Habitat Restoration

REVIEW SUMMARY
Organization. Habitat for Humanity of Lee County
Industry. Nonprofit organizations
Key. Nonprofit service organizations could use some professional management to steer through a difficult economy.
By the Numbers. Click here for a look at the impact of the real estate collapse on wealth totals.

Shortly after she was named president and CEO of Habitat for Humanity of Lee County in March, Katherine “Kitty” Green recalls an encounter she had with the thrift-store manager in the office lobby.

What, he asked Green, should Habitat do with a large donation of toilet paper he had just received?

Green, known for her dry sense of humor, resisted the temptation to deliver a good punch line. But the episode demonstrated how micromanagement had crept into the highest levels of the nonprofit organization.

Green, 47, who had most recently been president and CEO of luxury developer Bonita Bay Group until she resigned in 2009, is now bringing corporate management skills to Habitat for Humanity of Lee County. It's one of 2,000 affiliates in more than 90 countries that provide homes for low-income people.

Green is instituting a collaborative team-based approach to management, delegating tasks and demanding accountability. She's asked the board and the staff to create and approve a three-year strategic plan with details on how to achieve specific goals. “I really try not to operate this as a nonprofit,” she says.

That's a good thing because the Lee County affiliate of Habitat saw its finances take a big hit as it foreclosed on homes it had sold to people who couldn't keep up with zero-interest mortgages. In the fiscal year ended Sept. 30, 2009 compared to the previous year, cash contributions fell 34% and total assets dropped 21% to $22.8 million.

Charles Idelson, the chairman of Habitat for Humanity of Lee County, says it was essential for the organization to hire someone with Green's experience. She succeeded Vern Archibald, who had retired after running the organization for 20 years.

“If you put a pie chart together, construction is just one little piece of Habitat,” says Idelson, who also is president and CEO of Investors' Security Trust in Fort Myers. “You're actually looking at eight, nine or ten lines of business. I think you need a business person.” These different businesses include mortgage financing, a thrift-store shop and property acquisition.

For her part, Green had served on the board of Habitat since 2002, most recently as vice chairman. “She's been there for a long time, which is really important,” Idelson says.

And it's unlikely Habitat could have afforded Green's talents during the boom. For her part, Green makes little distinction between Habitat and Bonita Bay Group. “I would love to make a profit,” she says, whether it's for a company's owner or a nonprofit mission.

Financial incentives

Like many nonprofits, Green doesn't have the resources to pay big salaries and bonuses. “A lot of people in the world don't necessarily measure their worth by the size of their paycheck,” she says.

If money isn't the incentive, what is? “They get to keep working here,” Green snaps, revealing the toughness that got her to the top of corporate ladder at Bonita Bay Group. While at the Bonita Springs-based development company, Green rose through the ranks, earning her stripes by leading the development of two huge residential communities in Lee County.

Green says she's not trying to rule by fear, but she's eager to have the organization's 35 employees take responsibility for the success of the organization. “Why are we here?” she asks employees. “We're not here to warm a seat.” The organization already has pared down its ranks from about 50 at the peak.

When pressed, Green acknowledges money's always a good motivator. The Christmas bonus that traditionally was handed out evenly among all employees will likely turn into a performance bonus instead of a gift, for example.

To measure performance, Green is in the process of establishing an employee evaluation process. It's a basic tool in the corporate world, but it was missing from Habitat. The key, Green says, it to keep the evaluation simple and prevent it from becoming overly bureaucratic.

Because sales aren't the driving force behind the success of Habitat, Green says more subjective criteria will be part of the evaluation. These might include whether an employee takes ownership of the job and whether the person is a team player.

Delegating and accountability

When Green arrived at the nonprofit, the management was top-down, as the toilet-paper incident clearly revealed. “I'm more of a collaborative manager,” Green says.

To create that atmosphere, she reorganized Habitat into five teams, each with its own area of responsibility such as construction and finance. Some parts of the organization that were oddly separate were melded together into one team. For example, the community outreach team now includes volunteer organization, public relations and fundraising and she plans to hire someone with experience to be in charge of those previously separate functions.

None of the employees has ever been asked to set goals in the past, so Green asked them to do so when she took over. It wasn't easy at first. Sometimes the goals weren't specific enough or employees set the bar too low. “They would get frustrated,” Green concedes. “People were nervous,” she says. “They didn't know me.”

Teams now meet with Green bimonthly. “I've asked each team leader for a monthly report,” she says, looking for signs that the report has input from every member of each team.

Green says she praises team leaders who deliver both good and bad news so that small problems don't become bigger ones. “I need to know the good, the bad and the ugly,” she says.

Rehab homes

Restructuring the organization is key to returning Habitat to growth and remaining flexible in a changing economy. For example, Habitat has switched from building homes to rehabilitating existing homes purchased in foreclosure. “It's much more cost effective,” she says.

Green says Habitat's challenge will be to make rehabilitation of existing homes as exciting for volunteers as building new ones. The organization plans to rehabilitate 70 homes this coming year, increasing she says that number by 10% annually in subsequent years.

Some of those homes Habitat is rehabilitating include those it has foreclosed on. Homeowners get help with zero-interest mortgage, but the philosophy of the organization demands that they make monthly mortgage payments. With rising unemployment, many have fallen on hard times and Habitat has had to foreclose on 25 of its homes so far this fiscal year.

“You have to have some means of payment,” Green says. “The goal is to help people help themselves.”

Habitat is working with another 21 families to help them keep their homes. “Our own foreclosures will decline,” Green says. The organization services its own mortgages, though it sells some of them to raise money.

The internal reorganization of Habitat is essential for the organization to grow again. Green says the group has kept to itself and hasn't promoted itself enough. “We used to work in our own orbit,” she says.

For one thing, Green says the organization will try to tap into government housing grants, something it had avoided in the past. That's because corporate donations have fallen off.

And Green plans to increase Habitat's visibility in the community with public-speaking engagements and working with other nonprofits and government agencies involved in similar endeavors. She plans to devote 30% of her time to fundraising.

Curiously, Habitat has never had a formal fundraising system, something Green plans to change. While she plans to encourage board members to become Habitat “evangelists,” she says that fundraising events must be time well spent.

“I've tried to steer our people away from lots of little events,” she says. Don't expect any big galas from Habitat. “Those events are a big expense,” Green says.