Episode 4: A Social Enterprise That Is Sustainable for the Long Term

What are the benefits of setting up your social enterprise as a subsidiary of a nonprofit? How can you balance social mission with your business priorities? Where can you find funding for recidivism reduction work?

In this episode, Brenda Palms Barber shares how she set up Sweet Beginnings as a social enterprise that is sustainable for the long term. You’ll learn about the give and take relationship between Sweet Beginnings and its parent nonprofit, why we decided to set up Sweet Beginnings as an LLC, and how we put the values in our triple bottom line into practice.

Have a question for us? Thinking through how to start your own social enterprise? Send us a note through the interest form!


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Transcript

Brenda: Even though it’s expensive to produce, we have not sacrificed on the quality of the ingredients of our product because we just can’t. I think it’s really important that people who are seen as second chance are associated with a product that is first quality.

Alice: Hi, and welcome back to Inside Sweet Beginnings, our podcast that gives you an inside look at how we run our social enterprise.

In this episode, our CEO and founder, Brenda Palms Barber, explains how she balances our social mission of hiring formerly incarcerated individuals with the realities of running a business. She also answers a lot of common questions about how Sweet Beginnings is set up, including how she chose a legal structure, what it really means for Sweet Beginnings to be a wholly-owned subsidiary of NLEN, and how Sweet Beginnings is funded.

Alice: Hi Brenda, how are you?

Brenda: I’m good, Alice, how are you?

Alice: I’m doing really well, thank you. Thank you for making the time to come and talk some more with me about social enterprise.

Brenda: Oh you know, I enjoy it! It’s a pleasure.

Alice: So last time we talked about the client journey through NLEN’s programs, how they come to Sweet Beginnings, and the theory of change for them as individuals and for North Lawndale as a community. And today we are focusing a little bit more on the business side of Sweet Beginnings, and how you balance social impact with the realities of running a for-profit business.

So I think let’s start by talking about Sweet Beginnings’ triple bottom line. And I have it here so I think I’ll just read it, onto the record. So our triple bottom line has three parts. we have social, which is to provide people facing significant barriers to employment, primarily those with histories of criminal convictions with viable opportunities to establish a work history, learn productive work habits, and become productive members of society. Then we have economic, which is to contribute to the economic revitalization of the North Lawndale neighborhood through a social enterprise that is sustainable for the long term and generates jobs. And finally, we have product, which is to produce and sell high-quality honey and honey based personal care and relaxation products.

So how did you come up with this triple bottom line?

Brenda: Well certainly with a lot of help. We understood that it wasn’t just a traditional business, and again, Sweet Beginnings started off so much more ahead of the curve right, before there were lots of the types of consulting support and technical assistance that’s available today. And so we knew that we had to communicate to all of our various publics and supports that yes, this is a business, and that we needed to have – profitability mattered, but we also wanted people to understand that the driver and the whole reason that this business existed was to help men and women who have returned from incarceration to have a leg up. To have a fair chance to be able to demonstrate that they could be good workers. And so we partnered with a variety of different people and I was really very fortunate by chance to meet this dynamic African-American woman by the name of Jennifer Henderson. And I’m trying to – I think we were both at a conference together, I’m trying to recall how we first met. But Jennifer turned out to be the chair of the Board for Ben and Jerry’s ice cream. And Ben and Jerry’s have been the first pioneering business model to have a social consciousness and we understood that the ice cream that they developed was always named after some funky people, wonderful people, funky people that they would help channel a certain type – like their Peace Pops and give that money away to orgs working for peace.

And so we I just said you’re kidding me, this is what Sweet Beginnings is about, this is what we’re doing. And so she agreed to serve as our first chair of the Board for Sweet Beginnings, to help us develop a triple bottom line mission. And so it was through her leadership and her ability to leverage some social capital that she has with friends in the industry to help us think about what that is. And so we understood that our product needed to be competitive and on par with anything that you would find on the shelf. We knew that it was important that people understood that we were here to help people who needed second chances and who had served their time.

