“If you want a house, you have to work hard for it. And, oh Lord, am I working hard.”
— Anita, future Habitat homeowner
As crazy as it seems, we are on the downhill run to Christmas, with 134 days remaining until the big day. It is in this half of the year when we begin to recognize our respective good fortune, and that tends to put us in a charitable state of mind. As a result, this is the first in a series of newsletters where I'll profile a non-profit organization that you might consider supporting. You know I like to be different, so I'm not going to bore you with their financials. Instead, I want you to know about the people that founded them, the people that run them now, and what they hope to accomplish.
To start, we are going to look at Habitat for Humanity International. Its story is very cool....
One of my favorite sayings is "If something you think to be true really isn't true, when would you want to know it?" My research into Habitat for Humanity caused me to consider that line because I had the same kind of problem. I had always thought that President Jimmy Carter founded Habitat for Humanity. I was wrong. President Carter is simply the organization's most well-known volunteer and spokesman. The actual founders are Millard and Linda Fuller.
Millard Dean Fuller was born in Lanet, AL in 1935 in a small, cotton mill town about 40 miles north of Columbus, GA. Apparently, the man was an entrepreneur from the word go. He was also smart and ambitious. He earned his undergraduate degree in economics from Auburn in 1957 and then went law school at the University of Alabama. As the story goes, he met his future business partner, Morris Dees, in law school while selling him a Christmas tree. As business partners, Millard and Morris wanted to become rich. Together, they built a direct mail business, published student directories, and purchased and rehabbed real estate. They also manufactured and sold tractor cushions and published cookbooks. The cookbooks were a big deal, because Millard and Morris eventually became one of the largest publishers of cookbooks in the country. By 1964, at the ripe old age of 29, Millard Fuller was a millionaire.
Neat story, isn't it? It is a positive story, full of American grit, ingenuity, and financial success. Unfortunately, there is a darker side to the story. As fate would have it, in 1959, Millard married Linda Caldwell, his college sweetheart and a talented person in her own right. Was Linda married to a happy-go-lucky kind of guy? No, not at all. Millard worked enormous hours trying to build those businesses and he was rarely home. He was also messing around and Linda knew it. From the outside, they looked like the perfect power couple. They had money and a lot of the comforts that money could provide. They weren't happy, though. Tit for tat being what it is, Linda had an affair, too. And she then threatened to leave Millard.
So, what happened? That is the good news. Millard and Linda decided to stay together and start over. For the rest of Millard Fuller's life, he talked openly and frankly about repairing his marriage. Based on their Christian beliefs, he and Linda decided to rid their family of what they considered its excesses. The fancy cars, the lakeside cabin, and the speedboat were all sold. So was Fuller's $1 million interest in the business he started with Dees. What happened to the money? They gave it away.
I'm not kidding. They gave some of the money to a college in Mississippi, some to fund various Christian missions, and some to the Koinonia Farm in south Georgia. That farm plays an important role in this story, so read on.
The Koinonia Farm still exists today, and it has a heck of a history. It is a Christian retreat of sorts, founded in 1942 by a fellow by the name of Clarence Jordan. He was Southern Baptist to the core and held a PhD in the Greek New Testament to prove it. Jordan was also a man committed to peace, helping his fellow man, and treating blacks as equals. Jordan had a profound influence on the Fullers and it was at Koinonia Farm that the Fullers, along with Jordan and a few others, started to test a no-interest housing model designed to make homes affordable for working class families. In 1973 they tested the model in Zaire, now the Democratic Republic of the Congo, and were convinced the model could be expanded and applied all over the world.
In 1976, they formed Habitat for Humanity International. As Fuller later told the Chicago Tribune, "We want to make shelter a matter of conscience." The organization was to raise money and recruit volunteers to build homes for those in need. Government help would be enlisted for land acquisition and utilities, but the houses themselves were to be built from the donations of individuals.
