Introduction to Starting and Operating a Furniture Bank

This is a very brief overview of some of the issues you will need to address as you begin thinking about operating a furniture bank, either as a component of your for-profit company or as a separate non-profit entity.  It is not comprehensive and is very general. More specific information is available from the NFBA.

As you plan a furniture bank, it makes sense to know what, if any, existing services are being offered, and to also consider if it makes sense to simply build up an existing program, or start an independent program.  Once you have determined there is a need, and you have decided to move forward, the next step is to explore potential recipient agencies.  A local human services coalition is a good place to start.  Ask to speak at their next scheduled meeting to present the concept.  You will find tremendous enthusiasm for the project.   This group can also possibly help you identify someone to run the furniture bank, if not done by your staff. Typical agencies that would be interested include: battered woman’s shelters; transitional homeless shelters; county and state family and children services; disaster relief agencies such as the Red Cross; and, church or synagogue ministries.  Also, the local United Way is a very good resource for identifying potential partner agencies.

As with any for-profit business, a non-profit must design a business model and budget.  First, develop a mission statement. Your mission statement expresses the core goals of the organization. Sample mission statements are available from the NFBA.  As a for-profit entrepreneur, you are already familiar with the development of a business plan.  The plan should include: an executive summary; the mission statement; objectives; market analysis, organizational structure and administration; product and service descriptions; and, a cash flow analysis.  Your budget should incorporate all income and expense line items.  A sample budget is available from the NFBA.    

You will need to identify warehouse space for the furniture bank.  If you are going to operate a furniture bank at your location, you will need to set aside space for the operation.  If you incorporate as a non-profit, you may be able to obtain free or reasonably priced space from surplus buildings owned by your city or county.  Another resource could be a member of the National Association of Industrial and Office Properties (NAIOP) in your community.  Or, you can use your own space and obtain a tax write-off for the donation of space.

Legal issues

If you are planning on soliciting funds from anyone or any entity, or planning to give a tax receipt for donations, you will need to incorporate your agency as a non-profit organization.  As a non-profit, you will be able to accept donations and limit the potential personal liability of the initial organizers.  After incorporating, your organization can establish bank accounts, obtain insurance, and apply for funding.  To incorporate, you will need to complete IRS form 1023 to become a 501(c)(3) agency and obtain an Employer Identification Number (EIN).  At this point, you should form a Board of Directors and develop articles of incorporation and by-laws.  Sample 1023 forms, by-laws and articles of incorporation are available from the NFBA.  If you just plan to provide a service for your customers and distribute merchandise to selected families, you do not need to incorporate and your corporate staff can manage it.

If you do decide to incorporate, you will need to form a Board of Directors.  The Board will provide oversight for the operation of the furniture bank program.  You will want to practice solid recruitment techniques to ensure that the Board is and remains a vital resource. To ensure the strength of your Board, recruit members of the community that represent various facets; legal, PR, media, financial, political, interior design, hospitality industry (local convention bureau, visitors bureau, etc.) transportation, hotel/motel operators and associations, furniture retailers and associations, partner non-profits and others interested in your cause.  Again, this will not apply to you if you don’t plan to incorporate and do plan to operate the furniture bank as part of your for-profit company.  Board job descriptions and a Board matrix are available from the NFBA.

Fundraising

If you incorporate as a non-profit, you will need to have several resources in place before beginning any fundraising program or campaign. The most important is your case statement. A case statement is basically a large brochure in which you state your organization’s purpose and needs for funding.  A typical case statement should include: your agency’s missions, goals and objectives; a description of your services, location and governance; a financial picture; and, your fundraising plan. Another important piece is a master proposal for grant solicitation. Your master proposal will include information on every facet of your organization’s financial needs; future proposals can then be comprised primarily of excerpts from this document. Additionally, you will need to develop a fundraising plan. This plan is an essential part of your organization’s business plan.  This piece should address each audience for your fundraising efforts (foundations, churches, individuals, etc.), and outline a particular strategy (both short- and long-term) for each.  This document will serve as a map for your organization’s fundraising activities.  Potential sources of funding include: United Way; local, state and federal grants; corporations, foundations and religious organizations; individuals; and, special events.  Sample documents are available from the NFBA.

Publicity

Publicity is a key component of a successful furniture bank operation.  You should develop a media strategy when you are designing your business plan. Some of the most common forms of marketing include:  brochures; newsletters; direct mail letters; in-person presentations; promotional videos, media packets; “free donation pickup” cards for retailers and their customers; website information; news releases; press conferences; public affairs programs; articles in neighborhood, church, or employee bulletins; education and outreach booths at special events; or holding your own special events.  These activities can be part of your normal PR package as a for-profit. 

Newspaper articles, television news coverage, public service programming (radio and television) church bulletins, neighborhood newsletters, website; and business newsletters are all ways of getting the word out without having to spend a great deal of money.

Operations

As a for-profit entrepreneur, you are very familiar with the requirements of running an organization.  There are a few differences involved in effectively managing a non-profit agency.  Many non-profits depend on volunteers to help accomplish the agency mission.  To that end, volunteer recruitment and management is a very important component of agency operations.  Religious groups, schools, charitable and business organizations, partner agency employees, and community service through the court system are all resources for volunteers. Write short volunteer job descriptions, including title, time commitment and specific tasks and skills needed and distribute them to potential volunteer groups.  One other difference worth noting is the requirement that most non-profit agencies must file an IRS tax return 990 annually.  A volunteer training manual is available from the NFBA.

Incorporated or not, you will need to establish operating procedures and manuals, staffing needs, equipment needs, vehicle needs, the scheduling pickups of donations, client service delivery procedures, client and donor data collection procedures, fees, if any, and financial management procedures.

Conclusion

Furniture banks are an essential component of the effort to fight homelessness and poverty in this country.  Starting such an organization is a challenging entrepreneurial effort that requires outstanding commitment and extensive support.

The NFBA wants to help you get started and it brings many resources to help you.  Besides this short introduction, the NFBA library has a full-length startup manual, forms, and documents that cover nearly every facet of starting and operating a furniture bank. Remember, however, that every organization is unique, and you must work to find the best system to meet the specific need of your clients and your community.  The staff, Board and volunteers bring many years of experience to furniture bank operation and stand ready to help you in any way they can.  Call on us.

With adequate determination, you can create a viable organization that will have a tremendous impact on the people you serve.  Good luck!