Project Innovation

David Adams, Abby Stephens, Andrew Schenkel, Daniel Martin, Dylan Guth, Emily Sesterhenn, Jack

Barton, Jack O’Grady, Jaira Lacar, Janae Dawson, Joel Ahne, Nicolas Osterburg, Nicole Ihlenfield
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TABLE OF CONTENTS

I. Executive Summary ........................................................................................................................ 3-4

II. Business Description ...................................................................................................................... 4-8

a. General Description .............................................................................................................. 4-5

b. Marketplace Needs ............................................................................................................... 5-6

c. Vision & Mission .................................................................................................................... 6

d. Key Success Factors ................................................................................................................ 6

e. Business History................................................................................................................... 6-7

f. Future Plans .......................................................................................................................... 7-8

III. Market Analysis ......................................................................................................................... 8-15

a. Industry Description ............................................................................................................. 8-9

b. Objectives .......................................................................................................................... 9-10

c. Target Market........................................................................................................................ 10

d. Marketing Mix ................................................................................................................. 10-13

e. Competition...................................................................................................................... 13-14

f. Regulations ....................................................................................................................... 14-15

IV. Management ............................................................................................................................. 15-19

a. Structure & Ownership ..................................................................................................... 15-16

b. Key Personnel .................................................................................................................. 16-17

c. Personnel Plan .................................................................................................................. 17-18

d. Legal................................................................................................................................ 18-19

V. Financial and Accounting .......................................................................................................... 19-23

a. Financial Projections ........................................................................................................ 19-22

b. Funding................................................................................................................................. 22

c. Narrative ............................................................................................................................... 23
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VI. Conclusions ............................................................................................................................... 23-24

a. SWOT Analysis .................................................................................................................... 23

b. Next Steps............................................................................................................................. 23

c. Critical Risks.................................................................................................................... 23-24

APPENDIX ..................................................................................................................................... 25-26

REFERENCES .................................................................................................................................... 27
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I. Executive Summary

Drive 2 Defy is an extracurricular program designed to help at-risk and impoverished

students in the Cincinnati area. According to the U.S. Census data and Ohio Development

Agency’s Ohio Poverty report in 2018, 29.9% of Cincinnatians live in poverty, and nationally,

Cincinnati is among the top 15 poorest cities in the country with a population of 250,000 or more.

Poverty rates like these are a result of the poverty cycle and is extremely difficult to break. We

believe that the foundation for disrupting this cycle lies within the minds of the students that

make up part of these statistics. The mission of Drive 2 Defy is to give high school students the

tools and resources they need to achieve a healthy, successful future after high school.

D2D offers an after-school program which will cover topics such as staying healthy both

mentally and physically, creating a budget, planning ahead for a successful future, and many

others. While other programs tend to focus on skills that will benefit students in high school or

college preparation, Drive 2 Defy is unique because we incorporate both of these categories. This

universal appeal provides a competitive advantage over other third-party extracurricular programs

by attracting more students and providing them with a well-rounded curriculum. This curriculum

does not solely focus on getting kids into college, but rather it allows the kids to define what their

own version of success looks like while the D2D team helps them reach that goal.

Drive 2 Defy was founded after University of Cincinnati students saw the disparity

between the opportunities available to students in wealthy areas compared to students in poorer

areas. They were struck by the lack of support, preparation, and planning that students in at-risk

areas have for their future. Having benefited from many extracurricular programs and parental

advice throughout their lives, they sought to create a program that would combine the best lessons

they’d learned as well as connect students to resources they could utilize to achieve success.

Drive 2 Defy’s program is split into eight semesters throughout a student’s high school

career to teach students lessons at the most relevant time. For example, career planning takes
 4

place during sophomore year, so students are able to prepare for any testing that may be

necessary for their career choice. Each lesson is taught twice weekly: once after school on

Tuesday and once on Saturday morning. Many times, students in these areas are responsible for

taking care of siblings after school so having the program twice a week, one on a weekday and

once on the weekend will provide the most flexibility for these students.

The curriculum will be taught by volunteers, and a small executive team. Volunteers are

Drive 2 Defy’s ideal instructors for the program because they understand local needs and have a

stronger desire to make the community that they live in a better place. As D2D grows and

receives more funding, small salaries for the executive team will be implemented in order to

maintain quality leadership; however, Drive 2 Defy will always focus on the large majority of the

donations going to the program.

Drive 2 Defy plans to start at Hughes High School. After a few years of establishing the

program and perfecting the curriculum, D2D plans to expand to other high schools in the

Cincinnati area.

II. Business Description

a. General Description

Drive 2 Defy is a nonprofit organization based in Cincinnati, Ohio focusing on

aiding students living in impoverished areas achieve success after high school. Drive 2

Defy aims to help students find a successful career path after high school whether that is

college, the military, trade school, etc. Drive 2 Defy provides a different class each

semester that aligns with skills that a student should be learning at that time in their life.

