CASE 14.2 Aspire CoffeeWorks

In 2007, James Kales was appointed as the CEO of Aspire of Illinois, a nonprofit located in the suburbs of Chicago that assists people who have developmental disabilities. Aspire offers programs that include therapy, group homes, clinics, and preparation for employment. Although he had previously served as the CEO of a Big Brothers Big Sisters affiliate, he knew he would face larger challenges at Aspire, which had a much larger budget and 10 times the staff of his previous employer. Although Aspire had been in existence for 50 years, it was facing stagnant government funding, which accounted for 90 percent of its revenue. Kales would need to find new and more diverse sources of financial support (Glenn, 2007).

Meanwhile, the economy was about to sink into a major recession that would make philanthropic fundraising more difficult. Kales started to think about earned income as a possible source of increased revenue and perhaps also a strategy to create jobs for people with disabilities. With a grant from the UPS Foundation, he and his staff started exploring possibilities. In a meeting one morning, they were all drinking coffee and the idea hit: How about coffee? They began researching the coffee market, studying both low-priced and upscale coffee brands, analyzing trends in coffee price, and looking for a niche that Aspire might be able to fill (Frechette, 2011).

Just a few years earlier, Tony Dreyfuss had launched a new business in Chicago. He had worked at a coffee shop while a graduate student and had learned the business, working his way up to a management position. In 2003, with his father as a partner, he established Metropolis Coffee Company. The company operates a caf, roasts coffee in small batches to fit customers' preferences, and sells coffee retail to grocery stores. The company features coffee that is hand-roasted, organic, and purchased according to fair-trade principles (Metropolis Coffee Company, 2019). His market research led James Kales to discover Metropolis, and he called Tony Dreyfuss to propose a partnership. Dreyfuss's response was positive. "Where have you guys been?" he asked, adding, "We've been looking for an opportunity like this!" After some further discussion, Aspire CoffeeWorks was launched in 2009 (Frechette, 2011).

Aspire CoffeeWorks is not a separate company; it is a partnership of Aspire and Metropolis that generates profits that go entirely to support Aspire's program serving people with disabilities (Aspire CoffeeWorks, 2016). The coffee is produced by Metropolis under the Aspire brand. Aspire-branded coffee is sold in stores such as Whole Foods at a modestly higher price than the Metropolis-branded coffee, providing additional revenue to Aspire and also a choice for socially conscious consumers who wish to provide support for people with disabilities (Frechette, 2011).

Aspire has continued to develop partnerships with businesses, including Groupon and Office Max, which sells Aspire coffee for use in commercial settings. Aspire advises other nonprofits to see companies not just as donors but as potential business partners, and it emphasizes the importance of approaching potential partners with a proposal that brings benefits to their bottom lines as well as serving the nonprofit's cause (Ronquillo, n.d.).

1. What was the asset that Aspire of Illinois leveraged to create a source of earned income from Aspire CoffeeWorks? Was that asset something it had, something it did, something it knew, or some combination of these?