As boomer owners prepare to sell, a push for workers to buy

 

Your company’s next owner could be sitting in a cubicle down the hall, assembling parts on a factory floor or laboring on a construction site down the street. That, at least, is the hope of a burgeoning movement concerned about what will happen to the thousands of small and mid-sized businesses owned by baby boomers in Central Pennsylvania.

Most, if not all, of those owners will be looking to sell their companies over the next few years.

While many will turn to family members, industry peers or even private equity firms, an effort led by a Lancaster-based nonprofit is hoping owners will at least contemplate handing over the reins to employees.

“Widespread ownership transitions in our community offer us an opportunity to harness the moment to retain local jobs, root wealth locally and maintain a vibrant local economy. Employee ownership structures are a powerful way to do this,” said Craig Dalen, director of impact business strategy at Assets, the nonprofit that is leading the charge to spread awareness about employee ownership.

The nonprofit is describing the wave of anticipated sales as a “silver tsunami.”

At stake is the fate of roughly 11,550 businesses employing nearly 135,000 people in Berks, Dauphin, Lancaster, Lebanon and York counties, the areas covered by Assets, according to data the nonprofit gathered from the most recent U.S. Census survey of small-business owners, taken in 2012. The region’s boomer-owned companies represent $30.87 billion in sales and $4.79 billion in payroll.

 

 

 

 

As it looks to put employee ownership on the menu of exit strategies, Assets is collaborating with local lawyers, advisers and business owners, as well as an Oakland-based nonprofit, Project Equity, that is undertaking similar campaigns in other communities around the country.

Employee ownership remains relatively rare. Out of nearly 6 million companies of all sizes nationwide, just under 7,000 are held by employee stock ownership plans, or ESOPs, one of the most common vehicles for selling a business to its workers, according to the National Center for Employee Ownership. Another 1,000 companies operate under other forms of employee ownership, Project Equity estimates.

Employee ownership is not a fit for every business, its advocates acknowledge. And it is not the only way to preserve local control. Passing a business from a parent to a child or children, for example, also keeps wealth and ownership in a community.

But it is better than simply shutting a company down, which is often the path of least resistance, or selling to a third party from outside the community, said the co-founders of Project Equity, Alison Lingane and Hilary Abell

“Typically that means you’re going to lose at least some portion of the jobs in administrative and back-end operations,” said Lingane, noting that a company’s spending and profits also may leave the community after a sale.

Advocates of employee ownership want to ensure departing owners are rewarded fairly for what often represents their life’s work. But they also hope owners will value other factors besides the final sale price.

“The problem is that many advisers are pushing cash and that becomes a proxy for value,” said Ed Renenger, an attorney and ESOP specialist with Reading-based law firm Stevens & Lee. “In our experience if a business owner receives enough cash consideration to take care of their personal, family and charitable needs, it frees them up to think about other value drivers. There are lots of owners that find value in other things, such as legacy, community and employees.”

A sale to employees often entails risk and complications that don’t arise during a sale to a third party, Renenger and other advisers acknowledged. But the complexity ultimately is no greater than it is for a more typical sale.

“The reality is that the transition of a business to a third party, with the exception of an intergenerational transfer, is a very emotional event for the owner,” Renenger said. “It’s a complicated transaction that involves a detailed examination of current operations, current compliance with the law, current financial statements in ways that may feel very intrusive, and a sale to an ESOP is not unique in that.”

The ESOP, however, creates an opportunity to reward employees and preserve a business owner’s legacy, advocates said. And there are tax benefits, Renenger said. For one, an ESOP is considered a retirement plan, so a company that buys stock for its employees via contributions to an ESOP can use pre-tax dollars to do so, just like it would if it were making contributions to an employee’s 401(k) account.

Employee ownership also dovetails with changing expectations for the workplace, said Roger North, president of North Group Consultants Inc., a Lititz-based leadership consulting firm.

After World War II, workplaces followed a command-and-control approach fashioned along military lines, North said. Employees mostly accepted decisions handed down from above.

People entering the workplace today expect to have greater input into decision-making, he said. An ownership stake, whether held by children or employees, can help sharpen that input.

“My observation would be, if you don’t shift to that way of thinking, particularly over the next 10 to 15 years, you’ll likely be behind your competition,” North said.

 

 

It’s a way of thinking that has become ingrained at business software company Cargas Systems Inc. Employees have owned a growing stake in the company since 1998, said founder and CEO Chip Cargas.