And because North Lawndale is a community that has struggled economically since the civil unrest in 1968, that we felt that it was important that we become an economic engine in this neighborhood and that this business would in fact create local jobs and help to strengthen the economic position of our community. So those are the reasons. I think that if we had to do it again, we might consider what many people do which is to include something that affects the environment. Because we work with bees, we are very very attuned to the importance that the environment plays in the success of our business, in the success and longevity of that precious honeybee. And so I think that we might have rethought that and we still may, right, because the environment is so critically important. And what we’re learning now is that it’s another important vulnerability that people of color in low-income communities are often the first to experience the impact of climate change. So it makes sense for us to think about adding an environmental component to our – I think it would be a quadruple bottom line.

Alice: A four way triple bottom line.

Brenda: A four way mission, yeah.

Alice: And how do these values translate into practice for you?

Brenda: Well that’s a great question. I think we never forget who this is for and who we’re serving. Because we see these men and women coming out of prison at an incredibly high rate, particularly back into North Lawndale. And so just when you walk in the door and you see the men and women that have been hired to work, you know that’s what we’re here for. It is their experience. It is their ability to develop the skills, work habits, and rediscover their self-worth through work. So that’s core to the work.

Of course it’s very competitive, especially today, on the shelf. Many more people now really care about what they put on their skin. It’s the largest organ that we have, right? And so it’s really important that we know what we’re putting in our skin and absorbing into our bodies. It’s equally important about what we put in our bodies. So raw local honey is really important to people. Skincare that has few toxins. It’s as clean as it possibly can be. That matters when you’re doing it.

So I think that that maintains the sort of importance around the quality of our product. And even though it’s expensive to produce, we have not sacrificed on the quality of the ingredients of our product because we just can’t. I think it’s really important that people who are seen as second chance are associated with a product that is first quality. There’s just no way. It cannot be anything other than they are producing top quality, first-rate product, and that second chance people can do that. So that’s why we just have not diluted our special quality ingredients, our formulas, because it’s so important that the quality maintain. For that reason.

And in terms of economic, I think that that’s probably where we struggle sometimes the most. Because it is a very competitive market, retail market. I think that social enterprises that have chosen the path of retail, it’s tough. It’s a tough road. I know that my friends who are in social enterprises that produce services would say well it’s equally hard and I’m not gonna challenge that. But I just think that when you’re up against Procter & Gamble, and Unilever, and those kinds of businesses. You have to be able to compete on par. The customer isn’t going to know the difference. They’re going to feel the difference. They may taste the difference, and that’s where your competitive advantage is. And then they’ll discover your story oftentimes, which is another important differentiator.

So the economics are important but they are challenging and I know that when we first started, Alice, we had dreams of being a multi-million dollar business.

Alice: Really?

Brenda: Absolutely. Yes, and why not? Dream. There’s a friend that says that-  well actually I tell people this now which is, if people aren’t laughing at your ideas, you’re not dreaming big enough. So it’s okay. It’s okay. Dream big. So we did have that vision. But then because of the quality of the products, because of the population that we’re working with, our cost of goods sold aren’t very high. And most companies for your distribution purposes really want at least, to invite you into their shelves, want at least a 50% margin, right. So then you’re like yikes, our products are very expensive and if we reduce – if we come up with a wholesale price for distribution, that’s a minimum of 50% of what it cost us to produce the product, then that begins to eat into your profitability. Because you’re not selling the product at the level that it really would produce a higher yield – more money. And so what’s happened is that’s really why we had to stop selling honey all by itself and had to shift to skincare. Because the cost of producing skincare was a little bit less and we could actually improve the profit margins because it was this less expensive than honey. With the honey, it’s a commodity. And so it’s really difficult to make that incredibly profitable, right. There’s a very low profit margin.

Alice: You said it was like a 13 percent profit margin or something?

Brenda: Yeah, it is. Yeah, I’ve said that it’s about a 13 percent profit margin there. So you’re not making a lot of money on that. And then even with skincare, people tend to – they have to be introduced to the product, they have to experience it. Because we become very loyal to a particular brand.

Alice: Oh yeah, I am for sure.

Brenda: Yeah. So if you’re used to going into the store and getting this and you see something called beelove on the shelf, you’re like oh that’s nice, but keep rolling. And so that’s why we had to do demos and really let people smell, taste, experience the product so they would fall in love with it. And eventually we would have loyalty, brand loyalty. So it’s taken – it takes time for that. You think about Jergens or you think about some of the popular lotions that are on the shelf, or shower gels, these people have been out there for fifty, sixty years. That you become familiar with, it’s something you saw your mom use. So we still are building a brand. And so that takes time so that does affect one’s profitability and the economics around it. But fifteen years later, I’m much more comfortable with recognizing that Sweet Beginnings is a sustainable business. That’s the key. Are we meeting, are we breaking even essentially. And breaking even is beautiful just because that’s a financial metric. But the reality is, how many people did we hire? How many people did not return to incarceration? How many people restored relationships with their children or with their families? Those are sort of – that’s the social impact that is equally if not more important.

