Good beats greed for social enterprise ventures
As a girl, Amanda LaGrange liked to “play business,” borrowing her accountant father’s discarded briefcase and calculator and pretending her walkie-talkie was a mobile phone.
Now 31, LaGrange has turned her youthful dreams of helming a company into reality. In September 2015, she was promoted from her job as director of marketing for a thriving Twin Cities venture, elevated to the position of CEO.
“I wanted to work on all the pieces to grow the organization,” she says.
LaGrange runs Tech Dump, a Golden Valley-based social enterprise. Whether following the for-profit or nonprofit model, social enterprises by definition sell their goods or services to further a defined social purpose.
Such an end goal is baked into Tech Dump. It makes its money by recycling computers, cell phones and other past-its-prime technology. The muscle is provided by hard-to-employ workers who get paychecks and job skills that prepare them to be self-sufficient.
“We use our business model for good,” LaGrange explains. “We make decisions based on what’s best for the environment and the people who work here. We’re all on a journey of improvement.”
Founded in 2011, Tech Dump has grown rapidly; by 2015, its 68 employees processed 5 million pounds of electronics. In the fall of 2016, Tech Dump expanded its revenue stream by opening a second retail outlet to sell refurbished electronics at bargain prices.
“There’s no reason why making a difference and making money should be separate,” LaGrange adds.
Alliance for good
More than one thousand such operations are linked through their national membership organization, the Social Enterprise Alliance. The Twin Cities chapter, founded in 2010, has grown to 31 members who support or operate ventures with goals beyond the bottom line.
That reflects a global uptick in organizations that are structured to serve.
“Younger consumers in particular expect brands to be more than a money-maker for shareholders. They expect transparency, and these consumers have the technological nimbleness to track that information,” says Mary Meehan, co-founder of Minneapolis-based consumer strategist Panoramix Global and contributing writer to Forbes.com.
Meehan has her eye trained on the next generation of consumers, the post-Millennial cohort sometimes tagged as “Generation Z.” While Gen Z is still too young to call shots in the business world, Meehan has reviewed surveys of its developing values that predict it will be even more demanding than its older siblings.
“[Gen Z is] very idealistic but they’ve grown up with a lack of trust in institutions and so each one of them feels it’s incumbent upon them to do their part to save the world,” she explains. “They will expect every dollar they spend to have a mission.”
Meehan suggests that even consumer-facing businesses that do not follow the social enterprise model consider developing a platform to spell out their charitable contributions. She cautions that companies that exaggerate those efforts as part of their branding do so at their own peril.
“The consumer is well aware of what I call good washing — doing good that is only skin-deep. If you engage in false practices, someone will sniff you out. Getting caught at this could be worse than not doing anything.”
Raise a mug full of Peace
One of Minnesota’s senior social enterprises carries a familiar name. Peace Coffee is sold in groceries across the Upper Midwest and at multiple coffee shops, including four of its own branded retail operations.
The fair trade coffee company got its start in 1996, when the nonprofit Institute of Agriculture and Trade Policy in Minneapolis got an unexpected shipment of coffee beans grown by a Mexican farmers cooperative.
Today, as it celebrates its 20th anniversary, Peace Coffee employs 56 people locally who roast and deliver the fragrant beans that are organically grown in a dozen countries. This year, the social enterprise expects to sell 1 million pounds of coffee.
“The mission and commitment was built into our DNA from day one,” says Lee Wallace, 43, who calls herself Peace Coffee’s “Queen Bean;” on official paperwork, she’s its CEO.
Ten years ago, Wallace was a consultant for organizations interested in using entrepreneurship to leverage money for their outreach. Hired by Peace Coffee to do an assessment, she became so enthralled with its work that she stayed on to run it.
“One of the first things I did was ask my team for the names of companies they most admired, that we wanted to be like. I called leaders at those companies and asked how they built their business,” says Wallace. “I got advice, they suggested books to read and gave me personal email addresses so I could ask questions.”
Today, it’s payback time; Wallace frequently fields similar inquiries from socially responsible startups and has heard from a few large companies intrigued about building a social mission into their brand.
“We consider it our responsibility to expand this movement,” she says. “We smaller operations with experience have the opportunity to teach big business how to do this. A lot of barriers are breaking down right now.”
Leadership: Amanda LaGrange, CEO
Employees: 44 full-time
Description: A 501(c)(3) social enterprise providing job training and practical experience for adults facing barriers to employment to prepare them to be more valuable employees with expanding futures. This is accomplished through recycling (Tech Dump) and refurbishing (Tech Discounts) electronics.
Web: techdump.org and techdiscounts.org
Leadership: Lee Wallace, CEO/”Queen Bean;” Mark Rieland CFO/COO
Description: Peace Coffee roasts award-winning coffee and works with small farmer cooperatives around the globe to source 100% fair trade and organic certified coffee.