is um requires a very strong leader
who has vision and um is able to think
beyond
um the current year you know what what
do i need to raise this money
what kind of programs am i going to do
and they start thinking about how does
this year fit into
the next several years that's called
financial planning
and that's kind of been the the
connecting link
um in my entire career whether it's in
government in universities
or in the nonprofit sector or in social
enterprise
so from a leadership perspective uh this
is something that i have a conversation
with
with all my guests on failure um
have you failed that in in in the past
from a leadership perspective on
anything and if you have
what what was it that you failed at and
what were the lessons learned that
pretty much made you who you are right
now as a leader
well i think one of the one of the
biggest um challenges
for a visionary leader is to not get
too far ahead of their
constituency whether it be a board or
whatever
um you you have to bring people
on you have to learn to be
which is sometimes hard when you know
what needs to
be done um it's hard to wait for other
people to kind of catch up
um i was on a i was on a
zoom call last night on a board i just
joined
and um uh
that board has at this point
there all of their experiences are very
short
term orientation the notion of 2022
is something that i am even thinking
about um
the notion of um of all the things you
do which which two are
more important than the others is a
conversation they've never had
um one of the um one of the
eye openers for me was i headed the
new york financial control board uh
during the david dinkins administration
in new york city
uh the financial control boards of the
receiver so we have
oversight and approval over the new york
state
new york city budget and um david
dinkins
um uh
first time he'd ever been a mayor he'd
always been in a um
legislative situation and
um he basically inherited the ongoing
recession
from the 87 stock market crash
and um one of the things that
we were able to help him understand is
even in a recession when you're having
to scale back on your
budget you you still can
focus on cutting back the lower priority
things
because what usually happens is you cut
back on the things you know about
which chenery tend to be the more
important things
that you don't have to abandon your
agenda
you don't have to abandon your
priorities in tough times
um that's actually the most important
time to use
priorities and that that that was not a
common way of thinking about budget
cutting
budget cutting you know you you tend to
uh
go for the big numbers and uh
uh sometimes your low priority things
aren't so visible
and you forget about them so
um that's what linking mission to money
is all about
is think about what your priorities are
um
if you're losing money on low priority
things all that's doing is taking money
away from your high priority things
but thinking about what are your
priorities um
is very hard because generally it's
well that's what we do that's what we've
always done
we've done that for 10 years and
what i what i tell any organization
whether they're a non-profit or a social
enterprise or a conventional business
if you're doing the same thing you were
doing
10 years ago you're probably not
connected to your market anymore
that's true because the world's changing
that's true so if you
haven't changed something's probably out
of whack now and it's time to really
take a good look at it
again and um i think that's universally
true
and um the times when things haven't
worked out
is is not being effective
in getting people to truly internalize
that message so how do you so for
any non-profit out there or any small
business for say that that's
listening to this what are the uh what
are the strategies to actually
to cope with that with that internal
awareness
to actually say hey i'm going to take
care of the how can i take care of the
low-hanging fruit
or what are my low-hanging fruits first
of all i think you have to create a
budget
of some sort though what i guess what
are the characteristics of the process
that you
there's two parts one's technical and
the other is
non-technical okay the technical part is
you have to know um what all your
activities are
i was working with one organization
um they said well we just deal with
people who have trouble hearing
and we started pushing them to well what
do you do what do you do
and when we were done they had 22
different programs
so they thought they only had one yes
and then and then we at the technical
level we said
okay now you have to figure out
how much you spend on each of those 22
programs
of course because everyone's going to
just looking at that
single bottom line are we making money
or losing
money are we breaking even or not and i
said you have 22 things you have to tell
me
are you making money breaking even or
losing money
that's a technical exercise that few do
um and um it's
it it's doable it doesn't have to be
impossible and it definitely doesn't
mean you have to do the super
sophisticated thing called cost
accounting
then the the non-technical thing is you
have to really start
getting to people to tease out okay if
you could only do two of those 22
