MY SIDE OF THE STREET: Nonprofits don’t have to lose money

There is still some grumbling going on about Betty Chinn’s day center coming to downtown Eureka. Opponents say it will sap the delicate business atmosphere of vitality needed to reinvigorate the area. My MYSIDEOFSTREETbrother recently drove down Fourth Street for the first time in several years and wondered where all the pawn shops came from – I guess that’s the renaissance they are talking about.

Last week I wrote about the difficulties facing ex-offenders when they try to get jobs and become productive members of society. Training programs especially for them can be a useful part of the process. One I referred to is run by the Lutheran Metropolitan Ministry in Cleveland.

It’s a culinary school which prepares meals distributed to local shelters. It operates out of a new, purpose-built space with commercial equipment; the budget is $800,000 per year. There are nine full time workers.

The program recently moved from a more typical kitchen space for feeding the poor. Think old, underperforming equipment, surfaces that are hard to clean and inadequate storage. The replacement building, which also houses offices for the ministry, cost more than $7 million to buy and renovate.

The money was patched together from grants, both government and private, and donations. Whether they are called charitable or nonprofit, organizations which exist to help the unfortunate are usually regarded as black holes for funding. No matter how hard they try, there is never enough money to pay for everything.

That’s why a story in the San Francisco Chronicle caught my eye. It was about Rubicon Bakery in Richmond. The business had been for sale for some time, hampered by a slow economy, a social mission to employ only “ex-cons, recovering drug addicts and homeless people” and monthly losses in the tens of thousands of dollars.

When Andrew Stoloff, owner of the Red Tractor Cafe, was asked to consult, it didn’t take him long to see why the place was losing money. Employees were washing baking pans by hand and ingredients were being purchased at near-retail prices. The people running the bakery were focused on helping others, not turning a profit, and it showed.

He knew it would take a big investment to turn the bakery around – just the industrial dishwasher cost $100,000 – but he took the plunge, buying it from the founders with a promise to maintain a commitment to giving people a second chance. Less than four years later, the bakery has nearly 100 full time employees, up from 14 part time, and sales have increased by more than 400 per cent. Employees, most of whom would be turned away from conventional businesses without even an interview, earn $9 to $24 per hour, three weeks of paid time off per year and health insurance.

Rubicon thrives in a niche of the commercial bakery business, big enough to supply regional and specialty chains, but small enough to be flexible. If a customer wants 6-inch cakes instead of 8-inch, Rubicon can handle the job. Whole Foods wanted marshmallows without high fructose corn sugar; Stoloff made it happen.

He doesn’t just carry on the mission of giving people a second chance, he returns a portion of the profits to the original owners. The payments are higher than the nonprofit ever made running the bakery itself. In an article for the Huffington Post, he summarized what he has learned:

“1) Treat people with respect. It’s the golden rule, and it applies to everyone.

“2) Don’t judge people by their past. Give people a second chance and they will surprise you.

“3) Create a safe work environment. Many of our employees have had setbacks in their lives–homelessness, drug addiction, imprisonment. Together, they form a supportive community, and never judge one another.

“4) Find partners. We work with a number of local programs that assist people who want to turn their lives around. These programs help us identify those who are really ready for a second chance. In our area, we work closely with Rubicon Programs, the original founder of the bakery and the Berkeley Bread Project as well as with the Alameda County Jail.

“5) What seems small to you can make a big difference to someone else. Rubicon Bakery offers no-interest emergency loans starting at as little as $50 and up to $3,000. A few hundred dollars could help someone from winding up back on the street. I saw what happened to our employees when they were forced to borrow from a payday lender with interest rates up to 400% so I started our own interest-free loan program.”

Up until now, organizations seeking to help people improve their lives have seldom been run on a businesslike footing. Stoloff has shown it is possible to do both. I think Betty Chinn would approve.

(Elizabeth Alves notes the best way to help people is to make it possible for them to support themselves and their families. Comments and suggestions are welcome care of the Press or to

<a href=”mailto:”></a>