logo logo
Donate
    • Membership
    • Donate
  • Social Justice
    • Racial Justice
    • Climate Justice
    • Disability Justice
    • Economic Justice
    • Health Justice
    • Immigration
    • LGBTQ+
  • Civic News
  • Nonprofit Leadership
    • Board Governance
    • Equity-Centered Management
    • Finances
    • Fundraising
    • Human Resources
    • Organizational Culture
    • Philanthropy
    • Power Dynamics
    • Strategic Planning
    • Technology
  • CONTENT TYPES
  • Leading Edge Membership
  • Newsletters
  • Webinars

Another Social Enterprise Tries to Devour Its Host Nonprofit

Ruth McCambridge
May 14, 2018
“This is not a CASH Cow,” bixentro

May 13, 2018; Idaho Statesman

NPQ has previously warned nonprofits about the risks involved in developing a social enterprise that is expected to act as a cash cow to the mission of a nonprofit. Here is another example. The Idaho Youth Ranch is a 65-year-old nonprofit organization in Idaho that provides residential care for at-risk youth and their families. As it’s described in the Idaho Statesman, it can serve only 26 children and teens at one time, even as it operates 27 retail thrift stores and other outlets (like used-car lots) throughout the state. These are listed as programs, with the revenues listed as program-related income on their Forms 990. But the organization’s mission, according to its 990 posting on GuideStar, reads:

The Idaho Youth Ranch provides troubled children and families a bridge to a valued, responsible and productive future. To this end, we help each child find the hope, vision, courage and will to succeed. We provide stability, opportunity and security. We encourage growth and offer a chance to develop confidence, independence, esteem and respect. We teach values, responsibility and self-discipline in honest, caring environments. We believe in family, work, accountability, education and responsible behavior. We are a catalyst for change.

This conforms with its “Our Programs” description on GuideStar, but not with its financial reports.

Sign up for our free newsletters

Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

Idaho Youth Ranch as a whole operated on a $24 million expense budget in fiscal year 2017, but only 15 percent went to its charitable programs. The shops altogether brought in, according to the Statesman, $244,000 in profit from $17 million in sales, even though the organization as a whole ran deficits for the past four or five years, according to the interim director. Meanwhile, the organization spent $2 million on residential programs for at-risk youth, $1.4 million on “community services,” and about $112,000 on workforce development.

You might well ask which enterprise the organization’s main focus is and whether the children being served get the care they need. According to this report in the Statesman, former employees—and there are many, due to high staff turnover—allege that service numbers are inflated, administration is top-heavy (leaving direct care understaffed), and the safety of children at the ranch is questionable.

One former manager estimated that 50 to 60 employees left over 18 months, including a therapy team of 12 that dwindled to two. Due to hemorrhaging those workers, the Youth Ranch has lost its ability to give adequate care to children and their families, according to people who worked there during the past decade.

Over the last year, the organization has been in reorganization mode, closing five stores. NPQ has often cautioned nonprofits against thinking of social enterprises as cash cows for their real mission-oriented work. Too often, they drain precious resources, including time, attention, and cash away from programs. In this case, though, the social enterprise so dominates the organization that it’s hardly surprising that mission programming appears to be in a tailspin. Since the mission in this case deals with children with mental health concerns in residential settings, that’s a very dangerous road to go down.—Ruth McCambridge

About the author
Ruth McCambridge

Ruth is Editor Emerita of the Nonprofit Quarterly. Her background includes forty-five years of experience in nonprofits, primarily in organizations that mix grassroots community work with policy change. Beginning in the mid-1980s, Ruth spent a decade at the Boston Foundation, developing and implementing capacity building programs and advocating for grantmaking attention to constituent involvement.

More about: Equity-Centered ManagementMission-Related InvestmentNonprofit NewsSocial Enterprise

Our Voices Are Our Power.

Journalism, nonprofits, and multiracial democracy are under attack. At NPQ, we fight back by sharing stories and essential insights from nonprofit leaders and workers—and we pay every contributor.

Can you help us protect nonprofit voices?

Your support keeps truth alive when it matters most.
Every single dollar makes a difference.

Donate now
logo logo logo logo logo
See comments

You might also like
How to Transform Strategic Planning for Social Justice
Nick Takamine
Learning from a Near-Death Experience: How to Survive a Budget Crisis
Donnie Maclurcan
Merging Missions: Starting with Relationships and Shared Authority
Hoang Murphy
Scaling Impact: How Mergers Can Advance Housing in Communities
Priya Jayachandran
Beyond Shared Vision: Building a Collaborative Road Map
Michael Anderson
Why Legal Fear Shouldn’t Drive DEI Decisions: What Leaders Need to Know
Jennifer Johnson

Upcoming Webinars

Group Created with Sketch.
July 24th, 2:00 pm ET

Organizing in Divided Times

The Relational Infrastructure We Need to Protect Democracy

Register
Group Created with Sketch.
September 24th-25th, 2:00 pm ET

Advanced QuickBooks for Nonprofits

Expert Guidance for Experienced QuickBooks Users

Register

    
You might also like
US Capitol Building
Trump Budget Bill Spells Trouble for Nonprofits
Isaiah Thompson
A group of about two dozen students, many wearing blue shirts, walk in the rain in front of the US House of Representatives.
How Nonprofits and Activists Can Oppose Trump’s “Big...
Matthew Rozsa
Aurelio Diaz Tekpankalli’s allegorical “Liberation through Knowledge” shows people; two large, opened books; and animals.
How to Transform Strategic Planning for Social Justice
Nick Takamine

Like what you see?

Subscribe to the NPQ newsletter to have our top stories delivered directly to your inbox.

See our newsletters

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

  • About
  • Advertise
  • Careers
  • Contact
  • Copyright
  • Donate
  • Editorial Policy
  • Funders
  • Submissions

We are using cookies to give you the best experience on our website.

 

Non Profit News | Nonprofit Quarterly
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.