which ones would you do so instead of
forcing people to do one
through 22 you kind of
get them to divide them into maybe three
groups
those things that you think are
absolutely most essential
those you think that are pretty
essential and those that are
nice to do but you could hand it off to
another organization
and so you just kind of parse it that
way to give people
permission because nobody wants to say
your program isn't important
because that staff member will feel bad
and but it is important it's just for
this organization it could be done by
somebody else maybe more efficiently and
in general in the nonprofit world
because of the way the world works
and the way the law works um
a non-profit really doesn't
drop a program it passes it on to
another nonprofit
so um it you don't have to tell someone
when their thing isn't important
you tell them it's it's not as central
to what our organization can do without
um so there's a lot of human emotion
um and i think that's why a lot of
organizations don't do that
and i think yeah for sure and that's
that's exactly what i was going to say
that uh
the technical versus non-technical and
prioritizing were high medium and low
like you said not just for for
non-profits it could
definitely work for for-profits as well
or
you know or or a household it doesn't
have to be a business it's also a
household as well
you know when you're going through
spring cleaning example just throwing
that out there
um yeah it's actually easier for
conventional businesses because um
they uh they tend to do a lot of mergers
i mean if you think about it you name
you can you name me 12
companies today that existed when you
were born
probably not they've merged out they've
looked
into others they've changed their
products and the merger process
kind of becomes that cleanse not always
elegant not always nice
not always humane but it just
happens yeah you buy the company you
know you get bought out
and that's why most people when they see
a company's being bought they think oh
gosh i'm going to lose my job because
that's how companies purge they bring in
a different set of decision makers
who don't have those human relationships
i'm not saying that's good i'm saying
it's why
it happens more readily in the
for-profit sector
conventional for-profit sector
non-profit sector
you tend to have board members that have
been on it for 15 years you tend to
have people that have spent their whole
life in the nonprofit and it's
it's a little harder to do and um
but it's just as important now from the
marketplace
uh in social ventures that i that i see
here
there's a lot of categories on there how
does that how does that
work in and also at some point
you have your social ventures has to
make money right uh whether it's
donations
or through some other means is that
where
the the magic happens per se for the for
the funding
through that marketplace um
so on the philanthropic side your
question is is why do they support us
most of our support comes from the large
companies in town not from the
foundations
and the large companies
support us because they understand the
importance of sustainability
with business so we're talking about
jenny's we're talking about american
electric power as an example
american electric power nationwide l
brands
huntington bank um they um
they want the non-profits we want two
things
they want the non-profits to for their
impact to be sustainable
and they want the non-profits to be less
dependent upon philanthropy because the
the really nationally is
corporate philanthropy has been on a
downward trend for 15 years
one of the um pressures of the
stock market particularly um
in the last 10 years is
um there's more and more um
powerful stockholders shareholders
that are questioning
corporate philanthropy because every
dollar a company gives it away
is a dollar it's not giving to its
shareholders
and they're under tremendous pressure
i think in our community our
corporations have been
remarkable in how they have been able to
sustain their philanthropic activity
despite this pressure but it's a reality
and so they they really support our
efforts to help
non-profits become less dependent upon
that search because the other part about
columbus which is unusual
um and this this i learned
when um when i was still a consultant i
helped form an organization called the
columbus culture leadership consortium
which has
all of the 20 largest arts organizations
and we did a lot of research and what
makes columbus unusual
is we are predominated by corporate
philanthropy rather than individual
philanthropy
um in most other cities individual
donations are the largest component of
of donations to a non-profit gets in
this town
individuals aren't quite there um
uh a company ceo is more likely to write
a company check than a personal check
um and uh so the the notion
of of taking pressure off corporate
philanthropy is especially important
for columbus non-profits and many of
them have been very very proactive that
way
the columbus zoo and aquarium has
zombies ebay
a huge very profitable social enterprise
uh life care alliance which
has um the meals on wheels program has a
very
profitable la catering business