Cargas now owns about 40 percent of the company. About 70 of the firm’s 100 employees hold the remaining 60 percent. Employees have two opportunities a year to buy at least $600 worth of stock. Shareholders help elect the company’s board, but all employees have access to the company’s financial performance and profit-sharing bonuses and other perks.

Cargas may no longer be the majority owner. But, he said, he feels he has a more engaged workforce and a sustainable company where people want to work. They pitch in when times are hard and celebrate when times are good.

“When we started employee ownership, I was 100 percent owner of a small pie,” he said. “Today I’m the 40 percent owner of a much larger pie and 40 percent of that much larger pie dwarfs the 100 percent of the smaller pie.”

The pie, he said, would not have grown as large without the effort and engagement of employee-owners. “Yes, we have a hierarchical organizational structure with titles and whatnot, but the way we operate is so collaborative,” he said.

And Cargas doesn’t have to fret about what will happen to the company when he retires. The succession is already under way, allowing employees to focus on customers.

“We don’t need to be worried about shocks to the system from huge ownership changes,” Cargas said.

 

As they move ahead, Assets and Project Equity plan to do more than raise awareness. Their goal eventually is to conduct feasibility studies for companies interested in employee ownership and to work with them to make it happen. Details are still being worked out, Dalen said.

Project Equity already has undertaken several transitions in the San Francisco area and has been developing studies for companies in western North Carolina, where it is working with a local partner called Industrial Commons, Lingane and Abell said.

The chief risks for retiring business owners include ensuring employees are prepared to become owners, both mentally and financially.

“Most small businesses are looking to rely on key employees who have management potential, who can keep the ship sailing and keep things going,” said Peter Kraybill, an attorney and leader of the corporate practice group at Lancaster County law firm Gibbel Kraybill & Hess LLP.

The key employees also need money to pay for the business. It typically involves a combination of debt and a promise to pay the selling owner over time as the buying employees acquire ever-greater chunks of the company, Kraybill said.

Among the risks is less-than-complete payment to the seller, especially if the new owners stumble during the transition, Kraybill said. The new owners may not buy in at the original rate preferred by the seller, or they may not earn the full confidence of customers.

“It’s quite a bit to navigate for an owner,” Kraybill said. “There are a lot of nervous-making moments.”

But, he said, there is a risk when a business is sold to an outside party. A third party could require payments over time instead of in a lump sum, and it may run the company very differently.

“That’s also a risk to a departing owner who very often, particularly for small businesses, has built this as their life work,” Kraybill said.

Increased scrutiny seen to benefit B Corps

Members of the coLAB team, from left Kate Gallagher, Courtney Rinden, Caitlyn Bordon and Bree Gillespie hosted a celebration Nov. 29 to commemorate the company’s certification as a B Corporation. Based at Lancaster coworking space the Candy Factory, coLAB is a consulting firm that helps nonprofits. – (Photo / Amy Spangler)

The owners of The Stroopie Co. didn’t need a label to let customers know they wanted to make more than profits and cookies. But they decided to pursue one anyway.

The business, which bakes and sells crispy Pennsylvania Dutch cinnamon cookies, was founded in 2008 with a mission of providing employment to refugee women. Jennie Groff and her husband, Jonathan, doubled down on that cause when they assumed ownership of the business in 2010, even taking the top prize in The Great Social Enterprise Pitch, a local competition for socially responsible businesses.

The Groffs decided to take the company’s mission one step further by becoming a certified Benefit Corporation. The certification, also known as B Corp certification, comes from B Lab, a Philadelphia-area nonprofit that combs through companies’ operations for evidence of socially and environmentally responsible business practices.

The Stroopie Co. is now one of 56 Pennsylvania businesses to boast B Corp certification. The Groffs see the recognition as a formalization of their for-profit company’s commitment to a cause.

The certification, though, exists outside of any legislative framework and carries no direct legal or financial benefits. And business owners that opt to pursue it have to pay fees based on the size of their company and, in many cases, commit dozens of hours to the application and documentation process. They must also adopt enough B Lab-approved procedures — like offering employees paid time off for volunteering or creating written policies for prioritizing local vendors — to receive the requisite 80 of 200 possible points on B Lab’s assessment.

The commitment needed to pass muster with B Lab — on top of the fact that certification carries no promise of financial benefits — might be why The Stroopie Co. is one of only four midstate businesses that can boast a B Lab seal of approval. Other companies have gained certification over the years but were not recertified, another level of scrutiny to which B Corps have to commit every several years.

