FareStart is extremely good at what it does. The nonprofit opened in 1992 to serve nutritious and culturally diverse meals to Seattle’s homeless and disadvantaged men and women. But FareStart’s founders soon recognized both their need for sustainable funding and their clients’ employment potential. And so the organization opened several businesses that not only generate revenue for the nonprofit, but also train clients for food service jobs.

Every year, more than 300 clients complete FareStart’s intensive 16-week food service training program. Trainees learn their trades in FareStart’s businesses, which include Seattle’s acclaimed FareStart Restaurant and a contract meal service that provides more than 400,000 meals annually to homeless shelters and low-income child-care centers. FareStart also helps trainees with housing, counseling, and case management. Upon completing the program, more than 85 percent of trainees land living-wage food service positions. Meanwhile, the businesses that trainees operate provide FareStart with a generous and reliable income stream.

Because of FareStart’s successes, nonprofits around the country want the organization to teach them about its business model. “Food service is an area that draws nonprofits,” explains Jennifer Flanagan, venture manager for the Social Innovation Accelerator, a Pittsburgh-based organization that helps nonprofits develop and launch earned-income initiatives. “They think [food service] is easy, and it seems to tie to an immediate mission of feeding people. But many nonprofits stumble, and have no idea how to actually run a food operation business,” she says.

Despite a strong desire to share their experiences, the FareStart staff and board feared that teaching the organization’s lessons would distract it from pursuing its own mission. Guided by Jim Collins’ classic book, Good to Great, FareStart aspired to be a hedgehog—an organization that knows one thing extremely well—rather than a fox—an organization that knows many things somewhat well. Because hedgehogs “have a piercing insight that allows them to see through complexity and discern underlying patterns,” writes Collins, they are often the best-performing organizations.

The hedgehog idea gave FareStart guiding clarity, says Megan Karch, the organization’s executive director. “It may seem selfish,” she adds, “but every hour spent helping another organization with its mission is an hour lost to FareStart.”

But in 2005, David Carleton came up with a way to share FareStart’s model while avoiding mission creep. Carleton, a FareStart volunteer, donor, and consultant, suggested that the organization create another entity—a sort of consultancy. The new nonprofit would “break down the pieces that make FareStart successful and then assist organizations in using those pieces to build customized solutions,” he says. As a wholly independent organization with its own funding and staff, the new entity would not strain FareStart’s resources.

With the full support of the FareStart board, Carleton established the new consultancy, called Kitchens with Mission (KWM). The organization works with food-oriented nonprofits to bring business discipline and sustainability to their daily activities. Its clients include a broad range of organizations, from job training programs to coffee shops to institutional kitchens. Rather than trying to franchise FareStart, KWM lets “local communities own and develop their projects,” says Carleton. “We help.”

UNCLEAR COSTS

One client that has benefited from KWM’s services is the Urban Fusion Café (now called Eat UP), which the nonprofit Union Project operates in Pittsburgh. The café employs at-risk youth who receive job training while preparing and serving gourmet espresso drinks, breakfasts, and lunches. In 2007, the Social Innovation Accelerator, which advises and supports the Union Project, asked kwm to evaluate and restructure the café.

Despite its promise, the Urban Fusion Café was losing a lot of money. Yet no one in the partnership could explain why—partly because no one in the partnership had any restaurant experience. This meant not only business failure, but also mission failure, notes Flanagan: “If you don’t have an operating business, then you are not really training someone to run an operating business.”

KWM went to work. As with any engagement, the organization looked at everything from oversight to support services to training to facilities. “They are very good at sizing up an organization, from the numbers to operations,” says Flanagan.

The auditors discovered that although café staff knew that food and labor costs were high, they didn’t know exactly how high. This finding was not foreign to KWM. “It’s very troubling that so many food service organizations we encounter have absolutely no sense of their food cost,” says Carleton. “This ignorance illustrates a lack of rigor and basic operational knowledge. Not knowing costs will doom a social enterprise.”

Food-oriented social enterprises poorly track their spending in part because they tend to lump their food service costs with their organization costs. “It’s a very common mistake,” says Flanagan. “Many food service organizations don’t look at business costs on a stand-alone basis.”

Although many organizations may argue that such precise accounting is beyond the scope of their missions, they also know that ignorance is a very convenient place to hide their operational shortcomings. During its audit of the café, for example, KWM confirmed that the café manager was stealing from the organization, contributing to the organization’s bloated expenditures.

MONEYMAKING MEALS

KWM’s analysis did not stop there. The organization next worked side by side with Urban Fusion Café staff to give them in-depth, onsite training in restaurant management.

As Flanagan recounts: “Daniel [Escobar, program development manager of KWM] came in, rolled up his sleeves, and spent several days with us. He showed our staff how to do the basics of running a restaurant, such as taking inventory. No one on the café staff knew how to do this.” The café also learned how better to avoid ingredient and supply shortages, spoilage, and other unnecessary problems.

The organization further tutored café staff in the finer points of food preparation, from recipe rotation, to creating meals that represent the cultural diversity of the community, to avoiding casseroles—“one-dish wonders,” as Carleton calls them—to consistent portioning and pricing. “No one at the café was thinking about [portioning and pricing],” says Flanagan. “Properly and consistently portioned meals lead to correct menu pricing, which leads to an actual operating restaurant.”

The Urban Fusion Café is now approaching sustainability. It also has greater credibility and recognition in the community and among funders. The café’s recent successes arise in part because KWM secured it a partnership with Starbucks, which supplies products and equipment.

In addition, the café is having greater social impact due to its updated training curriculum, which KWM helped revamp. Called the Youth Barista Program, the eight-week curriculum covers everything from the history of coffee to the proper preparation of a shot of espresso.

Attests one 18-year-old program graduate: “The Youth Barista Program has been one of the best experiences I’ve ever had. It’s given me the confidence to do more. The program helped me with my résumé and included a mock interview that prepared me for interviewing, too.”

FOLLOW THE HEDGEHOG

“In the nonprofit world, there is a lot of reinvention of the wheel,” notes Flanagan. “People don’t look outside their cities. People don’t look outside their own organizations.”

Bucking this trend, kwm brings the wheel to the people. To date, the nonprofit has received more than 100 inquiries and undertaken some 25 consulting engagements—from the café in Pittsburgh, to a culinary training school in Boise, Idaho, to an operator of mental illness and addiction treatment centers in the Portland, Ore., area. For the coming years, the organization has set even more ambitious goals. By 2015, it plans to have helped more than 250 organizations. And with its network, the organization hopes to facilitate communication between food-oriented social enterprises nationwide.

Because demand for food service skills remains strong, nonprofit will continue to build food-oriented programs. “A well-run kitchen is a petri dish for life skills,” says Carleton. “It’s fast paced. It requires decision making. It fosters teamwork. It demands organization and discipline. It’s constantly changing.”

KWM will be there to help organizations offer this opportunity to their clients. Meanwhile, FareStart is free to follow the course of the hedgehog—single-minded commitment to its own mission—while making sure that the organization’s hard-earned knowledge does not remain trapped within its walls.

Read more stories by Robert Jungerhans.