Students can join the program at any time during their freshman through senior year,

during which, they can be involved in various classes. The general outline of the classes

are as follows:

Freshman Year:
Semester 1: Study habits, time management, being involved in the community
Semester 2: Keeping a healthy lifestyle both physically and mentally
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Sophomore Year:
Semester 1: Finding part-time jobs during school and financial planning
Semester 2: Career and/or college searching
Junior Year:
Semester 1: Standardized test prep (ACT/SAT)/Other prep needed for career path
Semester 2: How to apply for colleges, trade school, military, or program of
choice
Senior Year:
Semester 1: Finding scholarships/getting financial aid
Semester 2: Preparation for life after high school (how to do well in college, stay
financially stable, etc.)

Drive 2 Defy currently operates out of Hughes High School and offers two

sessions a week, one on Tuesday and one on Saturday, allowing students to have greater

opportunity to attend this program. Drive 2 Defy will ultimately allow students in

underprivileged communities have access to a system that will teach them necessary life

skills to ensure their success after high school and into adulthood.

b. Marketplace Needs

General lifestyle and career preparatory courses are critical to a student’s success

after high school and into adulthood. Unfortunately, students living in impoverished areas

are not fortunate enough to have access to these types of programs or are not taught these

skills at home due to the lack of support throughout the community. This results in the

students falling into the same cycle of poverty that their parents, grandparents, and great

grandparents have fallen into. Drive 2 Defy’s program is designed to help these students

learn the skills and have the resources they need to break the cycle of poverty.

Drive 2 Defy is not only a college preparatory program but has an overall goal of

proving students with skills and resources so they can have a successful high school

career and life after high school. Whether it is college, trade school, or a job in another

area, the goal of Drive 2 Defy is to help students become self-sufficient and independent

following high school. Through these program options, Drive 2 Defy helps students apply

for jobs in high school so they are able to provide for themselves and budget their

income. This will help students manage their money during and after high school, so they
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are able to live in stable environment and pursue their desired career path. D2D also

provides assistance that their parents are not able to provide when a student is trying to

choose a career path and pursue it. Drive 2 Defy’s overall goal is to provide the help and

support these students need to be financially stable later in life and be able to escape

poverty.

c. Vision & Mission

Our mission at Drive 2 Defy is to provide reliable resources and connections to the

students involved in our program in every level at every school. Our goal is to teach our

students how to live a successful lifestyle while also improving the communities that

Drive 2 Defy is involved in.

d. Key Success Factors

1. Finding committed volunteers to run the program and who want to see the

students grow and become successful in the future.

2. Having an excellent marketing strategy that informs the community about the

program since there is not a program exactly like this in the area currently.

3. Finding reliable donors who want to promote Drive 2 Defy’s mission so that the

employees and volunteers can remain focused on the success of the students in

the program.

4. Finding a way to keep students involved in the program for all four years of high

school so they can get the most out of the program.

e. Business History

After a long and tiresome week of class, students Nicole Ihlenfield and Emily

Sesterhenn thought about how grateful they were for the wholesome high school

education, and college and lifestyle preparation they had received prior to coming to the

University of Cincinnati. What may have seemed tedious and uninteresting at the time,

continued to resurface and prove to be beneficial throughout their first year in college.
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Nicole Ihlenfield and Emily Sesterhenn felt that the instruction they had been given

allowed them to find success throughout their first year at the University of Cincinnati.

Because of their desire to provide students with the same information and opportunities

they were able to receive, on February 14, 2018, Nicole Ihlenfield and Emily Sesterhenn

met with their PACE team: Daniel Martin, Abby Stephens, Andrew Schenkel, Jaira

Lacar, David Adams, Janae Dawson, Dylan Guth, Jack Barton, Jack O’Grady, Joel Ahne,

and Nick Osterburg, to establish a four-year lifestyle program for inner-city schools

within the greater Cincinnati area. After thorough discussion and deliberation, they

unanimously agreed on the creation of Drive 2 Defy.

f. Future Plans

The main goal of this venture is to establish Drive 2 Defy in as many high

schools within the greater Cincinnati area following its initial trial that will begin during

the fall 2018 school year at Hughes High School. After this initial program takes place,

Drive 2 Defy hopes that more students will be motivated and better prepared to pursue a

career and begin their lives as independent individuals. This success will allow our

executives to push the program into more schools and neighborhoods, as well as gather

more volunteers to assist in running the program. In addition to this, as Drive to Defy

expands, the organization will seek opportunities for additional funding, specifically

during the summer after the 2018-2019 school year, to transition from volunteers,

towards being able to provide salaries and hourly wages.

