Flora Family Foundation Final Report

Introduction

In 2003 Free Geek received its largest grant ever, $185,000 from the Meyer Memorial Trust. Combined with $70,000 in grants from the Oregon Department of Environmental Quality, the Collins Foundation and the Juan Young Trust, Free Geek embarked on a very ambitious expansion of the entire program. The goal of the expansion was to make Free Geek a self-sustaining organization by the end of 2005. This goal has been mostly acheived, but not without some substantial setbacks along the way. It was during the aftermath of the problems that we had experienced that a member of the Flora Family Foundation approached us and quite simply asked "how can we help?". Free Geek received $10,000 in August of 2004 and applied the money to our general operating costs that were still in the red, giving the organization crucial additional time in which to further increase income. As the end of 2005 approached, Free Geek began operating in the black and the first quarter of 2006 was an entirely self-funded quarter. We believe that this is the beginning of a trend that will make Free Geek somewhat unique amongst non-profits - sustainable.

The Program Expansion

Free Geek planned a large organizational expansion project designed to increase our impact in the community and increase our operational income to the point that all of our core programs are financially stable and self-sustaining. Four grants were obtained totaling $245,000 (Meyer Memorial Trust - $185,000, Collins Foundation - $35,000, Oregon DEQ - $20,000, Juan Young Trust - $5,000.

PHASE I: Facility Expansion – increasing capacity for all major programs by improving the existing facility, adding additional classroom space, expanding recycling, production space and the thrift store (This phase funded by Oregon DEQ and the Meyer Memorial Trust).

PHASE II: Long Term Capacity Building - stabilizing and expanding our current programs to take advantage of increased facilities and increase revenue generation to the point of self-reliance (This phase funded by the Collins Foundation and the Meyer Memorial Trust).

PHASE III: Programs Expansion - funding two new projects that will help distribute the increased production of refurbished computer systems in ways that increase both our impact on the local community and our income stream.

1. Collaborative Technology Project - Provides consulting services so that local non-profits can access to Open Source technology and training, reducing their technology costs (This phase funded by the Meyer Memorial Trust).

2. Computers For Kids - Provides computers and education to "At-risk" youth in the Portland Metropolitan Area (This phase partially funded by the Juan Young Trust).

Impact on the Community

Increased capacity has meant more volunteers can participate in our programs. We increased the total number of volunteers in our core programs by 145% over the previous 12 month period (2,123 to 3,071). The number of Adoption Program participants increased by 131% (1,438 to 1,890) and the number of Build Program participants increased by an impressive 172% over the previous 12 month period (685 to 1,181). Please refer to Appendix A for more detailed data.

The production of computers has also increased as predicted. Production numbers met the increased Adoption Program demand, and produced the expected surplus for non-profit hardware grants. This program has exceeded all expectations. We are able to grant a significant amount of hardware to non-profits every month. Key factor was the implementation of Request Ticket software that helps keep the project organized and responses to requests timely and professional. The Hardware Grants group averages 35 computers each month to non-profit organizations. Please refer to Appendix A for more detailed data.

Improved Financial Stability and Sustainability

The grant funding provided by both the Meyer Memorial Trust and the Collins Foundation allowed to increase our staffing levels well beyond our own ability to pay for them through our operational income. The goal was to increase operational income to meet these program increases by the end of the funding cycle. Over the two years plus course of the project, Free Geek has been steadily increasing our operational income. We are happy to report that we have achieved some measure of sustainability and are hopeful that this is a trend that will continue into the future. As part of this report there are several financial and program performance charts that help to illustrate these achievements which are attached in Appendix A. The financial performance indicators are part of trends that begin before the grant period and end after the grant period, but are very important to understanding the overall context of our achievements.

