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Case Study of Highs, Lows

The story is all too common: Non-profit organization with mission to serve a population in-need can’t seem to get its financial and management ducks in a row. Running over budget and not attracting new sources of revenue are a couple of the symptoms. This was the case a number of years ago for the Chatsworth-based Los Angeles County division of PathPoint, a non-profit that provides training and support services that empower people with disabilities or disadvantages. But the organization has turned things around. “The rest of the organization had been carrying the Los Angeles County division,” said Bill Murphy, VP director of the local operations since 2004. “Our revenues have all but doubled, and we have not had another year in the red.” Murphy, who joined PathPoint in 2003 after 35 years in the for-profit world, said sticking to the core mission, fine tuning management and financial processes, increasing marketing, and creating impeccable programs have fostered the change. From good to great PathPoint’s L.A. County division provides services to more than 400 individuals. Some of the services include residential support, transitional living, and staffing services for people with disabilities or disadvantages. “This is a neat business because it’s not about us,” said Murphy. “And we’re not an organization that rests.” PathPoint also has divisions in San Luis Obispo, Santa Barbara, Ventura and Kern counties. Fundraising only makes up 2.48 percent of the whole organization’s revenues. Program services fees and contracts provide the bulk (93.1 percent) of the rest. Re-visiting the L.A. County division’s billing and business processes was probably the biggest factor that turned things around, said Murphy. The organization had been doing work that could not be billed, and some people in leadership positions were “short” in some areas. On the management side, employees needed to learn what it means to be a “high performance organization,” he said. They needed to understand the levers and fundamentals. “Everybody stepped up and absorbed like a sponge the things that were put in front of them,” said Murphy, adding the team read and discussed the book “Good to Great: Why Some Companies Make the Leap…and Others Don’t.” The organization also needed to fine-tune its hiring and retention. Murphy said some of its wages are lower than other businesses in L.A. so new hires need to be on board with the mission. Staff needs to know what to look for when recruiting and he does not accept anything less than 100 percent performance. PathPoint has also developed a staff wellness program to increase employee retention. In 2007, the Commission on Accreditation of Rehabilitation Facilities gave the non-profit its highest level of award, a three-year accreditation. In 2009 it achieved designation as a “low risk audit.” Revenue opportunities Program quality is of paramount importance. You need to be able to answer questions from parents and clients about why a program may or may not be working for an individual. And offering high quality programs with a track record of success is what leads to new contracts and opportunities. “Our programs have to be impeccable,” said Murphy. “The quality of service has to be there. They’re not just leisure programs. They have to be in the realm of what we’re funded to do.” A couple of recent projects include: Harbor Regional Center in Long Beach inviting PathPoint to develop a site-based Licensed Day Program for people with disabilities; and Antelope Valley Hospital welcoming eight program participants to shadow staff in several departments. The Antelope Valley has also recently expressed interest in the L.A. division creating a bullying prevention program. In the past 18 months the division has launched five major initiatives. “We’re constantly surveying the globe for how other people are doing this and what’s new,” said Murphy. “We don’t assume the way we’ve always done it is the way we’re going to do it in the future. You need to look for new revenue opportunities.” The Ventura County division received $805,000 in American Recovery and Reinvestment Act funds to implement a paid internship program for youth ages 14 to 24. The summer youth program served 260 at-risk youth. “I think we’re good at designing programs and we keep it very real financially,” said Murphy. “Our proposals are not always the cheapest.” But the organization’s reputation and financial stability keep opening doors, he added. The marketing link Name recognition is another part of growing the non-profit, said Murphy. It went through a name change in 2008 from Work Training Programs, Inc. to PathPoint. The former was confusing to some people, considering the population the non-profit serves. “We’re bringing ourselves into the marketing realm and we want people to identify with PathPoint in L.A. County,” he said, adding some people just associate the organization with Santa Barbara and other counties. In addition to marketing efforts from the larger organization, Murphy said he and the L.A. County staff have been forging relationships with other local agencies. PathPoint is also looking into using social networking sites like Facebook and generating more revenue from fundraising. PathPoint has attracted funding from major philanthropic groups in the Los Angeles area such as the Weingart, Ahmanson and S. Mark Taper foundations. The turnaround didn’t happen over night, said Murphy. And it continues to happen only by making consistent and incremental progress. “I have an incredibly talented staff,” he said. “And if you have an organization with a noble mission it’s a lot easier to get people rallied.”

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