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Sun, May

Executive Summary

Child care providers’ work has widespread benefits for their own families and for all of society, yet, their labor is systematically undervalued. Providers -- 96 percent of whom are women and 40 percent are people of color -- earn only $23,000 per year on average, despite working 64 hours per week and having more than ten years of experience. On top of these challenges, providers face heavy regulatory burdens that further complicate their jobs. Pie for Providers uses technology to help child care providers build stronger businesses. We offer a digital assistant built for overburdened small business owners that helps providers navigate government programs so they can increase their revenue and spend less time on administrative work. 

Through simple tools like a case management dashboard and interactive checklists, we are creating the conditions for a better child care economy. We envision a future in which providers have stable careers and low-income families have better access to care. 

Why is Our Product Needed? 

Few small child care providers use business software, which is typically built for large businesses and does not support government compliance. However, there is a growing interest in serving this market. For example, KidKare processes Child Care and Adult Food Program reimbursements, and Wonderschool (another startup) offers administrative support to start family child care businesses. The success of KidKare demonstrates that providers use software when it helps them claim much-needed funding. Compared to our competitors, Pie for Providers serves a more robust set of compliance needs. We also better serve providers and families in low-income neighborhoods, as exemplified by our focus on subsidies. Nationwide, there are one million family child care providers and 100,000 day care centers. Our total addressable market for our first product, based on direct monthly subscription fees alone, is $321.6 million. 

Our opportunity to serve the child care market is much bigger. Nationally, child care is a $41 billion industry.  Recently, the federal government doubled child care funding, authorizing $14.1 billion over the next two years alone. As policymakers seek to professionalize the early childhood field with new regulations, the demand for administrative support among small child care businesses will only grow.

How Do We Help? 

To fund and operate their businesses, providers must navigate a complex maze of funding, licensing, and accrediting agencies and bear the risk of bureaucratic errors and delays. Each year, providers fail to claim thousands of dollars in available revenue that they desperately need -- up to 36 percent of their annual income.  Providers who serve low-income neighborhoods face the greatest risk of unclaimed revenue and the highest administrative burden. As a result, providers are discouraged from serving the families who need them most, and they have little time to focus on offering them high quality education. 

Pie for Providers streamlines providers’ compliance to increase their income, reduce the time they spend on administration, and make it easier to accept subsidy payments. Our suite of services includes three verticals: subsidies, licensing & accreditation, and expense tracking. Key features include: 

Subsidies

Providers access an online dashboard to easily manage and update their subsidy cases. Text message reminders ensure providers never miss an application deadline. Pre-filled forms ensure applications are complete and accurate. Monthly billing reconciliation ensures payment accuracy. 

Licensing & Accreditation

Checklists reconcile and prioritize the overlapping requirements of multiple agencies. Policy updates make it easier to track changes in rules. Pre-filled forms save providers time and ensure accuracy. Text message reminders ensure that providers monitor their compliance consistently and efficiently. 

Expense Tracking 

Providers upload receipts or send them via text message. Pie for Providers sends monthly and annual reports to help with tax accounting and business management. This simple process ensures providers track expenses regularly and completely, so they can easily claim all the tax deductions for which they qualify. 

We have built an iterative, human-centered design approach into the DNA of our business. This approach has helped us understand our customers’ pain points at a granular level and design software to improve their daily lives. We do the work every day to understand our customers’ lives, from their hopes for the future to the minutiae of their filing systems. This has allowed us to design a service that fits seamlessly into the lives and daily routines of small business owners.  

Why Does This Matter? 

Pie for Providers will increase access to care for low-income families by streamlining the administration of government subsidies. Today, only 15 percent of eligible children in the United States are enrolled in subsidies.  The subsidies are vastly underutilized, in part, because they come with a heavy administrative burden and risk for providers. Pie for Providers helps providers claim the subsidy revenue for which they qualify and spend less time doing so. 

In the next five years, we are projected to serve more than 15,000 providers who, in turn, serve nearly 55,000 subsidy-enrolled children. At that point, we will be generating more than $10 million per month in additional revenue for our customers and saving them more than eight million hours per month on administrative work. This additional revenue for providers will directly help low-income children access care, and it will enable greater continuity of care for these children.

There are close to 30,000 active 501(c)(3) public charities in the Chicago metropolitan area1. These nonprofit organizations include social service agencies that provide critical healthcare, rehabilitation, food, and shelter for their communities’ most at-risk populations such as youth, elderly, and individuals with disabilities. This sector also includes more than 1,600 licensed childcare centers with the capacity to serve more than 135,000 children annually. When you think of social safety nets, these community resources are on the front lines.

In Chicago and elsewhere, nonprofits face unique challenges when managing their facilities. Nonprofit organizations are often housed in aging buildings and have deferred maintenance due to tight budgets. Since these organizations typically operate long hours to serve their communities, their facilities consume a large amount of energy to heat and cool their spaces and keep the lights on. As a result, they often have more “low-hanging fruit” opportunities for energy savings as compared to other commercial spaces. High energy costs can be an unseen burden for nonprofits, and they are often left out of traditional energy efficiency incentive programs offered by utilities or other entities. These programs require a significant amount of time and technical expertise, making them difficult for nonprofits to access. As nonprofits in Illinois and across the country face budgetary uncertainty due to volatile political climates and diminishing support for the crucial social services they deliver, the need to reduce operating costs becomes even more urgent.

Energy costs are usually seen by nonprofits as fixed operating expenses, with remaining funds going to programming. But it doesn’t have to be that way. There is a real opportunity to help nonprofits allocate more of their budget to their services.

Energy Efficiency Provides Stability for Nonprofits 

Enter Chicago nonprofit Elevate Energy. Elevate Energy’s mission is to deliver smarter energy use for all. By developing and implementing programs for hard-to-reach markets, Elevate Energy and its partners can reduce costs, protect the environment, and ensure the benefits of clean and efficient energy use reach those who need it most. Elevate Energy’s Nonprofit Program works with nonprofit organizations to reduce their operating costs through cost-effective energy and water efficiency improvements that not only save an average of 15 percent on electric, natural gas, and water usage, but also allow organizations to redirect resources from overhead costs back to their important missions. 

