Susie Steckner
The Arizona Republic
Jun. 13, 2005 12:00 AM

A new caterer in town is serving up dinner buffets and banking profits to help needy families. A home improvement store is selling discounted wares to build more affordable housing.

Across the Valley and state, ventures like these, "social enterprises," are making money and fulfilling missions at non-profit organizations. Driven by shrinking government funds and the roller coaster of private donations, organizations want to generate some of their own income and then use it as they see fit.

Of course, many organizations have been doing this for years through thrift stores, cookie and candy sales, or other efforts. But more and more are trying out new ventures, some of which go beyond the usual or replicate what has worked elsewhere.

Phoenix's United Methodist Outreach Ministries New Day Centers, which shelters homeless families, recently opened the New Day Gourmet Catering. Events so far have generated $6,000 to $7,000 for the non-profit agency.

"When you have a budget of $4.5 million for UMOM and 45 percent of that is private (donations), it's a good beginning," facilities director Gary Law said.

The payoff in the end can be big. The Prescott Area Habitat for Humanity covers all administrative costs using revenues from its home improvement store. This year's gross revenues should hit $500,000.

All private donations now go to home building, which appeals to donors, Executive Director Miriam Haubrich said.

More than ever, the non-profit sector is getting guidance from academia, business leaders, foundations and advocates. Non-profit groups are responding, with everything from an art gallery in Bisbee to a wholesale bakery in Boston.

Robert Ashcraft, director of the Center for Nonprofit Leadership and Management at Arizona State University, said more non-profit groups are asking for help to become more effective and efficient. In March, the center's forum on social enterprise drew more than 200 people statewide.

Last week, Yale's School of Management and the Goldman Sachs Foundation completed its third-annual business plan competition for non-profit groups. More than 450 groups nationwide entered.

Among the finalists was Bisbee's Women's Transition Project, a transitional housing program. It made the cut for its income-generating Belleza Gallery, which showcases furniture made by WTP clients and work from regional artists.

Like any business venture, social enterprises have risks. Experts caution that non-profit organizations may lack business expertise, develop enterprises that don't fit missions or dilute their missions by paying too much attention to an enterprise.

"Social entrepreneurship is not the panacea for every non-profit desiring to implement new revenue streams," Ashcraft said. "But it is a concept that is worthy of exploring."

If an organization can become more self-sustaining, the greater community ultimately benefits.

"Social value is created as the mission of the organization is achieved and lives are changed for the better," Ashcraft said.

Like the gallery in Bisbee, UMOM's catering company is making money and providing vocational training for clients. The clients enroll in a 10-week culinary program to learn everything from basic sanitation to preparing soups and sauces, said Donovan Rainbolt, a professional chef who runs the program. The students also have internships and work at catering events.

UMOM resident and student Dalisha Taylor, 25, wants to continue her culinary education and open her own business one day. Her first catering job, for 1,000 people, was eye-opening.

"It let me know how it was really going to be," she said.

Habitat for Humanity Valley of the Sun in Phoenix, which opened its Discount Home Improvement Center in May, is banking on successes seen by 200 similar stores run by Habitat affiliates. The store, at Central and Watkins avenues, sells new items such as hot-water heaters, fixtures and furnishings from pricey homes that are torn down, and antiques, said Mike Booher, director of retail operations. Habitat hopes revenues will help pay for more affordable homes for low-income residents.

This kind of financial diversification is good news, said Marissa Theisen, president and chief executive officer of the Arizona Grantmakers Forum, a group of foundations and others who fund non-profit organizations.

"I think most funders feel overwhelmed as over and over again non-profits come to the well," she said.

Instead, donors prefer to provide grants for a few years and then help other agencies tackle other social problems.

Mesa's non-profit Xicanindio Artes, which promotes indigenous arts and culture, has been boosting its bottom line by selling artwork for about a decade. The agency works with artists to create prints, which are auctioned off at an annual fund-raiser or sold at special events.

Last year's auction brought in $20,000 for art, about half of it from the agency's money-making venture with artists, Executive Director Dina Lopez said. A special art sale earlier this month brought in $3,000, all from the venture.