First Step Staffing, Inc. Expands into Southern California

Atlanta-based First Step Staffing, Inc. Expands into Southern California Acquires Portion of OS4 Labor to expand its job placement program for men and women experiencing homelessness, veterans and returning citizens

ATLANTA (December 17, 2019) – First Step Staffing, a social enterprise founded in Atlanta, GA in 2007, has been focused on a tremendous expansion strategy for the past four years. Using social impact debt to finance the acquisition of existing for profit staffing companies, First Step is converting these acquired agencies into nonprofits with a mission-driven employment strategy – directly hiring those that have been most disenfranchised from the workforce – men and women experiencing homelessness, veterans, and returning citizens. With the acquisition of a portion of business from OS4 Labor, based in Southern California, First Step will be adding offices in Los Angeles, Orange, and San Bernardino counties – adding to its successful presence on the east coast with current locations in Atlanta, Philadelphia and Nashville. With this acquisition, First Step expects to nearly double its impact in 2020, with the ability to employ nearly 4,000 individuals weekly and pay a projected $25 million in earned wages to California clients next year.

After years as a successful entrepreneur and business owner, Greg Block used his business expertise to start First Step. For the past dozen years he has dedicated his time and resources to its growth. Block developed the unique acquisition model, funded by social impact investors that has brought explosive growth to the organization. First Step has completed three acquisitions in five years. “Greg’s creative solutions, steadfast determination and personal drive enabled this acquisition, converting a vision and dream into reality. His tireless efforts to identify a willing and suitable Seller, to organize and motivate lenders and to reach out to government officials have been examples for all. As a result, First Step Staffing has grown from a small startup nonprofit in 2007 to one that will now provide a first step to sustainable income and a path out of homelessness to thousands of men and women across America,” said First Step Los Angeles Board Chair, Joe Guerra.

First Step most recently acquired a portion of OS4 Labor, a for-profit staffing agency with expertise in temporary, long term and direct hire labor. The acquired enterprise will become part of First Step’s nonprofit organization and will include five offices in three counties and customers based primarily in the light industrial and logistics sectors. First Step is already working with local nonprofits and other agencies, including the Workforce Development, Aging and Community Services (WDACS), San Bernardino county agencies, the Los Angeles Union Rescue Mission, Long Beach Mission, and Homeboy Industries to place and support men and women into available jobs. Ultimately, First Step will have access to nearly 2,000 positions for these men and women. OS4 Labor’s operations in the rest of its markets will remain unaffected and continue to operate under the OS4 Labor brand.

“Our team has been working diligently with the owners of OS4 Labor and our collaborative funding partners, led by the Nonprofit Finance Fund and others, to execute this deal for nearly two years. With Los Angeles and surrounding counties facing epic numbers of homeless citizens, we believe that the jobs and income First Step can provide will be a critical component on a path to self-sufficiency,” said Founder and Chairman Greg Block. “The local government leadership has been extremely welcoming and supportive of our efforts, and we look forward to working together to make a dramatic impact in the coming years.”

OS4 Labor President, Bryan Gordon stated, “OS4 Labor has built our business based on a commitment to quality customer service – meeting both the needs of local businesses and jobseekers. We believe First Step shares this same
commitment, with an additional commitment to community impact. We are thrilled to be able support the needs of the thousands of men and women experiencing homelessness in our region with this agreement.” Prior to opening offices in Southern California, First Step has completed two other similar mergers. The first in Atlanta in December 2015 and the second in Philadelphia in January 2018. Both offices have increased annual revenues since the acquisition, which has allowed First Step to place and support more men and women into employment on a weekly basis. In 2019, First Step is employing over 1,100 men and women experiencing homelessness weekly and will pay $34 million in earned wages to its clients. These wages are critical as men and women take their first steps on the path out of homelessness.

As part of its program, First Step provides all clients with ongoing job coaching, access to a robust transportation program to help them get to and from work (over 100,000 rides in 2019), and additional assistance with other basic needs such as referrals for housing and mental health services. An additional critical component of First Step’s success has been strong partnership with other nonprofits and agencies that refer clients to First Step for employment, and this will also be part of the model in California. These partners provide other support services and help to ensure our clients are work-ready. In addition to previously mentioned partners, First Step is also connected with the Los Angeles Regional Initiative for Social Enterprise (LA:RISE).

Prior to its official opening this month, First Step started a pilot program with OS4 Labor to begin placing First Step clients into employment. Since September 2019, over 60 men and women have found employment, including Mayra Del Toro. Mayra struggled with homelessness which led her to a program at the Long Beach Mission. She was hired as First Step’s first California job coach and is excited about the opportunity to help others struggling with similar situations. “A job is such an important part of overcoming homelessness. It not only provides income, but gives you a sense of purpose, something to do every day. I am grateful for this new opportunity with First Step!”

The California acquisition was financed by Nonprofit Finance Fund (NFF) and its lending partners, Reinvestment Fund, REDF Impact Investing Fund, and Dignity Health, with additional early financial support from WDACS and San Bernardino County.

“We’re thrilled to support First Step Staffing’s expansion to Los Angeles,” said Norah McVeigh, Managing Director of Financing at lead lender NFF, which also supported First Step’s earlier expansion into Philadelphia. “Now people experiencing homelessness, military veterans, people returning from incarceration, and others will have new opportunities for employment, changing lives and strengthening the local economy.” Sara Vernon Sterman, VP of Strategic Investments at Reinvestment Fund stated, “A job is a crucial starting point for achieving stability for many individuals who face barriers to employment. Reinvestment Fund is delighted to be able to finance First Step Staffing’s growth and expansion as it brings its critical services to Southern California.”

Global law firm Dentons has provided ongoing counsel to First Step through each of its acquisitions, donating nearly $2 M in pro bono legal services over the last decade. “Our work for First Step is consistent with Dentons’ own principles of creating a positive social impact in the communities that we serve. It has been one of the most gratifying experiences of my career to be in strategic partnership with First Step and Greg Block,” said Dentons corporate partner Mick Cochran, a founding board member and the current Vice Chairman of the Board of First Step. “We are delighted to support First Step in its mission.”

First Step’s main office in California will currently be located at 8527 Alondra Boulevard, Suite 130, Paramount, CA 90723.

For more information please contact, Amelia Nickerson, Vice President of Development and Community Relations at (404) 577-3394 or amelia@firststepstaffing.com. Visit the First Step website at www.firststepstaffing.com.

About Nonprofit Finance Fund Nonprofit Finance Fund® (NFF®) works toward a more equitable, responsive, and valued social sector. We provide financing and consulting to help nonprofits and their funders better connect money to mission results. We are a community development financial institution (CDFI) applying 40 years of experience to today’s toughest social challenges, and we share what we learn to speed progress. NFF manages over $352 million. Since 1980, we have provided almost $890 million in financing and access to additional capital in support of over $2.8 billion in projects for thousands of organizations nationwide. Learn more at www.nff.org.

About LA:RISE LA:RISE is an innovative partnership that unites the City and County of Los Angeles to help people with high employment barriers get jobs, stay employed, and build a better life. LA:RISE connects employment social enterprises to the workforce system, supportive services, and employers, allowing all partners to bring their expertise and resources to the table.