Since the Program’s inception in 2012, the Elevate Energy team has assisted hundreds of nonprofit organizations in the Chicago area. The Program is designed to make it easy and affordable for nonprofits to undertake significant efficiency improvements, with the long-term goal of ensuring that they are able to sustainably serve their communities regardless of budgetary volatility.

The longstanding presence of nonprofits and their services has ripple-effects on the resilience of their communities. Elevate Energy is committed to helping organizations provide affordable childcare, stable housing, accessible healthcare, quality education, and other services long into the future.

A Service Model that Fits the Needs and Constraints of Each Organization

Improving the efficiency of nonprofit facilities represents a significant opportunity for deep energy and water savings, and subsequent reductions in greenhouse gas emissions. The average nonprofit facility in Chicago is 80 to 100 years old, often with years of deferred maintenance. 

Nonprofit staff often lack the capacity and expertise necessary to identify and address their efficiency needs. Organizations typically do not have an energy manager role, and sometimes do not have a dedicated facility director. Daily operations are often led by organization executives, volunteers, or staff members who do not have the background, technical knowledge, or time to pursue efficiency initiatives. 

Further, traditional energy efficiency incentive programs require a significant amount of time and technical expertise, making them difficult for nonprofits to access. Streamlining the efficiency retrofit process for these buildings can help nonprofits with limited resources and staff time undertake significant improvements. 

Elevate Energy’s Nonprofit Program addresses these issues by collaborating closely with nonprofit leaders, stakeholders, board members, staff, and volunteers at every step of the retrofit process. The program includes a comprehensive facility assessment, detailed recommendations, savings and payback calculations, incentive assistance and financial planning, construction management, and quality control.

Process Flow – Nonprofit Program Process, Elevate Energy
Photo credit: Elevate Energy

Elevate Energy works to develop longstanding relationships with the organizations they partner with on efficiency projects. Through one-on-one engagement, energy analysts and project managers establish a constant dialogue with decision makers at nonprofits to understand and meet their needs. Traditionally, underserved markets such as this are hard to reach precisely because they have unique needs that often fall through the cracks of typical energy programs. In order to fill these gaps, Elevate Energy focuses on understanding the challenges nonprofits face and constantly adjusting programs to meet them.

Efficiency in Action

Walking nonprofits through every step of the retrofit process helps ensure that completed improvements are high quality and cost-effective. Family service provider Chicago Commons took advantage of Elevate Energy’s assistance to do just that. For more than 120 years, Chicago Commons has been firmly rooted in traditionally-underserved communities, delivering programs designed to help children, families, and seniors live richer, more fulfilling lives. They maintain a portfolio of buildings in south- and west-side neighborhoods of Chicago that house childcare and adult service centers.

Facilities Director Eric Woods began to work with Elevate Energy to analyze how Chicago Commons’ portfolio uses energy and how they could save money by improving efficiency. Since utility bills take up a significant amount of their budget, Woods is always focused on running their facilities as efficiently as possible; Chicago Commons also utilizes state childcare subsidies to help families in need and looks to cut costs wherever possible to stabilize their budgets and remain resilient during uncertain budgetary climates.

After Elevate Energy performed comprehensive energy and water assessments for two of their facilities, Chicago Commons decided to move forward with lighting retrofits at the Nia Family Center, a childcare center in Humboldt Park, and their Adult Day Service Center on the south side. 

Elevate Energy helped them leverage multiple utility incentives and funding sources to cover more than 50 percent of the project costs. The lighting upgrades are expected to save the organization roughly 11 percent, or more than $9,350, on electricity annually. Chicago Commons is now assessing other energy- and water-saving projects with Elevate Energy to divert more resources to the important programs they operate in their communities.

“We are so grateful to be able to save on energy and costs at our facilities,” said Edgar Ramirez, President and CEO of Chicago Commons. “We can now pursue projects that we otherwise would not have been able to during these uncertain budgetary times. The improvements will help us continue to provide quality services to our communities and families long into the future.”

Financing Retrofits for Organizations with Limited Budgets

In addition to finding staff capacity to navigate the retrofit process, funding efficiency measures is often the largest barrier to implementation. Nonprofits must compete for the same pots of utility incentives alongside commercial facilities. Elevate Energy assists nonprofits with the required incentive applications and supporting documentation to ensure organizations can access these resources. Additionally, Elevate Energy works with utilities and other partners to develop innovative financing sources and mechanisms that are accessible to nonprofit organizations.

Funding for Energy Improvements Helps Continue Critical Services

Elevate Energy worked with Chicago Children’s Advocacy Center (ChicagoCAC) to improve their facility. ChicagoCAC and its partners are the front-line responders in Chicago to reports of child sexual abuse, as well as reports of physical abuse of children under age three. Since opening their doors in 2001, they have served more than 30,000 children. 

ChicagoCAC: Children playing at Chicago Children’s Advocacy Center
Photo Credit: Chicago Children’s Advocacy Center

Elevate Energy began working with ChicagoCAC in 2015 to identify opportunities for energy efficiency that qualified for incentives from ComEd’s Small Business Energy Savings (SBES) program. Elevate Energy assisted ChicagoCAC in soliciting a contractor proposal for a lighting project which included SBES incentives to cover almost 40 percent of the project cost. Unfortunately, when the State of Illinois budget was frozen in 2016, many of ChicagoCAC’s funding streams halted. Nonetheless, the staff and partners at ChicagoCAC continued to offer their services to children in need. While ChicagoCAC leadership was very interested in the lighting project, the organization could not afford the remainder of the project costs that year. 

Elevate Energy continued to work with ChicagoCAC and in 2017 was able to help them obtain grant funding in addition to SBES incentives to cover all project costs and complete the work. The project is estimated to save the nonprofit about $8,450 annually. Without access to this additional funding, the project would not have been possible.

“We could have never completed this project without the funding Elevate Energy helped us get,” said Susan Hogan, ChicagoCAC Chief Operating Officer. “The savings resulting from the work will help us continue to provide crucial programming for the children we serve, now and in the future.” 

Strong Service Organizations Build Strong Communities

Since the Program began in 2012, the Elevate Energy team has helped nonprofit organizations install more than 500 energy efficiency upgrades. Elevate Energy has assisted these organizations in leveraging more than $3 million in utility incentives and close to $1 million in additional grant funds to contribute toward these improvements. These retrofits are projected to save more than $2 million in total energy costs annually. 