Alice: So those are really the key metrics that we’re looking at when we’re talking about, is it working?

Brenda: Recidivism is also an important part. So there’s the first time that you serve. But then we know that within three years, the recidivism rate for those returning back to prison is roughly about 50, as high as 65 percent. That’s just sad. But that’s true and it’s proven state by state. So for the state of Illinois, it’s roughly about 55 percent of those who have served time, will return within three yearse. That’s not happening with Sweet Beginnings.

It’s a combination of – this is where the nonprofit and the social enterprise work in tandem. It’s the lessons that they’re learning through our U-Turn Permitted program and then the opportunity to apply those lessons immediately through employment with Sweet Beginnings. But I also think that the part that means a lot, especially now that we’re talking about the importance of Black Lives Matter. Being African-American or being Black and being male and or female and serving time in prison really is such a concentration of one’s questioning who they are. And really why they exist and if you matter. And so I think that a big part of what Sweet Beginnings and U-Turn Permitted, our job readiness program do is bit by bit, help you restore your understanding of your worth. Because society doesn’t make it easy. And so it’s a very protective, cognitive-based, rooted, culturally competent way for people to re-engage. Not just in work, but to re-engage in understanding how special they are.

Alice: Yeah. That reminds me of what Charlotte was saying in the last episode with her about how important it is for her to be able to share her story with people coming through and for them to know that their new supervisor is someone who totally understands where they’re coming from.

Brenda: That’s right. Yeah, I mean, it’s important for us to have people in leadership that bring lived experiences. It’s important for them to know – for me as an employer, how dare I not hire people who have gone through the system? And they have taught me so much along the way.

Alice: Was it always a conscious decision on your part to be seeking out people with lived experience to hire for these positions?

Brenda: Absolutely. Yeah. Because there’s a camaraderie that’s important, and there’s also – I’m just not cool enough, right. You have to have people who know the new terms and who are cool who can establish real credibility. Not to say that I don’t, but I just think when you’re working on the floor you have to have folks that understand the work, and that can, as Charlotte talks about, that can empathize, but then call you on your BS. You need that, and we’ve always been really fortunate to hire just outstanding individuals for those leadership positions at Sweet Beginnings.

Alice: That’s awesome. I think that’s one thing that’s really easy to apply to any organization and it’s a big part of our culture but it’s not necessarily, like obvious, if you’re starting out.

Brenda: That’s so important. I think that otherwise you’re gonna be missing a lot and as I said I’ve had some amazing teachers along the way that helped me have empathy where I should, that helped me sort of be tough where I needed to be tough. To understand when people are playing games. Which is easy to do when you have a big heart for the work. But just to be a little bit more astute overall. Yeah. We let our hearts get in the way sometimes.

Alice: Right. Yeah. Let’s talk a little bit more about funding and resources for Sweet Beginnings, we gotta keep it running somehow and bring the money in in. Can you talk about the relationship between the North Lawndale Employment Network and Sweet Beginnings and kind of give an overview of what it means when we say that Sweet Beginnings is a wholly-owned subsidiary of NLEN?

Brenda: Right. There are so many different business models that social enterprises and social impact businesses occupy. And again we started off so early on that B Corporations and L3Cs, those weren’t – they hadn’t been created yet right. And so for us, it was important that we knew and needed and wanted Sweet Beginnings to, as I often say, be pollinated across the country, to be able to be in places where there were neighborhoods like ours  where they needed an economic engine. Where there was high rates of incarceration.

So from the very onset we worked with our attorneys and shared with them that we hoped we would be able to franchise the model. We’ve since shifted that concept from a franchise model to a licensing model which makes a lot more sense, it’s a lot easier to do, and so that’s something that’s still important. And so as a result we shifted Sweet Beginnings from a program of the North Lawndale Employment Network to a wholly-owned subsidiary of the North Lawndale Employment Network. Which gave Sweet Beginnings the opportunity to be a for-profit entity as a business. It allowed – what’s really important is called the corporate veil between the subsidiary and the parent. So it was a way to protect Sweet Beginnings from any liabilities or lawsuits that might become toward NLEN, but it also protected NLEN from any potential lawsuits that might be brought on by Sweet Beginnings. Someone could say oh well there was a piece of glass in my honey and it scraped my neck, I’m disabled, so in order to maintain the protections of both entities, we decided that that model, that legal structure was the best for us at the time.

