Businesses want to make a profit, but are skittish about relying on one customer for all of their revenue. Nonprofit groups should be nervous as well, based on the experience of Craig Lambdin. Lambdin took over MFI Recovery Center, a drug treatment center in California, in 1985.
"They (MFI) existed solely on one government contract," Lambdin said. "That contract only covered 80 percent of the costs. Pancake breakfasts and car washes didn't quite make up for the rest."
The MFI Recovery Center opened in 1972 and had five employees and an annual budget of only $185,000 dollars. It now has 75 employees and a $5 million dollar budget with 12 to 15 government contracts each year. This explosion evolved into a class on how to manage a nonprofit organization like a business.
Lambdin believes that working in a nonprofit setting is no different from running a successful business.
"The stress is the same. At the end of the day, we have to have a bottom line that allows us to pursue the mission the next day," Lambdin said. Lambdin was a clinical director at another drug treatment center in Riverside, California, when MFI asked him to come in and help turn their financial tide.
"A lot of nonprofits spend their lives on the ropes," Lambdin said.
The MFI Recovery Center receives funding from both the public and private sectors. About 60 percent of their funding comes from public agency grants and contracts. About 40 percent of the drug treatment center's funding comes from private citizens and payments from health insurance companies.
Like any other business in the United States, MFI Recovery Center has to consider suitable pricing for their services.
"How can we get funding and price things so basically anyone can get some form of suitable treatment? It doesn't always work," Lambdin said.
The economy has made it difficult for businesses and nonprofit organizations are no different. Raising money has been difficult during the recession. The budget for the drug treatment center has been hit by approximately 5 percent. About a year ago, Lambdin had to lay off 20 percent of his employees.
"We literally postponed our annual fundraiser last year because we thought we would actually lose money. It's been a rough couple of years. It still doesn't look good for the next year."
As of March 2008, the Substance Abuse and Mental Health Services Administration data found 1,725 drug treatment centers in California. Of that number, 1,098 were private nonprofit agencies and 411 were businesses.
MFI Recovery Center has six counseling centers in the counties of Riverside and San Bernardino. They also manage four recovery homes and three residential drug treatment centers. MFI has expanded their services to women and children in addition to men. One of their programs offers counseling targeting toward preventing addiction for preschoolers living in homes where drugs are a problem.
The drug treatment center has tapped into a need for mothers to receive services while being secure in the knowledge that their children are safe.
"We now have more women in treatment than men," Lambdin said.
In 2008, the Substance Abuse and Mental Health Services Administration, a federal agency, found that there were 621 drug treatment centers in California offering treatment to women. Adult men in California could find programs at 555 drug treatment centers in California.
