Making charity a viable enterprise

At the helm of Razzett tal-Hbiberija, Nathan Farrugia has made it his task to integrate the runnings of a charitable foundation with a viable commercial enterprise. He speaks to David Lindsay about the difficulties and benefits of the challenge before him.

The Razzett tal-Hbiberija, or the Park of Friendship charitable organisation has come a long way since its inception in 1989, when it was set up through the vision of the Stubbs Foundation, which envisaged a centre for the disabled.
True to its founding concepts, the Razzett tal-Hbiberija today still applies its main focus on facilities and activities for the disabled, but has also moved further into the commercial sphere in a bid to contain the excessive costs faced by the charity, which, Nathan Farrugia explains, amount to some Lm100,000 every year.
Given such overheads, some three to four years ago, and after investing over Lm2 million in the Razzett, the Stubbs Foundation decided the Razzett was no longer viable and that its fundraising activities were no longer matching its expenditure.
Enter Nathan Farrugia, who, after a chance meeting with one of the Razzett’s governors at his former place of employment – the Corinthia Athenaeum health spa – took on the task of rendering the important services provided to the disabled viable by coupling them with commercial activities for a larger cross section of the population.
Following a wide-ranging restructuring plan that involved changes in the managerial team, bringing in people from different walks of life and their fresh ideas the Razzett is finally finding an even keel.
Farrugia explains, "Last year, 14 years since the Razzett started out as a farmhouse on a plot of land, was the first time it broke even, effectively freeing the Stubbs Foundation from the need to support us.
"Although the main focus here was and still is on the disabled and providing the best services possible, you cannot base an operation of this scale on fund raising alone. Fundraising alone accounts for 50 per cent of our revenue and this level is not expected to increase with today’s high degree of competitiveness for charity. As such, the other 50 per cent has to be created.
"The idea was to create commercial activities with the kind of top notch services people are looking for today such as fitness, aromatherapy, hydrotherapy, physiotherapy clinics and massage.
"This was accompanied by a streamlining of the business as a whole, where a lot of waste of taking place.
"This also involved a change in culture among the employees, since the Foundation was previously pumping in funding and as such the culture of really watching what you spend did not exist. This was quite a paradox – you had a charity that was being ruined by excessive expenditure while the people working here were not conscious that the expenditure was unsupportable.
"But now taking this into consideration and the fact that the Stubbs Foundation is no longer funding the Razzett, the staff and management feel they have to perform now that they are running on their own steam."
The increasing viability of the Razzett is coupled with the fact that some three years ago the Razzett had 4,000 people making use of its facilities on a yearly basis, while last year the number had surged to 15,000 and this year’s results are expected to top that.
In achieving the delicate balance between expenditure and revenue, the NGO’s management has applied a certain focus on its more commercial aspects such as the gym and the conference facilities but, at the end of the day, it undoubtedly remains a charity.
Despite the fact that the Razzett receives very little from the government by way of funding, it still offers approximately Lm80,000 worth of health care services for the disabled to the Department of Health, while a number of other similar charities that receive more substantial funding from the government also make good use of the Razzett’s facilities.
Asked which of the Razzett’s facilities prove the most popular among the disabled children, Farrugia explains that the animal interaction programme – which includes horse riding and animal petting, including rabbits, emus, goat and llamas. Farrugia adds that these activities are organised in such a way that the children receive therapy without even knowing it, having control of a horse while riding, for example, works wonders for children with low self-esteem or confidence.
"There is also the interaction with able bodied children from the schools that come on a regular basis. That social interaction is very important, you are providing an added service to a person with a disability but at the same time they are getting just as much out of it by being with other children of the same age.
"The feedback we are getting from facilitators and parents alike is that the children don’t stop taking about the experience when they get back home and that they want to always come back for more."
In addition to other similar activities, such as the art classes in which children are left free to let their creative juices flow, there is also the health aspect of the services offered to the disabled.
Many of the kids visiting the Razzett, especially those who have been institutionalised, are confined to wheelchairs or are otherwise immobile the whole day. As such, getting into a warm pool and stretching out is of great value to their emotional and physical well being, while many also bring their own physiotherapist.
"We also have members of the gym who pay a membership or pay each time they use the pool," Farrugia explains.
