Presentation construction gifts in kind

Maximizing the Construction GIK Opportunity

Driving Down the Cost of Home Construction and Repair

Habitat for Humanity’s National Affiliate Conference 2011

PANELISTS (In Order of Presentation):

– Dick Seitz, Director of Customer Service & Training/Valspar Corporation

– Joe Allwein, Board Chairman/Habitat for Humanity of The Chesapeake

– Bert Green, Executive Director /Habitat for Humanity of Charlotte, NC

–Steve Sferrino, Vice President Construction & Real Estate/ Habitat of Humanity of

Greater LA

– Joe Mulvey, Regional Development Director Great Lakes/HFHI

– Drew Meyer, Senior Director ReStore & Gifts In Kind Support/HFHI


National Gifts In Kind

• On Line Ordering System

October 2009 – December 2010

934 Affiliates , 50 States & Canada

15,560 Orders, $25 million

• Average Cost Savings per House

$3,000-$5,000

GIK/A CORPORATE PARTNER’S PERSPECTIVEDICK SEITZ

VALSPAR CORPORATIONDIRECTOR OF CUSTOMER SERVICE & TRAINING


Valspar’s Impact on our Mission• National partner since 1979.• In 2003 committed to over $45 million in cash and

GIK donations.• In 2007 kicked off the national launch of ABWK in

Los Angeles.• Supplies discontinued paint that can be resold in

ReStores. • Valspar Foundation shares our mission of providing

affordable housing in the neighborhoods we live and work.

LOCAL GIK PROGRAM

JOE ALLWEIN

BOARD PRESIDENT

HABITAT FOR HUMANITY of the CHESAPEAKE


HISTORY OF HFHC’S GIK PROGRAM

• Used most corporate HFHI GIKs (Whirlpool, Larson,

Yale, Hunter)

• Local GIKs very limited – No Focus

• House cost reduction not important

• Development resources devoted to raising cash

revenue, not GIKs

• Prior to 2007, GIKs per house averaged less than

$7,000 per house including national and local partners

2


DEVELOPING LOCAL GIK STRATEGY

• Dedicated resource(s) is a MUST• Buy in by ED/Board and Construction

Department• Acceptance of vendor turnover• Rank house costs starting from highest• Understanding of HFHI brand value• Tie in to ReStore donations

3


KEY FACTORS OF LOCAL GIKS

• Vendors must be large enough to donate labor and/or material (Don’t ask a “Mom & Pop” for 10 free houses)

• Generally, existing vendors will not be new GIK partners

• Break out material from labor on major trade subcontractors for separate GIKs

• Always ask for everything to be donated

4


IMPLEMENTING LOCAL GIK STRATEGY

• Update construction on regular basis• Ask for one (1) year commitment • Understand economic conditions of market/industry

(Discount vs. Donation)• Be flexible on partnership (i.e. Labor donated but

material at cost)• Use suppliers purchasing leverage with their supply chain• Offer to educate GIK partners’ employees on Habitat

mission/brand

5


GIK STRATEGY RESULTSas of DECEMBER 31, 2010

NOTE: (1) Based on rehabbed house construction costs excluding land acquisition cost

(2) Land acquisition costs now less than $5,000 per house

Plumbing2,500

Insulation1,800

HVAC2,500

Concrete500

Flooring3,000

Electrical2,500

Windows1,700

Drywall1,500

Cabinets500

Fencing700

Dumping Fees1,500

Portable Toilets425

Softwood Lumber 4,000

Other HFHI GIK3,300

TOTAL

$26,425

Historical GIK $7,000

GIK Increase $19,425

EST. HOUSE COST$65,000

6


LOCAL GIK SUMMARY

• Get buy in from all departments• Identify resource for GIK program• Analyze potential companies• Meet with decision-maker(s)• Ask for a donation• Be prepared to change vendors• Use ReStore as part of GIK construction

strategy• Don’t accept market pricing on purchased

materials or services!

