Why are you closing the social enterprises?
The decision to not reopen the social enterprises was a comprehensive one and is based on youth needs, the opportunity to have the greatest impact for our population, as well as the long-term financial sustainability and success of the organization.
New Door’s work has always involved providing access to employment with social enterprises operating to this important social mission. While a source of pride, Ashbury and Pedal are operated for the purpose of creating work opportunities and skills training for low-income and disconnected young people with barriers to employment.
With the additional challenges to our programming and fundraising projections for the foreseeable future due to COVID-19, the added financial burden of owning and supporting the businesses is no longer tenable. Through this difficult decision, we will ensure that New Door survives this economic crisis and can continue to provide programs and support for low-income Bay Area young people.
Can’t operations be suspended, and the decision postponed until after the economy sees some gains? Is this just a reaction to the effects of COVID-19?
COVID-19 has pressed a question we have been looking at seriously for several years. This was a stong eventual possibility. Absent a pandemic however, the timeline would have looked different and we would have had more room to explore possibilities.
While employment social enterprises do commonly operate at a loss for the sake of their social mission, in recent years, the operating loss has been increasing, detracting from fundraising revenue and forcing New Door to tap into operating reserves to operate the businesses. We have a responsibility to deliver on our mission of preparing youth for work and life, and COVID-19 aside, are confident that focusing on other areas of our programming will deliver the best experiences for our youth.
Won’t this cripple the program model/organization when re-opening? Is the organization in such bad shape financially that it’s cutting off a key program, and if so what will fill that void later?
As our external job site partnership model has grown, we have found that these internships are much less expensive per intern and provide similar job training experiences and outcomes for youth. In addition, New Door’s East Bay program has grown exponentially in the past two years and now accounts for close to 50% of program operations. In this region, very few young people could be employed at our San Francisco-based enterprises.
Since the employer partnership has proved so effective, the effort and ongoing losses associated with operating the enterprises have already risen to our attention as a detractor from focusing energies and resources on where we can deepen our impact for young people.
In terms of finances, with thoughtful, proactive planning and the support of the philanthropic community, New Door is in a solid financial position to weather this storm. We owe it to the young people we serve to make the difficult decisions when necessary to invest always in what will be most impactful for them, regardless of how painful some of those choices may be. We are grateful to all of our donors and partners who continue to invest in low-income youth. This is a pivotal time and low-income young people need our support now more than ever to ensure they are afforded access to opportunity.
How will this impact New Door’s return to programming as quarantine lifts?
We will continue to provide education services, case management, barrier removal, employment skills training, and hands-on paid work experience for low-income youth with significant barriers to getting and keeping employment. We are proud to have pivoted quickly and successfully to remote programming for our youth and have had 96% retention of youth enrolled at the time shelter in place began. We will continue to provide remote programming in accordance with local health orders and will begin providing in-person classes, workshops, and internships when the go-ahead is provided and we can keep youth and staff safe.
By moving now to cease operations, New Door is not only minimizing ongoing losses associated with the shutdown but also moving to ensure that we bring focus on the areas of our program that have the potential to achieve more for our youth.
We are in the process of taking up strategic questions related to our impact, the outcomes that are possible for the young people we serve, and how we can build on what is most successful about our work to achieve more. Our success in creating a uniquely strong employer partnership model has made operating our own enterprises redundant; we owe it to the young people we serve to shift to focus energies where we will see the highest return in benefits to them and their futures.
What are the next steps for New Door?
We’re working through closing the businesses and transitioning and supporting staff. New Door will continue all education, youth training, and development programs (though these have been temporarily modified to virtual programs for COVID-19).
As New Door moves into this next phase, the focus of our work will be on the strengths of our diverse employment partners, removal of barriers youth face through our wrap-around model, and maintenance of important relationships with our youth.
What are the next steps for Pedal and Ashbury?
As part of planning around how to cease operations in a way that aligns with our values, we are exploring whether a new operator might take over the businesses, either in their entirety or though the assumption of the brands. There will be more information to come on this process, as we work to stop operating the businesses ourselves. Our great hope, especially in the case of Pedal Revolution, is to find a way for it to be acquired and to continue operating. If you have a serious inquiry, email us.