the uh franklin park conservatory um has
a huge and
very very profitable event space called
the wells park
um the columbus museum of art in its
new um remodeling that are completed
now has a professionally run gift shop
and a professionally run
cafe and the um
best event space in town so
um a lot of nonprofits have really
stepped up probably the most remarkable
one
is aquitas health which um
runs a free and reduced cost clinics
um originally just in the aids space but
now in the
i'd say in the low income space they
have a for-profit
pharmacy that has become so profitable
that they were able to open a brand new
clinic in the king lincoln district
without philanthropy um
so there are some really outstanding
examples
of non-profits who have really grabbed
their
grabbed the horns and um started to
chart out
a um independence uh cosi um
eight years ago bought a national
for-profit consulting company
on experiential learning that which one
is that which one's that one
um i'm not quite sure its name right now
it's changed since their leadership
changed but okay when i worked with them
it threw off a quarter million dollars
that they didn't have fundraise for so
there's a lot of really outstanding
examples
of uh of um nonprofits
who are um stepping up uh
to use social enterprise to be more
sustainable
yeah you gotta be innovative in a way to
actually uh do that right so
um innovative and brave and creative
because it goes against the grain of a
non-profit
that is that is true i was uh surprised
to hear that but from
cosi i had no idea that they actually
did that but you know they are a huge
uh part of columbus so you know they
what they also allow
what it allows them to do is they have
the largest
free and reduced family membership
program in the state of ohio
which one is that one um families
who are um i i don't know
the exact criteria but let's say
eligible for food stamps
i don't know um can get a family
membership for
eighteen dollars a year
i didn't know that
so hopefully cosi is not i think i i
think nonprofits need to start tooting
their horn they're very
many of them are nervous about saying i
make money on this
so i can do that it's not it's not a
common story
yeah many of them are uncomfortable you
won't hear the columbus zoo and aquarium
talking about
ever talking about how much money it
makes of austin zumbzy bay
so you're nervous so are there any other
uh
uh key takeaways that you would suggest
for
uh other nonprofits out there that are
not associated with you or just are
listening
that are outside of the columbus area
obviously you spoke about the technical
and non-technical side
are there any other uh piece pieces of
like
uh tips that you would have for them to
actually in these troubling times
well these troubling times are different
because you've just been told to shut
down whether your market exists or not
correct um so um so
i don't really have any advice during
this time except
hold on um you know
and stay in touch with your market
stay in touch with your customers stay
in touch with your donors
although you can't do anything right now
keep the communication lines when it's
over
my main message to nonprofits is
think about what you do well and who
you do it for
and is it possible for you to do it
in addition at a different place
for a different person or at a different
price um for example
hospitals have done this all the time um
the mount carmel hospital system owns
the new albany surgical center
the new albany surgical center has a
profit margin of over 33 percent when
last
reported that's huge that's amazing for
any business
of course what is what does it do it
funds their charity care programs
elsewhere
it funds all the losses on their
medicaid programs in their franklinton
and grove city operations
so what they've said is if i can do
um orthopedic surgery for people with
insurance who can pay 35 000
when it only costs me ten thousand
dollars i'm able to provide
charity care for an awful lot more
people than i could otherwise
um we've seen examples of
of social enterprises non-profits
who they did weatherization in the low
in low-income neighborhoods for free
but they had to have good installers
they had to have good inspectors they
had to be able to meet a certain
standards
well if you can do that in a low-income
neighborhood you can go to the wealthy
suburbs and set up a business to do that
too
and then use the money you make they
change the place
the person and the price so they could
continue to do weatherization in the
low-income neighborhoods
that's that's the classic formula that
works for most nonprofits
now the the three the three different
companies that you said
have stepped back uh because of this
covid um
what are the why did they step back
number one uh i could say
like i could assume but i don't want
bitch they went out of business
okay um what about the uh do you
foresee others stepping back as well
because of that same reason
um i i do i don't know specifically we
are in the process of reaching out to
every single one of the social
enterprises
many of them have fallen silent so we're
trying to reach them by phone to say are
you still there
are you still in business um are you
just on hold