Alice: I see, so Sweet Beginnings was originally a program briefly.

Brenda: It was. And it was for about two and a half years. And it allowed us time – and I recommend it, that you can pilot, you can tweak it, you can make a lot of mistakes. And you don’t have the same risk as you would with you know starting right out as a business. So we were. And that’s why a limited liability corporation, that was key. So that’s the LLC, that was the limited liability corporation. So that meant that we were protected, that Sweet Beginnings would be well protected from any suits as well, and the parent company.

Alice: I see. I think in starting to learn about social enterprise personally, I didn’t understand that a nonprofit actually could have a program that sells stuff?

Brenda: Yeah, isn’t that something?

Alice: That the nonprofit is really just the legal classification. But we could basically do the same thing as a program even now. So the legal structure of an LLC was really just for all those reasons that you mentioned, wanting to be able to license and the protections.

Brenda: That’s correct. And yeah I mean, because there are nonprofits that occupy that space that don’t have that. But my Board and our attorneys absolutely insisted that we create that important corporate veil.

Alice: I see. So now, as a subsidiary of NLEN, that basically means that NLEN is like the only investor in this business, but it is privately kind of owned?

Brenda: That’s right. Ad it gets confusing for people too because – but to answer the question, yes. Sweet beginnings is wholly owned by the North Lawndale Employment Network, which is really a Board of Directors, legally. And so it’s not a minority-owned business, even though I’m an African-American woman. It’s not a woman-owned business either. And so it gets weird when we want to apply for certain things that have advantages for women or people of color because technically we are a wholly-owned subsidiary of a group of – another governing body, not an individual. So I mention that because that’s important and that gets kind of confusing for folks.

Alice: How do resources flow between NLEN and Sweet Beginnings?

Brenda: Yeah, so what’s important about our arrangement and the classification of being an LLC is that also right now, what’s called a disregarded tax entity.

Alice: Okay!

Brenda: I know, it’s a big deal . But what that means is as long as Sweet Beginnings is advancing the mission of the North Lawndale Employment Network, the parent organization, then we are protected from having to pay sales tax. Because we are advancing the parent mission. Now, if we were to stop hiring people with criminal records, and we decided we were going to get all professional people to produce our skincare, produce our products, we’re gonna hire professional third-party marketing entities and so that they’re aren’t any people who have criminal records that are employed by us, then that shifts everything and we lose that protection. Because then we’re really just a regular business. So that switches the minute that we move away from the reason we were established. So it’s always important – so I can have one or two professionals or three but as long as it’s- the majority of people that are hired must be people whom we are there to serve. And it makes sense you have to have professionals, but they can’t be the majority

Alice: Because Sweet Beginnings is a for-profit entity, but NLEN is a nonprofit, is it possible for Sweet Beginnings to still receive grant funds?

Brenda: You know what? That’s a really common question. And I’m happy to say that in fact, yes, and the reason is that as long as Sweet Beginnings is advancing the mission of NLEN, one, it allows grantmakers to give a grant to the 501c3, to the nonprofit, that can be used as a pass-through to support the subsidiary. Because it isn’t for profit and gain, it’s really to advance the mission or the social impact, the social purpose of the business. So it has been a great way for us to support Sweet Beginnings through our grantmaking efforts as well, and securing funding that we pass through, based on that donor and their interest.

Alice: Gotcha. And what about like, human resources and that kind of capital? I mean I know NLEN is handling some administrative stuff and then also after that we can talk about how the Sweet Beginnings story helps with development. I think that’s a key point too.

Brenda: So NLEN is, it’s the mom. And the dad.  And you’re gonna care about your little social enterprise, your kid, you know. And so when your kid shows up and says you know, I’m a little short this month, Mom and Dad, I need some money, it’s like okay! You’re our kid, we’re gonna take care of you.

Alice: Yeah, you get out your checkbook.

