$10 Million Mark Met: Under One Roof Celebrates

by Ken Ludden for the San Francisco Spectrum

Under One Roof is one of those places where everything is like it should be. It is a good idea that caught on, it brings businesses together in ways that help them while also helping AIDS service organizations (ASOs), the people who work there like working there, hundreds of volunteers are reliable and happy to be there, and it is making money. This all seems too good to be true. But that isn’t all! In their 14-year history they have just reached the $10 million mark in net profit.

This achievement alone is remarkable, but they have also just won a new IRS status that will help them to increase their profit in the future and donate much more to ASOs. This new status moves them from a consignment inventory to a pooled inventory plan. Howard Thornton, their Interim Executive Director, explains that “Consignment inventory meant that each agency owned specific pieces of product. But in our holiday trim program, because we bought so deeply from vendors, we pooled cash contributions from different agencies to leverage buying power in buying trim products, which means we managed to make more money for the agencies.”

This is more good news, but is only a coincidence that it occurred at the same time as reaching the $10 million mark. “We started over a year ago working with the IRS, our attorneys, the finance committee and auditors, and the IRS sent us a letter in the spring saying they approved this.” The favorable ruling means that the store will be able to pool all of its resources and manage their inventory like other retailers, which will produce a higher turn rate and productivity of our inventory, which ultimately means they will generate more money for the agencies they serve. “We can stay in stock of all of our best sellers,” says Thornton, “we can react to the economics of the retail markets and the trends in consumer buying preferences faster, which means that we can just run a better store.”

The celebration comes together on November 3 with their Holiday Premier Party. This annual event has been a traditional party where donors and agencies come together and get the first choice of holiday shopping. But it is an open party as well, and Under One Roof invites guests to join the shopping fun. Mark your calendars for Wednesday, November 3 from 6-9 pm at their shop on Castro Street.

It is unusual for a retail store to last as long as Under One Roof has. This is due to changing consumer trends, new product development, demographic shifts in neighborhoods and many other factors. “It’s significant in that retail is not an easy way to make money,” he says, “and certainly in the history of the past five years since the dot.com boom collapsed and 9/11 we’ve seen a lot of retail stores in San Francisco close. We’ve been viable and have a great reputation in the retail industry and that we continue to raise necessary funds for ASOs is remarkable. From a retail point of view, a 14-year old retail store is pretty significant and pretty unusual. A lot of stores close, particularly in the last few years.”

The store sells more than $200,000 worth of donated inventory each year, which is found money. They are also an official recycler with the City and County of San Francisco because they haul so much of their product out of the Moscone Center. This is an indication of creative thinking on the part of Under One Roof, as they have found over the years that when vendors at huge trade shows break down their booths at the end of a show, they normally just throw away all of the products they have brought with them. Under One Roof jumped at the chance to talk these vendors into allowing them to take the products and sell them, where otherwise it all would have ended up in a landfill.

“Our donated inventory program is pretty successful,” says a very happy Thornton. “We send out letters to exhibitors prior to their show and at the end of the calendar year, and we get calls from retailers wanting to donate. Recently a local company called Oly wanted to donate product to us. They have items of first quality that are discontinued or overstocked and they’ve exhausted their means of turning that inventory. They said ‘we don’t want to put this out in a secondary market,’ which is like discount dollar stores or TJ max, ‘we would rather donate them to you.’”

Thornton is well versed in vendor mentality. While on a recent buying trip for the store at the New York Gift Show in August, he took advantage of that understanding. “When I’m in a booth and talk to vendors and tell them their story they immediately start offering discounting and credit terms, or ask ‘why isn’t anybody doing this in NY’?” A good question, and the type of innovation that has kept Under One Roof viable for so long.

The IRS ruling resulted from the same kind of creative thinking. I think by allowing us to manage our inventory in a more efficient manner we should see a significant growth in our revenue. Thornton looked over the entire operation and saw how efficient the holiday trim model was and wondered how they might apply that to the store overall. He approached the IRS and found, to his delight, that there was the possibility to change their status. In the end, everybody wins, particularly the ASOs.

Their entire staffing model is also a little revolutionary, with over 300 active volunteers helping to run the store. “One of the things is that we’re very dependent on our volunteers, and having active volunteers allows us to save in overhead, which means more money goes to the agencies. We’ve become a significant presence in the neighborhood,” adds Thornton, “we are a defacto center. A lot of volunteers come to work here as a transition to moving back into the work place and there is a real sense of community among them.”

Lately Thornton has been thinking in new directions, knowing that innovation is the lifeblood of his creative approach to the store. “Recently our buyer and I were talking and she was saying it is time to change the concept. One thing that is going for people now is transitions. People are looking at how to change careers, change activities in their lives, looking at what is meaningful and significant in how they live their lives and I think that would be a goal in our new merchandise mix – how to support people in their transitions in their lives, and allow them to have products around that help in that.”

As Under One Roof celebrates, join the fun. You can satisfy your entire holiday shopping list with the wide variety of quality merchandise in the store, and know that you are helping build on the $10 million, providing ever more support to ASOs.

Under One Roof – “Where the right gift can change someone’s life”
549 Castro Street, San Francisco (415) 503-2300
www.underoneroof.org
Hours: 10-8 Monday-Saturday/ 11-7 Sunday

GGBA, the first LGBT
chamber of commerce.

Positive Resource Center, providing employment services and benefits counseling to the SF Bay Area HIV community.

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