Now that the start-up issues are in hand it’s time to look at setting up an organization that can sustain the work you are about to do. House building and home repair and rehabilitation are certainly the most visible products of our work, but a Fuller Center Covenant Partner is more than just a house builder or rehabilitator. It is a mortgage lender, a homebuyer counselor, a credit and financial literacy advisor and a messenger of the Gospel. That’s a pretty broad spectrum of tasks, and to do them all well requires a relatively large and dedicated group of volunteers.
Over the thirty years that Millard Fuller and his friends have been doing this work they’ve learned a number of lessons, not the least of which is that the greatest need we consistently have is for good leadership, and not just at the senior level, but throughout the organization. The first task, then, of the steering committee/founding board will be to recruit people who share their commitment to the cause and their willingness to devote significant time on a build site, attending necessary meetings or performing other needed tasks.
We recommend that the Partner Organization move quickly to set up a number of committees chaired by dutiful souls who will, in turn, recruit others to serve with them. In the following pages we will describe for you a committee structure that has proved to be efficient in doing our important work. Remember, though, that any organizational structure is of little value without strong leadership and dedicated team members.
The following pages will review the various committees that we have found to be essential for an efficient organization. Click a committee to jump to that section.
Fuller Center Terms & Concepts
BEFORE WE BEGIN: Let’s talk about the importance of committees
Naturally, committees should include members with specific skills and training in the particular committee’s work—a banker and lawyer on the Finance Committee, builders on the Construction Committee, for example. But successful committees include members from a variety of backgrounds to assure a more complete deliberation of the issues it confronts. In the early stages a member of the Board of Directors should sit on or chair each committee to facilitate communications among the committees and with the board.
A committee’s success depends on the effectiveness of its leadership, so selecting committee chairs who are dedicated and efficient and have the right set of skills to lead and motivate others is critical.
Committees need to meet as often as their task requires, but as committee members are giving of their time and talents, good stewardship of their gifts needs to be considered. Meetings should be well organized, follow an agenda, last no longer or be more frequent than necessary to accomplish its purposes. Committee meetings should begin with prayer, inviting the Lord into the deliberations.
Partner Families are selected on the bases of (1) need, (2) willingness to partner and (3) ability to pay the mortgage on their new home or willingness to donate through the Greater Blessing Box. The development and documentation of its Selection Criteria should be among the first tasks undertaken by The Covenant Partner.
Families in need are those whose present living conditions are substandard because of physical condition, overcrowding or safety, and who have no other access to obtaining decent shelter. This is not a first-time-buyers program, rather one designed to make decent shelter available to those who are truly in need. Families who have access to decent shelter through other means should be directed to those programs while the Covenant Partner focuses its energies on those who do not. By definition, then, The Fuller Center reaches out to poor and very poor families.
To assure compliance with fair housing laws, “need” should be defined in specific terms. The Committee should list those issues that constitute substandard housing such as physical deficiencies in the structure and/or its systems (plumbing, heating, electrical, etc.), overcrowding, health and safety, and so forth. The Committee must also define economic need in objective terms, e.g. household income at 50% or below of median. Income rates can be found on the HUD web site, http://www.huduser.org in the “income limits” section under “data sets”.
Willingness to partner
The Fuller Center is not a give-away program, but a partnership between people of good will and resources and the poor. The success of the program will ultimately be measured by the success its partner families enjoy as homeowners, and that success begins with families who are willing to enthusiastically participate in the construction of their own home and those of others and to make regular payments on their mortgage. One of the attractions of the Fuller Center approach to donors and volunteers is the opportunity of working hand-in-hand with people they would otherwise not have the opportunity of knowing. Selecting families who are willing to participate in the program not only helps assure the family’s success but is of great help to the Covenant Partner in raising funds and motivating volunteers.
Objective measures of the family’s willingness to partner include:
Ability to pay
A foundational principle of The Fuller Center is that families pay for their new home or repairs/rehabilitation on terms they can afford. This approach serves both the partner family and the Covenant Partner. The family benefits in a number of ways: it develops a true sense of ownership and the pride that attends it; it develops financial discipline as it learns to budget for the payment; and it moves the family from being just a recipient to being a donor, as the mortgage payments or Greater Blessing Box donations are used to build houses for other families in need. The Covenant Partner benefits by having a steady source of income that it can use to expand its ministry.
