Beau Necco Discusses Business Beginnings

Beau Necco seemed forever destined to make his living, and his mark, in the social sphere, particularly in areas concerning the welfare of the disenfranchised.

The son of two progressively minded individuals social justice was the backbone of his family.

Necco's parents both had a long careers in social justice. His father was a tenured university professor of child behavior disorders and his mother, in addition to teaching and various other endeavors, ran HeadStart programs in the hollers of West Virginia.

For many years he saw the plight of the people his parents vowed to help - children - as well as the corruption and waste present in the bureaucracy of the child welfare system.

While Necco knew he would land in social justice at some point, he wasn't sure of how. He went on to The Ohio State University where he studied philosophy with an emphasis on social contract theory. Necco was deeply intrigued by these contracts - or agreements, unspoken rules - by which society and business governed themselves.

From there he applied his interest in philosophy and social contract theory to the world of business, when he received his MBA in International Business from Thunderbird School of Global Management.

Necco knew he wanted to create a community of like-minded individuals in which the best idea would prevail. A system founded on meritocracy. When he graduated from business school he made that his mission. Again, though, he didn't yet have a solid understanding of how or in which market this would manifest.

As luck would have it, according to Necco, not long after he graduated a series of serendipitous events came to pass.

First, in 1996 President Bill Clinton signed into effect the Personal Responsibility and Work Opportunity Reconciliation Act, the largest revision of federal anti-poverty policy in over 30 years.

"Essentially when Clinton passed that reform, he gave the states less money in exchange for more flexibility or control," Necco said. "And thus more creativity."

The United States was also in the middle of a multi-year effort of deinstitutionalization. Meaning, the solutions to social welfare issues would come from the community rather than institutions - i.e. orphanages, prisons, detention centers, sanitariums, etc.

These community based solutions (foster care being one of them) were meant to be less restrictive and promote more positive and sustainable care/rehabilitation. The system, however was broken, and so reform was needed.

Second, Necco's mother was working for a company that provided therapeutic foster care. Recently (in 1996) the company was bought out by a larger company, the buyout plus the subsequent changes caused a riff between the employees and the company. They were not pleased, so much so that Necco's mother left the organization. That's when the staff contacted Necco.

"These people contacted me and said 'would you start a new company? Because we don't want to work for these people who only care about money,'" Necco said. "So I started looking at therapeutic foster care, which at the time, was the fastest growing social service in the country."

Lastly, and most importantly, was Beau Necco and his mind for social entrepreneurship. Necco knew he wanted to create a different place to work, he knew he wanted to create a positive and sustainable social contract based on meritocracy, and he knew, innately, that he was drawn to social justice. He was going to create a social enterprise and focus this work on child welfare, specifically the foster care system.

"The market was moving and we had a group of people with a shared vision. I came in with a different social contract than they had at the time," Necco said. "The social contract was 'let's create a meritocracy' and the social enterprise took the form of therapeutic foster care."

Necco set up shop in Huntington, WV, in an office he rented for exactly 100-dollars a month and a handshake (utilities included, furniture borrowed). He had a small pool of employees and he, himself, didn't take a paycheck for until year three of the company's existence.

"I was 27, no paycheck, living with my parents again. Dropped out of Harvard to end up in my parent's spare bedroom," Necco said. "But, I had an office with a very clear mission and goal: to change the face of child welfare."

Knowing the potential for this business, as well as the incredibly important mission, Necco reached out to a local business incubator and secured an SBA (small business administration) loan guarantee.

Necco and his company, Necco, quickly had great success and began paying off every loan they received … early.

"We paid off every loan we received, early," Necco said. "Then the SBA gave us an award for Young Entrepreneur of the Year."

By January 29, 1997 Necco had placed their first kid into foster care. From there Necco, the company, continued to grow through a combination of opportunity, forethought, and seizing said opportunities.

For instance, in late 1998 the Kentucky government was being sued by current child welfare providers for a rate increase. Necco, who at that time was running an alternative school and had a consulting contract to make some money, jumped at the opportunity and offered the government a lower rate to place these children. They began growing their services quickly in Kentucky.

Not long after the state of Kentucky was issued a Federal Consent Decree, wherein the state was sued by the federal government for the abhorrent conditions of the state detention centers. Their funding was cut off and given to the NJDA (National Juvenile Detention Association), and to provide alternatives to detention.

The NJDA awarded Necco a grant of 800-thousand dollars to expand services of detention alternatives statewide.

On December 1, 1997 tragedy struck Heath High School in West Paducah, Kentucky, when a young boy, Michael Carneal, opened fire on a group of students.

"People did not want to hear about alternatives to detention," Necco said.

However, despite this shadow over the system, Necco prevailed and placed over 230 kids in foster care within their first year. Necco rounded out the year with an annual revenue of 20-million dollars, another win for the young company.

By 2003 Necco was the 53rd fastest growing company in the nation, according to Inc. Magazine. With a 2500-percent growth rate, Necco was experiencing incredible success and creating positive outcomes for hundreds of kids.

Necco has continued to grow, providing over 20 different forms of service to families and children in many counties across Ohio, Kentucky, West Virginia, and Georgia. In 2017, the company was recognized one of the largest private companies in Cincinnati, according to the Cincinnati Business Courier. A title Necco will receive again this year.

"The passion was there for a social justice project and a social contract," Necco said when discussing the company's origins. "Maybe it's Keynesian economics and what was happening in the world pushed me into this space, maybe I'm like Kramer from Seinfeld and I fell ass-backwards into this. Either way, I'll take it."

Whether it was luck or good old fashioned hard work that brought great success to Necco, they're here to stay, and here to help.

"What's important is we started off with a social contract geared toward social justice and it continues to grow," Necco said. "Nothing feels better that being able to still do what we do and help kids."

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