"You also have the temporary disabled, who suffer from severe back problems, for example, which is preventing them from working, or others who have had car accidents and are in rehabilitation. They can have a physiotherapy consultation or regular therapy if they wish, where our physiotherapists are fully qualified so they can have their insurance cover refunding them as well.
"Then you also have the permanently disabled doing their own thing and the purely fitness element. As such what we have here is a mix of everyone from all walks of life.
"The problem in the past was that the facilities were always marketed for the disabled, so people with bad backs, who would not consider themselves disabled, would not come to use the facilities. People were, and still are, somewhat stigmatic about people with disabilities and might be somewhat reluctant to come here.
"However, this is not the case. The ratio of disabled to able bodied is always in favour of the able bodied with regards to the gym and pool, while the horse riding and the other activities are more oriented to the disabled.
"Awareness on this aspect has improved, now when you speak to people they have a much clearer idea of what we do and what we are all about.
"It’s really a question of getting people to come down and see what we have to offer, which is why we organise a lot of open days and free access activities. That in itself is selling the product, when people see features such as easy parking, the fact that we are open from seven in the morning to nine at night, our off peak special offers for shop owners between one and four. We’re constantly trying to build on our business processes and ways to sell our services and facilities."
The Razzett is also becoming increasingly active in the conference sector. Farrugia explains, "Look at the pool and gym, for example. Their level of saturation shows that we have enough members to make them viable to offset the cost of the disabled using them at no charge.
"However, we also have a five star conference facility that includes a kitchen, an outdoor barbecue area with its own kitchen and conference rooms.
"The facilities are there and I think that when clients are getting a good service, they really don’t mind what is sometimes perceived as a long travelling distance to Marsascala. It is, after all, just 10 to 15 minutes from Valletta.
"This is a niche market that we need to look at very closely. But our focus is on the smaller scale one to three day conferences from the local market as the hotels have practically monopolised the larger, overseas conference market as they have the accommodation.
"The word spreads and people are appreciating the fact that we have these facilities to offer."
The Razzett’s conference facilities are also gaining ground, particularly in light of the ‘corporate social responsibility’ buzzwords.
The Malta International Airport, the Drydocks and the Freeport have all combined this responsibility with securing a venue for company events.
On his own management team, Farrugia explains, "We have a more recent approach to management, through which we try and instil the proper culture. I train the management team on a regular basis because you get much more out of people when they feel they are doing something worthwhile. We also have an added benefit here in that at the end of the day you can say that you’re not working just to receive your pay, but you’re also helping people at the same time. Not many companies can make a similar claim.
"I think the philosophy is working, now that people feel more responsible about the work that is being carried out, we are being much more productive than before. So our idea is to pass this on to even people that come here for team or management training."
The Razzett’s next big project is a multi-sensory room – a bombardment of sensory input for all the senses. The idea is to create different rooms with different types of stimulation effects such as soft lighting, relaxation, vibrations, interactive colour, lots of soft furniture, padded floors for jumping and running and a host of other similar features aimed not solely at children but also for adults. The Razzett plans to break ground on the project in early May.
Farrugia explains, "The idea had started in Holland in 1975 and the interactivity it inspires is ideal for those with communication problems, such as autistic children.
"However, we have people with so many different types of disabilities coming in that we wanted to find something that would cater for everyone.
“When I did some research in the UK I saw not just children but also the elderly suffering from chronic pain and cancer maybe not using the equipment but sitting in the ergonomic ball pools and using other features as well.
"So we’re building a large extension to the Razzett with rooms for different ambiences and we will also allocate additional space with which to increase the size of the gym, which will be adjacent to the sensory facility."
"Now that we have the proper structures and management in place, we are in a position to make these improvements and look ahead with confidence, whereas when I first started here there was a great deal more emphasis on cost-cutting procedures and changes to the environment and culture.
"Our services are always our priority and our philosophy is to provide the best possible service to as many people as possible."
Farrugia concedes that linking the charitable and commercial aspects of the Razzett is something of a balancing act, but he is adamant that as long as you have the right people on board it can be done successfully.
However, at the end of the day the Razzett needs all the help it can get to continue to make ends meet, as it managed for the first time last year.
"The benefits of using our facilities are that the ultimate goal is that you are using a charitable organisation that is helping people that need us to provide the services they cannot find anywhere else, Farrugia explains. "But at the same time you are getting a professional service and a five star facility."