An eager reader sends this photo of the model for Madison's economic development planners:
The Closet, the Moody County branch of Inter-Lakes Community Action Project's thrift store program. Notice they have a fine Flandreau city banner out front, too. Banners and a thrift store: the essential elements of successful downtown revitalization.
ICAP runs similar thrift shops in Howard, Clear Lake, and Clark. According to ICAP's 2010 990 tax return, ICAP's net income from sales of inventory (and I'm assuming here that its four thrift stores are ICAP's only sources of such income) was $67,949. That's in four counties with a total population of 16,930. That's about four bucks generated per resident. Extrapolate that to Lake County, population 11,200, and you get projected annual thrift store revenue of not quite $45,000... significantly less than the $100,000 thrift store committee members project, and not much more than Lake County appropriates and spends on assistance for the poor in a much more efficient and publicly accountable fashion.
By the way, at the end of 2010, ICAP had net assets or fund balances of $3.19 million. Land, buildings, and equipment make up $1.26 million of that. ICAP lists $1.73 million as unrestricted net assets. In 2010 alone, their revenue exceeded expenditures by $388,000.
In 2010, ICAP disbursed $4.28 million in grants and other assistance to individuals. At the same time, ICAP spent $5.12 million on wages, pension, and benefits for its 217 employees.
Now I'm not an accountant. I welcome ICAP reps to drop by and explain how the cash they have on hand isn't really on hand or is already spoken for. But when I see over a million dollars on ICAP's balance sheet, plus another $425,000 on the Madison Community Foundation's legally non-existent books, those two organizations appear to have more than enough cash on hand to open and operate and fifth ICAP thrift store, comparable to the Flandreau shop shown above, without needing any further subsidies or gifts from the City of Madison or Lake County.
Cory,
I've got access to a financial scanning tool through GuideStar... they may have $1.7 M unrestricted net assets, but their cash on hand is alarmingly low - 0.6 months (18 days!).
Unrestricted net assets (to my understanding) are assets which don't have restrictions on how they can be used. It doesn't mean they're necessarily liquid, though (that's the $570k in cash).
Of course, if they wanted to liquidate those assets, that's their discretion... but looking at how their expenses were a steady $7 - $8M in 2006 - 2009, then jumped to $12M in 2010 (last year data available), I'd be very hesitant to liquidate. Their revenue stream has increased to match, but it's been much more shaky
Thank you, Wayne! That's important information to have.
I'm guessing that jump in expenses in 2010 (plus a jump in federal grants) corresponds to federal stimulus, esp. the weatherization program.
I sent the following e-mail to each of the City and County Commissioners yesterday (no response yet). The key paragraphs (to me) were these:
"Why should we spend city tax dollars to help with a business that will depend on donated items, and seems to expect an amazing amount of income from it? Has anyone talked to the various retail businesses - already existing in Madison - that handle used items and found out what kind of turnover and income there already is?"
and
"I already know there's no room in the new ICAP building for the thrift store - but, since ICAP is already building two new buildings, one for Head Start, and the other for offices, why does ICAP need offices in yet another building, the new thrift store?"
and
"If the Madison Community Foundation and the LAIC and ICAP want to do a thrift store, fine: they are individual entities, they can do as they like. But let them do it the same way any other small business person in this town has to: without being subsidized by City of Madison tax dollars."
That's probably a good assumption.
Their revenue from government grants went from 86.7% in 2009 to 90.5% in 2010. Program Service Revenues are falling steadily (greater reliance on grant fundings makes me a wee bit nervous). They've got about $1M invested, but it's performing pretty poorly (got hit in 2008 like everyone else).
On the bright side, they're recovering nicely from the 2008 crash in profitability - a positive trend from 4% to 4.5%.
Also, we could call them a "job creator" for 2010 - their personnel growth rate was 21.5% (!), adding over $1.1M in personnel expenses from 2009 to 2010.
Overall, the organization looks pretty stable... but with such a high reliance on grant funding, I'd be very concerned about sustainability. If they had to rely solely on those thrift stores, ICAP would be a very different animal.
I do enjoy a little financial forensics :)
They should just open a small store they can afford and that makes sense for the size of our town. That would be a welcomed addition to Madison, but to expect city and county money is way over the top. The city has already lost a lot of money on the old Rosebud building (purchase, sale and demolition) which benefited ICAP.
What are the plans for the existing ICAP office building when they build new offices and head start school? Could the the thrift store locate their--what once was the band room for the old JR. High?
Charlie, that building could host a thrift store as easily and quickly as any of the other vacant properties downtown... but the steering committee seems absolutely blind to alternatives.
It would be handicapped accessible, but it has many rooms inside and it's not on the main drag. They could sell it and buy something else, but not sure if they own it. Just drove by the old Montgomery Furniture building. Something needs to go in there!
I'm not sure what your problem is with thrift shops. Thrift shops are great. They are really doing pretty well in this economy. Marry a thrift shop with a non-profit that puts people to work and provides other services to low-income or disabled people and you have a way to do a lot of good things for the community. They can be a good place to train disabled people for stocking and other jobs.
Thrift shops provide a great service. First, they encourage reuse/recycling of used clothing and household items, thus reducing landfill costs. Second, they provide jobs and generate tax dollars. Third, they provide a local shopping experience for people who like to hunt for bargains.
In Madison, WI, there are a lot of students, who shop Goodwill and St. Vincent de Paul. We've also got Savers and Hospice Thrift Shops. There's really a boom in thrift store shopping right now. And people who donate can take the value of the donated items as a tax deduction.
No one has anything against thrift stores. Madison, SD, already has thrift stores though which would be impacted by a nonprofit thrift store, and which might affect how many donations the nonprofit would be able to get. The main concern with this one is the over a million dollars that the committee wants for a brand new building, while several buildings sit vacant that could be used at much less cost and which would generate the same amount of revenue. There is also the concern about the dealings between the city and LAIC as regard land and buildings owned by one entity and sold to the other.
Donald, the push back is only because our community needs to prioritize other things to the top. We have many resale shops but only one grocery store. Do "they" care the struggling can't afford to buy food locally? No, because we have a "Madison Mafia" that protects those who pay their dues. They call it an economic development corporation. A friend likes to point out we have legitimized corruption in our country rather than the more honest payoff Americans used to like to think exist only elsewhere, but everyone is catching on and finally starting to care.
Donald: yes, what Linda and John said! I'd love a good thrift store in Madison. Half of my teacher clothes are from Goodwills in Sioux Falls and Lincoln. My beef is that the promoters of this store are unnecessarily asking for $300,000 from taxpayers to start a project that they could start now with resources the boosters already have on hand.