Benjamin Soukup, the chief executive officer of CSD, says his agency is more like a hospital or a for-profit corporation than most nonprofits. So much so that it could become a for-profit company without too much difficulty.

Because virtually all of CSD's revenue is derived from program services, Soukup said that shift would not be difficult. Only a tiny percentage of its 2004 revenue came from donations: less than 1 percent, according to tax filings.

"That's very unusual," said Cynthia Massarsky, who runs a nonprofit called Social Returns, which helps nonprofit, philanthropic, and private sector organizations build entrepreneurial skills and use them to affect social change.

"The whole area of earned income, now called social enterprise, is not new," she said. "It's always been legal, but a nonprofit might have to pay some taxes. You just have to set it up in an appropriate way."

Because the services CSD provides are directly related to its mission, according to Soukup, its nonprofit status is secure.

"Let's call these folks entrepreneurs," Massarsky said of the emerging class of talented executives operating in the nonprofit sector. "They want to channel their energies and their skills toward doing social good."

S.D. first state to fund relay

Many say Soukup's presence and his organization's success have made South Dakota one of the nation's most progressive states when it comes to deaf rights.

South Dakota was the first state to fund relay service for the deaf, in 1975. And Marvin Miller, a former CSD employee, is attempting to build Laurent, a groundbreaking sign language community, in McCook County.

Soukup's own rise paralleled CSD's. As CSD grew, so did his profile in the deaf community. In 1993, he became president of the National Association for the Deaf, a position he held until he decided not to seek re-election in 1998.

In its early years, the operation bounced from office to office, adding services such as TTY repair and interpreting. A TTY machine looks like a telephone with an attached keyboard and screen.

Using telecom services

The point at which CSD no longer had to rely exclusively on grants and handouts came, according to CSD spokesman Rick Norris, with the passage of the Americans with Disabilities Act in 1990. The act, along with subsequent FCC rules, required telecommunications companies to make their services available to deaf consumers on a functionally equal basis with hearing consumers.

CSD, which was already operating South Dakota's in-state relay call operations, contracted with Sprint to provide interstate service for South Dakota customers.

That partnership with Sprint made CSD an important national player. CSD took off, first opening a call center in Wyoming, and then more - in 13 states and Washington, D.C.

As technology evolved, so did CSD, offering more services. Internet relay, which the agency started offering in 2002, allows users to communicate with anyone by telephone through an operator at one of CSD's call centers. The operator reads word-for-word what the user is typing and types the responses to the Internet user.

In 30 years, the company Soukup started in a closet in Sioux Falls became a national success.

Today, CSD sponsors equipment distribution programs that provide TTY telephones to the deaf and hard of hearing; Camp Lakodia, a year-round, deaf- friendly retreat near Madison; and advocacy, training, mentoring and education programs in eight states.

Last week, Augustana College announced that it would join with CSD to provide a four-year major in sign language interpreting.

Starting a for-profit venture

When CSD started a for-profit arm - CSD Contact Centers - it raised questions about how successful CSD could be in that very different world. After all, Soukup said, every other company that performs the same income-earning tasks as CSD is a for-profit.

The idea behind CSD Contact Centers was to contract with companies seeking to provide support and relay services to their deaf and hard-of-hearing customers. That venture, though, hasn't performed up to expectations, according to Norris. AOL was one of the first companies to sign on.

"The word 'struggling' might be a little too strong," he said, but he conceded that the company hadn't attracted as many large contracts as expected in its first year.

Despite the slow start, Norris said it was possible that a larger part of CSD could become for-profit, though, he said, "we haven't looked at the organization itself becoming for-profit."

The line between for-profit and nonprofit businesses has blurred in recent years, as nonprofits across the country have sought to diversify their revenue streams by adding programs and services designed to make money.

An annual contest held by the Yale School of Management/Goldman Sachs Foundation's Partnership on Nonprofit Ventures awarded cash prizes to the best business idea submitted by a nonprofit.

William Foster and Jeffrey Bradach of the Bridgespan Group, a consulting firm for nonprofits with offices in San Francisco and Boston, studied the sometimes-awkward interplay between nonprofit missions and for-profit bottom lines.

"Sometimes," they wrote in an article last spring in the Harvard Business Review, "the pursuit of profit directly conflicts with the pursuit of social good."

Foster and Bradach cautioned against the potential for "mission drift" when a nonprofit attempts to add for-profit goals.

"Commercial ventures can distract nonprofits' managers from their core social missions and, in some cases, even subvert those missions," they wrote.

Massarsky too said nonprofit organizations venturing into the for-profit world should tread lightly.

"Nonprofits often continue programs for the greater good when they're having trouble making ends meet," she said. "You can't do that in the business world. You have to know when to stick to a hard line with respect to pricing. A nonprofit also has to know when to bail because sometimes things don't work."

By Nestor Ramos
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