There is currently a lot of buzz around social enterprise and earned revenue as ways for non-profit organizations to increase their financial resources. Some of these efforts are well-known, such as Good Will which generates 95 percent of its revenue from Good Will stores. Others are lesser known, such as SHOP, a social enterprise of A Miner Miracle in San Francisco, California.
SHOP is a clothing boutique that offers women and men designer fashions at greatly discounted prices. It opened its doors for business in 2003. The clothes are new, current, in season and sold at 50-80% below retail. The revenue from SHOP funds A Miner Miracle, a non-profit that provides professional clothing and image counseling to low-income to women and men seeking employment. Take a peek at their new video now showing on closed circuit television at select hotels in San Francisco. And take a look at how ABC TV covered SHOP in the evening news.
In order to learn more about what it has taken to grow this social enterprise we spoke with founder Kathy Miner.
Saad & Shaw – tell us a little about yourself, why you founded A Miner Miracle, and how SHOP came about?
Kathy Miner: I have a long history in the clothing industry, especially off-price, high-end clothing. Like many people, there came a point in my life where I wanted to combine my skills and passion with doing good. In 1995 I founded A Miner Miracle as a way of helping people who needed to dress for work for but didn’t have the clothes or money to do so. Things went well, and in 2001 I was recognized by Oprah Winfrey’s Angel Network. Then came the 2002 recession and I had to seek out new funding sources. I couldn’t continue to rely on foundation grants. I started hosting special shopping events – these were clothing sales where people could buy beautiful clothes at drastically reduced prices. All the money went to A Miner Miracle. With my background in clothing I went on a buying trip to Los Angeles and found designer label clothing and some financial donations. I hosted four special clothing events before I finally decided to open a permanent store. I was lucky enough to be given a great location as a donation. That meant I didn’t have to pay rent. I tried many different concepts over a four year period before things really started to click.
In my fourth year I realized that I was going to have to go to New York to buy high end quality clothing and brand names. With this change SHOP became a fundraising vehicle for our agency and our target customer became anyone who likes a discount of 50-80% below retail for brands such as Ann Taylor, Calvin Klein, Michael Kors.
Saad & Shaw: A few questions about details. Is SHOP a part of A Miner Miracle or is it a separate 501c3 or is it a privately held business? And how does SHOP operate? What percentage of A Miner Miracle’s budget comes from SHOP revenue?
Kathy Miner: The name is “A Miner Miracle SHOP where giving is always fashionable.” We operate under one 501(C)3. SHOP operates like any retail store. I have a full staff who are hired with retail clothing experience. I also have an intern retail program to assist with some of the needs of processing and tagging the clothes. We train our interns in all areas of retail where we need help. At this point in time about 80% of the budget is supported by SHOP. Our goal is to have almost all the budget come from our store(s). In times like this, it has allowed us to continue serving over 600, men, women, young adults a year including those who have “aged out” of foster care and veterans who are homeless.
Saad & Shaw: What have been some of your biggest challenges and how have you overcome these?
Kathy Miner: The biggest challenge has been funding for SHOP. We started very slow with clothing events and then built up. We were only open three days a week in the beginning and built up to six days. That took four years and it was not easy by any means. Having a social enterprise support our agency means that really I am running two businesses at the same time. In our case it also meant doing it all with one small staff at the beginning. We have a line of credit and I also invested in the business. I don’t recommend doing that, but desperate times call for desperate measures.
Saad & Shaw: What role does in-kind services and donated merchandize play in SHOP’s success?
Kathy Miner: I have one great label donating all their samples to us. However, the shipping from NY costs over $50,000 alone. I have made relationships with many of the big brand names and they sell to SHOP at really good prices. Remember I sell everything at 50-80% below retail so I have to keep my buying price very low to make a profit. Having donated products is always preferable but for my concept not something that I could depend on. You have no choice when you get donations and many times it is hundreds of the same garment in one color. If you want a high quality store you have to choose – and often times buy – high quality merchandise.
Saad & Shaw: It seems as though you depend upon a great number of people to provide SHOP with in-kind goods and services or greatly reduced prices. How do you keep these businesses and individuals engaged with SHOP?
Kathy Miner: I keep as many people as I can engaged in our non-profit and the success of the business. I have a fashion advisory board, a business sponsor partnership, and I make sure that everyone gets recognition for helping us. It has been harder in this economy because the clothing business has been hit so hard it and many vendors have closed. I send photos, news pieces, and videos to keep them connected. I make sure I visit when I am back east and take San Francisco chocolates, sour dough bread and California wines. I let them know how much I appreciate all they do for us and make my success their success. People want to give. I do not ask anyone to donate except once a year for our big SHOP for Charity event. This means they don’t hide when I call or come to town. It is a win-win situation for all of us.
Saad & Shaw: What guidance would you offer to other organizations who would like to build a social enterprise to support their organization or institution?
Kathy Miner: Do something you know very well and love. If you can find something that ties into your service that is good. Don’t train on the job. Pick a service or product that is needed to a large population. Have a good board and do your due diligence and market research before starting anything. Get as much donated as possible but consider your social enterprise a business and not a non-profit. Social enterprise is not necessarily the answer to your money problems and could in fact take more resources than you receive. Go slow, test every idea first.
Visit SHOP (and purchase wonderful clothes at a great price and help change the lives of others!)
A Miner Miracle SHOP
441 Sutter St (between Powell and Stockton)
San Francisco, CA 94108
Be sure to tell them Mel and Pearl sent you! And as always, remember to have a FUNdraising Good Time!