Reducing operating costs for nonprofits helps ensure their long-term viability, allowing them to offer critical services that contribute to the stability of their neighborhoods, and ultimately create more vibrant, economically-sound, and thriving communities.

End Notes

1. GuideStar “Search Page,” Accessed April 17, 2018. http://www.guidestar.org/search

Author Bio

Dara Reiff, PMP, serves as Nonprofit Program Manager at Elevate Energy, a nonprofit organization dedicated to designing and implementing efficiency programs that lower costs, protect the environment, and ensure the benefits of energy efficiency and renewable energy reach those who need them most. In this role, she assists nonprofit leaders in cutting utility costs through cost-effective energy and water efficiency upgrades. She manages relationships with program funders, utilities, industry organizations, financial institutions and community leaders to grow opportunities for energy efficiency in nonprofit facilities and leads business development to ensure long-term program sustainability. She is a certified Project Management Professional and holds a B.A. in Urban and Regional Planning from University of Illinois at Urbana-Champaign.

Small Business Majority Midwest Director Lindsay Mueller and Chicago City Treasurer Kurt A. Summers Jr. explore the SimpleGrowth platform during an October 2017 event at Ain't She Sweet Cafe in Beverly.
Photo credit: Russell Ingram Photography

Minority entrepreneurship is blossoming in Cook County, but the support systems that normally accompany business growth -- like loans -- haven’t followed. 

As of 2014, Cook County was home to 110,155 registered African-American businesses, which was the most of any county in the United States, and the number of minority-owned businesses in the county grew by 30 percent from 2007 to 2012. Yet, Chicago’s minority entrepreneurs struggle to access the capital they need to grow their businesses. In fact, according to the People for Change Coalition, African-American businesses received just 2.3 percent of Small Business Administration loans in 2013, down from 11 percent in 2008. 

Women’s entrepreneurship is also on the rise in Chicago, but these business owners face similar difficulty obtaining loans. A study released by American Express found the number of women-owned businesses in Chicago grew by a whopping 41.8 percent from 2002 to 2015. What’s more, the National Women’s Business Council (NWBC) said between 2002 and 2012, the number of women-owned firms nationwide increased by 52 percent, which was more than double the national average. At the same time, NWBC said, women started their businesses with only about $75,000 in capital, while their male counterparts started their firms with an average of $135,000. 

In light of these facts, Small Business Majority, a nonprofit founded in 2005 by entrepreneurs for entrepreneurs with a nationwide network of 55,000 small business owners and offices in Chicago and throughout the country, recognized a clear problem in Cook County: women and minorities are starting businesses at high rates, but they aren’t getting the support they need from either a capital or educational standpoint. So Small Business Majority recently launched SimpleGrowth to boost Chicagoland entrepreneurship and close the lending gap in underserved communities in two ways: by making it easier to access responsible capital and helping businesses find the educational resources they need to succeed. 

SimpleGrowth connects entrepreneurs to local business assistance organizations that can provide free advice and tools like business planning, financial literacy, marketing, and licensing. All local business centers participating in this initiative, such as Chicago Urban League Center for Entrepreneurship and Innovation, Women’s Business Development Center, Bethel New Life, and Sunshine Enterprises, show a strong commitment to their communities, are action-oriented, and are responsive to the needs of both aspiring and established entrepreneurs and serve everyone. 

These specific organizations were selected because Small Business Majority is committed to choosing SimpleGrowth partners that are based in the Chicagoland community and invest in a diverse, full-time staff made up of individuals from both inside and outside the community. What’s more, at least half of a SimpleGrowth partner’s staff should consist of a mix of current and former small business owners who continue to engage with entrepreneurs and help drive partner programs.

Additionally, Small Business Majority’s Chicago staff frequently offer free educational workshops with a focus on serving women and entrepreneurs of color, as well as aspiring business owners. These events include networking opportunities, interactive presentations, and discussions with experts as well as local business owners, and presentations on the resources available through SimpleGrowth.

The other primary component of SimpleGrowth is its free loan application. With the support of Chicago City Treasurer Kurt A. Summers, Small Business Majority, Fundera, and Accion last year launched an online tool that helps match Chicago’s underserved small businesses with responsible lenders that are committed to helping small businesses succeed. All lending institutions offering loans through SimpleGrowth have mission-driven goals to support small business owners in their communities, and include Accion, Local Initiatives Support Corporation Small Business and the WBDC. SimpleGrowth is easy to use and offers unbiased comparisons of lending options. So easy, in fact, that business owners can receive approval for financing from $500 to $500,000 in less than 48 hours. 

Here is how it works: Using what is essentially similar to an airline fare-finding website for small business loans, entrepreneurs looking for funding enter fairly basic information including how much money they want, what they plan to do with the money, how much revenue they have, how long they’ve been in business, and what their credit score is. If qualified, the user is then matched with SimpleGrowth-approved lenders. If the user doesn’t yet qualify for a loan, they are then referred to SimpleGrowth’s partnering business assistance organizations that can help them become loan ready. And unlike many lenders, SimpleGrowth partners are happy to meet face-to-face with business owners in order to walk them through the process -- whether or not an applicant ultimately receives a loan.

Although SimpleGrowth only launched in October, it is already making a difference for Chicago entrepreneurs. For example, loans went to a ballet studio owned by Madame Elizabeth Boitsov, a Russian immigrant who is passionate about bringing the arts to Chicago’s South Side. Madame Boitsov has taught ballet locally since 1980, but in recent years was only able to offer classes part-time. Thanks to SimpleGrowth, the Greater Southwest Development Corporation, which is another SimpleGrowth partner, and Accion, she received two $5,000 loans and is now operating full time in a new studio space near Midway Airport.  

A tool like SimpleGrowth is needed because capital has become increasingly difficult to come by for all small businesses, particularly over the last decade. In the aftermath of the Great Recession, traditional banks are increasingly reluctant to make loans to small firms. The recession may have ended almost a decade ago, but even today about 80 percent of small business loan applicants are rejected, up from 60 percent in 2007. What’s more, small business loans have fallen from about half of total bank loans in the United States to under 30 percent of the total. As a result, new alternative and online lending opportunities have sprung up to fill this market need, which could be a positive development for small businesses if not for the fact that alternative sources of financing operate in an almost entirely unregulated market -- making many small business owners vulnerable to predatory practices like extremely high interest rates.