The expense in time and resources has not dissuaded the Groffs. Nor has it dissuaded a growing number of other business owners, mostly in Lancaster County, from chasing the B Corp label. At least 70 businesses in and around Lancaster have taken an initial assessment this year, with hopes of either becoming fully certified or at least learning some good business practices from the process.

Many feel that adding an additional layer of scrutiny to their practices is simply the right thing to do.

“These businesses we have in our hands are incredible gifts to nurture and use well,” Jennie Groff said. “This is just one more way we can do that.”

Good for business?

Central Pennsylvania’s other three certified B Corps are consulting firms Work Wisdom LLC and coLab Inc., and painting contractor Two Dudes Painting Co. All four companies are based in Lancaster.

Leaders at these businesses said they, like Groff, felt that B Corp certification provided an extra layer of authenticity to social and environmental practices they already had in place.

Two Dudes is the oldest and largest of the midstate’s B Corps, with 53 employees and a history dating back to 1987. Company co-founder Peter Barber started pursuing the B Corp certification around early 2016 before receiving the official approval in September of that year.

The biggest hurdle in the certification proved not to be implementing major policy changes, but rather documenting informal practices and principles that already existed, Barber said. The company, for example, had a general preference for local vendors before starting the certification process, but had no written buy-local strategy. It also tried to save energy where it could, but had never formalized a framework for doing so.

“There’s nobody out there that’s going to tell you their business doesn’t care about the community, they don’t care about their workers. Everybody is going to talk the game that they’re doing that kind of stuff,” Barber said. “How do you create very definitive standards?”

Kate Gallagher, CEO of coLab, and Kedren Crosby, president of Work Wisdom, say they had similar experiences.

Both consulting firms were founded specifically for the purpose of creating positive social impact — coLab through consulting services for nonprofits, and Work Wisdom through consulting services for socially responsible organizations. But putting everything into writing, they said, took time.

Crosby estimates the process took her company about four months from start to finish before it received certification this past March. Gallagher’s firm, which was already legally structured as a benefit corporation at the state level, received its certification this November after several months of trying to find time for the process while juggling all of the other obligations that come with running a business.

That’s not to say they did not have to make any changes. Gallagher, for example, added a money-back guarantee into coLab’s contracts — a big step for a consulting firm that might devote months of services to a single client.

Gallagher, Crosby, Barber and Groff all say the process was worth the effort — and not just for the privilege of putting a B Corp certification logo on their websites.

While Two Dudes cannot attribute any increase in business directly to its B Corp certification, Barber said, the process of taking B Lab’s assessments and learning how to formalize certain business practices likely made the company more efficient.

“Has it gotten us more work? I don’t know,” Barber said. “Has it made us more profitable? It may have.”

B Corp certification also adds a layer of formality to a company’s business practice if it ever needs to bring on new investors or sell to a new owner, Groff said.

On top of that advantage, the label has given Stroopie an avenue through which to share its story with other companies looking to make a positive impact in their communities.

“I kind of have a family of other businesses that are working toward similar things,” Groff said.

Lancaster leads the way

All four of the midstate’s B Corps call Lancaster County home. The Lancaster area, in fact, ranks second in the state for total number of B Corps. Only Philadelphia — which hosts 25 — has more.

The nonprofit ASSETS sits at the hub of much of the county’s B Corp buzz. The Lancaster-based organization, which offers business development programs focused on addressing social disparities, has been educating the businesses with which it works about the certification, encouraging them to at least go through B Lab’s initial impact assessment.

The free assessment is catered to businesses based on factors like size and industry and generally takes between one and three hours to complete, according to B Lab. It gives companies a framework through which they can start thinking about ways to improve their social and environmental impact — even if full certification is not in the cards.

The assessment is also a key tenet of B Lab’s Measure What Matters program, which provides guidelines for organizations like ASSETS that want to help businesses find quantifiable, concrete ways to increase their positive social and environmental impact while increasing profits.

ASSETS hopes to see 10 percent of Lancaster County’s 12,000 to 15,000 businesses take the assessment in the next three to five years, said Craig Dalen, a former B Lab employee who now serves as ASSETS’ director of impact business strategy.

Dalen also hopes to see between 120 and 150 businesses go on to gain full B Corp certification.

It is a lofty goal, but one Dalen feels confident Lancaster County’s businesses will meet. The county already has a strong record of corporate responsibility, he said, as evidenced by companies’ contributions to events like The Extraordinary Give, a countywide effort that raised more than $8 million for local charities in November.

Dalen knows the full certification process can feel daunting, both to small business with few resources to spare and large companies with complicated procedures that might take significant time to change. But he feels confident businesses will rise to the challenge — for the sake of both their communities and their own bottom lines.

