Q&A with Steve Votaw: Two Startups Help Mission Keep up With Growing Needs
Steve Votaw has used his two degrees in criminal justice to tackle its underlying causes. He spent the first 18 years of his professional life expanding Directions for Youth and Families to a $8 million nonprofit serving at-risk families. For the past three years, Steve has served as president of the Furniture Bank of Central Ohio, and has championed the launch of two social enterprises: Furniture with a Heart in 2016, and Downsize with a Heart in 2017. The organization’s latest startup recently received the 2018 Nonprofit Sustainability Award presented by SocialVentures at The Metropreneur’s ASPIRE celebration of Social Entrepreneurship in Columbus. The social impact of Furniture Bank’s Downsize with a Heart, as Votaw explains as: “for every family we downsize, we can completely furnish a home for two families in need.”
SocialVentures talked with Votaw about his latest venture and the lessons he has learned about entrepreneurship in the non-profit sector. A version of this interview first appeared in Columbus Business First on October 5, 2018.
As a nonprofit what inspired you to start in social enterprise?
The Furniture Bank was looking to replace some of our philanthropic funds which had diminished over the past several years. We wanted to create a social enterprise that could generate surplus revenue as well as additional furniture for our families in need.
Tell us about your newest social enterprise.
We want to help create a solution for older adults who are looking to move from a larger home into a smaller residence. Downsize with a Heart helps them sort through years of accumulated goods, pack their belongings, physically move, unpack, collect their donations, and remove trash. By providing all these services, we are able to make a move much easier for the customer.
The moving business is very competitive. What is your special sauce?
Our sales pitch is to sell the mission of our nonprofit. While keeping our prices competitive, the fact that our profits go into our mission and stay in Central Ohio often wins the bid. People resonate with the notion they are getting a move and they are supporting their neighbors.
Starting a new business is hard. What is the biggest obstacle you had to confront to bring your business to where it is today?
We had planned to help more families with the sorting and packing process. Shortly after we started, we found that the moving aspect of our service was the most requested. We hit a few bumps in the road and had to increase training and hire additional staff to enhance that part of the service.
Was making this pivot a no-brainer or was adding extra expenses a conceptual hurdle because you are a nonprofit?
We quickly decided that if we were going to make Downsize work as a business, we had to take on the extra costs. We had not emphasized nor built up the moving component of our offering, but the feedback from customers was not just about the moving component but also being able to execute the move without delay. We realized that if we didn’t do the moving component better, the business would not succeed. We had to hire an expert in the moving business because the need to shift quickly argued for hiring someone new rather than devote the time to develop internally a skill we didn’t already have on staff.
Some have suggested that social enterprise launches are more difficult when the parent organization is a nonprofit. What advice do you have for nonprofits that are considering starting a social enterprise?
Create a board sub-group that can lead and structure board deliberations about the new business. Make sure that the new business is clearly tied to the mission and that you know how you will communicate its tie to mission. Second, taking on debt is good when it adds value. Nonprofits should at least explore a loan option rather than just seek grant funding. Third, a startup’s need to spend before revenue can come in compels us to be much more vigilant in tracking revenues.
Fourth, get the talent of your board involved. They most often come from the business side. Also, be willing to bring in the expertise you need to make the business work. Don’t assume your current mission-related staff are the right ones for this new business.
You have been in non-profit management for a long time. What are the major changes you have seen in the challenges and opportunities nonprofits face?
The biggest change is that we should not expect more money from the government or philanthropic sectors. And even the money that remains is continually redirected to new priorities. As a nonprofit, we have an obligation to serve as many as possible within our financial means. That requires us to find new ways to generate revenue. To do that, all nonprofits need to get into the game and explore starting a social enterprise.