A few weeks ago, I had the pleasure of renewing a high school friendship with Jonathan Bradford. I thought his work with a nonprofit organization in Grand Rapids, Michigan, was so fascinating that I wanted to share it with you.  Not only is he making great progress against formidable odds, his story reflects the challenges many nonprofits face today.

Bob: What does ICCF do?  

Jonathan: The Inner City Christian Federation (ICCF) is a not-for-profit housing development and housing service corporation.  Our chief products fall into two primary categories:  The finance and production of affordable rental or owner-occupied units and the provision of housing counseling and education services that enable people to realize housing success thereby go on to pursue broader life goals.  A bit more detail:                                       

• Real Estate Development – ICCF has developed about 515 units of housing, nearly all of it single family detached.  We arrange the financing using various combinations of financing from local banks and investors or loan/grant programs available from all levels of government.  We then construct the building(s) most often ourselves because we are a state-licensed residential building contractor.  For larger multi-unit projects we may go out to larger commercial contractors.  We are also a U.S. Department of Housing and Urban Development (HUD) and Michigan State Housing Development Authority (MSHDA) certified property manager, so we also provide property management of our rental units. 
• Housing Counseling and Education – Whether for our own residents who are in or going in one of our properties, or for clients referred by one of several other non-profits or local banks, we provide a broad array of learning opportunities around topics related to home maintenance and home management. For example these include classes on plumbing repair, furnace maintenance, or landscaping on the one side and family budgeting, and insurance/tax matters and parenting on the other.  We also operate a five unit emergency shelter for homeless families.  This is a building that we designed and constructed about 21 years ago to provide 30 day crisis intervention shelter for families.  Because it is not a dormitory model and has instead five fully furnished and equipped efficiency apartments, it was the first shelter in Michigan that was designed to enable adolescent and adult males to stay with their families. Until five years ago, a common demand profile would run at 50 to 75 cases per year and many of them would be in some way related to the borrower having too much debt (i.e., over-leveraged).  In the most recently completed fiscal year we saw about 780 families and roughly 80 percent of them were at risk of losing their houses because of economic interruption: loss of employment, overtime pay, bonuses, or more rarely divorce or death of bread winner.

Bob: I understand you have a for profit subsidiary.  How does that work?

Jonathan: Yes, in 2003 we launched a mortgage brokerage called Providence Home Mortgage (PHM).  Using our own capital or that which was lent to us at very advantageous rates, we started PHM as an antidote to proliferation of predatory lenders in our community.  PHM is just a broker.  That means we are doing the leg work for larger lender/servicer companies who in turn represent larger investors.  We are to larger lenders what a local Chevy dealer is to GM.  In our nearly seven years of operations, we have had three strong years, two marginal years and two bad years; overall we have not broken even yet.  Clearly a large part of the reason for that is the housing finance crisis of the last 3+ years.  We are rather proud of the fact that we have been able to weather this storm thus far.

Bob: How important is government revenue to you and what has happened to it the last few years?

Jonathan: At any given time we have at least 10 different “purchase of service” contracts going with the City of Grand Rapids, Kent County, the State of Michigan, or the Federal Government (mostly HUD).  Most years these contracts will comprise about 45 percent of our revenue.  So you see it is very important. 

Over the last five years it is safe to say our government contract revenue has increased a good 30 percent.  Nearly all of this is related to the foreclosure crisis.  We receive funding from two different sources for foreclosure counseling and three sources for the acquisition, rehab, and resale of formerly foreclosed houses.

Bob: What do you see as your biggest challenge in the next few years?

Jonathan: There are at least two.  The first and biggest challenge is to stabilize philanthropic revenue thereby enabling us to continue to attract and retain top talent.  The world of housing is so volatile and constantly challenging right now such that this will continue to be a daunting task.  The second challenge is much more nebulous: As is the case in many cities, there is a significant “back to the city” movement in Grand Rapids.  In broad urban planning conceptual terms, this is most welcome because economic diversity is key to long term urban health. Indeed, ICCF wishes to be a part of this effort, but we are committed to doing so in a manner that ensures the interests of current residents are protected while also creating genuine value and attractiveness that will benefit all.

Bob: How do you measure success?

Jonathan: In the fact that ICCF places as much emphasis on high quality real estate development as on services that empower our residents toward new levels of independence and accomplishment success measurement comes in two forms.  In real estate we must accomplish the construction or reconstruction of the building(s) in a manner that the market accepts, i.e., it is sold or rented with minimal delay at a price that covers our costs net of grants and/or tax credit equity, etc.  True success also demands that we design and construct the building(s) in a manner that is truly respectful of both the resident and the neighbor or passer-by.  This in turn requires care in aesthetic design, energy efficiency, and construction quality. Success in services to our residents and clients is fundamentally about their realization of goals that we have helped them set.  It could be to retain the house they already have, or acquire a better house at a lesser cost than their current arrangement.  It could also be the gaining of skills that will help them better maintain and retain their house or quite simply live for a short time in a place more safe than a the basement of an abandoned house or under a bridge.

Jonathan Bradford in front of ICCF's headquarters

Bob: In this picture you are standing in front of a pretty fancy building.  Is there a story here? 

Jonathan: There are actually several stories here.  The building is the former D.A. Blodgett Home for Children which as of September 2007 became ICCF’s home.  It was built in 1908 as an orphanage. In 1948, when foster care had replaced institutions for the care of children, the building was given to a private physical rehabilitation facility called Mary Free Bed Hospital.  Because of the polio epidemic in the 40’s and 50’s they needed more space.  They actually removed the entire facade of the building and grafted four different ugly utilitarian additions on the front of the original building nearly obscuring its extraordinary neo-classical Italianate beauty.

When Mary Free Bed left the building for a new facility in 1976 it was home to a few small businesses for 12 years or so.  In 1988 it was abandoned and in the early 1990’s was briefly considered as a site for a charter school.  After being left to rot for 16 years the City of GR issued demolition orders in mid-2004.  We acquired it late that year and persuaded the city to give us a year to raise the funds and put a historic rehab project together.  We started demolition of the 1950’s additions in January 2005.  After a total recreation of the original facade and a historically considerate adaptation of the interior into offices and classrooms we moved in just in time for the big housing implosion of the fall of 2007.