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A company acquires the staff of an agency for the disabled as lines separating charity, business and government become blurred.
By CURTIS KRUEGER
© St. Petersburg Times, published March 12, 2001
LARGO -- For more than 40 years, a home-grown, non-profit organization called Abilities of Florida has trained disabled people for jobs in the computer industry and other fields.
But now, in a sign of the ever-blurring lines separating charity, business and government, this stalwart non-profit has decided to bet its future on the good will of a for-profit mega-corporation.
Abilities of Florida plans to transfer 89 of its roughly 115 employees and more than $3-million of its budget to Lockheed Martin IMS, a division of Lockheed Martin. Abilities will shrink to an organization of about 25 employees with a smaller mission.
"It's kind of cutting-edge stuff," said Abilities CEO Bill Sandonato, who is among the employees soon to be employed by Lockheed. He says Lockheed's financial strength will put the training programs on a sound footing and allow Abilities to focus on other important work for disabled people.
But some say Lockheed's acquisition of Abilities' training programs raises questions about whether an out-of-state corporation -- obliged to generate profits for shareholders -- will prove to have the same long-term commitment to disabled workers.
"You cannot serve two masters. It's hard enough to serve one," said Barbara Pacheco, president and CEO of the United Way of Pinellas County, which is not involved in the merger. Abilities was founded in 1959 for people such as Melody Pease, a 41-year-old Largo woman who was receiving computer training one day last week.
Mrs. Pease is a registered nurse, a career she had wanted since childhood. But one day three years ago she was helping hoist a patient up in bed when pain shot through her back. Mrs. Pease had damaged two discs, and that was the last day of her nursing career.
Now she is learning about computers at Abilities and taking classes at another school -- which she hopes will soon lead to a job as a case manager who tracks patients' medical progress.
She said Abilities' staff is "really great. They are very supportive, and I think they back you up all the way."
The change that's looming may sound a lot like a corporate takeover, but it's not a hostile one. Abilities CEO Sandonato said Lockheed "didn't come and try to take over Abilities. We sought them out as the strategic partner for what our ideal mission is."
"We will be better able to serve not only those people with disabilities but those people who are in need of work-force services," added Gerald Miller, Lockheed Martin IMS's vice president for welfare and work-force services.
Lockheed is best known for making military aircraft such as F-16s, but in recent years it has moved into welfare services. The company recently asked to leave a Pinellas welfare contract after county officials gave it poor reviews.
Over the years, Abilities has found different niches for disabled workers, such as in computer assembly, chiefly in Pinellas County but also around the state. Because of constantly shifting job markets and low margins provided by state contracts, the training programs usually lost money.
Therefore, those programs "are the ones that we wind up subsidizing pretty heavily with the dollars that we raise in the community," Sandonato said. A separate foundation raises money for Abilities.
So Abilities began looking for another group that could take over the programs, run them efficiently and free the remaining Abilities staff to focus on such needs as housing for the disabled and a program for adults with cystic fibrosis, Sandonato said.
"We still want to continue to be a foundation that raises money and does good things for people with disabilities," said Sandonato, who also will continue to work for Abilities. Sandonato said he would get a raise of less than 10 percent.
Lockheed thinks it can make money from the same training programs that lost Abilities money. The company can operate with lower expenses because it already has an "administrative infrastructure" in place for payroll, finance and other necessities, Miller said. The vast majority of employees transferred to Lockheed are hands-on trainers, and only a few are administrators, he said.
"We know it will be financially positive," Miller said.
He said the company would not cut services to turn a profit. The state contracts are generally "pay by performance," meaning the company doesn't get paid if it isn't performing satisfactorily, Miller said.
However, the Pinellas welfare contract was the same type, and it is ending badly, with county officials grousing that Lockheed was unable to document whom it actually helped move off welfare and into jobs. But that sour experience does not worry Sandonato, who says "Pinellas just isn't a good example" of the company's overall strengths.
Abilities board chairman Pat Keller said the merger "has been a difficult decision for us, and we certainly remain in the business of serving and integrating handicapped people."
Board member and County Commissioner Bob Stewart supported the move but acknowledged some concerns. "Not being in control of our own destiny is certainly one aspect of it, and the other is that we may not have the same impact and presence in the county and the communities that we're in."
County Commissioner Susan Latvala, who has experience as a board member of another leading non-profit, the Operation PAR drug treatment organization, said a transition like this one "has to be done carefully and not with the idea of making money."
Some money will change hands, but it's likely not to be much more than $30,000 or so for some furniture and equipment, at least in the short run. If Lockheed Martin does profit on the training programs, it will share some of that cash with Abilities. But, Sandonato said, "we have a long way to go to have those programs to a point where they're even covering their own costs."
The arrangement can be viewed as a sign of the times. Florida government is increasingly awarding contracts to independent organizations for social service work the government used to do itself. In some cases, for-profit companies also are vying for these contracts.
That competitive environment has "has driven us to the position that we're currently in," said Keller, the Abilities chairman.
George Locascio, an activist for disabled people who started working for Abilities the year it was founded, said at first, "I did have some reservations. I expressed them at the board meetings, but I see Abilities going in a direction that we would have never even been able to get to on our own. . . . I think we're going to be able to do more."
- Curtis Krueger, who writes about social issues, can be reached at firstname.lastname@example.org or by calling (727) 893-8232.
Welfare coordinator wants out (February 22, 2001)