just a handful have made announcements
um empower bus
announced last week they're going out of
business uh prism magazine
announced last week they're going out of
business
um uh elvis house announced last week
that they are
suspending their they're closing down
their lawn care social enterprise
um i'm sure there'll be more um
it all depends on how how how strong the
company was
before it was forced to stop selling
so you mentioned before you mentioned
before as a leader you're a visionary
um and now we're talking about
innovation how are you
are you i'm assuming you have a plan in
place or thinking about how can
social ventures uh start innovating
right in the future
whether it's q3 we've already made some
pivots for example one of our
our main areas of earned revenue was
putting on social enterprise markets at
the business locations where
we basically over lunch time we bring in
you know let's say 15 social enterprises
their staff come through
they buy from the social enterprises
that's the connection to consumer
well that's not happening now right and
um so what we've pivoted is
well what ways can we help connect
um individuals to social enterprise
products for the meantime so we
in seven days conceived and launched
an impact box program where people can
go online
to our website and they can buy products
we've got
um forced social enterprise products so
far next week we're expanding
to six uh social enterprises
um we lost that it's um we're averaging
about
two hundred dollars of sales a day now i
hope it builds
um they can go to our our website um
www social ventures cdbus.com
impact boxes and um and see what's there
um we've been constantly innovating we
sold uh
candles coffee hot sauce and dog bones
and we've we've now got ground coffee or
bean coffee we've got two
flavors of coffee you've got three
fragrances for candles
we've got three different kinds of hot
sauce next week we're
we're adding in um uh uh
organic fruit treats that are made by a
social enterprise in akron that employs
disabled individuals um so
we've we've pivoted to say okay our job
is to connect
individuals to consumers we can't do it
through job site
uh you know markets now we'll try
we'll set it up online and see what we
can do there and that's the kind of
innovation that i think
one has to do is okay what was your main
goal
our main goal is to connect customers
to social enterprises we couldn't do it
the way we've been doing it hopefully
that'll come back
soon what can we do now um so
we've actually started a new business
from scratch
and uh we'll see how it evolves we're
learning every day
what the market wants listen it's all
about
that's a good example of the innovation
uh
and that so um for our
social enterprises um i think the
hardest thing right now
for any business is how do you maintain
your vision when you're worrying about
cash
and i suspect most of our small
businesses have gotten nothing from the
government
at all and um they're just saying how
long can i
keep people on staff um
how many do i have to lay off to
conserve cash
um you know um
we haven't laid anybody off because i'm
just acutely aware of the
financial reality of my employees
they would be in crisis if if we cut
back
and um i'm
i'm just hoping that we can resume
events and people will be
interested in doing on-site programming
um
have to play it by ear we run out of
cash in september
so you know that creativity is really
really important uh because i think the
the fact that you ended up
pivoting from that visionary standpoint
it's pretty pretty uh
pretty strong in uh from your
perspective
but a couple things that i want to ask
you there is the uh your character i
think is pretty
strong in my opinion um and the reason
why i'm saying that is because as a
leader
you could easily say i'm gonna shave off
uh
you know back to what we're talking
about the low-hanging fruit
and you could say i'm going to reduce my
workforce and let them go but you're
aware of who your employees are and if
you
end up uh so that vicious cycle right
they were from an
economy standpoint so you're obviously
you you have the the education that
uh that you know what what it looks like
but now you're on the other side of the
fence that you see
the reality so from from your
perspective
now your perspective but your character
from a human character i
applaud you for doing that because
you're keeping them as much as possible
no seriously it's uh listen uh
you and i and everybody else in the
world we we uh we try to avoid as much
as possible
the media or the news because it could
be very uh detrimental
at times but some things that we have
seen is that
22 million people have filed for
unemployment
in in the united states of america and
that's literally 4.4
there's a lot of economists that say
that that 4.4 is going to be in the
double
digits uh when we actually get the real
number in april or
or may so from a character perspective
what do you think has shaped you in your
life from a leadership perspective and
your character to basically
take a step back and say you know what
i'm not going to lose reduce my labor
force because
that what you just said right there i
know who they are
and the impact that's going to happen
their lives