B Corp versus benefit corporation

Not all B Lab-certified B Corps are legally structured as benefit corporations, and not all benefit corporations are B Lab-certified B Corps.

Business owners can structure their companies as benefit corporations or benefit LLCs under Pennsylvania law, in much the same way that they can choose to be S corps, C corps, sole proprietorships or any other kind of business.

Legally defined benefit corporations must submit annual reports to shareholders outlining the ways in which they contributed to the public good. These reports are also shared with the state, making them a matter of public record.

The benefit corporation structure is available only at the state level, and only in certain states. Companies registered as benefit corporations in their home states have to register under different business structures — like LLCs or C corps — at the federal level.

B Lab’s B Corp certification, on the other hand, is a label that has no ties to a business’s legal structure. It is similar to the LEED certification for environmentally friendly buildings in that it is connected not to legal requirements but rather the standards of a non-governmental nonprofit.

B Lab strongly encourages its certified B Corps that are not structured as benefit corporations to pursue becoming one in states that offer the option to do so.

Lancaster B Corps

The Stroopie Co.
Description: Cookie maker with an emphasis on hiring refugees
Number of employees: Seven
Founded: 2008
B Lab-certified: May 2016

Two Dudes Painting Co.
Description: Commercial and residential painting company
Number of employees: 53
Founded: 1987
B Lab-certified: September 2016

Work Wisdom LLC
Description: Consulting firm with a focus on workplace culture
Number of employees: Zero (Six consultants provide services as independent contractors)
Founded: 2015
B Lab-certified: March 2017

coLab Inc.
Description: Consulting firm with a focus on nonprofits
Number of employees: Four
Founded: 2014
B Lab-certified: November 2017

For more information

Business owners can take B Lab’s free impact assessment test at bimpactassessment.net/assets. Creating an account on the site will also put the test taker in touch with ASSETS, which can answer further questions.

ASSETS is also hosting a series of seminars over the next several months focused on socially responsible business practices. More information is available at assetspa.org.

ASSETS works primarily with companies in Lancaster County but is also able to provide guidance and resources to businesses in other parts of the midstate.

Together, we can build an economy that works

Picture a group of 10 Lancaster entrepreneurs starting or growing their businesses. They are a more diverse group than you often see in Lancaster—4 are African American, 3 are white, 2 are Latino and 1 is African. They all have one thing in common: They are entrepreneurs with a dream of improving their lives by starting a business of their own.

You know how risky starting a business can be. Imagine, then, the risk involved in not only being responsible for a loan of your own, but also guaranteeing the loans of 9 other individuals. But that’s what they did. Through ASSETS’ Lending Circle program, entrepreneurs support each other for a full year of business growth. They commit to each other’s success. They improve their credit and access traditional capital. They formalize their businesses and increase their income. They increase the diversity of Lancaster’s economy. And they do it together.

This is the power of ASSETS, which you help to make possible with your financial support.

With your help, ASSETS supports businesses and helps to create thriving wage jobs. Through your generous support, ASSETS helps local businesses be a driving force for good. And it is not just the Lending Circles that are working.

We are:

  • Training social enterprises through the Great Social Enterprise Pitch to hire refugees and people with barriers to employment.
  • Helping women start and grow businesses through the ASSETS Women’s Business Center to achieve parity in business-ownership.
  • Working with existing for-profit companies to Measure What Matters – to consider their social and environmental impact in the community in new ways—through restructuring businesses to offer employee ownership, diversifying leadership and management structures, adding more local women-owned or people-of-color owned businesses to their supply chains, and becoming certified B Corps.

The BBC has called Lancaster “America’s Refugee Capital.” If we can resettle 20x more refugees than any other place in the country, we believe that we can build an economy with the highest rates of women- and people-of-color-owned businesses and the most B Corps per capita. Will you help us work toward this vision?

Together, we can build an economy that works.

Your donation will help us meet our $40,000 fiscal year-end goal and continue to build an economy that works for all. You can give on-line today!

Sweet Jobs Give Immigrants New Opportunities

ASSETS client and participant in the 2015 Great Social Enterprise Pitch, The Stroopie Co., is making news!


The Stroopie Co. in Pennsylvania Employs Refugees to Make Unique Cookies

If you’ve ever heard of Lancaster County, Pennsylvania, you’re probably aware that it’s home to one of the biggest populations of Anabaptist religious sects, such as the Amish and Mennonites, in the United States. You may not know that it sits near the heart of Pennsylvania’s enormous sweets industry, just next door to the candy-making mecca of Hershey; and that the county accepts hundreds of refugee immigrants every year.

