Financial Losses Persuade Haley House to Close Social Enterprise
October 26, 2017 Haley House, a nonprofit based in Boston's South End neighborhood that provides food and shelter for the homeless, this week announced it will shut the Dudley Dough pizza shop, a social enterprise it launched two years ago, citing money losses that financially stressed the parent nonprofit.
opened Dudley Dough in Roxbury, its second social enterprise, as a response to "difficult economic conditions facing restaurant workers." The pizza shop, which emphasized healthy ingredients, living wages, and profit-sharing opportunities for its employees, will close at the end of December.
"Our very compelling and aspirational vision for a fair-wage pizza shop was vital and appreciated, but after two years of operation, it is still far from breakeven, which is necessary for its success (to be able to elevate staff wages further, which is a central tenet of the mission)," Bing Broderick, executive director at Haley House, wrote in a letter announcing the closure of Dudley Dough. "Our board determined that Haley House could not continue to subsidize itto remain open would involve jeopardizing Haley House for the future."
Broderick said all seven Dudley Dough employees will continue to be employed at the Haley House Bakery Café, a full-service café, catering, and wholesale business, the first social enterprise the organization launched, in 2005. Both enterprises offer community-centered programs. Haley House today employs 58 people, including those working at Dudley Dough.
Broderick declined to describe the magnitude of the losses incurred by Dudley Dough, noting, "The model was to make money to increase wages. Our challenge was we were using premium ingredients, paying high wages, and charging moderate prices."
He said his organization sought to pay Dudley Dough what is often called a living wage. The minimum wage in Massachusetts today is $11 per hour. According to the Massachusetts Institute of Technology, a living wage in Boston, the amount needed to support their family, is $13.02 for a family consisting of a single adult, $27.31 for a family of one adult and one child, and $24.67 for a family of two adults and one child.
Noting that Dudley Dough was "still far from breakeven," Broderick said his board "determined that Haley House could not continue to subsidize it to remain open would involve jeopardizing Haley House for the future."
Since it launched in 1966, Haley House has pursued creative solutions to complex and systematic problems and injustices, with Dudley Dough and the Haley House Bakery Café being two examples.
Broderick said, "We are hoping to bring the innovations and aspirations of Dudley Dough to the Haley House Café."
Haley House launched in 1966 as Boston's only soup kitchen when local homelessness reached a crisis point. In response to a growing cycle of disenfranchisement-to-addiction-to-prison-and-back, the organization in the 1990s developed training and employment programs for ex-offenders. A lack of healthful food led to the opening of the café in Dudley Square.