January 9, 2011 | Read Time: 3 minutes
While many charities have cut programs and laid off employees because of the bad economy, Barium Springs Home for Children has grown significantly—and in the process has saved struggling groups that might have otherwise been forced to shut down.
The North Carolina organization, which provides education and mental-health services to young people who are poor, troubled, or neglected, has entered into four mergers since May. When the last of those mergers is completed in February, the group will have doubled in size—from an $11-million annual budget to $22-million—in a little more than a year.
Barium Springs Home for Children began charting a course for growth as far back as 2005, when the organization decided it wanted to offer a full a range of mental-health services to abused and neglected children, rather than just the residential care it had offered for most of its 119-year history.
To do that requires sophisticated databases, more in-house psychiatric staff, and a medical director—resulting in significant overhead costs, says John Koppelmeyer, Barium Springs’ leader.
“The only way you can do that is to have enough volume of service so you can have the pool of resources available to try to create that structure,” he says.
In the last year, the State of North Carolina decided to focus most of its mental-health financing on such comprehensive providers, which increased the importance of the organization’s effort to expand and also put pressure on small organizations.
“We couldn’t afford to implement the processes, which included hiring a psychiatrist and having a medical director,” says Glenda Andrews, former chief executive of Rainbow Center Children and Family Services, in North Wilkesboro, N.C., the first charity Barium Springs merged with last year.
Joining forces with Barium Springs has benefited Rainbow Center clients because they now have access to a wider range of services, says Ms. Andrews, who is now foundations and community-relations manager at the combined organization. She says that if Rainbow Center hadn’t merged with Barium Springs or another comprehensive provider, the organization’s only other realistic option was to close.
Avoiding Mission Drift
Merging with an organization that already has strong programs but may be facing a financial shortfall gives Barium Springs a running start in its efforts to expand, compared with starting from scratch in a new location, says Mr. Koppelmeyer. For example, Barium Springs merged with Rainbow Center in May. By the start of the school year, the organization was able to add more counseling and case-management services, as well as a program to treat kids in their schools. “If we had walked into that community unannounced, so to speak, we would never have been able to have done that kind of additional services in that short a period of time,” says Mr. Koppelmeyer.
But even as the organization has grown, Barium Springs has made the difficult decision to end programs.
One criterion the charity uses to evaluate programs is whether they fall within its mission to provide education and mental-health services to disadvantaged youths. As a result, Barium Springs did not take over a program, run by one of the groups with which it merged, that provided transitional housing to adults with mental-health problems. Instead the program went to another social-services group.
“Having those priorities really allows us to stay away from mission drift,” says Mr. Koppelmeyer.
The organization also looks carefully at how much it costs to run each program.
Even services for which the group has a government contract require additional funds—usually requiring money to be raised from private sources or tapping the group’s endowment, says Mr. Koppelmeyer. If the organization has to subsidize a program at such a high level that it’s only able to serve a small number of kids, he says, Barium Springs has to weigh whether there might be another use for that money that would be of greater service to more children.
Says Mr. Koppelmeyer: “That kind of mind-set puts us in a position of continually looking at our programs and seeing how efficient we can become with them.”
