Wednesday, November 19, 2014

A Good Use for a Quarter Million Dollars

What’s the right way to use $250,000?

Saturday Sally and I took a behind the scenes tour of ProjectHome Indy, one of the neighborhood non-profits that Trinity Episcopal Church supports.

PHI rents from Trinity, for about a dollar a month, a home around the corner from the church that the organization has nicely restored and now maintains as a place that offers shelter and life-skills training to homeless pregnant teens and teenage moms.

Read that again.  Homes for pregnant teens have been around for generations.  This one fills a need for girls (yes, “girls,” we’re talking about children) who have no place to live.   Many of them are 15 or even younger; they are pregnant or raising a newborn; and they have no home.  Perhaps they’ve been kicked or driven out of a parent’s home.  Perhaps the one parent they have is homeless themselves.  Perhaps home is where a stepfather or relative or unrelated adult male impregnated them.

PHI’s lovely house has five bedrooms upstairs, so at any one time they are working with as many as five girls (and maybe their babies).   Sometimes they’re not full.  Some clients don’t like the structure and bolt at the first bad opportunity to sleep on a friend’s couch.   Some stay as long as 18 months, but the average is closer to six months.

 “Success” for PHI is when a client completes whatever is necessary to move out into a sustainable home life.  Sometimes that means that the original home has become viable again.   More often, it means completing high school or a GED, getting a job, perhaps sharing an apartment with another “graduate,” ideally having acquired the knowledge and the habits to build a life outside the cycle of poverty and abuse  that led them here in the first place.

Based on the numbers above, it would take an absolutely ideal set of circumstances for PHI to serve and graduate ten young women a year.  But probably, five is closer to the reality.

We didn’t talk about budget, but afterwards I looked PHI up on Guidestar.   The most recent numbers there show them as a $250,000/year operation.  Most of that is the cost of having 24/7 paid adult supervision in the home.  They also have an impressive part-time executive director who, like most part-time non-profit execs, is really just receiving part-time pay for full-time work.   In the year I looked at, less than a third of their revenue came from reimbursements from the state’s Department of Child Services.  Private donations made up the rest.

I have to admit to doing a mental calculus on return on investment.   $250,000 seems like a lot of cost to society to run an operation that serves five people a year.  $250,000 is four times the annual budget of each of the two feeding ministries – a food pantry and a kitchen – where I volunteer.  And those both serve hundreds of people a month.
On the other hand, our clients are hungry again within a week, or a day.

At PHI, that $250,000 helps five teenage girls who ideally learned the skills and disciplines to break the cycle.   Odds are, without intervention, they would have had another baby while they were still children themselves; maybe more.  Odds are, those babies would grow up in the same cycle of dysfunction and, in 15 to 18 years, have a couple of babies themselves.   And they would repeat the cycle. 

Ideally, this year’s quarter million dollars turns around the lives of five young people.   It avoids the need for ten such investments in 2030 and the couple of years thereafter, and twenty in 2045, and forty in 2060. That’s 70 future “broken” lives, in just the next fifty years, that hopefully won’t need interventions at the cost of $50,000 each.   That’s three and a half million dollars.

PHI’s inspirational CEO Lakshmi Hasanadka would love to build an endowment, and who can blame her?   We teach our non-profit leaders to use renewable revenues on operations, and one-time gifts like bequests for capital projects or to build endowments.  But would another $250,000 be better used if it was used as an endowment?    It could create $12,500 a year in spendable income.   How much of a difference would that make on this issue, in the lives of five people a year? 
Such a gift to PHI, as an endowment, would spin out $12,500 a year … $125,000 a decade … $625,000 over fifty years. 

Coincidentally, $250,000 is also just about what it took PHI to rehab a sturdy but dilapidated house that our church made available to them four years ago.
I don’t want to oversimplify the situation, or make another organization’s decisions for them based on two hours of observation.  I just want to point out that sometimes, the best way to use $250,000 can be to spend it.

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