Analyzing a family’s ability to pay includes determining the family’s income and its obligations. Income can be defined broadly to include any legal source including welfare payments and SSI. (When including SSI payments to minor children care should be taken to plan for the time when those benefits cease). A calculation is then made of the funds available to the family after its monthly obligations are met to pay the mortgage.
Covenant Partners are subject to the Fair Housing Act and the Equal Credit Opportunity Act, which require that the selection criteria not discriminate on the basis of race, creed, color, religion, national origin, sex, marital status, familial status, age or disability; or because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. To assure compliance, the Selection Criteria must be as objective as possible and applied fairly to all applicants.
Identifying the community in need
Many people live in a community for years without ever visiting its poorer neighborhoods or even knowing where they are. A thoughtful approach to addressing poverty housing includes a fairly comprehensive survey of the geography and demography of the community. This will provide the Covenant Partner with an idea of where its work is most needed and also where the work can be efficiently and affordably undertaken. It will help identify potential partners who can assist with other aspects of community enhancement such as improving schools, economic development, health care and transportation.
When the Covenant Partner is ready to start accepting applications the issue becomes one of finding the applicants. Young organizations that have not yet established themselves in public awareness need to be proactive in seeking potential partner families. Good sources for support would include social welfare agencies, the local housing authority, and churches.
Once applicants have begun to appear they should first be invited to an orientation meeting. This is the first opportunity for the Covenant Partner to explain The Fuller Center’s mission, method of operation and foundational principles. It is important at this time to explain the sweat equity and repayment requirements that the partner family is expected to meet. It should be remembered that a full understanding of the Fuller Center approach will require repeated explanation over the course of the entire process from this first meeting to closing on the house, but a thoughtful orientation meeting will help get potential family partners off to a positive start.
A second step could be inviting the partner family to participate in an upcoming work day. The family’s enthusiastic participation in the work day will provide evidence of their true willingness to partner going forward. On the other hand, reluctance to participate could provide a warning sign of potential difficulties with that particular family.
Processing the application
Once applications are received the Committee should review them looking for information that may disqualify the applicant on the basis of income, asset level or an income to debt ratio that would make it difficult or impossible to repay the loan. A credit report should be obtained to identify potential liens or a poor payment history that would make homeownership untenable. It should be remembered, though, that the financial circumstances of the families we seek to serve will most likely be troubled and the credit report should be seen more as a guide to how they can be helped rather than simply as a disqualifier.
When it appears that an applicant is a likely candidate for homeownership a home visit should be scheduled. Two members of the Committee should make that visit, during which they can assess the nature of the family’s current living conditions and get a better sense of the family’s willingness to partner and ability to pay the mortgage.
Once the application has been approved by the Selection Committee it should be referred to the Board of Directors for a final sign-off. This should be done in executive session and any materials distributed for the Board’s review returned to the Selection Committee and destroyed. When the applicant has been approved by the Board, the work of the Selection Committee with regard to that applicant has one remaining task, issuing the Acceptance Letter.
The Partnership Agreement constitutes the understanding between the family and the Covenant Partner that will result in the construction and sale of the new home. The Partnership Agreement should include a good faith estimate of the cost of the finished house, the term of the mortgage with explanatory language about it not bearing interest or earning profit, and an explanation of the sweat equity requirement. The letter should bear the signature of the Board President with an acknowledgement and acceptance signature by the buyer/s. The Partnership Agreement represents a contract between the Covenant Partner and the homebuyers. On small repair or renovation projects the Partnership Agreement should explain the Greater Blessing Box concept, in which there is no mortgage or other legal obligation.
The goal of the Fuller Center is to provide families in need with decent homes in decent communities. The Family Partnering Committee is a fundamental part of assuring successful homeownership for the partner families.
Once the application has been approved by the Board, the work of the Family Partnering Committee begins. The Partnering Committee serves as the liaison between the family and the Covenant Partner; provides the family with financial, homebuyer and life skills training; monitors the family’s sweat equity component; and works with the family to resolve late payment issues.
