Charity Stays Optimistic Despite a Lack of Support From Foundations

It’s 8 a.m. on a sultry Monday. Nine men and one woman are standing quietly in a circle in the foyer of Harbor City Services, a charity whose operations are housed in a grimy industrial park here. They are holding hands.

The group calls its daily get-together a “morning wake.” They listen respectfully as, one by one, the assembled share what happened to them over the weekend — and what didn’t.

A man named James says he broke two toes when a frozen ham fell on his foot. This brings several guffaws. But Keith Dedmon, the operations manager and circle leader, says sharply: “How many of the rest of us would come to work with two broken toes? This is the kind of responsibility we like to see.”

Another man says he was tempted by drugs and drink in his West Baltimore neighborhood, but he resisted. “Thank you for allowing me to share,” he concludes. “Thank you for sharing,” says the assembled company, en masse.

The group finishes by reciting the serenity prayer, the well-known homily about accepting the things one cannot change. They begin to head for their work stations.

But first John Herron has something to say.

“I do not accept the things I cannot change,” declares Mr. Herron, the 61-year-old founder and chief executive of Harbor City. “I want to change them.”

Mr. Herron came up with the idea for the charity and established it here 21 years ago as an organization that runs businesses for a profit and employs hard-core drug addicts and the hard-core mentally ill. He has built Harbor City into a self-sustaining operation by selling, by cajoling, by managing hard, and occasionally by pleading even harder.

Harbor City does shredding, moving, storage, and general warehouse operations. It employs more than 135 people. Its clients include some of Baltimore’s biggest hospitals and law firms. Its annual budget has grown steadily and is now $2.3-million.

But “we need to raise capital,” says Mr. Herron. So for the first time, Harbor City is trying to shake the philanthropic tree.

It has been totally unsuccessful so far.

At first blush, Harbor City would seem to be a fund-raising natural. It hires only substance abusers and the mentally ill, and provides them with a way to re-enter society, earn a living, and stabilize their lives. As a result, they very often stop selling or using drugs, end their dependence on unemployment benefits, and no longer commit crimes.

For example, Charles Hamilton, 51, came to Harbor City via a local treatment center five years ago. He says he had been a cocaine addict and dealer for 32 years. He was convicted of drug-dealing four times and spent 19 years in prison. “Getting high was a way of life,” says Mr. Hamilton.

In October, 2007, after four years of proving that he was reliable and able to work on Harbor City teams, Mr. Hamilton was hired as a manager by a commercial warehousing operation. He now has a decent salary, benefits — and a Narcotics Anonymous medallion hanging around his neck.

“Harbor City is a very good stepping stone for any young man who has a background as bad as mine,” Mr. Hamilton says. He has given up using and dealing drugs forever, he says.

Despite successes such as this, Mr. Herron has swung and missed each time he has tried to raise funds.

He was turned down once by the Baltimore Community Foundation and twice by the Harry and Jeanette Weinberg Foundation. The Abell Foundation guaranteed $165,000 worth of loans made by others, but would not donate money outright.

Why the tough slog? Because Harbor City is a collision of cultures. On the one hand, it runs businesses as any for-profit organization would. On the other hand, it provides obvious social benefits to the community. The combination seems to puzzle grant makers.

The foundations that turned Harbor City down said they were worried about the organization’s financial vulnerability. This causes Mr. Herron, a Baltimore native and a former seminary student, to rock impatiently in his office chair. “Foundation people seem to be so averse to giving somebody money because they think we’re going to [expletive] it away,” says Mr. Herron, who holds graduate degrees in both social work and business. “They should be in the risk-taking business and not be risk-averse. They should be looking for people like me.”

Officials at several Baltimore-area foundations say they are more inclined to donate to “pure charities” than to business programs that wrap themselves in nonprofit clothing. The officials, who declined to be quoted by name, say they are leery of backing new businesses run by Harbor City, especially since the economy is in a downturn and especially since Harbor City (by Mr. Herron’s admission) is in the black only month to month.

Yet for pure social value, there’s little in Baltimore to compete with Harbor City.

Marietta Smith is a 52-year-old records clerk for Harbor City. She has an 11th grade education — and a lifelong diagnosis of depression. She has worked for Harbor City for 12 years. She earns $9.46 an hour by sorting and culling records in Harbor City’s cavernous warehouse headquarters.

Ms. Smith has traveled a hard road. She was hospitalized for three years after she suffered a breakdown. Her son was shot and killed on a Baltimore street in November 2007. She said she suffers regularly from mood swings, lack of appetite, and crying jags.

Because of her illness, there are days when she simply can’t function. Harbor City understands and expects this. Ms. Smith knows she will be welcomed back as soon as she is better. She says this is the key element that makes Harbor City different. “With my illness, I tend to have a lack of trust in people,” she says. “Here, it’s not like that. I don’t think I’d have any kind of a life without Harbor City.”

“These people, when they’re not working here, are vulnerable to relapse,” Mr. Herron says. “I’m looking for a venture philanthropist who can help me define a social return with parameters that I can deliver on.” In that effort, Mr. Herron says he needs to build “the infrastructure to manage that kind of growth.”

“He has board members balancing the checkbook, for heaven’s sake,” says Dick O’Keefe, a Baltimore businessman who serves on the Harbor City board.

“You need a sufficient amount of capital for this to work well,” adds J. Howard Kucher, a University of Baltimore business-school administrator who is also a board member.

“The essence of what we do is to adjust the work to what the person can deliver,” says Mr. Herron. “I embrace relapse. You’ve got to be willing to go after new business” to provide for the operational instability that relapses can cause.

Mr. Herron says he will keep plugging in the vineyards of philanthropy. He expects to break through soon.

If he doesn’t?

“Well, maybe we can find a few rich widows,” says Mr. Kucher.

Mr. Herron laughs at that. Despite all the fund-raising disappointments and the long odds, he still can.

Bob Levey teaches journalism at the University of Memphis and has served in numerous fund-raising roles.