The first thing one notices at Homeboy Industries in downtown Los Angeles is that there are multiple employees for each position.

The second is that most of them have tattoos.

Not immediately visible at the center, home to the city's best-known and widely admired gang intervention program, is a stark reality: Homeboy is facing the biggest challenge in its 17-year history namely staying open during the grimmest economic downturn in years.

"Right now we're ahead on cash flow but only for a few more weeks," said Mona Hobson, the non-profit's development director. "We're doing everything in our power to keep these doors open."

In recent months, that has included a number of firsts: the layoffs of as many as 40 former gang members who weren't performing well in their jobs, the cutting of its summer hiring program by about 80 percent, an expansion of services at the company's public caf & #233; and an aggressive online fundraising campaign.

Homeboy officials said they are also actively pursuing a dwindling number of foundation grants and negotiating with the city for nearly $500,000 in gang-reduction funds.

In recent months, Father Gregory J. Boyle, a prominent Jesuit priest who founded the organization to give jobs to former gang members, has increased the number and pace of his public appearances, contacted numerous potential private and corporate donors, and personally met with Los Angeles Mayor Antonio Villaraigosa to solicit support.

"People can help out by giving us their business," said Boyle, 55, who started the organization in the barrios of East Los Angeles and now serves as its executive director.

Money losers

The company actually operates five separate businesses under a single non-profit umbrella.

Homeboy Bakery, the oldest enterprise, provides breads, pastries, cakes, cookies and fruit tarts to local restaurants, hospitals and universities.

Homegirl Caf & #233; & Catering, adjacent to the bakery at the agency's Bruno Street headquarters, is often packed for lunch, and since mid-July, for dinner as well three nights a week.

A retail store at the site sells hats, T- shirts and mugs bearing the Homeboy logo, while Homeboy Maintenance sends out crews to do landscaping and cleaning.

And Homeboy Silkscreen & Embroidery, two miles away on Santa Fe Avenue, uses state-of-the-art technology to put designs on promotional items for more than 2,000 clients.

Sounds like it should be profitable, yet it's not.

The only enterprise that's ever made money, said Chief Financial Officer Mary Ellen Burton, is silk screening and, in the current economic recession, even that is barely breaking even.

Part of the problem, Burton said, is that the company has traditionally hired considerably more employees than it needs in the belief that young people ready to escape from gangs will not come knocking twice.

Recently, the problem has only gotten worse. The number of potential clients walking through its doors has increased by 50 percent to about 12,000 a year, with at least 8,000 gang members. A small percentage of those able, among other things, to pass drug tests are hired with salaries starting at $8 an hour.

"We have indeed sometimes hired people for whom we didn't have jobs," said Burton. "It's not scientific."

Indeed, during a recent visit, young people many of them sporting tattoos, shaved heads and baggy pants were falling over each other to wash windows and answer phones.

As a result, Homeboy Industries' five businesses cumulatively gross about $2 million each year but cost more than twice that to run. At the same time, grants and donations, which provide most of the funding for Homeboy's annual budget, have shrunk by nearly 25 percent.

"I worry every payroll, which comes up every two weeks," she said. "But every two weeks, somehow we make payroll."

Homeboy's budget this year is about $9.2 million, and aside from subsidizing the businesses, it pay for overall administrative expenses as well as other services, including job training, drug counseling and tattoo removal.

Among the recent success stories for the company are its "virtual carwash," an idea borrowed from Latino culture. Back in the barrio, they said, when tragedy strikes or an unexpected financial need arises, the community organizes a carwash.

In the online version, both the car and the wash are part of an animation. Donors using their credit cards to make contributions are rewarded with a "clean" virtual automobile emerging in a field of purple bursting bubbles.

Since starting last month, organizers say, the virtual carwash has raised about $200,000.

"Our goal," Hobson said, "is to get a million people to give $10 each."

HomeBoy is counting on the goodwill of people such as Val Maki, general manager of L.A. radio station KPWR-FM (105.9). Maki said she's been buying silk-screened T-shirts from Homeboy Industries for years.

'Good job'

"We give them away as promotions," said Maki, adding that the company spends tens of thousands of dollars on the products annually. "Homeboy does a good job; the service is good and the product is good."

Recently, the agency looked into starting a solar installation service, which has been a hot industry over the last few years due to rising energy costs and a subsidy given homeowners who install such systems. However, those plans are on hold, because the company doesn't have the capital to buy the necessary equipment and inventory, as well as space to store it. In the meantime, Homeboy is enrolling some of its young clients and potential future employees in a solar panel training and certification program at the East LA Skills Center.

What keeps everyone going through it all are the success stories.

"I was homeless, out there in the streets, selling drugs and sleeping in my car," said Anthony Collins, 23, who's been working a regular 3-11 a.m. shift at the bakery since 2007. "Working here has made me feel more like a person. It's been like putting glasses on someone who was blind; I can see things I couldn't see."

Homeboy Industries

Founded: 1992

Core Business: Getting former gang members off the streets by employing them in any of five businesses

Employees: About 300, including 270 former gang members

Goal: To make the enterprise profitable and start new business, including solar installation

The Numbers: Total budget of $9.2 million a year, including about $2 million in gross revenue generated by the businesses

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