Family partnering plan
The first assignment of the Family Partnering Committee will be to develop a plan of action that will guide its interaction with the partner families. The plan should include the following elements:
Sweat Equity is an important part of the Fuller Center approach, involving hands-on participation by the partner family in the construction or repair/renovation of their own home and those of others. The benefits of sweat equity include helping keep construction costs down, providing the family with a heightened sense of ownership in their home, and providing skills that will be helpful to the family in the future maintenance of their home. Important decisions in implementing this program include:
It is important that the family understand that sweat equity, while a required element of participation, has no cash value, and if the family chooses to leave the program their sweat equity becomes volunteered labor. Sweat equity should not be considered as a down payment—doing so could result in the sweat equity being considered as wages or imputed to have a cash value.
All elements of the sweat equity component must be thoroughly explained to and understood by the partner family and should be specifically referenced in the Acceptance Letter.
The Resource Development Committee is responsible for raising funds and in-kind and land donations to advance the ministry of the Covenant Partner. These are tasks that many find to be challenging, but the real work of the Resource Development Committee is to provide opportunities for individuals, churches, social organizations, corporations and others to receive the blessings that generosity brings.
RESOURCE DEVELOPMENT PLAN
The first task of the Committee is to develop a Resource Development Plan identifying both immediate and longer-term strategies based on the budgeted needs identified by the Board of Directors. The Committee should review a variety of development options, including
INDIVIDUALS historically represent a major source of income and can be approached through giving clubs, direct mail campaigns and through churches and other groups.
BUSINESSES are valuable sources for funds and in-kind donations. Businesses typically donate as a part of an overall public relations strategy. Accordingly, successful negotiations with business donors include a demonstration of how their gift will be publicly recognized. Many businesses have active volunteer programs and make donations to charities that can provide volunteer opportunities for their employees. Many national corporations give to communities in which they have a presence, so approaching local divisions of large corporations should be included in the plan.
CHURCHES are such natural partners to Fuller Center programs that Covenant Partners are encouraged to have an active Church Relations Committee with which the Resource Development committee should coordinate church appeals.
FOUNDATIONS can be a source for a variety of funding needs. Most have particular areas of interest and geographical limitations. The Foundation Center offers a variety of services for nonprofits seeking foundation support. They can be reached online at www.foundationcenter.org.
SPECIAL EVENTS can develop into great fundraisers; however in the early days often seem to be more work than benefit. Properly executed special events can have great value as a public relations tool. Many nonprofits have annual events that become part of the social structure of the community and raise significant funds.
PUBLIC & MEDIA RELATIONS
Effective resource development relies heavily on positive public perceptions of the Covenant Partner and the work it is doing. The development and maintenance of that positive perception is a critical task of the Resource Development Committee and is sufficiently important that consideration should be given to identify a PR coordinator or create a PR subcommittee.
Among the responsibilities of this sub-committee are preparing informational brochures and other materials, developing a speaker’s bureau to make presentations, establishing relationships with local media outlets to assure coverage of events, and being the liaison between the Covenant Partner and the public.
BOARD MEMBER CONTRIBUTIONS
Board members should be encouraged to contribute to the Covenant Partner. This serves a number of purposes: it assures the commitment of the members—we always esteem those things we have an investment in, it sets a good example for others, and it can be useful in grant applications as some foundations ask specifically about directors’ gifts.
The Fuller Center mission statement says that we are faith driven and Christ centered. The Fuller Center is not a church, but it is a servant of the church, providing opportunities for Christians to demonstrate the gospel. Every house that a Covenant Partner builds is a sermon of God’s love and an example of the teachings of Jesus Christ. It is natural, then, that Fuller Center Partners reach out to the churches in their communities to create partnerships that serve to bless both parties.
Churches can provide a wide range of services to the Covenant Partner from lending their facilities for meetings and events to sponsoring and helping build houses. In turn, the Covenant Partner can provide a vehicle for the church to come together around a common cause and strengthen its fellowship and sense of ministry.
It is the task of the Church Relations Committee to cultivate relationships with local churches and engage them in the work of the Covenant Partner. Ideally, the members of the committee will represent a number of different faiths, demonstrating the spirit of ecumenism.