7


GIK JOB REQUIREMENTS

• Able to relate to business owners• Ability to identify right GIK partner• Understand how to market brand value• Passion for Habitat

8


Thanking Our National Gifts In-Kind Sponsors


In-Kind Cost Savings

Donor Since # of homes

Avg $ donation per home

Total

Dow 1983 923 $500 $461,500

Ferguson 2008 100 $75 $7,500

Schneider Electric 2001 512 $1,000 $512,000

Valspar 2002 472 $500 $236,000

Whirlpool 1999 597 $1000 $597,000

Yale 2006 307 $500 $153,500

Total $1,967,500


In-Kind Sponsors

National Sponsors Local & Regional Sponsors• Bill Hefner Plumbing• Charlotte Pipe & Foundry • Christian Plumbing Co.• Colonial Materials• Edifice, Inc.• Hunter Douglas• Island Boyz• Larson Manufacturing• McDowell Excavating Inc.• M/I Homes• Morris Jenkins Co. • Thomas Pest Control• Shepherd's LM• Southern Energy Management• Standard Pacific Homes• Starr Electric Co.• Summit Air & Electric LLC


Sponsors’ Website Links

Dow: http://www.dow.com/habitat/

Ferguson: http://www.ferguson.com/corporate.shtml

Schneider Electric: http://www.schneider-electric.us/sites/us/en/company/community/habitat-for humanity/habitat-for-humanity.page

Valspar: http://www.valsparpaint.com/en/about-us/habitat-for-humanity.html

Whirlpool: http://www.whirlpoolcorp.com/responsibility/building_communities/habitat_for_humanity.aspx

Yale: http://www2.yalelock.com/Yale/Templates/LocalNormal____3814.aspx

http://www.dow.com/habitat/

http://www.ferguson.com/corporate.shtml

http://www.schneider-electric.us/sites/us/en/company/community/habitat-for-humanity/habitat-for-humanity.page

http://www.valsparpaint.com/en/about-us/habitat-for-humanity.html

http://www.whirlpoolcorp.com/responsibility/building_communities/habitat_for_humanity.aspx

http://www2.yalelock.com/Yale/Templates/LocalNormal____3814.aspx


Sponsors’ Contact InformationCompany Contact Name Address

Dow Chemical Corp. Andrew LiverisPresident & CEO

2030 CenterMidland, MI 48674

Ferguson Enterprises, Inc Frank W. RoachPresident & CEO

P. O. Box 2778Newport News, VA 23602

Schneider Electric Square D

Christopher CurtisPresident & CEO

1415 Roselle RoadPalatine, IL 60067

Valspar Corporation William L. MansfieldChairman and CEO

P. O. Box 1461Minneapolis, MN 55440-1461

Whirlpool Corporation Jeff M. FettigChairman and CEO

2000 N. M-63Benton Harbor, MI 49022-2692

ASSA ABBLOY Americas Yale Residential Security Products

Thanasis MolokotosPresident & CEO

100 Sargent DriveNew Haven, CT 06511-5918


Draft of Proposed Signage for Habitat Charlotte ReStores

Signs thanking our sponsors will appear soon in both of our ReStores.


Thank you to our other sponsors:

Yard sign, front

and back

MAXIMIZING CONSTRUCTION GIKDriving down the cost of home construction and repair

Steve SferrinoVP CaRE

Greater Los Angeles


Know Your Cost

Determine True cost to

Build

Establish goal per house GIK value

Develop Tracking Measures

2008 - $106,250 = $85sf

GIK Goal 20% = $21,250

net cost $85,000

2009 - $115,000 = $ 92sf GIK Goal 20% = $23,000

net cost $92,000

2010 - $125,000 = $100sf GIK Goal 25% =$31,250

net cost $93,750


2008 2009 2010$80,000.00

$90,000.00

$100,000.00

$110,000.00

$120,000.00

$130,000.00

$106,250.00

$115,000.00

$125,000.00

$85,000.00

$92,000.00$93,750.00

Standard CostNet Cost

Taming Increasing Costs with GIK

Cost of building increases by approx $10,000 per year net increase is only $1750 due to increased GIK