SimpleGrowth is also addressing these predatory lending concerns by working with nonprofit lenders that have a proven track record in their community and work to put the entrepreneur’s needs first. These lenders also strive to offer products with transparent rates, no hidden fees and clear terms. 

Chicago is at the forefront of urban entrepreneurial activity in the United States, but the local infrastructure hasn’t yet caught up with business growth -- particularly for women and minorities. As a result, Small Business Majority and its partners are working to remedy this problem in the hope that the city can serve as a blueprint for small business success in this country. 

Author bio

Geraldine Sanchez Aglipay manages Small Business Majority's outreach, education, and policy efforts in the Midwest region and Greater Chicago to enhance financial capacity and health security for small business owners, their employees and their families. She also manages Small Business Majority’s national outreach to women entrepreneurs and women's business organizations. As a former solo-entrepreneur, Geri is passionate about helping entrepreneurs strengthen their asset building and building an inclusive economy that works for all through entrepreneurship, especially for women, communities of color, and the underserved.

Prior to joining Small Business Majority, Geri worked with the Asian Health Coalition and GetCoveredIllinois.gov to help roll out the Affordable Care Act in underserved areas and managed the national Health Resources and Services Administration’s Public Health Training Center Network under the U.S. Department of Health and Human Services. She has extensive professional and volunteer experience on minority issues, especially in the arena of public health, civil rights, and civic affairs, having served on boards such as the American Public Health Association's Asian Pacific Islander Caucus. Geri was selected to the Cultivate: Women of Color Leadership Program, which aims to strengthen women leaders of color in Chicago working to advance economic, social, and racial justice issues. 

Summary

Thousands of Illinoisans every week encounter legal problems that can have a huge impact on their health, stability, and economic wellbeing. Many can afford to pay something for legal assistance but too often are not getting necessary legal help from lawyers due to a failure in the market for legal services for middle-income individuals and small businesses. In 2011, The Chicago Bar Foundation (CBF)1 recognized this broken market and developed an innovative solution to address it by tapping into a growing number of talented and entrepreneurial lawyers interested in socially conscious careers in law: the Justice Entrepreneurs Project (JEP). A small business incubator that fosters innovation in an inherently conservative field, the JEP brings principles of entrepreneurship and experimentation common in the tech startup community to the problem of access to legal services. 

To date, the JEP has helped more than 50 attorneys build sustainable businesses serving this market. In 2017 alone, JEP attorneys helped more than 4,000 low- to middle-income clients and brought in more than $4 million in revenue in the process. In addition to the direct impact of that work, the CBF is identifying successful and replicable practice models and helping to spread these innovations to the broader legal market. Dozens of organizations across the country and beyond already have adopted the JEP model or leveraged JEP resources to improve access to legal services in their own communities. 

The Market Failure for Legal Services

The proposition that we all stand equal before the law and will get a fair shake in the justice system regardless of our income or circumstances is one of America’s most fundamental principles, reflected in our nation’s promise of “justice for all” that Americans regularly recite at the end of the Pledge of Allegiance. Yet, when people lack meaningful access to legal assistance, that promise can be illusory.

Thousands of Illinoisans will face a legal problem in any given week. Their legal problems may involve family, housing, consumer, immigration, criminal, or other “bread and butter” legal issues that can have a serious impact on their health, safety, independence, and economic wellbeing. Whether they have access to good legal help can make all the difference in what happens to them next. Small businesses and startups regularly encounter legal issues at the early stage of their life cycle that can carry similar consequences for their future success.

"The legal market in Cool County represented by umbrellas in a rain storm. The rain represents legal problems people regularly face, while the umbrellas access to legal help. The people are divided into poor/low-income, middle income, and corporate/upper- income, and as noted in the graphic, the corporate/upper-income group is the only one that regularly has access to necessary legal help today."

The umbrellas in the visual included with this piece represent the people of Cook County, Illinois, but with modest variations in how many people fall into each of the three groups, this chart could represent the legal market anywhere in the country. The group on the left makes up about a quarter of the population and in theory has access to free legal aid or public defender services (for criminal cases). It is a very leaky umbrella, however, because studies consistently show that more than half of them cannot get help when they need it due to a chronic underinvestment in pro bono and legal aid services.2

The group on the right represents about a third of the population and has a very nice umbrella covering them. They can afford legal help when they need it and have a competitive market of lawyers and law firms there to serve them.

The people in the middle class, who make up the largest share of our population in Illinois, earn too much to qualify for already overstretched free legal aid or public defender services, but generally not enough to afford a lawyer at prevailing market rates. In some instances, this market is functioning well, generally where contingent fees (e.g., personal injury cases) or fixed fees (e.g., real estate closings) are the norm. But for most other legal matters, middle income people do not have the “umbrella” of affordable and accessible legal services available to them.

Perhaps the most startling consequence of this growing gap in the market for legal services is the number of people who are representing themselves in court today; the most recent statistics show that in 74 percent of civil cases, at least one party was unrepresented3 even though other studies show the vast majority would prefer to have a lawyer.4 Yet studies show that people represented by a lawyer are far more likely to get better results, resolve their cases more efficiently, and believe they got a fair outcome.5 

This is a classic market failure, and it has huge consequences for people facing legal issues, for our community, and for overall confidence in the justice system. 

Enter the JEP

In 2011, The Chicago Bar Foundation (CBF) recognized this market failure was also a significant market opportunity and developed an innovative solution to seize that opportunity by tapping into a growing number of talented and entrepreneurial lawyers interested in socially conscious careers in law: the Justice Entrepreneurs Project (JEP). The JEP brings principles of entrepreneurship and experimentation common in the tech startup community to the problem of access to legal services. 

The focus of the JEP is on making legal services more affordable and accessible to low- and middle-income people by helping participating lawyers to develop innovative market-based law practice models that enable them to build sustainable small businesses serving this untapped market.

