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
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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
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Habitat for Humanity’s National Affiliate Conference 2011
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
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Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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
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Habitat for Humanity’s National Affiliate Conference 2011
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
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Habitat for Humanity’s National Affiliate Conference 2011
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!
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Habitat for Humanity’s National Affiliate Conference 2011
GIK JOB REQUIREMENTS
• Able to relate to business owners• Ability to identify right GIK partner• Understand how to market brand value• Passion for Habitat
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Habitat for Humanity’s National Affiliate Conference 2011
Thanking Our National Gifts In-Kind Sponsors
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
Draft of Proposed Signage for Habitat Charlotte ReStores
Signs thanking our sponsors will appear soon in both of our ReStores.
Habitat for Humanity’s National Affiliate Conference 2011
Thank you to our other sponsors:
Yard sign, front
and back
Habitat for Humanity’s National Affiliate Conference 2011
MAXIMIZING CONSTRUCTION GIKDriving down the cost of home construction and repair
Steve SferrinoVP CaRE
Greater Los Angeles
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
LEVERAGE
Leverage All Available GIK Sources Utilize NSP Funded Projects as ROI to Donor Collaborate with Other Affiliates in Region
Habitat for Humanity’s National Affiliate Conference 2011
TRACKING MEASURES
Establish Per Project Goals Record Gift Values Maintain Accurate Records Assess Areas of Need Increase Affiliate’s Creditability
Habitat for Humanity’s National Affiliate Conference 2011
Know where you are at
Habitat for Humanity’s National Affiliate Conference 2011
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)
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
MAXIMIZING CONSTRUCTION GIK
Why Focus on GIK?
Joe MulveyHFHI Regional Director
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
What’s changed since last conference?
Economy
Donations Down
Increased demand for GIK
National Affiliate Conference • No Hands But Yours
Habitat for Humanity’s National Affiliate Conference 2011
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
National Affiliate Conference • No Hands But Yours
Habitat for Humanity’s National Affiliate Conference 2011
Cash versus GIK?
Is it an either/or?
How about “BOTH”!
Habitat for Humanity’s National Affiliate Conference 2011
Cash is top lineGIK is bottom line
Bottom line with enhanced GIK–yields more families served!
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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!
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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
Habitat for Humanity’s National Affiliate Conference 2011
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
National Affiliate Conference • No Hands But Yours
Habitat for Humanity’s National Affiliate Conference 2011
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]