Apr 04

Shawna Blanchard and Habitat for Humanity

My friend Shawna Blanchard (pictured above) left a well-paying job at a major bank (one with a safe pension plan too) to become director of development at Habitat. This is what you call being “other directed.”

Habitat runs two ReStores in Ottawa and many more throughout their network in cities across North America. Each ReStore sells millions of dollars of donated recycled goods to the development, construction, renovation and homeowner markets each year. Every dollar raised goes toward their mission–providing good quality, affordable homes to families currently living in subsidized but substandard and overcrowded quarters as well as unsafe neighborhoods.

If you have anything you would like to donate and recycle, you can drop it off at a ReStore; when it sells, you will get a tax receipt for the amount it sold for… very green.

If you require stuff for your reno project, you can buy things you need at a ReStore for around half what you would pay, new.

I have always thought it makes sense for charities to run “businesses” within their organizations to provide sustainable funding for their good works. Canada Revenue Agency apparently agrees making it official public policy a few years ago.

When I set up the Sens Foundation in the early 1990s, it wasn’t long before we found one of the best ways to support the work of that charity was to run 50/50 draws at every home game. In its first 20 years of operation, the foundation raised more than $50 million for good works focused on kids, education, technology, health and fitness.

I found Habitat’s business model quite interesting. They build houses for needy and deserving folks but it isn’t free. Here’re some of their policies:

-client families have to put 500 volunteer hours on their own build

-this is their “down payment”

-they need to go through a coaching program before taking possession to learn how to take care of a home

-they get a 20-year, interest free mortgage with payments geared to 25% of their income, which, in Ottawa, means they have to have annual family income of $42,000 to $60,000

-they must report their income to Habitat every year 

-they cannot refinance and “cash out.”

It’s a great model. It “forces” families to save (by paying off their mortgage).

What would I add to it?

In a give-a-person-a-fishing-rod-not-a-fish scenario, it will not surprise my readers to know that I would probably add a basement apartment or coach house for Habitat families to rent out so that they could also get some income from their own homes. 

Here’s why I suggest this change to their biz model, http://profbruce.tumblr.com/post/153639912969/why-you-should-treat-even-your-principal-residence

The additional rental income from a basement suite may not be something they can take advantage of until their kids grow up and move out, but once they realize that the average CPP (Canada Pension Plan) payout in 2015 was about $550 a month, they will soon realize how important it is to: a) pay off their mortgage, ie, be forced to “save” the value of their home and b) at least have some rental income potential to help them in their elder years.

@ profbruce

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