During the summer after the 2018-2019 school year, D2D would like to establish

a partnership with CityLink. CityLink aims to assist with lifestyle skills, but their service

is aimed towards adults. By partnering with CityLink, Drive 2 Defy can have access to

more resources to benefit the program and participants, be able to spread the word to

individuals who participate in CityLink, and have children that could participate in Drive
 8

2 Defy. This is a resource that could be beneficial for students after high school who are

pursuing a career path but are not self-sufficient just yet.

After four years, Drive 2 Defy will have sent four different sets of students into

the post-high school world and will continue to see where these students choose to go and

whether they truly are more prepared for an individual lifestyle. To assess the success

rate and effect of Drive to Defy, research and development resources will be devoted

towards monitoring the actions of the select students that participate in Drive 2 Defy to

see what path they choose to pursue and how their quality of life has changed. Drive 2

Defy will then be able to assess what changes need to be made to the program in order to

raise or maintain success rates with participants.

By 2023, Drive 2 Defy plans to have a scholarship established for graduating

high school students which will be available for those who may choose to attend college

post-graduation. With the generous donation from a respected Cincinnati-native who

values educating Cincinnati’s youth and the efforts that Drive 2 Defy implements, this

scholarship will help send three participants to college.

III. Market Analysis

a. Industry Description

Drive 2 Defy will operate in the nonprofit industry in Cincinnati, Ohio staring in

the 2018/2019 school year. According to a news report by PNP, "the nonprofit sector has

grown by 20% over the last 10 years in contrast to a growth rate of about 2-3% in the for-

profit sector". This expansion within the nonprofit sector is supportive of our company's

future success because it gives our company favorable conditions to keep growing and

developing without as many limitations that are faced the for-profit sector.

To keep up with the growth and competition within the non-profit sectors and

keep a successful business in the future, Drive 2 Defy plans to keep up with current

trends by continually seeking new perspectives and implementing them within our
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business. Drive 2 Defy aims to humanize its marketing platform and be sensitive in

terms of the stories we share with the public which will allow Drive 2 Defy to improve

engagement with our audience and donors. This provides an emotional connection

between Drive 2 Defy and their donors resulting in higher donor engagement and

ongoing support by donating money, supplies, or their time. Next, we aim to simplify the

donation process through technology by accepting online donations through trending

apps such as Venmo. This will help cut cost of paper and mailed donations and ease the

donation process for repeat or new donors. Drive 2 Defy hopes that these steps and

continual updating of the program will assist in keeping an up to date business that

successfully targets and collects donations from everyone possible.

To start out, Drive 2 Defy will start off small, operating only out of one high

school, Hughes High School. In the coming years, we plan to expand into other local

Cincinnati high schools and ultimately expand our operations across major cities in Ohio,

expanding in size and resources.

b. Objectives

Drive 2 Defy will strive to achieve a positive and well-known brand name not

only in the high schools we serve, but also in the Greater Cincinnati area. It is our goal

for every student in the schools where our program is offered to know about Drive 2

Defy, even if they do not choose to participate in it. Furthermore, we hope to see Drive 2

Defy become a respected name among members of the high school, known for being a

safe place to learn how to succeed in life as well as a positive light in the community.

More specifically, we plan to begin our program in Hughes High School. Hughes

has on average 150 students per class. In our first year there, our goal is to have at least

ten students participating at each grade level, the total number of students in the program

being 40. As the program becomes more developed and begins to create a name for itself

in Hughes, we hope to see that number double within two to four years. After three to
 10

five years of a successful program, our goal is to have created such a positive brand in

Cincinnati that we can easily move into other schools in the Cincinnati area and further

expand our program to other major cities in Ohio.

c. Target Market

Drive 2 Defy’s mission is to reach high school students in at-risk or low-income

communities in the Cincinnati area. The Cincinnati Public School District alone serves

35,000 students from K-12 and has 56 schools. Students in this area often are from low

income families or a home with a low level of familial stability. As a result, Cincinnati

Public schools has a graduation rate of only 73% compared to the 83% national average.

Drive 2 Defy plans to begin its program in Hughes high school, which has a total of 937

students in grades 9-12. Hughes is an ideal market for our program as it has test scores in

math and reading that are more than 15% below that state average and is in a district with

only a 25.1% college readiness.

d. Marketing Mix

Product: Drive 2 Defy will offer an eight semester high school lifestyles program for less

fortunate students who attend underfunded schools. Each semester will consist of a

specific skill that pertains to the year in school the students are in, as well as important

milestones that will be approaching.