Starting in the 3rd quarter of 2003, Free Geek received a combination of $137,718 in grant funding from the DEQ and Meyer Memorial Trust. $35,000 was earmarked for equipment and remodeling projects, while the remaining $102,718 was targeted for staff expansion and growing two new programs. During the 3rd and 4th quarters of 2003, staffing was increased 200%, health care benefits were added and two new programs: Computers for Kids and Collaborative Technologies (Collab) were started. All projects started off well and as predicted. However, by the 2nd quarter of 2004, we began to realize that the Collab project was not proceeding as predicted. Several mis-judgements regarding scope of work and payments to sub-contractors had begun to develop into serious problems. These problems were beginning to affect our cash reserves and steps were taken to get these problems under control. Even with corrective measures, our reserve funds were used up and we began to show a negative balance. During the 3rd quarter of 2004, we received the $10,000 grant from the Flora Family Foundation, a $35,000 grant from the Collins Foundation (nted earlier) and $39,405 in additional matching funds from the Meyer Memorial Trust. These funds ($84,405 total) were again allocated for staffing costs and benefits.

With the infusion of funds, our cash reserve was once more in the black and we seemed to be back on track. At this time, two problems occurred. First, we experienced a significant (and unpredicted) drop in operational income. Second, the financial problems with the Collab project had reappeared, and in the 4th quarter of 2004, our financial obligations once again reduced our cash reserves into negative territory. As we headed into the 2005, we realized that our operational income was not increasing at a fast enough rate to meet the program goals.

With the realization that operational costs had grown at a rate that was not sustainable, measures were taken to reduce operational costs and further increase the rate at which we were growing our operational income. The reduction methodologies included a 5% pay cut for all staff, not rehiring for 2 positions vacated by attrition and cuts to some volunteer rewards programs. The operational income increases were accomplished through increased efficiencies and as a result, recycling income, donation income and sales income were all increased significantly.

By the 3rd quarter of 2005, we had accomplished both goals of reducing expenses and increasing our operational income so that we were operating in the black. This trend did not quite continue into the 4th quarter, but a modest amount of fund raising more than adequately made up the small difference between operational income and expenses. By the end of 2005 we had gone from a fund deficit of over $30,000 (in the 1st quarter of 2005) and built it into a more than $10,000 cash reserve. Overall, the trends are all heading in positive directions and a cash reserve is again in place, with all indicators pointing to a sustainable future.

Conclusion

Funds granted to Free Geek by the Flora Family Foundation came at a critical time for Free Geek. Combined with funds from other foundations, this money allowed our organization to contrate efforts on decreasing costs and increasing income without any significant loss to program vitality. Free Geek did accomplish a significant level financial sustainability and the grants are ultimately considered by our organization to be successful, the program expansion grants did present Free Geek with some significant organizational challenges over the three year course of the project. By most measures, Free Geek has obtained a level of sustainability, though there were and continue to be a couple of areas of concern that are only now being addressed.

1. Pay cuts to staff wages.

2. Not all staff positions eliminated in the budget cutting process have been replaced.

With the hope that future quarterly income will continue to exceed expenses, the Board of Directors recently approved pay increases for staff and the hiring of additional staff. While neither of these two items brings us fully to where we'd like to be, they are steps in the right direction. As we move into the future, we are expecting to continue to increase staff benefits and wages to our targeted goals as well increase staffing levels. Staff benefits and levels will grow at a pace matched to the organization's growth.

APPENDIX A

Adoption and Build Volunteers

Number of new adoption and build volunteers each year 2000 to 2005.

Click on the chart to the right to enlarge it.

The raw data from the chart is as follows:

Year	Adoption Volunteers	Build Volunteers
2000	45	7
2001	1062	209
2002	1160	244
2003	1269	768
2004	1557	825
2005	1985	1400

Prior to 2003, the Build Program was much more informal. For this reason, we have smaller numbers of builders during these early years. As the program's curriculum became more formalized, word got out that volunteers could come to Free Geek to receive quality learning in the hardware and Linux software areas, and the Build Program grew. In 2005, we saw a huge leap in Build Program volunteers: new Build volunteer signup numbers increased 70% over those in 2004.

Volunteer Hours

Number of volunteer hours each year 2000 to 2005.

Click on the chart to the right to enlarge it.

The raw data from the chart is as follows:

Year	Volunteer Hours
2000	1002
2001	16614
2002	16161
2003	34682
2004	47789
2005	52618

The chart includes hours volunteered by all volunteers, including those not signed up for the Build or Adoption Programs.

Donors and Thriftstore Customers

Number of thrift store transactions and donations at the front desk from 2000 to 2005.