Identify Needs and Sources1.GENERAL CONDITIONS Architect Storage Waste

Temporary Services

2.SITE WORK Excavation Equip rental Asphalt

3.CONCRETE Rebar PumpCement Masons

4.MASONARY Material Union

5.METALS Simpson

6.WOOD SLA

7.THERMAL/MOISTURE Dow Malarkey

8.DOORS/WINDOWS Plastpro Windows

9.FINISHES Yale Hunter Dgls BPS Empire Tile partners US Gypsum

10.SPECIALTIES Solar

15.MECH/HVAC/PLUMBING PEX US AC Dist FergusonELECTRICAL Sq D Cree lighting

Labor Trade Schools UnionsApprentice Programs

Construction Co's


ASK

Seek Mutually Beneficial Partnerships

Consider Prospect Buy-In Identify Decision-Maker

Emphasize Habitat for Humanity’s Mission

Highlight Green Initiatives Extend Opportunity to Support

Community Engagement


LEVERAGE

Leverage All Available GIK Sources Utilize NSP Funded Projects as ROI to Donor Collaborate with Other Affiliates in Region


TRACKING MEASURES

Establish Per Project Goals Record Gift Values Maintain Accurate Records Assess Areas of Need Increase Affiliate’s Creditability


Know where you are at


DEDICATED RESOURCE

Jessica Killeen GLA’s AmeriCorps VISTA GIK Coordinator

Identify Capacity for Dedicated Resource to Develop and Implement Program (AmeriCorps VISTA, Volunteer, Intern, Committee and/or Staff)


WIN-WINMUTUALLY BENEFICIAL

PARTNERSHIPS Engage GIK Donors in Build Days Provide Appropriate Tax Documentation Involve Donor in All Affiliate Special Events Publicize through Print and E-media Highlight Partnership through Onsite Signage Offer Recognition at Home Dedication


MAXIMIZING CONSTRUCTION GIK

http://www.strongtie.com/index.html?source=topnav

Why Focus on GIK?

Joe MulveyHFHI Regional Director


HFHI GIK Initiative designed to:• Leverage successful relationships between HFHI and donors like Dow, Whirlpool,

Schneider Electric, Valspar and others• Increase GIK use both from national and local GIK partners • Focus on cost reductions

GOALS: • Reduce costs (cash outlays by affiliates)• Generate unrestricted cash (With ReStore)

– [I will focus only on GIK for House production in this section – but recognize that GIK for ReStore is vital)

National Affiliate Conference • No Hands But Yours


What’s changed since last conference?

Economy

Donations Down

Increased demand for GIK



For Many National GIK Donors Still less than optimal utilization of GIK by affiliates:

Many reasons for low utilization:– Lack of Communications between HFHI and affiliates– Affiliates not focused enough on cost reduction opportunities using GIK– Overall planning and logistics, order entry system complexities– Many smaller affiliates find utilizing GIK more difficult than large affiliate



Cash versus GIK?

Is it an either/or?

How about “BOTH”!


Cash is top lineGIK is bottom line

Bottom line with enhanced GIK–yields more families served!


If you are not focused on GIK and other cost reductions:

It’s a symptom that the affiliate leadership (ED and Board) are

missing a good opportunity


If you are focused on GIK and cost reduction:

Your affiliate leadership knows its business and is a benchmark in the

country. Too few affiliates are leaders in GIK in the U.S. today!


Who in the affiliate wakes up in the morning thinking of GIK?

-Someone has to be (i.e., Board member, ED, Volunteer. Person doing this should understands business well)

-Affiliate leaders on this panel are benchmarks in the country in cost management and GIK leadership

- Thank you Bert, Joe, Steve for your leadership


The Rewards

Corporate Programs

Examples of HFHI GIK

GIK DONOR Amount Product• Whirlpool $1,253 Range and Refrigerator• Dow $2,100 Insulation• Square D $ 605 Electrical• Valspar $ 425 Paint• Yale $ 120 Locks• Hunter Douglas $ 300 Blinds• Larson Doors $ 190 Screen doors• Ferguson $ 215 Pro Flow Toilets• Softwood Lumber $7,500 Wood (new house building)• TOTAL $12,708


Summary

GIK utilization is Growing- GIK donors can be migrated to give Cash as well

- Keep focus & sense of urgency on GIK to reduce costs

Thank YOU to all our GIK donors



Contact Information

• Dick Seitz [email protected] 612-851-7767

• Joe Allwein [email protected] 443-925-1173

• Bert Green [email protected]

• Steve Sferrino [email protected]

• Joe Mulvey [email protected]

• Drew Meyer [email protected]

Presentation construction gifts in kind

Business

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