For-Profit Activities by Non-Profit Organizations I. TOPIC Food Concessions at Fort Worden State Park II. LOCATION Northwestern Washington III. SUBJECT For-Profit Activities by Non-Profit Organizations IV. SUMMARY The Clallam-Jefferson Community Action Committee (CJCAC), a Community Action Agency in northwestern Washington, needed to increase its pool of unrestricted discretionary funds to improve its ability to deliver individual, emergency, and community services. Most of the grants it receives are earmarked for specific program activities. This made it difficult to expand agency operations and upgrade its resources, e.g., starting new programs and buying new computers or other office equipment. Therefore, when the Washington State Department of Parks issued a request for bids to run the concessions at Fort Worden State Park, CJCAC put together a business plan and submitted a proposal. In 1992, it won the contract and formed a wholly owned for-profit subsidiary. CJCAC has an exclusive contract to provide any and all food service concessions at the park. There are five separate aspects to this service: (1) a main dining hall that hosts small and medium sized conventions; (2) Blackberries, an upscale restaurant; (3) Cable House, a small deli/market that sells sandwiches and drinks; (4) vending machines throughout the park; and (5) providing coffee and snacks at performances and workshops sponsored by Centrum. The concessions operation has enabled CJCAC to provide full-time, year-round employment to approximately 30 people and full-time, summer employment to an additional 20 people. This business enterprise grosses more than $800,000 per year; 1994 profits for CJCAC were more than $54,000. V. SUCCESSFUL PRACTICE Created a wholly owned for-profit subsidiary that operates concessions at a large state park and brings more than $50,000 per year in unrestricted funds to the Community Action Agency while providing employment to as many as 50 people. VI. CONTACT Lee J. Tickell, Executive Director Clallam-Jefferson Community Action Committee (A Community Action Agency) 802 Sheridan, 1st Floor Port Townsend, Washington 98368 360-385-2571 360-385-5185 (FAX) VII. CASE STUDY The Problem: Most of CJCAC's operating funds are in the form of grants to conduct specific programs. The grants often require most, if not all, of the funds to be used only for program activities. Grants may include provisions for administrative and overhead costs of the program, but they do not allow the funds to be used by the agency for purposes outside the program itself. CJCAC recognized that it needed to increase its pool of unrestricted funds so it could work to develop new programs to serve the low-income population in its service area and improve its service delivery capabilities. The Approach Adopted: CJCAC saw an opportunity to enter into a for-profit venture that would provide unrestricted funds. The Washington State Department of Parks had issued a request for proposals to run the food concessions at Fort Worden State Park. If CJCAC submitted a proposal and won the contract, it could form a wholly owned, for-profit subsidiary that would generate income. How They Implemented The Approach: CJCAC put together a business plan and submitted a proposal to the Department of Parks. The state judged CJCAC's proposal the best it received and awarded the community action agency an exclusive contract to provide food service concessions in the park. CJCAC formed a separate, for-profit corporation to run the concessions business. It then received a $50,000 loan from the Coastal Loan Fund, a loan program administered by the state to promote job development projects. CJCAC also received some smaller loans and grants from private individuals. These funds provided the business start-up costs. CJCAC runs five separate types of concessions at the park: 1. The main dining hall. Fort Worden has been a popular site for small and medium sized conventions for many years. The main dining hall is used for meals and banquets during conventions and can accommodate 500-600 people a day. 2. Blackberries. Blackberries is an upscale restaurant that serves local cuisine in an elegant setting. The restaurant seats 32 people. 3. Cable House. Cable House is a small delicatessen and market that sells sandwiches, drinks, and other grocery items. Its primary customers are people visiting Fort Worden's beaches and employees of the marine science center housed in the park. 4. Vending Machines. Vending machines that sell snacks and drinks are scattered throughout the park. CJCAC operates all of these machines. 5. Centrum. Centrum is a non-profit, fine arts organization that sponsors music and other performances as well as various workshops at the park's pavilion. CJCAC supplies coffee and other snacks at these events. Results: CJCAC's concessions operation has provided year-round, full-time employment to approximately 30 people and full-time, summer employment to another 20 people. The business grosses more than $800,000 per year, and in 1994 CJCAC's profits were more than $54,000. The profits go towards CJCAC's operations as unrestricted funds. Because the business has done so well, CJCAC was able to pay off all the loans it received to start the business in its first two years of operation. Profits from 1994 are being held to ensure the business does not have to incur new debt in 1995. CJCAC will use future profits on one-time expenditures to improve its service delivery capabilities by purchasing new equipment, e.g., computers, and on innovative projects, e.g., housing. VIII. KEY WORDS Community Action Agency Concessions Discretionary Funds Food Service For-Profit Enterprises Profits Subsidiaries Unrestricted Funds