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Thursday, May 19, 2022

Service Opportunist

Since founding Hope of the Valley Rescue Mission in 2009, former preacher Ken Craft has grown his nonprofit into one of the largest transitional housing and homeless service providers in the San Fernando Valley. With regulatory red tape and a strong NIMBY contingent limiting real estate options, the job has been anything but easy. But Craft’s managerial style, a penchant for networking and a genuine desire to help change people’s lives have moved the organization forward in its mission. In the last two years alone, Hope of the Valley has set up nearly a half-dozen tiny home communities, an 85-bed bridge housing facility in North Hollywood, six COVID-19 shelters in parks and recreation centers and purchased the landmark Skateland building in Northridge for conversion into a homeless shelter. That’s in addition to operating several cold-weather shelters, a substance abuse home, job center and thrift stores in Granada Hills, Simi Valley, Santa Clarita and Palmdale. In 2021, the nonprofit will cross a major milestone by providing more than 1,000 beds for unhoused Valley residents.Question: This is a time of significant expansion for Hope of the Valley.  Why now?Answer: When I started Hope of the Valley back in 2009, there was a recession going on. There was a lot of resistance. What made it difficult was the current policies within the city. It wasn’t until the last four years that I think as a whole Los Angeles had an “aha!” moment, a “eureka!” moment, where our eyes were opened. There was the notion to pass the two bond measures, H and HHH. Angelenos were feeling pretty good about themselves. But the challenge with the only arrow in your quiver being permanent housing is that you’ve forgotten how challenging it can be to get affordable housing passed and how long the process takes.

What happened?When the mayor declared the shelter emergency, it changed the playing field. Now, no longer could you only have a shelter in a C2 or CM zone with 30 beds or less without a conditional use permit. It did away with the conditional use permit. It added M1 and M2 manufacturing buildings and any property that was city-owned. And there was no limit (to the number of beds).

So?All of a sudden, the political winds shifted. Instead of having headwinds every time we tried to do something, I started feeling this tailwind. If I’ve learned anything in life, it’s that when the wind is at your back, you put up your sail. I remember meeting with our board and saying the thing about opportunity is that it does not announce itself before it knocks. Either you open the door and respond, or you don’t. Throw a federal lawsuit on top of it, this additional pressure from the city to respond to the needs of the poor and homeless, and it became this perfect storm for not just us, but for all service providers to step up and do something on a grand scale.What about NIMBYism?It’s still a reality, but where before it was a 10, now it’s down to a 5. Change nothing and nothing changes. Angelenos who drive and they see this mass increase in encampments, it’s a bit of a disgrace. This is not just the government officials’ responsibility. We have to find ways to open our arms to those who are truly hurting and in need.Where and how you get the funding for projects?When I started the organization 11 years ago, the thing that was first and foremost on my mind was sustainability. It doesn’t do any good if you launch a nonprofit, do good for a few years and then it closes its doors for lack of funding. You need donors. How do you acquire donors? Well, one way to do it is to actually rent lists of individuals. It’s a one-time use and if someone responds, you have their data. We took a risk, rented a list and sent out a mailer during the fourth quarter of 2009. We didn’t have any results to share – all I could share was my vision. Fortunately, there are some donors that are early adopters. We have many donors that were there with me in the first year when we had nothing but a dream. They have also been pleasantly surprised to see that their early investment has produced a good return. For us, the return on investment is to change lives.

What about your thrift stores?I knew we wanted social enterprise – that was an important part of our business model. So we opened up our first thrift store at the end of our first year. That way, people could support us not just by writing a check but by gifts in kind. That was a great decision.

Any other revenue streams?Events – we’ve always been pretty big on events. In your first three years as a nonprofit, foundations pretty much won’t look at you because you haven’t filed enough 990s so they can’t really check you out as a charity. Today, 40 percent of our revenue comes from thrift stores, another 40 percent comes through contracts with the City of Los Angeles and the final 20 percent comes through individual donors, foundations, corporations and events.

What’s Hope of the Valley’s annual budget? In 2019, it was $7 million. In 2020, it was $13 million. In 2021, it’s going to be $22 million. Homeless services are expensive. We’re open 24 hours a day. We have food services. We have all our buildings, the cost to lease, to insure and the utilities. We have our specialist employees, the case managers, the housing navigators. We have mental health, substance abuse and job training services. Put that all together, plus all the supplies. It’s not cheap. But by the end of this year, we’ll have well over 1,000 beds available here in the San Fernando Valley.

Have you run into challenges scaling  that quickly? Part of business is the ability to look ahead and see what’s coming your way, and to be ready for it. We started to see things were going to change, so we started preparing for that in terms of our org chart. We had it all mapped out with each shelter so we built the infrastructure to not just maintain what we have, but for growth.

Where’s this headed?Part of my vision is not just to have Hope of the Valley – I want to have Hope of the Antelope Valley, Hope of Hollywood, Hope of Los Angeles. We’d have a parent organization that would be called Hope United that would basically link all these Hope entities together, but through economy of scale we keep costs down on human resources, insurance and food costs by doing things collectively.

You’ve mentioned job placement and vocational work. What percentage of your clientele is employable? I’d say about 60 percent. Some may need modified work. Other clients may have more severe mental disabilities or physical disabilities that would prevent them from holding down a job.What employment opportunities exist for people transitioning out of homelessness?That’s the great thing about having social enterprise. Every one of our truck drivers used to be in our men’s recovery program. Our thrift stores – we hire people that stayed with us. They’re able to go on and get retail jobs. Our kitchen, were hiring people. Our staff monitors – that’s a great entry-level position for those who have a heart for this. Other times, I’ve had construction folks and plumbers who say, “send me some people, I’ll train them.” Same with air conditioning, gardening, telemarketing. At our job center, we have job specialists and that’s what they do all day – reach out to employers.

What do you think of city officials’ response to homelessness?I often see negativity and critical comments about the city and I truly believe, for the most part, that’s misguided. People don’t necessarily know and understand all that the city has done and is doing. … This job is way too big for any one agency to solve. It takes every agency and then some to effect lasting change.

What could city officials, regulators or developers do to build more housing to address homelessness?The big part is the zoning. Where can you build multifamily dwelling units? What will you allow or not allow in R1 zones? Offering tax breaks to developers for building affordable housing, and really encouraging shared housing. A lot of single-family homes are big. You could easily have two, three, four families that could live in these homes.

What management principles have you learned that could apply to other organizations or businesses? I’m going to steal a book title. It’s one that has influenced my life and I try to teach it to our staff. The book is “Stay Humble, Be Hungry and Hustle.” Those are three incredible business principles.

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