Doing well by doing good 

The rise of Missoula's non-profit retail sector

An organic soy cheese pizza for $4.99. A yoga ball kit for $21.50. A bottle of Castello di Gabbiano’s Chianti Classico for $16.99. You won’t find all these items out at a Reserve Street box store, but all this and much more can be found browsing Missoula’s massive non-profit grocery—the Good Food Store. After a hefty expansion, the Good Food Store is leading the way in non-profit retail. Being non-profit, the store has no owners or shareholders demanding ever-increasing profits. Instead it’s run by a board whose motives are based in providing alternative products for the community and funneling profits back into the business. Not being bound to a bottom line, the store offers products that may not give a great return, but can’t be found anywhere else in Missoula.

But the Good Food Store isn’t the only non-profit that has endeavored to enter the retail market, and it isn’t the only local success story. An examination of a cross-section of Missoula retail non-profits makes it clear that there is no single motive behind delving into a world dominated by for-profit business. Each organization’s motive and style is creatively adapted to serve each organization’s unique mission. For some that means an alternative means of fundraising. Others aren’t concerned with the money they make, hoping that even window shoppers will learn something about the non-profit’s purpose as they pass by. Then there are those rare cases where retail is actually the primary objective—like the Good Food Store.

The Jeannette Rankin Peace Center’s goal is to empower people to build a socially just, non-violent and sustainable world—an aim that seemingly doesn’t have a lot to do with hawking Vietnamese tea pots and Guatemalan coin purses. But business manager and fund developer Jean Duncan says that it’s not the ching of the cash register that keeps the center going financially—it relies on traditional fundraising for that. Rather, it’s the knowledge about fair trade practices—partnerships between marketers in more developed countries and producers in less developed countries in which workers are paid a living wage—that is important for customers to take away, says Duncan.

“When you take expenses out of it, it’s a break-even operation,” she says of the retail portion of the center. “The purpose is to let people know that there are other marketing practices besides the mainstream, and to raise awareness of global issues.”

The center doesn’t plan on its fair trade store growing into an outlet that can compete with Kmart, but Duncan is confident that a piece of sterling silver jewelry can create awareness about the plight of workers in Bali. From there, the hope is that awareness will lead to a ripple effect.

The Peace Center’s break-even-but-educate strategy has worked for the store, but it’s atypical. In Missoula—a town of dozens of non-profits—there’s a great deal of competition for local funds. When the downturn in the economy is factored in, the competition for national funds becomes even more intense. To pick up the slack of dwindling contributions and disappearing grants, some Missoula non-profits have turned to retail.

“People don’t have access to as much money anymore,” says YWCA Secret Seconds assistant manager Ginny Huebner. “The more we can raise on our own, the [fewer] grants we have to find.”

The YWCA mission of community service has evolved over its nearly hundred years with a thrust toward crisis counseling, shelters, therapy, transitional housing and continuing education. These programs are effective, but cost a great deal to maintain. While the Secret Seconds store provides free clothing to women and children in their shelter, and on the-job-training for women wishing to learn job skills, its retail sales also help to defray the costs of the YWCA’s programs.

“Our ultimate goal is to raise money, and we take it pretty seriously,” says store manager Betty St. John.

Above the tiny, antiquated cash register is a sign that reads: “Our prices are the best effort to give a fair price to the buyer and at the same time support the YWCA.” This maxim mimics the principle behind for-profit business—fix a price that will attract customers while still earning the business money. But for Secret Seconds the equation is more complicated.

Secret Seconds’ challenge is finding a niche. Assistant manager Huebner says that she looks for donations that will distinguish the YWCA’s store from competitors like the Goodwill and Salvation Army thrift stores, and the Missoula Catholic Schools’ Bargain Corner. That niche may manifest itself in a slightly pricier inventory, but in reality all four stores share similar wares and an overlapping customer base, which makes standing out in the crowd difficult.

Yet Huebner admits a catch-22 in that no store wants to siphon too much from other non-profits’ business. She stresses that the four stores don’t have an adversarial relationship like competing fast food restaurants. Whereas McDonalds’ goal is to sell more cheeseburgers than Wendy’s does, Huebner is hoping and even counting on the success of both Secret Seconds and its competitors. Because all have the same goal—helping struggling members of the community—a success for one organization can snowball into success for the community at large.

“We actually have a map up [at our register] to show our customers where the other stores are,” St. John says proudly. “We try to encourage people to try the others [if they can’t find what they want at Secret Seconds].”