well um without seeming corny i don't
want
people start with their parents um
my my my father was a
teacher and my mother was a hospital
administrator in a small town
she knew the name of everyone in her
hospital
including the custodians
and she she grew up on a subsistence
farm
and she she felt that everyone
was just as important as the doctors in
a culture
that is very hierarchical that's true
um and my father
really felt that his job was
the porter and advocate of his students
even when that meant taking on the
administration
and uh you just see that um
the um i started out
um
uh i think that that
orientation of helping people uh has
always been there and
in in my early career i i had the um
privilege of working at some pretty high
levels
and um the way that
manifested itself was uh
most economists are trained to say this
is the question i'm interested in this
is the question i'm going to answer and
this is i'm going to give you
my opinion and what what i saw
was what really mattered was
the person that we worked for what was
their question
and did we give them an answer they
could use
and um so that
even when i was the deputy budget
director for new york city
um during the fiscal crisis
ed koch was the mayor at the time
um my job wasn't to tell
him what i thought was going to happen
to the revenues and economics in the
next 12 months
my job was to tell him the various
scenarios of how it could play out
and when he would know which scenario
materialized and to let him decide
which he could work with because my job
wasn't to
undermine him my job was to give him
information he could use in his
leadership decision making
and that that is what we now call
servant leadership
yep um though i find the term actually
not very helpful
but that's kind of what it is is
my job is is to figure out what you need
and to help you do it
obviously there are sometimes
you're asked to do something that you
do not believe is consistent with your
values and
that has led me to leave some
jobs um because i i just wouldn't do it
listen uh he started that that answer by
saying you don't want to be corny
i don't think that that definitely what
uh
you were not corny at all i think the uh
the way you started
the answer with you you know your where
you grew up with your parents and how
your parents you saw how your parents
were interacting with any any individual
the custodian
uh effect and i think you know i agree
with you
um i agree with you completely because
uh that's how
that's how i approach things too that uh
you could be the ceo i'm gonna give you
the respect you you deserve
obviously or uh but at the same time i
think
custodians are their own ceos as well
because let's face it they have the keys
to the kingdom
and uh with the keys to the kingdom they
know every
everybody in the operation they know
what's going on and they may have a
little bit more
insight of what's going on with the
boots on the ground more so than the
individuals that are
the shareholders or or whatnot so i
applaud you for saying
that well i thank you um you know it's
there's a there's a concept of
management called managing by walking
around
yes and and i i think that uh
the ground the the basis for that
is you got to have a lot of humility
that even if you're in this
v suite you don't know everything that's
true
and um your job is to have
perspective and um
how do you get perspective when my board
members
say well what do you look for from a
board member and i said well
to me what a board member brings is
perspective because
you are episodically involved in what we
do
i'm in there every moment you can see
things differently
so i need to know different perspectives
and frankly
especially in a very large organization
you need to have ways to get to know
what's going on and to have perspectives
outside of that
bubble which is called the c-suite
that's true
um so two more questions before because
i know you're a busy man and i don't
wanna
i could i could have uh continue talking
but uh
what's one thing that people don't know
about you that you wish that they knew
whether you
you wanted them to know
i started out as a musician and i was at
the
conservatory and uh i studied under a
remarkable man named
vic firth who those who are in
percussion or drums know that name
and um that's always been my heart
but i couldn't make a living in 1972
in music in a way i wanted to
um no no offense to people getting
married
but almost every wedding is the same as
the other one
and in 1972 it was waltzing the kilda
and i would rather shoot myself than
make a living
sorry so
drums is that what you played before or
dramatically a concert percussion
i um i uh sold my drums
uh four years ago but i still have a
concert grand marimba
and a uh vibraphone which i can't bear
it apart
but uh i got to move away from my music
uh
a long time ago to manika listen uh i
used to play
i used to play the the baritone and the
tuba uh really
yes sir i used to play the tuba part of
the marching band in my high school and
i think that's you know i again i was in
high school i didn't know
you know too much but i said hey i don't
think i could make a living off of
playing the two of the rest of my life
but now that i'm
