A New Model for Community Service

"Do good by doing good." More entrepreneurs are heeding the principle by creating profitable businesses that provide jobs to the underprivileged

by Stacy Perman

Greyston Bakery's Maya Lin-designed facility in Yonkers, N.Y. Credit: Cybul and Cybul Architects

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Twenty-five years ago, Bernie Glassman, a former McDonnell Douglas space-programs manager and a Zen Buddhist abbot, along with a small group of like-minded Buddhists, borrowed $300,000 to launch Greyston Bakery in a Bronx storefront. The idea was to start a company that was both entrepreneurial and spiritual, and that would employ the conventionally unemployable by giving jobs to the struggling urban population. In other words, to do good by doing good.

Today, Greyston sticks to this formula, while continuing to turn out quality, locally made products, including gourmet wedding and specialty cakes. The company produces 20,000 pounds of ice cream mix-ins per day, and is the exclusive supplier of brownies to Ben & Jerry's. Last year, sales totaled $6.5 million, up from $4.5 million in 2004. Indeed, business is so brisk that in 2004 the company moved to a new $9 million state-of-the art Maya Lin-designed facility in Yonkers, N.Y.

"Businesses can make sure to respect profit goals," says Julius Walls, Greyston's chief executive officer, "but they also need to respect their responsibility to the world community and their employees." To that end, Greyston's 50 employees are plucked from the ranks of the homeless, single mothers, new immigrants, drug abusers, and ex-cons, and are given work and training via a one-year apprenticeship program. All new hires start at entry-level positions and are given opportunities to advance in the company. "We give jobs without regard to past performance or issues," says Walls.

Twin Mandates

According to Walls, one out of every three new hires makes it through the apprenticeship program. About 10 to 15 employees have been with Greyston for seven or more years, with the majority staying between one and three years. Greyston even helps those workers interested in moving on with classes in résumé writing and interviewing, and it also offers job counseling. "This is founded on the idea that an employee that wants to be with us is more productive," says Walls. And if not, the business offers assistance for those moving on.

Like Greyston, a growing number of businesses operate under the twin mandates of making a profit while maintaining a sense of strong social purpose. Co-op America’s Business Network, a membership network for for-profits that fit this dual profile, has gone from around 500 businesses in the mid-1990s to about 3,000 today, according to the nonprofit’s corporate responsibility programs director, Todd Larsen. He says most members are small and midsize businesses, with a number of them playing pioneering roles in underserved communities, roles traditionally held by nonprofits. And a 2006 report released by Co-op America’s sister organization, Social Investment Forum, shows community investing assets growing to $20 billion in 2005 from $4 billion in 1995.

Allen Grossman, a professor of management practice at Harvard Business School, says businesses with a strong social core have been around for a long time, but the niche is expanding. "People are experimenting a great deal in this area because of deficiencies in the capital markets for nonprofits," he says. "They aren't necessarily aligned when it comes to [measuring] good performance."

Three years ago, Ruth DeGolia and Benita Singh were working on their senior theses in international relations at Yale when they came up with the idea to launch Mercado Global, an online store that today sells handmade jewelry, handbags, accessories, and ceramics from women's handicraft cooperatives in Latin America. Working with partner nongovernmental organizations, Mercado Global scouts U.S. markets in which to sell these handcrafted products. All of the profits are returned to the cooperatives in order to promote fair-wage employment, as well as an investment in the workers' children's education.