HOLLAND — The impact of Kandu Inc.’s closure last year could have been far worse for adults with disabilities in Ottawa County were it not for the opening in October of the Hope Network Development Center.
Hope Network President and CEO Phillip Weaver said his organization is serving a “couple dozen” clients who were receiving workforce development training and employment assistance through Kandu, a nonprofit that had been in business for 62 years.
At the time of Kandu’s closure, the company had a staff of 75 and 220 client-workers. The nonprofit provided training to adults with disabilities, cognitive impairments, or other barriers to employment.
Kandu’s closure created a gap in service delivery, Weaver said. He met with individuals in the community served by Kandu to discuss ways to close that gap and increase opportunities for clients and others outside the organization.
“We’re not serving as many as we want, but we’re still in the launch phase,” Weaver said of the Development Center. “We don’t want to just say come through our doors and we’ll serve you unless we can do it.”
Kandu’s closing was tied to a complex series of changes in Ottawa County Community Mental Health’s Medicaid funding, which meant the agency had less money available to send its adult clients to outside organizations. Kandu also saw a huge drop in its client-employee base and a resulting $1.4 million decrease in Medicaid reimbursements.
Fewer client-employees made it difficult to grow revenue through Kandu’s manufacturing contracts, according to Tom Vreeman, the former CEO of Kandu.
Given changes to public policy and government funding for these services, it was apparent that no single organization would be able to provide all of the services that Kandu did, said Elizabeth Kidd, vice president of community impact for the Community Foundation of the Holland/Zeeland Area. She said community leaders from the public, nonprofit and private sectors recognized the new environment required a more integrated model that offers a continuum of options for employment and supportive services across the community to be sustainable.
“Some partners were already doing this work in our community and took on new or expanded roles,” Kidd said. “Other regional partners, such as Hope Network, decided to begin offering their training and employment services in the Holland/Zeeland area, which they had not done before when Kandu was present.”
The building housing Hope Network’s Development Center, located at 11172 Adams Street in Holland, was purchased for $920,000. Hope Network spent an additional $200,000 to build out the interior.
Weaver estimates the first-year operating expenses will be between $200,000 and $250,000. The center supports 50 individuals at a time and works to move them into gainful employment within the community.
Hope Network employs about 10 people at its Holland facility and more than 120 at its Grand Rapids location.
“We didn’t raise money to buy the building. We raised money to repurpose the building,” Weaver said. “We also raised the first-year operating expenses. Business leaders in town did the building on a land contract with us so we didn’t have to pay for it all at once.”
Kidd said the Community Foundation made a $25,000 capital grant from its Community’s Endowment toward the new Development Center. She said the flexibility to respond quickly to significant and unexpected changes in community needs is one of the core reasons the endowment exists.
About 50 percent of Hope Network’s funding comes from Medicaid through Community Mental Health dollars. Between 30 and 35 percent comes from private insurance. The remainder comes from programs operated by the Department of Housing and Urban Development, the Michigan Department of Transportation, and re-entry programs overseen by the Department of Labor.
Weaver said funding remains an ongoing concern.
“CEOs worry about funding no matter what business they’re in,” he said. “We are always looking at more effective, more efficient ways to take care of individuals with Medicaid funding. I am always looking at how we can do more effectively and efficiently to move more people into employment.”
However, growing and continual reliance on nonprofits to provide services that used to be provided by state and federal governments is placing additional strain on agencies like the Hope Network.
Weaver said that for many years, the nonprofit sector has carried the ball in multiple communities for individuals with disabilities.
“That is kind of what the nonprofit sector was set up for,” he said. “If you look at what’s happening today, there are only so many dollars the government can spend on Medicaid. Those dollars have to be stretched farther than they were 10 years ago.
“We built a system back in the 1990s to empty state hospitals out. This built a bureaucracy that’s now getting over-complicated.”
Among the challenges Weaver cites is the inability to pay his direct care professionals a living wage. He said it doesn’t make sense that fast-food workers make more than his employees who work directly with clients.
“Lots of organizations are working together to get the Legislature to recognize that these people need a living wage,” Weaver said. “People who are taking care of people need to be respected and paid more. With just a little bit of help, people with disabilities can be integrated into the community.”
Weaver, who has a 27-year-old son with cerebral palsy, said he knows firsthand how programs like Hope Network enable individuals with disabilities to secure good-paying jobs. He said his son, Matthew, needs help with even the most basic tasks like eating, but training and technology made it possible for him to work full-time as a computer programmer.
Hope Network clients work in warehousing and on assembly lines, in addition to places like the Gerald R. Ford Presidential Museum and the Ford International Airport.
“Sometimes employers won’t give them the opportunity,” Weaver said. “We need to figure out how we get more individuals to recognize the ability in everybody and give them an opportunity. We’ll help support them in the job site.”