One of the defining features of the JEP is its open, loft-style space. The space is modeled after business and tech incubators rather than traditional law offices and is designed to promote collaboration and innovation.
Photo Credit: Meredith Mazzuca at The Chicago Bar Foundation.

The JEP provides training, resources, mentoring, and support to the participating lawyers in a collaborative office setting. Core tenets of the JEP’s robust 18-month program include setting predictable prices rather than using the traditional billable hour, offering a la carte services, and leveraging technology to create efficiencies.  

The CBF is able to leverage significant pro bono and in-kind donations valued at hundreds of thousands of dollars per year to provide cutting-edge training and resources to participants. Dozens of successful alumni of the program remain part of the JEP network and now assist with training and mentoring as well.

The JEP Niche

Historically, the CBF and most other funders of access to justice initiatives have focused their funding and resources on nonprofit legal aid programs serving low-income and disadvantaged people rather than on the broader private market for legal services.

Support for pro bono and legal aid services remains critical and will continue as a central focus, as low-income and disadvantaged people are particularly vulnerable in the legal system when they do not have access to legal help.

However, that work will never be successful if large swaths of the middle-class lack access to affordable legal help. Our justice system depends on everyone having equal access, and programs like the JEP that are developing innovative and replicable market-based models to serve this middle market will play an integral role in the broader solution.

An Exponential Impact

The CBF evaluates the JEP’s success against the three central goals of the JEP Strategic Plan: 

(1) Helping the participating lawyers create successful and sustainable law practices targeted towards this market; (2) Helping more low- and moderate-income people get access to affordable legal help; and (3) Identifying successful innovations and creating replicable models that the legal profession can more broadly adopt here in Illinois and beyond.

The JEP already is showing real impact in all three areas. To date, the JEP has helped more than 50 attorneys build sustainable businesses serving this market. In 2017 alone, JEP attorneys helped more than 4,000 low- to middle-income clients and brought in more than $4 million in revenue in the process. In addition to the direct impact of that work, the CBF is identifying successful and replicable practice models and helping to spread these innovations to the broader legal market.6 Dozens of organizations across the country and beyond already have adopted the JEP model or leveraged JEP resources to improve access to much-needed legal services in their own communities, and the American Bar Association recognized the CBF and JEP as exemplary models.7

Much Greater Potential in the Future

Given the proven success of the JEP and the important niche it is serving in the broader access to justice picture, the CBF is committed to continuing to support the program for the long haul. The MacArthur Foundation and the Coleman Foundation already have recognized the potential of the JEP and partnered with the CBF, along with dozens of companies, law firms, and organizations providing pro bono and in-kind support.

However, unlike many other business and technology incubators that can attract outside funding based on a potentially significant return on investment from the startup businesses, more traditional sources of capital are an unlikely source for small law firms geared towards serving this middle market. Successful lawyers in the JEP are proving they can make a good income, but to provide affordable services to this market is never going to bring a large enough financial return to justify traditional outside investment on a large scale. 

While new investments in the JEP and similar programs may not yield direct financial returns, the social impact returns are significant. A $250,000 cash investment in the JEP in 2017 created a huge multiplier effect, helping more than 50 lawyers to provide services to more than 4,000 people, and generating more than $4 million in economic activity.

Looking ahead, scaling of the JEP program is most likely to come with replication of its successful practice models and development of similar networks of small law firms around the country. There remains huge potential for socially conscious lawyers to serve this largely untapped market while building successful small businesses, and social innovation will be a critical part of fulfilling our nation’s promise of justice for all.

Author Bio

Bob Glaves is the Executive Director of The Chicago Bar Foundation (CBF), where he is responsible for leading and overseeing the CBF’s work that brings Chicago’s legal community together to improve access to justice for people in need and make the legal system more fair and efficient for everyone. He is a past chair of the Board of Directors for the Donors Forum (n/k/a Forefront) and a past president of the National Conference of Bar Foundations, and has served in several other civic and nonprofit leadership roles.

Works Cited

1 The Chicago Bar Foundation (CBF) is a public foundation based in Chicago that brings the legal community together to improve access to justice for people in need and make the legal system more fair and efficient for everyone. The CBF’s work is made possible by thousands of lawyers and other individual contributors, more than 200 law firm and corporate supporters, and many other dedicated partners. 

2 “The Justice Gap: Measuring the Unmet Civil Legal Needs of Low-income Americans,” The Legal Services Corporation, June 2017, www.lsc.gov

3 “The Landscape of Civil Litigation in State Courts,” National Center for State Courts, accessed April 10, 2018, www.ncsc.org.

4 “Cases Without Counsel: Research on Experiences of Self-Representation in U.S. Family Court,” June 8, 2016, http://iaals.du.edu/honoring-families/publications/cases-without-counsel-research-experiences-self-representation-us; Julie Macfarlane, “The National Self-Represented Litigants Project: Identifying and Meeting the Needs of Self-Represented Litigants, Final Report” May 2013, representingyourselfcanada.files.wordpress.com.

5 “Judicial Council Report to the Legislature: Sargent Shriver Civil Counsel Act,” Judicial Council of California, July 18, 2017, jcc.legistar.com

6 “Pricing for Access to Justice,” The Chicago Bar Foundation, March 21, 2016, https://chicagobarfoundation.org/news_item/pricing-access-justice/; “New Limited Scope Representation Toolkit a Great Resource for Lawyers to Expand Their Practice and Improve Access to Justice,” The Chicago Bar Foundation, September 13, 2017, chicagobarfoundation.org.

7 “CBF Receives ABA Louis Brown Award for Legal Access,” The Chicago Bar Foundation, February 17, 2018, www.americanbar.org

Best Practices for Nonprofit Led Social Enterprises 

Deconstruction training in Gary, Indiana in 2017
Photo source: Eve Pytel

What makes a viable, thriving social enterprise? The truth is many social enterprises created by nonprofit parent organizations, that work to accomplish their mission through the sale of goods and services, struggle. 

Survey data and interviews with Chicago’s nonprofit social enterprise leaders indicate that key decisions at the formation of these organizations pertaining to strategy, marketing, staffing, and product design either enable success or portend struggle. This article identifies critical decision points and how those choices influence future success.  