The Site Selection Committee is charged with identifying building sites or repair/rehab, securing those sites with the Board’s approval, and preparing those sites for house building or repair/rehab by assuring that infrastructure, zoning and titling issues are managed.
SITE SELECTION PLAN
The work of the Site Selection Committee will begin with the development, in consultation with the Board, of short and longer term plans, including:
The site of the first project is especially important as it will be the “premiere” of the organization and, if the Resource Development PR subcommittee has done its work well, should be highly visible. Accordingly, the site should ideally be located in a reasonably accessible location.
Ongoing duties of the Site Selection Committee include:
The Construction Committee is responsible for delivering the principal product of this ministry, the house. Because of the technical requirements of home building, this committee should have at least a few professional builders as members. Because of the rich partnership opportunities that come from building it should also include members with excellent people skills.
Consideration should be given to on-site materials and tool storage as security against weather and theft. Arrangements should be made with suppliers to deliver materials as they are needed to limit the need for on-site storage. Storage containers can be rented fairly inexpensively for this purpose.
An important consideration in costing the houses is how in-kind donations are calculated. It is likely that some projects will attract more attention than others and result in a higher percentage of donated materials being used. To assure equity among the homebuyers, the value of such gifts should be calculated and included in the final calculation of the house costs. This will assure that families whose houses don’t include the same percentage of donated materials aren’t unfairly charged more for their home than those that do.
House building presents a number of partnership opportunities. Professional builders, who are typically task and time oriented, sometimes struggle with the soft side of a Fuller Center build, with its emphasis on family and volunteer participation. But these are the elements that distinguish our work and, when properly managed, control costs towards the goal of affordability. The basic partnership engagements are:
HOUSE DESIGN CRITERIA
The House Design Criteria provide the basis for all Covenant Partner construction. They are developed by the Construction Committee and approved by the Board of Directors. An important consideration in developing the House Design Criteria is the fact that the buyers, if properly selected, are of limited means and will be coming from sub-standard living conditions, while the majority of the Committee and Board member will generally be middle and upper-middle class. It is important that the Committee not impose artificial notions of what is needed in the house, thus raising its costs. Our goal is to build simple, decent homes. The Fuller Center recommends the follow
HOUSE SIZE—and house cost are directly connected. The Fuller Center recommends the following maximum sizes:
STREETSCAPE AND DECORATIVE FINISHES
As we are in the business of building communities, not just houses, care should be taken to assure that the houses are attractive and, to the extent affordable, distinctive. A volunteer craftsman, for example, can help build a well-finished entry and variation of paint colors and shutters made from scrap lumber can greatly enhance the appearance of the home.
The Fuller Center recommends against installing carpet for a couple of reasons: it is not volunteer friendly, so it is more expensive to install; and it doesn’t hold up well in houses that typically receive heavy use. We recommend using more easily installed tile squares.
The Covenant Partner should consider including an energy efficient stove and refrigerator as part of the house package.
The Fuller Center recommends that the primary entrance be covered and, where appropriate, protected from the weather with side walls.
The Fuller Center recommends that, when feasible, a no-step entry doorway be provided to accommodate persons with disabilities. This doorway should lead to a no-step walkway from the street or parking area.
GARAGES & CARPORTS
The Fuller Center recommends against including garages or carports. A garage can add up to 10% to the total house cost, which means that for every 10 houses built with a garage one family will not have the benefit of a new home.
Without the discipline that results from a profit line, many nonprofits fail to behave in a businesslike way. It is the responsibility of the Finance Committee to ensure that the Covenant Partner employs solid business principles and practices. This assures ongoing financial security and maximizes the number of families that can be housed. The Finance Committee will benefit from having successful business people, including a banker and lawyer, as members.
The tasks of the Finance Committee include:
BUDGET—working with the Board of Directors and all committees to develop an operating budget. Given the uncertainties of fund raising, the budget will be subject to periodic revision, but having a working budget will improve the likelihood of financial stability. Creating the budget, however, is just the first step. The Committee should review the budget against actual income and expense on a regular basis and keep the Board aware of variances.
