Nonprofits take entrepreneurial path

8 groups join effort to boost revenues, aid parent organizations

February 10, 2004|By Reginald Fields | Reginald Fields,SUN STAFF

The Hollywood Diner, downtown under the Jones Falls Expressway, dressed up its menu yesterday with a new sandwich named for the mayor.

O'Malley on a Roll is roast beef, sauteed onions, lettuce, tomato and mayonnaise on a sub roll -- nothing unique. But the sandwich marks a new marketing approach for the diner's owner, a nonprofit organization trying to make money on the restaurant.

"We need to do more to draw customers in," said Ivan Leshinsky, executive director of the Chesapeake Center for Youth Development, a nonprofit organization that has operated the diner for 14 years.

As the economy has slumped, nonprofit organizations, which rely heavily on public and private donations, have felt the pinch and are seeking new ways of generating revenue to sustain their programs and services.

Eight nonprofits have joined to form the Baltimore Community Wealth Collaborative in a 10-month process to learn how to run a business whose profits will be funneled back to the parent nonprofit organization.

The process is being led by Community Wealth Ventures, a Washington business whose nonprofit parent is the anti-hunger organization Share Our Strength.

Ventures is being paid $350,000 by several Baltimore area nonprofits, including the Annie E. Casey Foundation, to teach business skills to nonprofits striving to be more self-sufficient.

"We're very interested in making sure that these nonprofits are very stable and have the resources they need to do good work," said Diana Morris, director of the Open Society Institute-Baltimore, a foundation that funds nonprofits and is also helping to pay for the business training.

"The problem," Morris said after a news conference yesterday announcing the collaborative, "is that a lot of them are depending on public and private donations that lately have been quite shaky."

Thirty-seven nonprofits applied to be part of the Baltimore collaborative. Eight, organizations that had previously made entrepreneurial efforts, were selected: Chesapeake Center, BioTechnical Institute of Maryland, Bon Secours of Maryland Foundation, Caroline Center, Goodwill Industries of the Chesapeake, Parks & People Foundation, Patterson Park Community Development Corp. and Vehicles for Change.

The Hollywood Diner has been operated since 1990 by Chesapeake Center, a Baltimore group that provides job training for at-risk youths. But the diner has never made a profit, which defeats part of Chesapeake Center's purpose for getting involved with a for-profit venture.

Few at Chesapeake Center understood how to run a business, Leshinsky said.

"We've had no advertising budget, no marketing program, and no real job description that holds anyone responsible for profits and losses there," Leshinsky said. "We've had to subsidize it every year. That's why we joined the collaborative, to learn some business concepts."

As part of the 10-month process, Community Wealth Ventures will bring in entrepreneurial speakers each month, and Venture staffers will help the nonprofits write business plans.

For the Hollywood Diner, renewed efforts to start turning a profit began last month when the roast beef sandwich was named for Mayor Martin O'Malley in an attempt to implement some of the marketing strategies the diner has learned.

Leshinsky said the diner has increased its operating hours to 84 from 35 a week.

"Potentially, if the Hollywood Diner goes through the planning process ... they may be able to put together a very good business plan to turn a profit, and with that money they will be able to support other Chesapeake Center programs," Morris said.

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