The product schedule is as follows: Semester one of freshman year will consist of

teaching effective study habits, how to manage your time, and ways to be involved in the

community. Semester two of freshman year will consist of how to maintain a healthy

lifestyle both physically and mentally. Semester two of sophomore year will pertain to

how to find a part-time job and how to manage your earnings. Semester two of

sophomore year will be dedicated towards beginning to search for potential colleges and

careers that spark an interest. Semester one of junior year will solely be for standardized

test preparation, i.e. the ACT and/or SAT or other pretests or preparations needed for
 11

selected career path. Semester two of junior year will be an instructional period on how to

apply for college, as well as assisting students with applying for programs after high

school. Semester one of senior year will be specifically for helping the students find and

apply for scholarships and seeking out financial aid, while semester two will be focused

on preparing our graduating students for life after high school, whatever path that may be.

Our eight-semester plan is organized so participating students will learn lifestyle skills

that will become relevant soon after they learn them, or at that particular moment. The

goal is to make sure that these prospective students are receiving the necessary lifestyle

information to have the opportunity to achieve and experience a better future.

Sales Strategy: Students that choose to participate in Drive 2 Defy will be able to sign up

online through our website or at their counselor’s office. We understand that some

interested students may not have the resources to sign up online, but we want to make

sure that the convenience of the option is still present. Signing up at their counselor’s

office will allow the school to personally inform and answer any potential questions, as

well as match a face to the name of the prospective students.

Considering Drive 2 Defy is an extra-curricular benefit, we believe the best and

most reasonable location for it would be at the participating schools. Students will attend

the program that takes place at their school but will also have the option of participating

at a program that is most convenient for them and their families. This way, if students

need to travel together, or if a different participating school is closer than the one they

attend, then they can choose that location.

Pricing: Drive 2 Defy will not charge a fee for participation in the program. Our target

market is not one that necessarily has money to dedicate to an extra-curricular program as

such, so we want to make sure that cost does not stand between students and bettering
 12

their lives. Charging our students a registration fee is not necessary because there are

other ways that we can provide resources and information to our students. Donations will

be able to cover startup costs. When it comes to the programs Sophomore-Senior year,

other than covering additional startup costs for technology resources like projectors and

computers, all other material can be accessed online via free websites. We would rely on

donations heavily from the beginning to allow ourselves to get the program started, but

not only monetary donations are important. Many upper-middle class Cincinnati residents

have college prep materials and even may have appliances that they no longer need or

use. We want to do the best we can to make our program convenient and appealing to

students, and the best way to do that is to set ourselves away from the competitors by

making our program free of cost.

Promotion Strategy: In order to promote Drive 2 Defy, we will post eye-catching flyers in

participating schools to spark initial interest in the program, as well as sending similar

flyers in the mail to all students’ houses. These flyers will include basic

who/what/when/where/why information regarding the program, as well as include the

website and phone number of Drive 2 Defy to allow students or family members to do

any additional research and ask questions.

In addition to this, we will create social media accounts and post various videos,

flyers, and informational posts to spread the word about our program and its goal.

Considering high school students are very consumed in their phones and social media,

this will be the most effective and economical way to directly catch the attention of

potentially interested students. A final promotional strategy we will implement is

allowing high school counselors at participating schools to recruit any and all students

they believe would be excellent candidates for our program. As we are an outside

organization, we do not know the students as well as the counselors might, so allowing
 13

them to assist in the recruiting process raises the chances of gathering more students.

Although Drive 2 Defy is a high school-based program, we would like to come full circle

with the community by establishing a social responsibility strategy of raising the literacy

rates among children in grades K-12. Inner city areas, especially in Cincinnati, suffer

from alarming literacy rates amongst all age levels.

As an organization that strives to get students prepared for life on their own,

being able to read is a vital skill that needs to be encouraged and improved within our

society. We will aim to hold literacy events every weekend at various locations such as

public libraries, elementary schools, and respected village/town halls. We want those who

are interested in learning how to read to be able to go wherever is most convenient for

them, as well as bring the community together through bettering their reading

capabilities.

In order to tell the Cincinnati area about our strategies, we will create

informational videos and flyers that consist of statistics about the high illiteracy rates in

inner city neighborhoods and why it is important to lower these numbers. It is common

for those who are unable to read to feel embarrassed or uncomfortable to seek assistance,

but we want to ensure any and all potential interests that our mission is a judge free zone.

e. Competition

Drive 2 Defy is a fairly unique product in the sense that most high schools do not

offer lifestyle programs, especially not in underprivileged areas. The closest program to

Drive 2 Defy’s is Overcoming Obstacles, which is a program that integrates life skills

such as goal setting, conflict resolution, and decision making into the school curriculum.

These skills can help build a foundation within students that would create a drive to go

out on their own and achieve the skills that our program offers. Additionally, private
 14

standardized test prep programs such as Huntington Learning Center, could serve as

competition for junior-year students because since this program is well-acclaimed,

students may be more willing to spend the extra dollar if there were a better chance of

their test results being higher.