A nonprofit led social enterprise may be for profit or not-for-profit, but they are formed by nonprofit parent organizations to maximize mission impact by selling a product or service that enhances social, economic, and/or environmental benefit. There are critical factors that help to ensure the viability of a social enterprise that are important to know about before entering into a social enterprise. 

At their core, nonprofit led social enterprises are businesses that compete with the private sector. However, often nonprofits face additional constraints with land, labor, capital, and entrepreneurship than their for profit peers. For example, a nonprofit led social enterprise may be executing a service using workforce trainees with barriers to employment (Labor), operating in a particularly challenging location (Land), working within the limits of restricted funding (Capital), or their board charged with fiduciary responsibility is ill-suited to work with innovative risk takers (Entrepreneurship).

Due to the interest and hype around social enterprises, there have been many attempts to reconfigure services typically funded by local and state governments or through private philanthropy to transition fee-for-service or social enterprise modes. While these can be successful, a product or service sold by the social enterprise must be clearly defined and have a customer base. More importantly, the product or service generated might potentially generate revenue, but development of the product or service does not offset or reduce the need to provide the core services that may represent significant costs for the parent nonprofit. 

For example, a nonprofit led social enterprise might have its clients make goods that are sold, but the parent organization must still provide the services to the client. Therefore, servicing clients is not the social enterprise, the social enterprise is the production and sale of the goods. Here’s a real example of a successfully operating social enterprise. 

Knockout Pickles is a nonprofit-led social enterprise started by its parent organization, Opportunity Knocks, which is a nonprofit serving young people with developmental disabilities. Knockout Pickles is a small batch line of farm-to-jar pickles that is produced, marketed, sold, and distributed all by young people with intellectual and developmental disabilities. The production and sale of Knockout Pickles achieves Opportunity Knocks’ mission. 

The excitement around social enterprises has resulted in nonprofits attempting to receive funding through services typically funded by local and state governments or through private philanthropy. In the case of Knockout Pickles, its parent nonprofit, Opportunity Knocks, bares the cost of case management and provides client support and Knockout Pickles generates enough revenue to produce, market, and sell the pickles. Knockout Pickles does not alleviate or minimize the cost of service provision to Opportunity Knocks.  

Best Practices 

While the private and public sector flock to social enterprises in hopes of doing well by doing good, it is important that nonprofits consider the following best practices at the formation of a nonprofit led social enterprise to start off on the right foot.

Entrepreneurship is the capacity and willingness to develop, organize, and manage a business venture along with any of its risks in order to make a profit. When we envision entrepreneurs, we typically think of someone with an exciting idea with the capacity, acumen, and appetite for taking risk. 

The principle requirement of risk accepting behavior is diametrically opposed to the role of the nonprofit board. Nonprofit board members are the fiduciaries who steer the organization towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies, as well as by making sure the nonprofit has adequate resources to advance its mission. 

By definition nonprofit boards are risk averse, which can hamper entrepreneurship, and thus a nonprofit led social enterprise. To ensure that the parent nonprofit can support such an enterprise, nonprofit leadership should consider the following best practices: 

  • Recruit board members with the personality, experience, and background to thoughtfully assess and provide leadership on a social enterprise. 
  • Create a committee to determine the process and steps for assessing and forming a social enterprise.  
  • Create a process and plan adopted by the full board of directors that addresses business planning, risks management, long term participation and exit strategies. 

Capital refers specifically to the financial resources to plan, develop, start, and manage the social enterprise. However, venture capital, lines of credit, and angel investments that are often essential to for profit startups are rarely reported for nonprofit led social enterprise funding. This is often because additional reporting and administrative requirements are placed on nonprofit businesses that the private sector is immune from. 

Nearly all leaders interviewed believed a greater amount of capital and diversity of capital is foundational to success. Support for social enterprises can come in a variety of funding forms. However, inconsistent government funding can cause social enterprises uncertainty and possible instability.

Without enough capital or the right types of capital, it is hard to be successful. Successful nonprofit social enterprises typically have: 

  • Multiple funding sources for the parent nonprofit and the social enterprise such as private foundations, individual donations and sponsorships, government grants and contracts. 
  • Board members and staff with the capacity to raise adequate funds. 
  • Reasonable expectations for profit. 

Despite the fact that creating a successful social enterprise is an uphill battle with even more challenges than those faced by startup businesses, where 50-70 percent of those businesses fail, there are tremendous opportunities for nonprofits, their clients, and partners. If you are going to form a social enterprise prepare accordingly, expect an uphill battle, but enjoy the view. 

Author Bio

Eve Pytel is Director of Programs at Delta Institute, a nonprofit that collaborates with communities to solve complex environmental challenges across the Midwest. Eve works to empower communities to solve legacy environmental challenges while maximizing economic and community development opportunities. She has 15 years of urban planning experience and is a subject matter expert in waste, green infrastructure, and social enterprise. Prior to joining Delta Institute, Eve served as the Director of Environmental Initiatives at the Metropolitan Mayors Caucus. Eve has a Master’s degree in Urban Planning and Public Policy from the University of Illinois at Chicago, and received a BA in Liberal Arts from St. John’s College in Annapolis, Maryland. She serves on the board of the Building Material Reuse Association, is a parent to 10-year-old twins, and practices Jiu Jitsu.

Summary

People with Serious Mental Illness, SMI, live on average 25 years less than others, often due to chronic medical conditions. Heartland Health Centers provides primary care to people with SMI in the facilities of partners Trilogy Behavioral Healthcare, Thresholds, and Community Counseling Centers Chicago. From checkups to psychiatry to shared medical records, we collaborate intensively. These partnerships have shown patients do better on weight loss, smoking cessation, blood pressure and other indicators, while patients’ satisfaction with their care increased. But care integration for people with serious mental illness remains rare in Illinois and beyond. This article documents key components to successful partnerships and highlights barriers to scaling-up integrated care.

Article 

Track star Julius Mercer, who receives integrated primary and mental-health care from Heartland Health Centers and Trilogy Behavioral Health Care, is now an author and inspirational speaker.
Photo Credit: Heartland Health Centers

“I was sick by myself,” says Julius Mercer. “I could soar high with the help of other people.”

