Nonprofits jump into license office management

When charities experience declines in donations, it’s not uncommon for those organizations to turn to the government for financial assistance.

This time, government aid isn’t coming through grants or tax credits. It’s coming from managing the state’s license offices.

The Missouri Department of Revenue began awarding management contracts for the 183 license offices statewide in January 2009 through an open bidding system.

In this uncertain economic environment, several local not-for-profit agencies are jumping at the chance to create a sustainable revenue stream. On Feb. 4, the license office at 1534 S. Glenstone Ave. was awarded to Breast Cancer Foundation of the Ozarks, marking the first venture into office management for the Springfield organization.

“Our board liked the idea that the organization can provide a service to the community and earn revenue to support families with breast cancer,” BCFO Executive Director Crystal Webster said, noting that 2009 donations were down roughly $100,000, or 10 percent, compared to 2008.

System changes
BCFO won the bid by agreeing to return 10 percent of revenue, an estimated $42,177, to the state. The 10 percent return is high compared to other winning bids, said DOR spokesman Ted Farnen.

He said the highest return among winning bids is in North St. Louis County, where Invaluable Solutions LLC is returning 12.25 percent. The state average among offices returning revenue to the state is just more than 3 percent, and more than a third of awarded offices are not returning any revenue.

Prior to the bidding process, license offices were awarded by the governor’s office; some went to nonprofits, but more offices were managed by independent operators or local government or civic organizations.

The new system offers one-year contracts for the offices, though Farnen said the state can renew those contracts for up to three additional years without soliciting other bids. Farnen said the goal of changing to a bid system was not necessarily to make extra revenue, but rather to ensure cost-effectiveness.

“One of the goals was to increase the number of groups that might be interested in getting involved,” he said. “That’s what’s remarkable about the new system. Anyone can bid, and based on the qualifications, anyone can win. That’s a big difference from the past.”

The largest percentage returns come from offices in some of the state’s most highly populated and most competitive areas, Farnen said, forcing groups to sweeten their bids.

BCFO on board
Venturing into license office management is not a decision BCFO made lightly. Webster said the organization only considered bidding on the office after BCFO leaders were approached by an unnamed longtime license office manager who said she would like to work for the organization if it made a bid.

“This is not something we would have pursued had it not been for that relationship. It’s a complex bidding process, and it’s a critical service you’re providing to the community and the state,” Webster said.

Despite the complexities involved, BCFO is jumping in with both feet; the nonprofit also bid on the offices at 3061 S. Fremont Ave. and in Republic.

Among the seven entities that bid on the South Fremont office was Isabel’s House, Crisis Nursery of the Ozarks.

The bidding period closed Feb. 11, and the state said it should be awarded in early March.
Crisis Nursery board chairwoman Stephanie Montgomery said it was important for her organization to look for any possible source for new revenue, as long as it doesn’t impede the nursery’s ability to carry out its main function: providing a safe haven for young children with families in crisis.

“Running a driver’s license bureau is not the main mission of Isabel’s House, and it’s not something that the people running Isabel’s House would be involved in,” she said. “But if there’s a way to get funding another way, I think you have to try.”

She said that if Isabel’s House wins the Fremont office, the organization would hire an office manager, but board members have offered to volunteer overseeing that position.

“We have people on the board who are good businesspeople and can help donate those services,” she said, adding that Isabel’s House also bid on the Glenstone office won by BCFO.