Other than these programs, there is not much direct competition in the form of

opposing companies or organizations. However, in regard to barriers, our organization

will have to deal with the potential lack of classroom space to host our program. Drive 2

Defy would require at least four different rooms for each of the different grade levels

because they would each be covering a different area.

f. Regulations

Our non-profit will function under the Ohio Revised Code 1702.01 which

defines, outlines, and regulates non-profit organizations. Under these regulations, Drive

2 Defy is required to file for incorporation and create a board of directors that is filled

and rule by officers and employees.

Drive 2 Defy is following the proper steps to incorporate our business in Ohio by

preparing and filing articles of incorporation, obtaining an Employer Identification

Number, and getting Ohio State tax identification number/accounts. During this time, we

will draft our bylaws, which are the rules our board of directors will follow when leading

Drive 2 Defy. These steps of incorporation will boost our organization because it will

give us a formal structure that gives credibility to our program and services and it will

limit the liability of our organization’s officers and directors.

Next, we plan to apply for 501(c) tax exemption with the IRS. The 501(c) tax

exemption will not only allow our company to be exempt from taxes, but it will also

allow us to apply for grants and grow our fundraising. To keep in compliance with the

law later, Drive 2 Defy will also file Form 990, the information tax return for each year.
 15

Finally, we registered for charitable solicitation through Ohio Attorney General.

This will allow us to legally solicit to the public for donations. Without this, Drive 2

Defy may face heavy penalties so staying on top of the required paperwork is one of

Drive 2 Defy’s biggest priorities.

IV. Management

a. Structure & Ownership

(Refer to Organizational chart in Appendix)

Because of Drive 2 Defy’s small size, our non-profit corporation has a flat span

of management. The head of the company is the CEO, with a President and Vice

President underneath him/her. The President and Vice President are shown on the same

level in the organizational chart because they are of equal importance to the organization.

They both serve integral roles to the non-profit; however, their duties are concerned with

different areas of the company. The President deals strictly with the Drive 2 Defy’s

Board of Directors. Because Drive 2 Defy is a not for profit company, there are no

specified “owners” or “shareholders”. This is unlike for-profit companies that have clear,

legally designated ownership roles in their organizational structures. The board of

directors for Drive 2 Defy serve as the equivalent to shareholders in a for-profit business.

The members of the board of directors are made up of people that have contributed

greatly to the business. These people are either founders of Drive 2 Defy, or citizens that

consistently contribute financially to the funds the business needs to run the program. The

President’s job is to keep efficient and clear communications with the Board of Directors

by sending them reports and statistics of Drive 2 Defy’s progress. While the Board does

not deal directly with everyday activities of the non-profit they are still consulted to give

input or vote on large and strategic decisions regarding Drive 2 Defy.

On the other side of management, the Vice President has a handful of committee

members that report to her. There are six committees that oversee recruiting,
 16

employment, expansion, communications, operations and fundraising. Unlike the Board

of Directors, these committee members deal directly with the daily activities of the non-

profit in their respective committees.

b. Key Personnel

Owners: Dylan Guth and John Barton

CEO: Nicole Ihlenfield

President: Emily Sesterhenn

Vice President: Janae Dawson

Co-Heads of Recruiting: David Adams and Andrew Schenkel have been chosen based on

their familiarity with the locations we will be operating in. They have many connections

already formed in the Cincinnati area due to the fact that they have lived here for many

years. This eases the initial recruiting process because they already know people would

be able to volunteer for D2D or would donate to D2D.

Vice President of Human Resources: Abby Stephens was chosen due to her experience in

various organizations in her community and her skills in interpersonal interactions. She

is able to communicate well this various people from different backgrounds and

understand what needs need to be met.

Head of Employment: Daniel Martin was chosen based on his previous experience in

management at Chick-fil-A & leadership roles at school. Through this experience he will

be able to properly choose qualified candidates that will fit the roles of the volunteer

positions needed.

Head of Communications: John O’Grady has been chosen due to his experience with

customer service at his previous jobs in retail. Through his experiences, John knowns

how to communicate clearly and deal with miscommunications in a professional manner.

Head of Fundraising: Jaira Lacar was chosen due to her experience in customer service at

her previous job at Calvin Klein. At Calvin Klein, Jaira had to interface customers and
 17

sell products to them. This previous sales experience gives Jaira the skills to be able to

sell our business to potential donors.

Head of Operations: Joel Ahne has been chosen based on the schooling and experiences

he has obtained while majoring in industrial management at the University of Cincinnati.