All buyers of Habitat homes must work a few hundred labor hours in the building of their respective home. Fuller calls this "sweat equity" and he points out that it builds a sense of pride and ownership in the soon-to-be new owners. In the early 90's, Fuller wrote a book explaining his "theology of the hammer" philosophy. He said, "that our Christian faith mandates that we do more than just talk about faith and sing about love. We must put faith and love into action to make them real, to make them come alive for people…. True faith must be acted out."
Impact, Structure, & Vision
Over four decades have passed since Habitat's founding and in that time, more than 13.2 million people have benefited from the organization's work. It is remarkable that a small non-profit started in Americus, Georgia is now helping people in the United States and more than 70 countries around the world. I can't help but recall Margaret Meade's famous quote, "Never doubt that a small group of people can change the world. Indeed, it's the only thing that ever has."
The home office is now based in Atlanta and the organization operates on a geographical basis: U.S. and Canada; Latin America and the Caribbean; Asia and Pacific, and; Europe, Middle East, and Africa. There were 1,469 employees and 2.1 million volunteers to the organization in 2016. Total revenue was ~$250 million and net assets were ~$144 million. In the United States, there are over 1,400 affiliate chapters of Habitat for Humanity. These affiliates have their own staffs, raise their own money (some of which is "tithed" to the main office to support operational needs, marketing activities, and international projects), and motivate their own volunteers. The affiliates have local autonomy over what they do, and that local autonomy helps make Habitat a very effective non-profit.
The organization's current CEO is Jonathan Reckford. He grew up in North Carolina and received his undergraduate degree from UNC Chapel Hill and a master’s degree from Stanford University. He worked for Goldman Sachs, was president of stores for Musicland (a division of Best Buy), senior vice president of corporate planning and communications for Circuit City, and director of strategic planning at The Walt Disney Company in his for-profit days. Before joining Habitat for Humanity, he was executive pastor of Christ Presbyterian Church in Edina, MN. At Habitat for Humanity, Reckford is known for quoting Henry Blackaby, a Christian pastor, by saying, "We should take on God-sized tasks because then it is clear to everyone who deserves the credit."
One of the things that most impresses me about Habitat is how it is reframing its vision. Habitat for Humanity's focus used to be only about getting people into decent homes. That was and is an honorable vision. Are decent homes the only things that make for good communities? No, of course not. Thriving communities have people that care about their neighbors. They build parks and argue over traffic lights, stop signs, and roundabouts. The people in good communities vote. They also have good relationships with the police. In recognition of those simple and soft facts, Habitat is changing its measurements of success from merely outputs (number of houses built or repaired) to outcomes around revitalized communities. The graphic below illustrates the metrics that Habitat is looking at now. Personally, I like them.
North Central Georgia Affiliate
The local affiliate of Habitat near my office operates out of Roswell, GA and its territory includes the counties of north Fulton, Forsyth, Dawson, and Cherokee. Like the parent, this affiliate is a fantastic organization staffed and supported by great people, two of whom you should know more about. Russ Hayes is the CEO of the North Central Georgia affiliate. He is an attorney by education and spent nearly two decades of his life with a large home builder as its General Counsel. He joined Habitat for Humanity out of retirement and has been running the show since 2008. For those of us living on the north side of Atlanta, we would be hard pressed to find a better, more knowledgeable, or more experienced man at the helm than Russ. Mary Lamond is Director of Family Services for the affiliate and she and I have known each other from a distance for a few years through Rotary. Hailing from Texas, she made her way to Georgia as a property manager with a large real estate company. Like Russ, she is also very talented, and she was kind enough to spend nearly two hours educating me on how things work locally at Habitat for Humanity.