Support from family and friends helped Mercer become a track and field All-American in the 1980s, alongside stars like Carl Lewis. Knee inflammation kept Mercer from the Olympics. Then, his life unwound due to an untreated bipolar affective disorder that led to substance abuse, then four years in prison.

Since 2014, Mercer has benefited from integrated care, defined as systematic coordination of general and behavioral healthcare by the federal Center for Integrated Health Solutions. For Mercer, integrated care means, between appearances as an inspirational speaker and self-published author, he travels to one location to get combined services and visits weekly to check in. 

While there he can see his therapist, pick up prescriptions at the on-site pharmacy, and see his primary-care medical provider. His providers also share medical records, while involving Mercer in his care. For example, high cholesterol spurred the former athlete to go to Zumba and start a diet. “I dropped 13 pounds in the past nine months,” he says.

Background 

For decades, people with Serious Mental Illness, SMI, received little attention even as others gained access to care. In 2006, the National Association of State Mental Health Directors showed people with SMI had 25 years lower life expectancy.1 A 2012 study found people with SMI were 3.4 times more likely to die from heart disease, 3.4 times more likely to die from diabetes, 5 times more likely to die from respiratory ailments, and 6.6 times more likely to die from pneumonia and influenza.2 

Chicago’s North Side had 60,031 behavioral health hospitalizations in 2011, almost twice as many as for heart disease (33,689). In Rogers Park, mental health disorders account for the largest portion of hospitalizations.3 Meanwhile, community-based care for people with SMI is a growing need. Medicaid expansion and the move to managed care have expanded primary care coverage for many in Illinois. Federal judges in the Ligas, Williams and Colbert cases upheld the right of individuals with disabilities to live in the community, driving a parallel expansion for community mental health services.4

Founded in 1993 as part of Heartland Alliance, and incorporated in 2005, Heartland Health Centers is a Federally Qualified Health Center (FQHC) offering affordable and comprehensive primary care, oral health care, and mental health care services. Since 2013 it has been accredited and designated as a Primary Care Medical Home by the Joint Commission. Heartland Health Centers has 16 locations serving Chicago’s North Side and suburbs. In 2016, Heartland Health Centers treated 23,000 patients. Behavioral care accounted for 15 percent of nearly 90,000 patient visits to all clinics.5 

Heartland Health Centers seized an opportunity in 2010 to improve the health of people with SMI by partnering with Trilogy Behavioral Healthcare in a Substance Abuse and Mental Health Services Administration (SAMHSA) integrated care demonstration program to help people with SMI. From 2010 to 2014, more than one thousand clients participated. Those who completed an assessment using National Outcome Measures developed by SAMHSA demonstrated improved outcomes. These included weight loss, cholesterol and diabetes, and blood pressure improvements; and quitting smoking.

The partnership received an Integration Award from National Council for Behavioral Health in 2014. Heartland Health Centers and Trilogy have continued to collaborate, and Heartland Health Centers expanded to work with Thresholds and C4. These partnerships have also shown results. For example, over a 10-month period at Thresholds, patients’ blood pressure control improved from 38 percent to 71 percent.

Heartland and Trilogy are among only a small number of the agencies to participate in that demonstration program to continue providing integrated care. Providing integrated care requires a series of shifts in operational thinking, collaborative practice, and organizational culture. Plus, current Medicaid reimbursement and financial systems dis-incentivize integrated care. 

Improved Outcomes
More than 1,000 clients participated in Trilogy Heartland Integrated Healthcare program over the last four years. A significant number of clients experienced health improvements on a scale developed by the U.S. Substance Abuse and Mental Health Services Administration’s, the National Outcome Measures of progress toward mental health and recovery from addiction. 
Photo Credit: Heartland Health Centers 

Integrated-Care How-to: Added Attention, More Teamwork

The first shift to provide excellent integrated care is spending more time with a vulnerable population: Extra time and sensitivity is required to get results for patients with SMI. “Patients with SMI come with a more complex list of challenges so they benefit from a more holistic approach,” says Laurie Carrier, MD, Heartland Health Center’s chief medical officer. Even a few extra minutes, she says, builds rapport. 

For a new patient, Carrier says, she may delay invasive screenings and procedures to build trust if she judges it might cause the patient to abandon treatment. Carrier and other providers also see patients more often -- nine to 11 visits a year on average compared to two to three visits a year on average for all patients. 

Another shift is the nature of collaboration between primary & behavioral health care centers. Teamwork by primary care and mental health providers, and pharmacists leads to “gold standard” care for people with SMI, says Alice Geis, DNP, APN, Director of Integrated Health at Trilogy Behavioral Healthcare, assistant professor at Rush University College of Nursing, and a psychiatric nurse practitioner. This includes connecting patients to care and sharing insights about patients’ needs and how they respond to treatment across different organizations and among staff with different training and experiences. 

On-site pharmacists at Trilogy deliver medications, which helps prevent harmful combinations and avoid overly complex regimens. Assertive Community Treatment staff do outreach to ensure patients get to their appointments and share insights about each patient with providers. Plus, shared access to medical records from both mental and primary health centers keep everyone up to date on each case.

Openness to shared decision-making and compatible organizational cultures are essential to integrated care. But partnerships between primary and mental health centers can be hard to initiate and sustain. “It takes intense focus for two cultures working together to try to bend the mortality ratio for people with serious mental illness,” says Sheila O’Neill, LCSW, vice president for Care Integration, Thresholds. For example, when it came time to hire new providers to staff the integrated Heartland-Thresholds integrated center, O’Neill proposed jointly interviewing candidates: “Heartland said, ‘Absolutely! When can we start?’” she recalls. To achieve that level of coordination, leaders from the partnering agencies meet on a monthly basis.

Scaling up: Changing How We Measure, Reimburse Care

More than 90 percent of America's health plans use HEDIS, Healthcare Effectiveness Data and Information Set, to measure performance. But HEDIS measures may not apply perfectly to treatment outcomes for people with SMI. Outcomes HEDIS currently fails to capture include Assertive Community Treatment outreach teams’ ability to connect people to care and patients’ quality of life measures. 

Both are key to better care for people with SMI. Another measurement that is hard to come by: per-patient total expenditures. More visits and services can increase expenses to care for people with SMI. But integrated care can also reduce emergency-room visits and prevent expensive interventions, which lowers total per-patient cost. If insurers in Illinois provided per-patient data, it would be easier to demonstrate and evaluate savings of the integrated-are model.