Head of Expansion: Nicolas Osterburg was a good fit for this position because he has

done a lot of traveling throughout he united states for golf and has a wide base of

connections. He has the best knowledge on which cities are the best ones to expand into

next.

c. Personnel Plan

In starting our organization, will be run solely via volunteers until we receive the

funds to begin paying full-time employees. After we receive the necessary funds our

organization will be able to pay the CEO, president, vice president, and full-time, nine

dollars an hour. Each year their salaries will increase by twenty-five cents. Later on,

when funding is stable we aim to pay committee members (Heads of Recruiting, Head of

Employment, Head of Expansion, Head of Operations, Head of Fundraising, and Head of

Communications) part-time, eight dollars and fifty cents with a ten cent raise each year.

All participants that assist with teaching the students and helping out during the sessions

will stay volunteer based.

Job descriptions for each position are as follows:

CEO: Responsible for creating, planning, implementing, and integrating the strategic

direction of Drive 2 Defy.

President: Works with the Board to help create long-range goal, strategies, plans, and

policies. Also keep clear communications with the Board of Directors by sending them

reports and statistics of Drive 2 Defy’s progress.

Vice President: Oversee the committees

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Head of Recruiting: Responsible for leading and running of the recruiting functions

within Drive 2 Defy. They will manage the sourcing, interviewing, and employment

processes. Finally, they must build the company’s professional network through

relationships with HR professionals, colleges, and other partners.

Head of Employment: Responsibilities include training and supervising all volunteers

brought on the Drive 2 Defy team. They must teach the new volunteers the curriculum

being taught and make sure that they are implementing it correctly.

Head of Expansion: Responsible for ensuring long term growth of Drive 2 Defy’s brand.

They must devise strategies for driving up donation rates and set targets for new business

development and expansion into other schools in the Cincinnati area.

Head of Operations: Ensure that the everyday activities of Drive 2 Defy are running

smoothly and targeting areas of our company that are not operating efficiently.

Head of Fundraising: Devise and implement a fundraising strategy for Drive 2 Defy.

Coordinates fundraising events, other programs, and make cold calls to potential donors

to help raise money for our cause.

Head of Communications: Responsible for managing all internal and external

communications. Other responsibilities include: supervise public relations, create

communication strategies, and serve as key spokesperson and media contact for Drive 2

Defy.

d. Legal

As a business with employees, we must complete the Federal Application for

Employer Identification Number to receive an Employer Identification Number (EIN),

which is required for tax purposes. This process will be completed before the hiring

process begins for the program. In addition to applying for an EIN, we must also file a

Form W-2 for each individual employee and one Form W-3 for all employees together to

the Social Security Administration. When in the hiring process, each employee must file
 19

a Form I-9 as a proof of their eligibility to work in the United States. After this, we must

file a New Hire Reporting Form 7048 to the State of Ohio. Lastly, we must file a Form

IT-1 to the Ohio Department of Taxation, in order to pay the taxes that are withheld from

each employee.

Although it may not seem like anything could happen to our employees, we are

still legally required to have Workers’ Compensation Insurance. In order to apply for

coverage, we must file a Form U-3 to the Ohio Bureau of Workers’ Compensation with a

$120.00 application fee. In addition to Workers’ Compensation, the protection of

workers’ personal information is extremely important. Because of this, copies of all filed

forms, proof of citizenship, social security numbers, and payroll must be kept secure,

with the best way to do so keeping these files in a locked cabinet with limited access.

In order to work in the Cincinnati Public Schools, an application and background

check is required for each employee. This can be done most easily through the school

district itself, granting each employee a badge that can be scanned to access the

schools. There is no formal application process to start an after-school program with the

Cincinnati Public Schools, and so any legal requirements to do so may vary, dependent

on each individual school. This process may also require specific coordination with the

school staff until the program starts to grow, but it is also informal rather than a

requirement.

V. Financial and Accounting

a. Financial Projections

i. Starting Expenses

Our starting expenses for the first year include equipment, start-up costs, and

advertising. Equipment costs are $5,000, start-up costs are $599 (incorporation, 501c fee,

and Ohio charitable organization), and advertising costs are $12,000 ($1,000 budgeted

per month). This brings our total starting expenses to $17,599.

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ii. Payroll

To start out, Drive 2 Defy will consist of 6 part-time employees earning a wage

of $10/hr for an average of 20 hours a week. This equates to an expense of $62,400 for

our first year for payroll alone. Our Social Security expense is $3,869 and our Medicare

expense is $905. Drive 2 Defy’s total salaries and related expenses are $67,174. From

year 1 to year 2, our payroll will increase by 5%. This results in a payroll expense of

$65,520 and a total salaries and related expenses of $71,248. From year 2 to year 3, our

payroll will increase by 30%. This results in a payroll expense of $85,176 and a total

salaries and related expenses of $92,623.

iii. Sales Forecast

Drive 2 Defy will be bringing in money from corporate and personal donations.