Brenda: Yeah. You get out the checkbook and you support. And that’s really very much what we’ve been able to do. Or we’ve been able to help minimize some of the expenses that a traditional business would have to have the burden of because we can. So HR, our HR work, our department will hire and support individuals for Sweet Beginnings. We have leveraged good rates for healthcare and our benefits and so the professional staff get to benefit from our ability to have a much lower rate. If we just went out by ourselves with Sweet Beginnings, that would be insanely expensive. So we have the benefit of leveraging that based on the number of employees we have at NLEN. So there’s a lot that NLEN is able to help stabilize and support and leverage.

But it’s two-way. It’s just really different because Sweet Beginnings on the other hand is a huge amplifier of the work that NLEN does. Most people learn about the North Lawndale Employment Network because they’ve had their first encounter through Sweet Beginnings. So Sweet Beginnings is like what, oh, and there’s this North Lawndale employment thing. So it really is a give and take relationship. I think it’s actually quite perfect in many ways. Because if you are someone that just cares about skincare and good honey and then you read this tag and you’re like what, what is this, they’re doing what, oh and there’s this other organization that’s a nonprofit, and what do they do, let me visit their website. And the same thing happens the other way. But most of the time people learn about the population that we’re serving, they learn about North Lawndale and the community that we’re in, they start to care about the work that we do because their entre was through Sweet Beginnings.

Alice: Yeah. Do you have any sense of that percentage, like a ratio, how much of our audience comes from Sweet Beginnings? We have a huge national profile due to lots of media coverage because it’s such a cool story. I know it’s hard to quantify.

Brenda: It is. But we sort of have to in a way quantify it because there are those times like I said when we might have to get a checkbook out and underwrite a check to keep the business afloat until other funds – there might be cash flow challenges that we’ll assist with. We haven’t done a real real study but boy, probably maybe 40 percent. Maybe 40, 50 percent. A lot of the donors and funders that we have at NLEN are already in the workforce development space and so they get our work and they already appreciated it.

But then I think that where that 40 percent comes in, it’s the awareness that’s been generated through corporate corporations, businesses that have corporate giving, that someone goes what? Like right now we have this really cool relationship that was established with Bain, Bain Capital, they’re helping us develop a subscription program for Sweet Beginnings and all these really cool products, they’re helping us think about pricing and marketing and it’s just so exciting to have that kind of support. But I don’t know if NLEN had approached them if there would be that enthusiasm. But they learned about us through Sweet Beginnings and it’s business for them. They’re like, how do we help you guys? Well here’s how you can help us. So that has happened quite a bit. That’s how our relationship with Boeing established, and Boeing was one of our first stakeholders to help us develop our very first business plan along with Jennifer Henderson with Ben and Jerry’s. Those were the folks that helped us to get this off the ground.

Alice: Yeah, that’s interesting, so provides sort of a bridge  to the corporate world where people can get engaged that way.

Brenda: It does. It’s an important bridge. And I think the other – it’s attracted a wonderful and different and diverse caliber of members that serve on our Board. I think that most of the individuals on our board of directors have learned about the North Lawndale Employment Network through their first purchase of a jar of honey.

Alice: So you get talent through it, too.

Brenda: Absolutely, yeah.

Alice: Are there any other kind of advantages to having this business be a standalone business instead of a program? I’m wondering if like, the Benefit Chicago loan for example is something we wouldn’t have been able to get.

Brenda: Well no, right, there’s certain kinds of impact investing that is very popular now that does require an actual business. A product or service that’s being offered to the public that’s a genuine business. And so Benefit Chicago was looking for those kinds of businesses, a real business, but that had just an amazing social impact associated with it. And so it was a long journey but we were really thrilled to be able to have that infusion of impact dollars to support and advance the infrastructure of Sweet Beginnings. So now, as a result, we have just – we use Shopify, which is great, there’s a point of purchase sales that we were able – we have great ability to manage inventory in a way that we hadn’t through DEAR, which is another software product that we use. Just helped us to become and operate and shift from a hands-on mom and pop kind of inventory, sales management process to really being able to do ecommerce and generate sales. And as a result we’ve seen our online sales steadily increase and even during this pandemic we are grateful that we have a strong web presence and that ecommerce is what’s been keeping the business really moving forward.

Alice: Can you explain what Benefit Chicago is for people who don’t know?

