Today’s episode explores a unique path that one nonprofit took to transition from steady, incremental growth to a dramatic program expansion and impact: buying a for profit company.
We spoke with David Shaffer, CEO of First Step Staffing. In 2015, First Step Staffing was a $2 million nonprofit organization providing employment opportunities for low-income, hard to employ people (including those who are homeless and citizens returning from incarceration). The nonprofit took
a bold step by purchasing a for profit staffing firm with annual revenues of about $20 million!
One year after the purchase, First Step staffing was using the combined infrastructure to have a much larger impact on the community. They provided employment to over 2,100 of Atlanta’s homeless, and 86% of those working over 180 days were able to rent their own residence!
This unique conversation explored:
- Identifying the company to purchase
- Being willing to walk away from the wrong deal
- Due diligence necessary to purchase a for profit company
- Financing the purchase of a for profit company
- Merging two entities with very different organizational cultures
- Identifying metrics to track
- Understanding the purchase’s impact on charitable contributions (they went up, listen to find out why)