In our first year, we forecast that we will bring in $61,000 in corporate donations and

$34,100 in personal donations. This is a total of $95,100 in donations for Drive 2 Defy’s

first year. In our second year, we forecast that we will bring in $85,400 in corporate

donations and $47,740 in personal donations. This is a total of $133,140 in donations for

Drive 2 Defy’s second year. In our third year, we forecast that we will bring in $128,100

in corporate donations and $71,610 in personal donations. This is a total of $199,710 in

donations for Drive 2 Defy’s third year.

iv. Operating Expenses

For our first year, Drive 2 Defy’s operating expenses will include advertising,

volunteer insurance, supplies, and miscellaneous expenses. Advertising expenses are

$1,000 per month and $12,000 for the year; volunteer insurance expenses are $600 per

month and $7,200 for the year; supplies expenses are $250 per month and $3,000 for the

year; miscellaneous expenses are $100 per month and $1,200 for the year. Depreciation

and Line of Credit expenses are $1,868 for the year. This will bring the total operating

expenses for the first year to $25,268. For our second year, advertising expenses are
 21

$12,360 for the year, volunteer insurance expenses are $7,416 for the year, supplies

expenses are $3,090 for the year, and miscellaneous expenses are $1,230 for the year.

Depreciation and Line of Credit expenses are $2,244 for the year. This will bring the total

operating expenses for the second year to $26,346. For our third year, advertising

expenses are $12,731 for the year, volunteer insurance expenses are $7,638 for the year,

supplies expenses are $3,183 for the year, and miscellaneous expenses are $1,273 for the

year. Depreciation and Line of Credit expenses are $2,244 for the year. This will bring

the total operating expenses for the third year to $27,069.

v. Cash Flow

For Drive 2 Defy’s first year, total cash inflows are $85,150 and the total cash

outflows are $91,727, resulting in negative $6,577 net cash flows. For Drive 2 Defy’s

second year, total cash inflows are $129,160 and the total cash outflows are $96,880,

resulting in positive $32,280 net cash flows. For Drive 2 Defy’s third year, total cash

inflows are $192,745 and the total cash outflows are $118,978, resulting in positive

$73,767 net cash flows.

vi. Income Statement

For Drive 2 Defy’s first year, total revenue is $95,100, payroll is $67,174, and

operating expenses are $23,400. All other expenses add up to $6,068. This results in a

loss of $1,154. For Drive 2 Defy’s second year, total revenue is $133,140, payroll is

$71,248, and operating expenses are $24,102. All other expenses add up to $6,444. This

results in a profit of $31,346. For Drive 2 Defy’s third year, total revenue is $199,710,

payroll is $92,623, and operating expenses are $24,825. All other expenses add up to

$6,444. This results in a profit of $75,818. Being a nonprofit organization, the profit of

the company will not be distributed to its owners but rather used to further its cause.

vii. Balance Sheet

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For our first year, total assets is $35,183 and total liabilities and equity is

$35,183. For our second year, total assets is $66,528 and total liabilities and equity is

$66,528. For our third year, total assets is $142,347 and total liabilities and equity is

$142,347.

viii. Breakeven Analysis

Drive 2 Defy’s monthly breakeven amount is $7,703 and our yearly breakeven

amount is $92,442. This means we need to bring in $92,442 a year to not suffer a loss.

We are projected to be above the breakeven point each year, which means that we will

have money left over to put towards the next year. This money could go towards more

equipment for the kids or giving the full time employees a raise.

ix. Financial Ratios

Our current ratio for year 1 is 1.6. Our current ratio for year 2 is 3.3. Our current

ratio for year 3 is 7.3. The industry average for current ratio is 1.3. Our debt to equity

ratio for year 1 is 1.2. Our debt to equity ratio for year 2 is 0.4. Our debt to equity ratio

for year 3 is 0.2. The industry average for debt to equity ratio is 0.3. Our ROA ratio for

year 1 is -4.4%. Our ROA ratio for year 2 is 47.1%. Our ROA ratio for year 3 is 53.3%.

The industry average for ROA ratio is 17.29%. Our inventory turnover is 0.0 for all three

years. The industry average for inventory turnover is 168.39.

b. Funding

Drive 2 Defy will receive all of its funding from personal/corporate donations

and government grants. For our first year, we will need about $18,000 to get started. We

predict we will need to bring in $92,442 every year to breakeven. Government grants will

assist us with our start-up costs and personal/corporate donations will assist us throughout

the year. The two grants we looked at were the Ford Grant which is around $16,000 and a

Leona Gruber Trust Grant which is a $2,000 grant. Both of these grants are specifically

geared towards nonprofits that help kids develop.