Brenda: Sure, Benefit Chicago is a very special program designed to be the cash infusion through a loan to small businesses that were doing good but that needed access to capital. And that is the key. Most businesses that are like Sweet Beginnings are often determined to be not quote investment ready. And the idea was, how do you – if Sweet Beginnings has been in business for fifteen years, they’re not going under, they’re somehow able to maintain the business but they do need infrastructure, they do need marketing support, they do need to attract talent that can run the business. And so as a result, they created, this is an effort of the MacArthur Foundation and the Chicago Community Trust and the Calvert Foundation that came together to create more avenues for small businesses to access significant capital, and  the minimum amount of a social impact loan was a half a million dollars.

So this was a different space that was being created for businesses. Most small businesses, certainly there are twenty-five thousand dollar loans or maybe fifty thousand dollar loans. We’re accustomed to those. But this was a huge impactful amount of investment that oftentimes small businesses and social enterprises like ours would not qualify for. But because of our social purpose, they understood the value.

Alice: Yeah, and had a big impact on how we run everything.

Brenda: Yes indeed.

Alice: So cash flow, always a struggle especially as a social enterprise that is balancing social impact with everything else. What parts of a traditional business do we tend to lack funding for, or what kind of suffers the most would you say?

Brenda: I think like with any business it’s probably the personnel, you know, those are always your highest cost. And so in our case we’re fortunate that the wages of our workers are subsidized through the city and the state through what’s called wage subsidies under the auspices of what we call transitional jobs. And the idea is that a person works for 90 days, they gain work experience and then it prepares them to transition into unsubsidized work.

Alice: Yeah, let’s talk a little bit more about those transitional wages and the funding of Sweet Beginnings. How did you find that initial funding when you were just getting started?

Brenda: So the initial seed funding that Sweet Beginnings received was a real exciting time in the state of Illinois in that there was a lot of conversation around the high rate of incarceration in certain neighborhoods. And NLEN had just commissioned a study that measured the impact of incarceration in North Lawndale through a report that we called Drugs, Crime, and Consequences: The Impact of Incarceration in North Lawndale. We did that study back in 2002, and we shared that report with all of our policymakers from Congressman Danny Davis to the mayor at the time, Mayor Daley. It was spread across, we mailed it to everyone because we were one of the first neighborhoods to actually measure the impact of mass incarceration and learned at that time that 57 percent of the adults in our community had had some involvement in the criminal justice system.

The Department of Corrections received a copy of that report as well. They asked me to host some meetings in the community about what the Department of Corrections could do to partner and support because they felt that if we don’t do something in communities where these folks are returning, they will only come back to prison. And so it was in those conversations that I had also had this sort of awakening around the need to create jobs in North Lawndale because the jobs weren’t there. And so it was sort of like a perfect storm where we recognized that after developing our U-Turn Permitted program and that after completing that program, there weren’t enough people willing to hire people in the community who had been incarcerated, that we needed to create our own business. And it was at that time that the Department of Corrections was like wow, you guys are creating jobs specifically for people with criminal records? And you have 57 percent of your community – how can we help you?

And so that’s where they decided that – there was a special initiative that was in place at the time, it was building a prison called Sheridan focusing specifically on drug-related offenses. Because we also know that three-quarters of the crimes committed are drug-related offenses. These aren’t violent crimes. These are people much like Charlotte who are making poor decisions because of poverty. So they said to me well listen, can we help you start this business? And they went ahead and seeded us with a hundred and forty thousand dollars to get started. So that’s where we developed a business plan, we conducted feasibility studies, we bought bees, we got it all started and launched and that was the beginning. And I will say the Department of Corrections has been an amazing partner for many many years.

Alice: Does that surprise a lot of people to learn that the Department of Corrections was our first funder?

Brenda: Oh yeah, strange bedfellows right, they’re like what? But yeah absolutely, it’s amazing. I think it’s a lesson in not – in being open rather to some of the strangest opportunities that can turn out to be some of the best investments. Who would’ve thought that the Department of Corrections would be one of our lead investors.

Alice: We’re kind of working at counter-purposes in many ways.

Brenda: Exactly. But then I have to say the city of Chicago came right on board right after that. I think the city was like, we can’t let the Department of Corrections outdo us. We have to – this is happening in our city and what will we do. So the city jumped on board and continued to help us and again remain a partner today.

Alice: So both of those are still major funders today.

