Business Skills in the Social Sector

Fuqua Alum Keith Artin Charts Growth at Entrepreneurial TROSA
by Matt Nash, Associate Director, CASE

You could call Keith Artin an “accidental social entrepreneur.” In fact, Keith never expected to work for a nonprofit organization. However, six years after earning his MBA at the Fuqua School of Business, Keith has found challenging and deeply satisfying work as the chief operating officer of one of the most innovative substance abuse treatment organizations in the country, Triangle Residential Options for Substance Abusers, Inc. (TROSA).

TROSA is a Durham-area nonprofit organization that helps recovering drug and alcohol abusers change their lives. During their two year stay, residents receive therapy, housing, food, and clothing for free. In exchange, these men and women must stay off drugs and alcohol and work in one of the earned-income ventures that TROSA operates. This work experience helps residents learn life skills and work skills that enable them to find jobs after they graduate from the program.

In a recent interview with CASE, Keith explained that TROSA currently serves a population of 350 residents with a history of chronic drug and alcohol abuse and from a wide variety of racial, economic, and educational backgrounds. Over 85% of residents have had a long-term addiction to crack, cocaine, or heroin prior to entering the program. TROSA represents a last hope for most residents—nearly 90% have participated in at least one previous treatment program and about 1 in 3 residents are probated to TROSA as an alternative to incarceration.

Despite what may seem to be daunting odds of success, TROSA aims to produce self-reliant and upstanding citizens through a highly structured and organized operation run by staff, graduates of the program, and current residents. Using principles of self-help and individual empowerment as the methods of recovery, the intensive residential rehabilitation program promotes personal development through vocational training, education, communication, peer counseling, mentoring, and leadership training.

An Entrepreneurial Approach
Perhaps the most distinctive feature of the TROSA program is its entrepreneurial approach to vocational training. Since its humble beginnings in 1994, with only $18,000 in cash, an abandoned schoolhouse, and seven residents, TROSA has launched an impressive array of earned-income ventures. For example, TROSA has built the largest privately-owned moving business in the Triangle area, performing 5,000-6,000 moves per year and grossing $3-4 million in annual revenues. In addition, TROSA runs a catering business out of its on-site commercial kitchen, which prepares 6,000 meals each week. Its construction department has renovated numerous housing units across Durham, earning TROSA several awards for its beneficial impact on several neighborhoods. Other businesses include landscaping, picture framing, contract labor, eBay auctions, and holiday sales. In addition to these earned-income ventures, residents also operate and maintain a fleet of 200 vehicles, provide food services and office support, carry out property rehabilitation and maintenance, and solicit and warehouse in-kind donations valued at approximately $3 million per year.

While describing this ever-expanding collection of businesses, founder and CEO Kevin McDonald quips, “I didn’t know we were ‘social entrepreneurs.’ Our program is about how to get going in life. You have to have a skill, a trade. We empower our residents with job training and a work ethic.”

The residents’ hard work has a direct payoff—TROSA’s earned-income ventures provide financial and material support for its therapeutic program. According to Keith, revenues from these activities have grown nearly 40% in the last two years and presently amount to about half of the organization’s budget, producing a level of self-sufficiency that is rare in the nonprofit sector. He also notes that only $24,000 of TROSA’s annual budget comes from government sources, though he estimates that TROSA services save North Carolina and other states at least $6 million annually in reduced costs of incarceration.

Management Skills Critical
Keith acknowledges that running such a complex organization demands advanced financial and management skills. In many ways, he has been preparing for this challenging work throughout his professional career. Prior to entering Fuqua, Keith worked for five years as a Smith Barney investment banker in the field of public finance. After earning his MBA, he went on to work in several technology start-up firms. He credits this entrepreneurial experience for teaching him how to relentlessly pursue a compelling vision and make strategic decisions in the face of limited resources.

“You can’t have it all. I spend a lot of my time analyzing our needs, reviewing priorities, and making decisions. It is always a juggling act. At the end of the day, we don’t have the resources to do everything and to do it all now.”

Keith credits his management training at Fuqua for helping prepare him for dealing with challenging personnel issues. “Sometimes I have to ask employees to make changes they might not want to make. Feedback can be hard to give, but it is critical to employees’ growth.”

In a field where business skills are sometimes held in suspicion, Keith is careful not to wear his MBA on his sleeve. “I don’t pretend to have all of the answers. I listen to people a lot and learn from their knowledge and experiences. Being humble and open to others can take you a long way.”

His work as COO has earned him the respect of TROSA staff and residents. Explains CEO Kevin McDonald, “This is an oddball place and there’s definitely a learning curve for everyone. Keith came in and worked in a tense, high pressure environment. Keith has really proved himself here.”

Carefully Planned Growth at TROSA
The TROSA formula appears to be paying off. After 21 months in the program, residents begin the “work out” phase by accepting local jobs while living in TROSA-owned transitional housing and continuing their education. Among the 500 program graduates to date, 100% have had jobs upon graduation. In the words of one resident close to graduation, “TROSA is a Godsend! Now I’ve got hope—real hope—to be a success in life!”

In the face of such results, TROSA is under great pressure to expand. However, Keith counsels a more carefully planned approach with initial emphasis on building TROSA’s infrastructure, strengthening its program, and improving outcomes for residents.

Kevin McDonald agrees. “It’s all about the people coming behind us. We have to build for the future.”

Accordingly, TROSA is undertaking a major expansion of its central Durham campus, where is it building new apartment buildings, town homes, single family homes, and a community center complete with auditorium and gym. As this expansion progresses, TROSA will need to add staff, expand business enterprises and launch new ventures, and access additional streams of funding.

Once TROSA is on a stronger footing for growth, both Keith and Kevin look forward to sharing tools and lessons learned with other communities that hope to replicate the TROSA model with local adaptations as needed.

Advice for MBA Students
Reflecting on his serendipitous career path, Keith notes that, although he enjoyed his work in the private sector, he has found his work at TROSA to be especially meaningful. “At TROSA, the work I do has a real impact. I believe in what the organization is doing. The good we are doing is tangible, and that pulls me through the hard days.”

Keith encourages MBA students to consider social sector job opportunities. “Social enterprise is a growing field,” he explains. “Many nonprofits—though not all—could benefit from earned-income ventures. Besides, with the skills and education of an MBA, you will always have other opportunities if things don’t work out.”

Adds Kevin McDonald, “MBAs can make a huge difference. But, they must be able to fit the organization.”

As for Keith, he knows he has made the right career decision and has found the right fit. “Personally and professionally, I am a lot more content because of the work I do these days. If anything, I wish I had gotten into it sooner.”