A few times each month, Thomas Vozzo sits in on interviews with prospective hires. All of them have felony convictions. All have been gang members. And most won’t get hired.
Not because of their records, but because Vozzo’s non-profit, Homeboy Industries in downtown Los Angeles, has had to cut back on hiring by almost half to stay solvent. It’s a collision of the program’s mission of gang reform and money problems, with Vozzo in the middle.
“It’s a responsibility for me to square those two ideas,” said Vozzo, 52, who for the past year has been Homeboy’s chief executive. “That’s part of what leadership is about – standing up and making those hard decisions. It’s hard. It’s a struggle.”
He’s behind the recent cuts in the number of trainees – the program now accepts one person a week out of about 20 applicants – but he’s also working to bring in more cash through Homeboy’s businesses and put the continuously cash-strapped company on firm financial footing.
“I’d like to be in a position where we could bring in three trainees a week,” he said. “If I can lead this place effectively and move the businesses forward, I don’t have to make those tough calls.”
That’s the challenge of being the dollars-and-cents executive at famously open-hearted Homeboy Industries, founded by Jesuit priest Greg Boyle. Boyle hired Vozzo in December 2012 as his first chief executive in order to help the company transition from a struggling non-profit toward greater self-sufficiency.
Homeboy offers free tattoo removal, legal aid, job training and counseling services to former gang members and ex-cons. For most of its 25-year history, Boyle has relied on donations and money from the city or county, but that’s led to budget shortfalls and a near shutdown in 2010.
Now, Vozzo, a former executive with Philadelphia food service and uniform company Aramark Corp., is pushing a new approach. He hopes to bring in more money from Homeboy’s businesses, including a commercial bakery and three cafes, making it less dependent on donations and the city and county. Within three years, Vozzo wants half of Homeboy’s budget to come from the businesses, up from about 25 percent a couple of years ago.
He’s already made some progress. Last year, about 35 percent of the non-profit’s $14 million budget came from Homeboy businesses. In 2012, Homeboy finished the year with a deficit, but it ended last year with a small operating gain.
But that progress has come at a cost, one that Vozzo said he struggles with: Instead of having about 300 job trainees on the payroll at any given time, Homeboy cut back to about 200 last year and to about 160 this year.
Vozzo wants Homeboy to keep providing job training and he wants to help as many people as he can. But he’s also responsible for ensuring the non-profit survives and that can only happen if it lives within its means.
Vozzo spent more than two decades with Aramark, serving as president of the company’s $1.3 billion uniform and apparel division before retiring in 2011. The Thousand Oaks resident split his time between offices in Burbank and Philadelphia.
In 2012, Homeboy Industries Chairman Viktor Rzeteljski asked Vozzo to work as an executive volunteer, overseeing Homeboy’s businesses part time. Vozzo and Rzeteljski, a retired KPMG partner, knew each other as members of a local Salvation Army advisory board.
Vozzo started volunteering in October 2012. Soon thereafter, Boyle asked if he’d come on board as Homeboy’s first chief executive. He said Vozzo was a good fit because he understood Homeboy’s mission and he knew how to run a company.
Boyle had been running Homeboy since he founded it, and while he had been able to hand off some duties to board members and other volunteers, he said the time had come for the non-profit to get a full-time executive.
“We’re a $14 million annual operation,” Boyle said. “It makes sense to have someone dealing with the businesses, balancing the budget and getting Homeboy Industries to such a place where we need fewer and fewer donations to keep the place going.”
Vozzo’s goal is to make Homeboy’s businesses run, well, more like businesses. The enterprises include Homeboy Bakery, which supplies fresh bread and pastries to restaurants and farmers markets; Homegirl Café and Catering, which operates a restaurant at Homeboy headquarters; Homeboy Silkscreen and Embroidery, which makes custom apparel and promotional items; and Homeboy Diner, which runs a small restaurant at Los Angeles City Hall. Other businesses include a Homeboy Café at Los Angeles International Airport and Homeboy Grocery, which licenses Homeboy-branded chips and salsa sold at Ralphs and other grocers. Most of those businesses exist to provide employment and job training, but Vozzo said they can become the main source of support for the whole organization.
Because the focus is on job training, the businesses take on more workers than they really need. That means they need to run efficiently in every other way to survive.
“We run two to three times as much labor as a for-profit business, but everything else needs to be run like a business,” he said. “In terms of the quality of products and everything else, we need to compete in the marketplace. When we grow the businesses’ top line, we can hire more people.”
When he started as chief executive, Vozzo asked the general managers of each business to take more ownership of their operations and control their costs. Over the past year, he said that’s led to a 10 percent cut in nonlabor costs, including an 8 percent drop in Homeboy’s cost of goods sold.
He’s also hired additional sales staff, including a former Homeboy trainee, trying to increase revenue from bakery products and catering in particular. He said those two businesses have the capacity to double sales.
“For me, the back half of the past year and now going forward, it’s all about how do you sell, sell, sell Homeboy,” Vozzo said. “We’re trying to up our game on that.”
Vozzo said that he also hopes to expand into more new ventures. Within the next year and a half, he wants to acquire a business and “Homeboy-ize” it, creating a new source of revenue and a new place to train Homeboy employees.
Still, even if Vozzo meets his goal of funding half of Homeboy through its businesses, he’ll still be counting on the other half to come from local governments and donations.
But Boyle, who recently lamented that government funding has gone from 20 percent to about 3 percent of Homeboy’s budget over the past few years, said bringing in more money through the non-profit’s businesses should help attract more outside money.
“You want them to see their money as an investment,” Boyle said. “If they’re investing in businesses that will in the end provide the funding we need, that’s a good investment.”
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