The Arc of Iowa was struggling financially with local chapters closing, memberships declining, and a growing need for advocacy related to managed care moving into the state. They wanted to build a social entrepreneur program that would help augment current fundraising and membership dues. The program needed to increase the awareness of The Arc of Iowa, engage existing chapters, and be a program that could be grown in both rural and urban communities. In what felt like a do or die moment, the board and director took a leap and spent every dime on building 28 vending machines that were placed in four communities across the state. We chatted with the Executive Director of The Arc of Iowa, Doug Cunningham to learn how the program works.
What does the manpower behind the vending machines look like? How do you fund, place, stock, and maintain them?
We partnered with Goodwill to assist with staffing statewide. One individual can stock three to four machines a day. They sort products based on a checklist, package them, and take them to the location. They then put the items in the machines, count the items, clean the machine, and digitally fax the inventory back to the State Office each day. We placed machines in the Goodwill Service Centers and on their store floors, programs that serve individuals with disabilities, and local businesses. They recruit workers with varying abilities and we train them to stock and service the machines. They even donated space in their local service centers to warehouse products. The sales are GPS monitored and we can see when machines require service or stocking from a central location. The machines cost between $4,000 to $7,000 a piece and require about $1,500 in coins and stock to set up. The machines are expected to have a useful life expectancy of 10 to 15 years.
Where does profit from the machines go?
Annually the machines generate about $5000 to $7000 a piece. Merchandise costs about 35% of what we can sell it for and labor is an additional 20%. We give the local sites 10% of the revenue and we used the remaining proceeds to build a new interactive website, a new statewide fund raising tool that local chapters can use, training for self-advocates, fund a liaison at the State Capital, pay affiliation dues, and to further grow the vending program.
How the initiative resulted in new or amplified relationships with other organizations/companies throughout the state?
One of the biggest challenges that the vending machines helped us overcome is getting out of our state offices and forcing us to work in the local communities. There was a disconnect between the state office and the local chapters. The vending machines required us to know the staff in Goodwill, our local chapters, and other agencies that allowed us to place machines in their facilities. It also gave us a unique way to inspire donors to invest in The Arc of Iowa again. In fact, a donor ended up paying off $70,000 of our machines and challenged the community to assist which generated another $25,000 in gifts.
What are your hopes for the long-term growth and sustainability of the program?
We currently have 28 machines across the state which generate $90,000 annually. We hope to have hundreds of machines that generate an endless and consistent stream of revenue that can promote advocacy for years to come. After three years, and the generosity of donors, the machines were profitable and now provide a steady stream of revenue every day.
How can other chapters explore and implement similar revenue-creating ventures?
The company that builds these machines can ship and set them up internationally. This opportunity is still in its infancy, and we made mistakes—however, there is room in the profitability to make those mistakes and learn from them. To make the program successful you need to think big. Build lots of machines and the infrastructure around it. The more machines you have, the better the value and the more efficient you become. Be interdependent with your local chapters for the highest impact. To make The Arc relevant, the community needs to see us. These machines, staffed by people with disabilities and used as big marketing machines, can promote awareness and foster financial independence for your chapter. Please feel free to reach out to me at firstname.lastname@example.org for further questions.