Another issue: reimbursement to primary and mental health centers has evolved separately. Each gets reimbursed for similar services at differing rates, via different billing methods and codes. There is minimally sufficient funding for psychiatry and primary care, but funding for licensed clinical social workers, counseling, and support services currently are inadequate. 

Another funding related issue is that integrated care programs lack support to get up and running. Heartland Health Centers and its partners rely on grants and individual contributions for expenses related to this work. For example, in 2016 Thresholds used private funding to build-out a primary care clinic that Heartland Health Centers now rents. Ongoing costs also include staff time for coordination time by institutional leadership. None of these costs are covered by existing reimbursement formulas. Currently Heartland Health Centers and its partners are working with Health and Medicine Policy Research Group on a financial feasibility study that may clarify these issues and lead to new recommendations.

Conclusion 

We have found providing behavioral health and primary care together delivers more effective treatment. The health of people with SMI can be more complex with more diagnoses, but integrated care is helping them live longer and improve their quality of life. This article shows it can be done, now it’s time to bring these innovative collaborations to scale. 

 

End Notes

"Morbidity And Mortality In People With Serious Mental Illness | National Association Of State Mental Health Program Directors." 2006. Nasmhpd.Org. Accessed April 8, 2018. www.nasmhpd.org.

Hardy, S. & Thomas B. 2012. "Mental And Physical Health Comordibity: Political Imperatives And Practice Implications. - Pubmed - NCBI ". Ncbi.Nlm.Nih.Gov. Accessed April 8 2018. www.ncbi.nlm.nih.gov.

Anonymous. 2016. Cityofchicago.Org. Accessed April 8 2018. www.cityofchicago.org.

For an overview of these three cases, see: Anonymous. Oct. 4, 2016. “EFE’s Recent Work,” Equip for Equality. Accessed April 8 2018. www.equipforequality.org

5 2017. Anonymous. “Annual Report.” Heartlandhealthcenters.org. Accessed April 8, 2018. www.heartlandhealthcenters.org.

Author Bios

Gordon Mayer, principal of Gordon Mayer Communications, is a writer and storyteller who has been ensuring all stakeholders have voice in shaping effective and fair policy for more than 20 years. He has a Master’s Degree from the University of Chicago. 

 

Molly Bougearel is Vice President for Strategy & Development at Heartland Health Centers. She has a Master’s Degree in Public Health Policy and Administration from the University of Illinois at Chicago.

“The challenge these days, is to be somewhere, to belong to some particular place, invest oneself in it, draw strength and courage from it, to dwell in a community.” bell hooks

The marble plaza at St. James Cathedral is strewn with sunlight as we gather for our first viewing of an installation to remember victims of gun violence. Statues dressed in the clothing of victims are posed to mimic their gestures, appearing lifelike but faceless as a reminder that their lives have been lost. The effect is unsettling and as I cross behind the statue of Terrell Bosley, his mother, an activist and partner in this work, approaches her son’s figure. I am locked in place by the swell of emotions that crosses her face as she advances, reaching gingerly towards his gray sweatshirt. In an instant I feel useless and unprepared -- confronted with the impact of isolation, poverty, lack of services, and indifference that have contributed to high rates of gun violence in Chicago. 

Raised in a city segregated by race and income, with a history of institutional policies that created visual delineations between those with means and those without, seeking solutions to the challenges faced by our communities can feel overwhelming for an individual. In this time of persistent antipathy for racial, economic, and environmental justice and rapidly changing political norms, opportunities to engage in social change are innumerable as are the issues of importance. Yet, as a Millennial working to bring resources to my community, sustain initiatives, and foster collaboration I have found it challenging to find opportunities that go beyond the fleeting tweet or one-day protest -- that allow me to build relationships, support my community, and invest in strategies that align with my values. 

In the late 1700’s African Americans began a movement to provide economic support and assistance to their communities. Through mutual aid societies African Americans funded the underground railroad, efforts of the civil rights movement and the healthcare, education, and social services needed to confront systems of oppression that kept their communities from accessing basic needs. This culture of giving has continued in the African American community and according to the W.K. Kellogg Foundation’s Cultures of Giving report1 African American households give 25 percent more of their income to charity than the national average. But few in our community are aware of their philanthropic power. Narratives of failure and degradation surround black communities and so it is of little wonder that we struggle for visibility as philanthropists, as a source of giving in our own communities. 

Facing the need to find community and invest in changing the conditions and systems that promote violence in Chicago I sought an opportunity to engage in giving that resonated with my desire to support African American women as agents for change in our city. I found that opportunity with the South Side Giving Circle of Chicago Foundation for Women (SSGC). SSCG launched this year as an effort to mobilize the philanthropic resources of women to invest in the economic, social, and political power of black women and girls in Metropolitan Chicago. By embracing the experience of service and the opportunity for leadership we provide space for authentic, people-centered collaborations around giving strategies that are responsive to our communities’ needs. 

For many women seeking to have impact through collective action giving circles provide an opportunity for leadership and civic engagement. As described by the Collective Research Group2, giving circles are understood to be highly flexible and democratic mechanisms for giving. Much like the mutual aid societies that shaped the development of African American giving, giving circles are a growing movement that have attracted more than 150,000 people across the United States. These circles tend to be more diverse in race and gender than traditional philanthropy and seek deep engagement with funding recipients beyond just their financial support. Giving circles are of value to communities for the monetary investment that they provide but equally important for their value as catalysts for building capacity and increasing the visibility of the community organizations they support. 

Nationally, it is estimated that just seven percent of all philanthropic dollars are allocated to address needs specific to women and girls, and funding has never exceeded 8.5 percent allocated to addressing the needs of African Americans.3,4 In Illinois, we are behind the curve, giving just three percent of philanthropic dollars to address needs specific to women and girls. The SSGC provides an opportunity to address this need and advance change in our communities. Imbued with this purpose we ask you to join us. To shift the lens and change the narrative, to make visible both the power of African American philanthropy and the strength of our communities. 

1  philanthropynewsdigest.org

2 johnsoncenter.org

3 www.womensfundingnetwork.org

4 ncg.org

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