Click on the chart to the right to see a larger version.

The raw data from the chart is below:

Year	Store Transactions	Gizmo Donations
2000	N/A	48
2001	1	1877
2002	2776	3130
2003	6102	4795
2004	8471	7651
2005	11315	9917

Our thrift store began in earnest in 2002, so no thrift store transactions were recorded before then.

Website Traffic

www.freegeek.org hits through 2005.

Click on the chart to the right to see a larger version.

The raw data from the chart is below:

Year	Hits
2000	7,612
2001	32,496
2002	48,267
2003	75,525
2004	147,195
2005	207,004
Total	518,099

Our web appeal is steadily growing, as is the popularity of the Internet. This speaks to the growing popularity of the organization and the effectiveness of our outreach efforts.

Our website holds lots of useful, easy-to-understand information about our organization. We're beginning to put more energy into the website so that it can be even more informative for those interested in Free Geek without sacrificing accessibility and ease of use.

Recycling

This page contains information that shows how much electronic scrap (i.e. e-scrap) we've recycled throughout the years.

Tons of material recycled by year, broken down by type.

Click on the chart to make it larger.

The raw data from the chart (numbers are in tons):

Year	Mixed	Monitors	Steel	Copper- Bearing	Plastic	Gold- Bearing	Other Non- Ferrous	Total Tonnage
2000	2.22	0	0	0	0	0	0	2.22
2001	59.92	11.13	0	0	0	2.74	0	73.79
2002	20.68	32.78	24.45	6.86	2.14	2.78	0	89.69
2003	40.31	22.50	40.33	19.44	8.92	6.66	0.68	138.84
2004	41.70	38.02	74.65	46.14	11.70	11.56	2.20	225.97
2005	46.20	126.90	140.30	71.70	16.60	13.80	2.20	417.70

Some clarifications about what comprises the items in some of the above categories:

Mixed

printers, keyboards, and otherwise whole components that are ground up to recover materials such as steel, plastic, etc. In the early days of 2000 and 2001 we used to huck whole computers into a box for recycling, starting in 2002 we began to break everything we could down into the materials listed below.

Copper-Bearing Material

an item from which we can salvage some copper, generally from a small motor or wiring buried in its workings. Mice, stereos, telephones, and miscellaneous adapters go in this category.

Gold-Bearing Material

processors, memory, and circuit boards are included in this category.

Some fun, additional stats for you:

• Over the life of the organization through 2005, Free Geek recycled, or "recovered", 948.21 tons of e-scrap.
• In the year 2005, Free Geek recycled about the same amount of steel as it had recycled during all of the previous 4 years combined.
• At the end of 2005, Free Geek was recycling over 35 tons per month through its facility.

Operational Income and Expenses

Operational income and expenses for each year 2000 to 2005.

Click on the chart to the right to enlarge it.

The chart's raw data is below:

Year	Operational Income	Operational Expense	Operational Profit/Loss
2000	$1,639	$31,513	-$29,874
2001	$20,709	$74,238	-$53,529
2002	$78,488	$102,241	-$23,752
2003	$158,201	$226,673	-$68,436
2004	$348,346	$490,950	-$142,604
2005	$439,305	$458,649	-$19,334

The income and expenses gained and lost by way of our normal operations are tracked in the chart to the right. This would include income through sales, monetary donations collected at the front desk, and recycling income, and expenses such as staff salaries and rent. This would not include income through grants. Tracking our operational income and expenses gives an indication of how self-sustaining we are.

Overall Income and Expenses

Overall income and expenses for each year 2000 to 2005.

Click on the chart to the right to enlarge it.

The chart's raw data is below:

Year	Total Income	Total Expense	Profit/Loss
2000	$36,550	$31,513	$5,037
2001	$68,439	$74,238	-$5,799
2002	$95,072	$102,241	-$7,169
2003	$305,558	$251,839	$53,719
2004	$444,932	$502,648	-$57,716
2005	$476,202	$458,649	$17,553

Overall income is our total income over the year, including grants, fundraisers as well as all daily operatonal income. Total expenses is the total amount of money we spent over the year including remodeling expenses as well as operational expenses such as rent and staff.