Helping to help even legends need business strategies: the reputation of New York Harlem's Hale house sank when its president was indicted for financial mismanagement Dr. Lawrence T. Davenport, a veteran financial executive, has stepped in to apply his business acumen and administrative talents to steer the organization back to its former glory.

Over 30 years ago, Mother Clara Hale opened the doors at Hale House Center in Harlem in New York City. Her goal: to sustain babies and children in need and their families in crisis who couldn't support them. President Reagan called the legendary founder "a saint and an American hero." When she died in 1992, her daughter, Dr. Lorraine Hale, succeeded her as president, but she resigned two years ago amid a financial mismanagement scandal and subsequent indictments. Her husband, who worked with her at the facility, was also indicted.

Her successor, Dr. Lawrence F. Davenport, Hale House's current Executive Director and CEO since June 2002, is a former educator and college administrator, high-ranking federal government official and Vice President and CFO of the Milton Hershey School. As a young boy, he wanted to be a social worker, making that his first job out of college. "Coming to Hale House is, for me, coming full-circle professionally," says the tall and soft-spoken Davenport.

When he accepted the post, he knew he faced formidable challenges to repair the center's tarnished reputation and win back public confidence for the center. Any misgivings he had revolved around the uncertainty and risk of relying on donor contributions in a tough economy, with individuals and corporations cutting back on charitable giving.

But Davenport is very mindful, and somewhat in awe, of how Mother Clara Hale continually found ways to address new problems and needs while performing her mission of building better lives for disadvantaged children.

Since his arrival, Davenport and his staff have implemented systemic changes to the organization, aiming to perform some minor miracles of their own by developing and implementing basic management models. Can coordinated strategic planning, program evaluations, and performance measures help to carry on the legacy?

Pennies Don't Come from Heaven

When Dr. Lorraine Hale stepped down, the New York Attorney General's office took over the organization, dismanted the board of directors and appointed a new board. This new board then hired an interim director, who served for one year prior to Davenport's arrival.

During this transition period, fundraising and public relations were in crisis mode, or worse; the usual support of notables and celebrities eroded, direct mail solicitations for donations ceased and the frequent donor contribution list dwindled from 200,000 contributors to 12,000.

"The public simply didn't know Hale House was still in business," Davenport says about the situation when he stepped in. "No official fundraising took place at all. It was as if a car manufacturer had financial problems, or lost a large part of its market, and then decided not to tell customers it was still making cars."

Just before taking the reins, Davenport held a weekend meeting with the staff, board, outside Legal counsel, advisors and the interim director to discuss what they had done for the past year and what everyone could do--and should do--to raise the quality of services. Starting with the fundamentals, he tackled the structural and financial problems.

He began by looking at the organizational structure, which lacked basic internal controls and, due to all the controversy, was weak and unstable. He prepared an environmental analysis to re-conceptualize Hale House from the ground up, focusing on core areas such as: evaluating the external and internal environment, determining the constituent base, assessing constituent needs and how to respond to them, estimating the cost of implementing quality services over time and exploring the potential income sources to support those services.

Putting the Strategy to Work

Three months after that weekend meeting, Davenport conducted a board retreat where he presented a draft strategic plan, along with a resource plan designed to stabilize the current residential program, help implement new programs and coordinate fundraising and marketing strategies. He emphasized that staff could no longer perform these processes independently; an integrated framework was needed.

"The key to fundraising for a charitable organization is creating sound management controls that are bolstered by long-range planning and financial accountability. But this doesn't happen simply by recognizing the need for money," argues Davenport. His strategic blueprint established an initial two-year planning cycle, which focused on designing better ways to communicate and promote the organization's message; re-examine recruitment of staff, board members and volunteers; and develop an ongoIng market-testing system to monitor the fit between programs and constituents' needs.