but a lot of people do a lot of people
you know they're in uh
so a lot of respects for musicians out
there that are definitely figured out
how to do it but i
me when i was 17 years old i i didn't
know
i didn't know any better i didn't know
any better sometimes i actually do
miss playing the tuba in the atmosphere
of actually just being
being with a crowd of people um and
playing uh
some beautiful music so uh you know i
apologize
one of my dreams is to learn to play the
piano because
the best way to continue to play music
is to be able to
play me by yourself and the problem with
drums or tuba
is you have to be in a group with other
people and i haven't played in a rock
band since
1988 so i think i i think i see
as a visionary i'm also a visionary too
i think uh in the next six months
i think you and i should learn an
instrument and just play
you can play uh the drums or whatever it
is the piano and i'll try to
you know saxophone is one of the one of
the uh uh instruments that i
it's a very um
it's very it plays beautiful music
there's another word that i
i'm not going to say here but it's it's
a beautiful view
look for uh a soprano sax
an alto sax or a tenor sax which really
intrigues you
i think tenor ah you want the big one
i think tenor i think i mean
i think all three of them are pretty
interesting but i think the tenor is
just
the the sound that it makes i don't know
it can go hot but it can really honk oh
yeah
oh yeah oh yeah
final question for you uh how can people
help
social ventures make uh today i know you
mentioned the uh how you pivot it with
the with the impact box
uh i think there's really there's
there's two ways um they can help us
today during the culprit virus
is um we we have seen our major revenue
sources
cut off like everyone else um the
foundations
are not are funding the grasshoppers
we're an ant
um they can buy the impact boxes
and they can donate to us we would
really benefit with donations
even you know 10 bucks helps um
you know so i can keep my staff on
payroll
um it's socialventuresbus.com
impact boxes when you go to that site
it'll give you the option to donate or
to buy one of our impact boxes
and if you buy an impact box you're
helping
to provide cash to organizations that
are
transferring all their profits to the
food bank system
employing survivors of trafficking
giving jobs to people who are developing
disabled and um uh
helping people that are survivors of
trafficking it's
it's a way you can really do some good
we all drink coffee or we burn a candle
or we give our dog treats you know um
and uh or we like to spice up those
noodles because they're getting so
boring
know that's that's something that's
something you can you can do
um you know it's not it's not a lot of
money but it'll make a lot of difference
and to stay in touch with our general
social enterprises when this covered
crisis is over
go to our website click on the
marketplace
you can sort by product sort by cause
you can look at the map see where
they're located and make the notion of
buying social a part of your everyday
this may be you know date me but there
was a commercial
for v8 use was i could have had a v8
yeah i want people to say i could have
bought social
i didn't instead of going to starbucks i
could have been a roosevelt coffee
you know um instead of going to uh
candle works i could have gone to 11th
candle
um there's a those are choices
and in the front of your mind when you
get your
grass cut you can have your grass cut by
a social enterprise
you can have your house painted by a
social enterprise you can have
your deck fixed and repaired by a social
enterprise
it's amazing what you can do and when
when we're back in our
offices and you order and lunch for a
meeting you can have a social enterprise
box lunch for that meeting there's just
unbelievable
ways that what you do every day
you could start to make an impact
without spending more money than you're
already spending
so here's my pledge to you i think i'm
gonna take you up on that offer for the
uh for the grass
maintenance of my of my house on a
personal level but uh for anybody
out there that's listening uh i would
like for you to please uh share with me
at least
a picture or two of the impact box that
way i can share also
on the social media page because uh i'm
highly active on social media
so one of the things that i'm gonna do
for you is uh put that impact box
uh picture that you that you're
providing put put in all the links on
there
um that way to help you out i know you
said ten dollars is a little bit but
trust me like i mentioned before and
i'll say it again
uh as a founder of a nonprofit
organization before and also as a
founder
of a small business myself that i also
lost
my small business every single penny
account so
i'm going to do my best to help you out
um and every single
yeah for sure so alan dr proctor thank
you so much for being part of the
conversation
uh with the with me luis ramirez and the
host and again you could also
uh reach out and subscribe either on
youtube
instagram uh or soundcloud or also
podcast to listen to this audio and
video which will be posted soon
dr alan thank you so much sir thank you
so much
have a good week stay healthy for sure
thank you