A key point the Mary and Russ want everyone to understand is that no one receives a house from Habitat for Humanity for free. That is a myth and it is a damaging one. People that are interested in getting help from the organization attend one of approximately six meetings hosted across the year where Mary explains the process. Those with the motivation to move forward complete an application, undergo a credit check (and Mary makes applicants order it themselves, so they can read what it says), provide pay stubs and tax returns and evidence of citizenship, and go through a background check, criminal history check, sexual offenders list check, and the like. Russ tells me the process for approval at Habitat is much more thorough than anything a "traditional" homeowner goes through. Habitat wants to make sure that the people it builds houses for are good neighbors to you and me. If approved, these individuals make a down payment of approximately $1,500, invest 200 hours of "sweat equity" in the building of their homes, and then they buy the completed home with a 30-year, interest free mortgage from Habitat for Humanity. Note that I said "buy."
In my conversation with Mary, she floored me when describing the housing costs of many working-class families. A trailer - yes, a trailer - costs $700/month to rent. Because of the lack of insulation, electricity is another $200. And then there is the cost of propane gas when winter comes. Now, think about giving people the opportunity to buy a $150,000 home. If they were to obtain a traditional 30-year mortgage at 6% interest, the monthly payment would be ~$900/month (plus electricity, taxes, insurance, and maintenance). For people that are making $14 an hour, that is out of reach. Because Habitat offers them a mortgage at 0%, the payment is ~$417/month (plus electricity, taxes, insurance, and maintenance). That is a huge difference and it makes home ownership possible and it changes the vector of their lives. As the cherry on top, because the money lent to the buyers of these homes is paid back, it makes it possible for Habitat for Humanity to do it again. And again. And again.
Many of us have questions about the type of people helped by the local Habitat for Humanity affiliate. I've already mentioned the term "working-class family” but allow me to give you a few examples of what that term means. Think about the lunch lady at your child's elementary school or the assistant manager at the local McDonald's. Think about the policeman working in Roswell, the firefighter working in Dawsonville, or the butcher at the local Ingles grocery store in Woodstock. And Habitat does more than just build homes. Through a Community Development Block Grant obtained from the federal government by Cherokee County, Habitat is repairing homes for veterans and senior citizens, too. As a little bit of a side-bar, Mary shared with me a letter she and Russ received from a Habitat home buyer. This woman wrote them to say thank you...and to say that her daughter was just accepted at Yale. These are the people that Habitat helps.
So, how can you help? Well, Russ told me that he'd appreciate help in three areas. First, there is a problem with land. Since the Great Recession, land has become super expensive. If you have land that you would be willing to donate, Habitat would be grateful for the assist. Oh, and please be sensitive to the need for land on which a home can be built. It is not uncommon for people to try to donate narrow strips of land or land with streams running through the middle for the tax deduction, rather than for practical use. Second, Habitat needs people willing to volunteer during the work week to prep homes for the mass of volunteers that come on the weekend. Frequently, the people that do this work are retired or in-between jobs. While many of the work-day workers know something about building homes, not all do, so don't be intimidated. If you have an interest, send me an email and I'll connect you. For the third and final request, green is a pretty color and money is always helpful. If you are willing donate cash, appreciated stock, an IRA distribution, etc.; Russ and Mary would appreciate it. The local affiliate is operating on an annual budget of $3 million to $4 million a year. That means that they can build 12 - 15 homes a year, plus home repairs. Your donations help the organization to help more people.
As you may have guessed, I'm a big believer in charitable giving. I believe it fosters a great perspective on life and helps us maintain an important sense of gratitude for the things we have. It links you and your children to not only the people that may need a little help, but to your neighbors and the leaders in your community. Finally, because human nature drives us to rise to the occasion when others are in need, a family tradition of charitable giving ties members of families closer together in the act of helping others. To learn how to make this a tradition in your own family, download a copy of our guide, Family Approach to Charitable Giving.
As always, I hope you found this article interesting. If so, give it a like on Facebook and share it broadly! Stay well....and let me be the first to wish you a Merry Christmas.
Bruce Wing is the president of Strategic Wealth, LLC, a fee-based Registered Investment Adviser located on the north side of Atlanta.
Entrepreneur, financial guy, husband and father of two great kids.