(FORTUNE Small Business) – Christmas comes in November for kids at the Chester County Family Academy in West Chester, Pa. That's when Operation Warm volunteers collect new winter coats and distribute them to the neediest students at the K-2 charter school, one of several that Operation Warm supports in the area. More than a dozen years ago entrepreneur Dick Sanford, 61, came face-to-face with the reality that, even in this affluent Philadelphia suburb, some children brave the winter weather with only sweatshirts and jackets because their families cannot afford coats. This year Sanford's program is on track to distribute some 50,000 coats to needy kids in 16 states.

In the early 1990s Sanford read a story in the local paper that both angered and inspired him. "The article talked about a bunch of children of Mexican immigrants who came to farm mushrooms and were freezing because they didn't have coats," Sanford recalls. At the time he was semiretired and the ex-CEO of Intelligent Electronics, a $4-billion-a-year PC franchise business he founded in 1982. Using his own money, Sanford went to a local department store, purchased all its children's apparel, and then distributed the clothing to immigrants' kids through a local social services agency.

He continued the practice every winter until 1998 when, realizing he could reach more kids with help, he persuaded the local Rotary Club to get involved, and Operation Warm (operationwarm.org) was born. "It wasn't a hard sell because everybody can identify with what it means to be cold," Sanford says.

Rotary Club members held fundraisers and provided the labor to purchase, sort, and distribute the clothing. La Comunidad Hispaña, a Chester County nonprofit, contacted local social service agencies, tallied how many kids needed coats, then collected their sizes. Within two years of its founding, Operation Warm was helping clothe nearly 1,200 children from low-income households.

Operation Warm initially joined with local Burlington Coat Factory stores, which sold their clothing to the nonprofit at substantial discounts. Later the organization approached the apparel industry in New York City to get coats at wholesale prices. Once manufacturers understood that Operation Warm would be giving the coats away instead of selling them, they negotiated generous prices. This year the cost of sponsoring one child is just $10.

Recently, the nonprofit has been experiencing a growth spurt. In 2003 about 25,000 kids got coats through Operation Warm, and this year that number will double. "Other people hear about the program and ask us to come into their area," says executive director Wendy Leslie. "We get funding from grants, foundations, and individuals."

Sanford spends most days in the Operation Warm offices, housed in a separate building on his Chadds Ford property. He continues to look for new ways to expand the program and run it more efficiently, which explains why it has only three employees. "We don't want a big staff because if you're spending a lot of money on staff, you ain't putting it on the kid," he says.