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c. Narrative

All of the requirements have been met and all necessary information has been

explained above.

VI. Conclusion

a. SWOT Analysis

Refer to chart in Appendix

b. Next Steps

Drive 2 Defy’s future involves expansion into nearby high schools in the

Cincinnati area and later into other Ohio cities in need of our program. A standardized,

formal lesson plan will ease this transition into multiple other schools. As Drive 2 Defy

expands, we will be able to make sure that we are getting an adequate number of

volunteers that are able to run the program. In an effort to ensure stability within the

company as it expands, D2D hopes to switch over to tall organizational structure.

Drive 2 Defy needs find a source of consistent funding, such as a partnership

with a nonprofit meta-site like GiveWell. This will help ensure that the program will be

able to keep providing its service even when donations go through highs and lows.

c. Critical Risks

With an understanding of the necessity to maintain volunteers to allow the

program to run, a general risk that is critical in Drive 2 Defy’s success is a negative

outreach from the public. Considering Cincinnati’s successful volunteer outreach, finding

ten volunteers to commit to this program should be a successful endeavor, however, there

is still a risk that these participants may not comply with their required assignments. To

address this, frequent check-in’s can occur to ensure all volunteers are up-to-date on their

requirements and if necessary, new volunteers can be added to replace existing volunteers

to ensure all goals of Drive 2 Defy are met.

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Another risk is inconsistent funding. If funding varies wildly from year to year,

the overall quality of the program will vary as well. This will make it much less

attractive to students - and when students leave, funding will likely decrease as well. To

prevent this, a source of consistent funding should be sought during our programs start

up.
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Appendix

Organizational Chart

SWOT Analysis

Strengths Weaknesses Opportunities Threats

Product/ Prepares Curriculum may Expand curriculum Other after-

Service students for real need to be adapted to teach different school programs
Offering life events after for certain locations skills or jobs
high school

Brand/ Strong social Relies on word of Recognition in Slander or

Marketing media presence mouth local news negative publicity

Staff/ HR Volunteers are Full time staff pay Staff will have the High turnover of
well connected will start out low opportunity to earn part time
with their more as the volunteers
communities organization
expands
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Finance Part time Funding is purely Alumni may be a Other nonprofits

employees will from donations source of donations compete for same
be unpaid in the long run donor dollars
volunteers

Operations/ Low operating Workforce may have Connecting with Other non-profits
Management cost due to a high turnover rate other nonprofits to in the area
majority of staff because volunteers find dedicated already utilizing
being volunteers tend to be temporary volunteers available
workers volunteers

Market There are many Schools may not be Expansion to more Other reasonably
schools that willing to undergo schools similar programs
would benefit the inconvenience of exist -
from this hosting the program competition for
program students in those
areas

Can any of your strengths help with improving your weaknesses or combating your threats? If
so, please describe how below.

Since our volunteers are local and know their communities well, they can help tailor curriculums to
local areas.

Based on the information above, what are your immediate goals/next steps?

Garner a positive reputation to get more funding, more volunteers, and more outreach.

Based on the information above, what are your long-term goals/next steps?

Secure steady sources of income and volunteers, or accrue a base of long-term volunteers.
 27

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the-district.

Compliance, Harbor. “Home.” How to Start a Nonprofit Organization in Ohio | Harbor Compliance,

www.harborcompliance.com/information/how-to-start-a-non-profit-organization-in-ohio.

Fraile, Alba, and Cyberclick. “Twitter Ads vs. Facebook Ads: The Advantages of Each Advertising

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"Government Regulations for Nonprofit Organizations." BoardEffect. February 22, 2017. Accessed April

22, 2018. https://www.boardeffect.com/blog/government-regulations-nonprofit-organizations/.

“Leona Gruber Trust Grants.” Center for Nonprofit Excellence, www.thecne.org/engage/grants/leona-

gruber-trust-grants/.

“Neighborhoods That Declined 10 Points or More between 1970 and 1980.” [Image: Compass Rose],

www.socialareasofcincinnati.org/report/Chapter2.html.

"Nonprofit Sector Trends." National Council of Nonprofits. April 07, 2018. Accessed April 22, 2018.

https://www.councilofnonprofits.org/nonprofit-sector-trends.

Ohio Small Business Development Center. Starting Your Business In Ohio. Ohio Small Business

Development Center, 2016, clients.ohiosbdc.ohio.gov/DocumentMaster.aspx?doc=2462.

“The Student Body at Hughes STEM High School in Cincinnati, OH.” U.S. News & World Report, U.S.

News & World Report, www.usnews.com/education/best-high-schools/ohio/districts/cincinnati-

public-schools/hughes-stem-high-school-92185/student-body.