Brenda: Yeah. Big supporters.

Alice: Awesome. So let’s circle back to the triple bottom line, to close. Can you tell me about a time when you made a business decision entirely because of the mission?

Brenda: What comes to mind pretty quickly is we had our first retail experience at a large scale outside of farmers markets, was an invitation to bring our product to Whole Foods. And I twas probably one of the most amazing moments because our customers kept saying why aren’t you in Whole Foods, why aren’t you in Whole Foods. So I’m like okay let me go check it out. So I remember heading up to North Ashland and going to meet with the buyer and she fell in love with the products and asked me do you have UPC codes that we can use and we’ll get you in the store right away. And I’m like I don’t know what those are but we can get them really quickly! So we did and we just had a wonderful relationship with them. And Whole Foods actually said that we’re one of the cleanest skincare lines that they carry. And it was just one of the biggest compliments that we could’ve ever gotten.

Alice: Like the most natural?

Brenda: Yeah, the most natural, yeah. Chemical free. That’s something that really meant a lot because Whole Foods was such and it remains a standard bearer. If you have the seal of approval from Whole Foods, then your product is – people will automatically know that’s a good product. So we were in Whole Foods for a number of years and I constantly was asking, would you be willing to hire somebody from our program, the people that produced this product, could you take one on or two? And there was just a warm relationship but just really rigid around considering hiring anyone that had a criminal records. They were even uncomfortable with people who had produced the product to even come into the store and do demos.

Alice: Oh, that’s pretty extreme.

Brenda: Well, there was a time when if something showed up missing in the store, they would automatically assume it was one of our people. Yeah so that’s not good right and so eventually the timing was good because Mariano’s was coming online. And we made a pivot and decided that we would work with Mariano’s because I did meet with Bob Mariano and asked what their values were, and would they be willing to hire people with criminal records. And they said yes and they were very specific about what type of crimes, which is what employers should do. What types of crimes are they comfortable with and which ones aren’t they? And then we could screen for those individuals. And we so we were able to place people at Mariano’s, and they carried our products and still do today. Whereas Whole Foods at the time was just not receptive and we were in there for seven, at least seven or eight years. So it was sad, but that was the decision that was absolutely based on our mission and what’s important. So I felt it was, if our products were good enough to be on your shelf, why aren’t our people good enough to work for you?

Alice: Yeah. That’s such a perfect example of applying that triple bottom line and the social mission. It’s not easy to give up a huge distribution partner like that.

Brenda: It was scary. It was really scary. But again I think having another grocery store lined up made it easier. Without question.

Alice: Right, yeah. Eased the transition. Thank you. Do you have any last reflections on balancing impact and business, especially for other social enterprises in a similar space?

Brenda: You know it is important to try to do your best to keep it balanced. Depending on your board of directors, depending on your various donors, depending on your allies, it’s easy to feel yourself shifting one way or the other and I think that you just have to stay rooted in why the business exists. If you start the business to make money, then that’s not the right reason to get in, in my opinion. There are other ways to make money that are a lot easier than running a social enterprise. Oh my goodness.

But I do think it’s important that when you asked me earlier – when you walk into that production floor and you see people smiling and you see people working and then when you have a debrief and they tell you listen, I’m so glad I have somewhere to go to work, I’m so glad I’m making new friends, I’m so glad to produce something that people really like and respect. That’s important. And that’s what keeps you grounded because you’re really touching lives. You really are creating a new pathway forward for people that felt hopeless. So that’s why the business, and then you go well I love them, but I can’t focus a hundred, I can’t go too far that direction either. They have to have work and it has to be a quality product in order for us to keep serving individuals like them. So you get quickly reminded about the balance. You really have to have all three of those working in your favor and that you’re conscious of them. You don’t let other people push you down a path that takes you out of balance.

Alice: Beautiful. Thank you so much, Brenda.

Brenda: Oh Alice, thank you. I appreciate you listening.

Alice: In this episode, we explored a lot of details about how Sweet Beginnings works, from its legal structure and tax status to the give and take relationship between Sweet Beginnings and its parent nonprofit. We also talked about how the social enterprise is guided by the values in its triple bottom line.

To send us a question or comment, or to listen to the other episodes of the podcast, please visit the landing page at blog.beelovebuzz.com/insidesb.

Thanks for listening, and see you next time.

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Brenda Palms-Barber

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