BOOKKEEPING—the Finance Committee is responsible for setting up and overseeing a bookkeeping system that will allow for regular reporting to the Board of the organization’s financial condition. There are off-the-shelf products that can adequately provide the necessary tools. A successful accounting system depends on the correctness of the input, so the Committee must regularly monitor it to assure proper assignment of income and disbursements.
AUDIT & REVIEWS—the Committee should work with the board to have annual, independent reviews of the books. Some donors and/or governmental entities may require a certified audit. These are expensive in both time and money, however, and should not be necessary on an annual basis unless otherwise mandated.
MORTGAGES—the committee is responsible for developing the mortgage documents, which should be prepared to conform to Fannie Mae requirements and state and federal law. Properly prepared mortgage files are necessary if mortgages are later sold to secondary markets. The laws covering mortgage lending are significant and the Committee should seek professional assistance in creating these documents.
The Covenant Partner has a great deal of latitude in structuring payment plans that will accommodate the ability of needy buyers to meet. The mortgage term can be extended, for example, to result in lower monthly payments. Or the mortgage can be structured to allow for lower payments in the early years with the amount paid adjusted upwards as the family’s income increases.
MORTGAGE PAYMENTS—the Committee must create a system for receiving mortgage payments, for escrowing homeowners’ insurance premiums and property taxes and for paying those premiums and taxes as they come due. The Committee may want to look into having this service performed by a bank or other agency if it can be done affordably. Of course, with small repair or renovation projects, there is no mortgage, as costs are recovered using the Greater Blessing Plan.
DELINQUENCIES—if the Covenant Partner does not experience periodic difficulties with collections it may be selecting the wrong beneficiary families. Those coming from a background of limited means often find it difficult to make regular payments on time. That said, however, it is unfair to the other homeowners and to those who are awaiting the blessing of a new home to allow families to fall seriously into arrears or to stop making payments altogether. It is up to the Finance Committee to monitor payment habits and then to work with the Family Partnering Committee to resolve problems.
INSURANCE—the Committee is responsible for securing general liability, non-owned and hired auto, builders risk, property, workers compensation and volunteer accident insurance. The Committee works with the Construction Committee to secure certificates of general liability and workers compensation insurance from subcontractors.
Tasks assigned to the Volunteer Committee include:
RECRUITMENT—the Committee needs to develop a recruitment plan that includes an inventory of duties that volunteers can perform, both in the office and in the field, and a list of potential sources, e.g. Churches, schools, colleges, and service clubs. The Committee should work closely with all committees in determining the needs of the organization and with the Development and Church Relations Committees in sourcing volunteers to perform them.
TRAINING—volunteers who are properly trained for the task they do perform better and with a higher level of satisfaction. This is especially true of construction volunteers, who face significant health and safety issues. All volunteers should be supplied with information on the mission, method of operation and foundational principles of The Fuller Center. The Partnership Covenant provides a good basis of information for volunteers.
It is important, too, to train volunteers on the true nature of their gift of time. Some volunteers sign up for personal reasons that ultimately do not serve the ministry. If the volunteer’s intention is “to help the poor folks”, “to make a difference”, or to feel better about their own life condition by spending time with people they consider to be worse off, then the ministry risks being tainted with paternalistic and superior notions. Volunteers need to understand that we are working as partners with the homebuyer families—that we aren’t doing “for”; rather we are doing “with”. The most satisfactory volunteer experiences are those where the volunteer comes away receiving as much as he or she has given.
DEPLOYING—making proper use of volunteers’ skills requires that those skills be properly assessed. An application form with a skills survey is helpful in making such an assessment. Communicating clearly with volunteers about where and when they are needed is vital, and being prepared for their arrival greatly enhances their experience. Volunteers who feel that their time is not being used well are likely to drift away.
RETENTION—given the challenge of recruiting volunteers and the expense of training them it is important that the Committee work hard to retain them. Volunteers have expectations of the time they give. Important considerations of the Committee in developing the volunteer plan include:
DATABASE—a database should be created and maintained with volunteers’ names, addresses, phone numbers and email addresses. This will be helpful in notifying volunteers of events, sending newsletters and other information, and for seeking donations.
Helpful hint: If you want to search for a specific topic in the Operations Manual, search for the word “manual” followed by a “+” sign and then a specific term. For example, if you want to know more about hammers, you would search for “manual+hammers”.