One major goal for the management team is cultivating new donors and diversifying the base of support--Davenport hopes to build the donor list to 150,000 by next June. As an FEI member and former trustee for Financial Executives Research Foundation (FERF), he has experience in the area of reaching potential contributors that he is applying to his current task. "Cultivation of supporters is driven by the ability to develop relationships over time. What better way to do so than by recognizing and following someone else's success?" he asks.

Big Problems, Bold Moves

One big headache that had nothing to do with fundraising or programs, but that required immediate attention, involved apartment buildings given to the organization. Donated by New York City in 1988 and 1993, the buildings were the site of a tenant rent strike prior to Davenport's arrival. He notes that 60 units have been brought up to standards. Additionally, Hale House has made a proposal to the city department serving the homeless to utilize 16 of the apartments for transitional housing and supportive services.

Perhaps best of all, these properties will house two new programs Davenport has established: the Mother Hale Learning Center, accommodating 40 children from the ages of six weeks to four years, and the Hale House TLC, a therapeutic learning center for 28 special needs children. Both programs will open in early 2004.

With its emphasis on financial accountability and expanded programming, the restructured organization is making serious efforts to regain the confidence of United Way, to broaden and create alliances and to reconnect with its donor base. To his surprise, Davenport learned that Hale House did not belong to any national or local charitable organizations. That is no longer the case. It has joined the Child Welfare League of America, the Federation of Protestant Welfare Agencies and the Harlem Chamber of Commerce.

The shelter also began the Hale House Business Partnership Program to seek community support from neighborhood businesses. There are now internships available for both undergraduate and graduate students from local universities to work on the partnerships and in the flagship residential childcare program.

Also, a media consultant, hired by the board to deal with crisis management, was asked by Davenport to build media relationships and distributes press releases about successes to all media outlets. Additionally, he implemented a symbolic change by making the center's car available to staff for business purposes, rather than reserving it for exclusive use by the executive director. Indeed, Davenport is now a regular user of New York's mass transportation system.

Maximize Services and Evaluation

Business executives know that to improve strategy and products and become "best in class" requires capitalizing on organizational strengths and dealing with structural weaknesses. To its credit, despite the problems of the past few years, Hale House's staff continued--without interruption--to care for babies born to mothers with problems in a community ravaged by poverty.

Like other enterprises striving for good management practices, Hale House must address recruiting and retaining quality employees. Davenport understands the importance of providing an environment for staff that supports training, professional growth and continuous learning. "We strive to make this a best-in-class children's program. So we need people with the highest qualifications and experience who want to stay here because they are happy with their mission."

He has instituted both a fully funded pension plan and non-contributory health insurance benefits for employees, neither of which had been in place. Also, several new staff positions were created, such as: coordinator of family services, director of program development, director of education and training, director of finance, facilities manager and two full-time custodians. No detail is too small or minor to Davenport; he hired a specialist to review cleanliness standards, and now the custodians have daily checklists they follow to make certain the organization's facilities are maintained at the highest standards.

Davenport holds weekly staff meetings and also meets regularly with individual department heads, who must now develop their own budgets and annual reports for inclusion in the organization's annual report. Also, he has incorporated a strategic plan with a weekly tracking system so everyone can assess his or her progress on a day-to-day basis.

His advice to other financial executives who choose to run non-profits is to be willing to admit they don't have all the answers and need help making decisions. "Especially in a turnaround situation, keep your faith and build a team with the same dedication to success," he says.

In the future, Davenport envisions Hale House having a different structure with even more employees, offering integrated services that will enable it to be a touchstone in the lives of the children who have benefited from the shelter.

Using his background in finance and process, Davenport has the organization busy exploring ways to measure the effectiveness of its programs and whether they are addressing the community's needs--through data assessment, research and technology integration linked to program implementation and evaluation practices. But, ultimately, the bottom line at Hale House is its ability to continue performing its core mission: to help children and families build better lives.

Cynthia Waller Vallario is a business writer and lawyer in Livingston, N.J. She can be reached at [e-mail].