This ethos of cooperation over competition doesn’t seem to be holding any of the non-profit retails back. The Salvation Army recently expanded into a second, larger location, and Secret Seconds has purchased the old Good Food Store building and hopes to reopen it as a larger Secret Seconds outlet, which will include furniture, by October.

The Good Food Store is thrilled Secret Seconds is moving into its old building, says store general manager Cheryl Loberg. Like a winter coat handed down by an older sibling, the building will stay in the Missoula non-profit family.

More than a year ago, when the grocery knew it was moving, it was approached by almost two dozen interested parties, though the building never officially went on the market. The YWCA was the first prospect, and was exited about the spot, says Loberg.

“We’re leaving our registers behind,” says Loberg. “So it’s kind of nice that a little bit of the Good Food Store will remain there.”

While Secret Seconds and the others have grown healthily, none has experienced the unprecedented explosion the Good Food Store has seen. Started in 1970 by a local yoga group and bounced around all over town, the store settled in at its Kensington Avenue location in 1982. By 1994, the store had expanded and remodeled, but continued to suffer “growing pains,” says Loberg. Even with, or maybe because of a 25 percent increase in space, business was booming. The choice quickly came down to expanding again, or facing competition from a national competitor. With help from the Missoula Area Economic Development Corporation, the Good Food Store secured financing and began shopping around for a new location.

Because the store has no owners per se, it had no collateral—like owners’ homes or other assets—to put up for a loan. But with local help, a lot of forethought and a hefty piggy bank, financing wasn’t the biggest obstacle—location was, says Loberg. The board wanted to stay true to its non-profit values and not over-expand. They also didn’t want to relocate to the commercial hub of Reserve Street.

So when the former location of the Bi-Lo grocery store at 1600 S. Third St. West became available, the Good Food Store jumped on it. The choice of location also made the Missoula Area Economic Development Corporation happy, since the real estate had already been identified as a decaying commercial location ripe for revitalization.

The only worry was that customers endeared to the old store’s co-op intimacy wouldn’t take to the new store. The move meant 27,000 square feet of commercial space, 38 freezers, 70 new employees and the addition of products the old store never carried, like Kodak film, Duracell batteries and Corona beer. The new products were added partly out of the need to fill the store, but Loberg says management also wanted locals who shopped at the old Bi-Lo to feel they hadn’t lost everything about their accustomed neighborhood grocery.

“We thought long and hard about our choice of products, because we went into a location that was used to having a conventional store,” says Loberg. “To stock Band-Aids when you don’t have enough room for all your soy milk just doesn’t make sense, but now we have the space.”

But adding common brand names hasn’t seemed to alienate the store’s customer base. Loberg says that if people don’t like the additions, they haven’t complained, and cites register receipts twice the average of the old store.

Good Food Store management attributes the growth and loyalty to a continued commitment to retain that which distinguishes the store from for-profit ventures: supporting local producers and offering healthy alternatives to standard grocery store fare, even if it means higher prices.

“There are a lot of other stores that are getting into providing organic and natural products, and personally I think that’s great,” says Loberg. “I think competition can be very good. It makes businesses examine how they treat their customers and their employees. But I know we still offer something unique.”

That distinction from the mainstream is a direct product of being a non-profit, she says.

“I think when you have a sole owner, the place takes on the personality of that owner,” she says. “This is much more of a collective personality. We don’t have a corporate office. This is it.”

As she says this she looks out her office window overlooking the store. This is indeed a different shopping environment. There’s a fireplace, comfy chairs, warm colors and a flood of natural light. These are things that give the store an edge, not the non-profit status, says financial manager Carol King.

“People hear that we’re a non-profit and think that it’s easier for us,” says King. “But it’s not. We still pay taxes.”

Unlike Secret Seconds and the Jeannette Rankin Peace Center, which enjoy tax-exempt status and use their retail sales to prop up their programs, the Good Food Store has no other programs and is taxed like any other grocery. Nonetheless, the store has succeeded mightily and even been courted by other Montana towns. But expansion beyond Missoula isn’t on the agenda, says Loberg.

Nor is it on the agenda of other Missoula non-profits. While the Peace Center deals with global issues, there is no franchise plan. These organizations’ primary goals are providing for the Garden City and its residents. And all are examples of experimental business models in which the cliché of “people, not profits” takes on a local face.

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