The Stroopie Co., a small Lancaster company that manufactures Dutch-style cookies, has a mission to hire and train refugee women as its workforce. The company’s hiring practices reflect its community’s history and spirit.

“We were looking for a really practical way to love our neighbor well,” says Jennie Groff, who co-owns “Stroopie” with her husband, Jonathan. She worships in an Anabaptist church that focuses on supporting refugees. “The company fits my roots,” she says.

Stroopie’s was started in 2008 by Ed McManness and Dan Perryman, who remain part-owners. The goal was always to provide “meaningful employment” to local refugees; McManness’s family had enjoyed Dutch “stroopwafels” — a cinnamon cookie made in a waffle iron with a layer of caramel inside. The circular cookies rest perfectly on the lip of a mug of steaming hot tea or coffee, which softens the caramel filling. The Stroopie Co. makes one version half-dipped in chocolate.

“They’re hard to find in the States. It gave us something we could market,” Jennie Groff says. “We knew if we were going to establish a social enterprise, we needed to provide a great product.”

The Groffs joined the enterprise in 2010, bringing with them Jonathan Groff’s lifetime of experience in his family’s candy-making business.

Today, Stroopie’s employs six refugee women — three from Myanmar and three from Syria. Another employee manages the staff and acts as an ESL teacher. Employees typically stay a year or two before moving on, Groff says.

“The refugee women we’re hiring, they’re super-motivated, thankful, great workers. Just a huge, huge asset to our company. I just can’t imagine taking our family and having to start over in a new place. We view it as a deepest privilege to provide a job with dignity.”

Mary Myint, an “expert Stroopmaker,” offers her testimonial on the Stroopies website: “I like my job because my schedule is nice for my children. When we lived in Myanmar and Malaysia, we were scared of the police. In the USA all the people are equal, so my family loves the USA.”

Workers start out making $11 an hour, Groff says, then move up to $12 an hour after training. The owners want to eventually pay a wage of $15 an hour, and perhaps even start giving the women part ownership of the company.

Getting to that point, however, requires that Stroopie’s take a big next step.

Filling Out the Mission

“We need to make a profit in a more sustainable way before we can consider granting ownership shares,” Groff says. “We are holding our own, we’ve been breaking even. … For a small company, that’s something to celebrate.”

In 2015 Stroopie’s won “The Great Social Enterprise Pitch,” a local competition meant to encourage businesses that “perform a social good while also making a profit.” The prize: In-kind products and services worth more than $25,000, meant to help the company grow. Stroopie’s used its winnings — along with money raised from Indiegogo as part of the competition — to open a retail storefront in Lancaster, where the cookies are made and sold directly to the public.

“The biggest thing — it gave us a platform to tell our story,” Groff says of the competition. “The community really rallied behind us.”

The company also distributes its product in nearly 70 stores across the United States and is pitching bigger retailers.

“We feel like we’re poised and ready to grow,” Groff says. “We’re still relatively small, but every year we gain momentum and get our story out there.”

Groff says she is confident the company will continue to grow, increasing profits and employing more refugees.

“Both have to be equally strong — you have to have passion for both things — or it’s not going to be sustainable, it’s not going to work,” Groff says.

Small Change. Big Difference.

ASSETS is the #GiveLocal recipient of March and April 2017!


Launched in 2017, Lemon Street Market’s #GiveLocal project is a register round up initiative designed to support Lancaster organizations whose missions align with ours.

Customers can elect to “round up” their purchases to the nearest dollar when they check out, with proceeds donated to the featured organization for that month. Customers can also choose to increase their at-the-register donation by adding to their round up value. By shopping at Lemon Street Market, customers are directly supporting more than 75 local farmers and vendors, and even more through local distributors like Lancaster Farm Fresh, Oasis, and Four Seasons. For each dollar spent at a local, family-owned business, 80% is put back into the local economy. For every dollar spent at large, corporate owned stores, only 20% makes it back into the local economy.

Help us to contribute even more to our community by choosing to #GiveLocal when you check out at Lemon Street Market.

Harvest Moon Bagel Co.: Philly-Style Bagels brought to Lancaster

Chelsea Zawisa has always worked in the food industry. “At times I wondered if I should get a job outside of the food industry, but saw no reason to, I love food.”

In High School, Chelsea worked in various restaurants and bakeries, building a passion for her own cooking. In 2011, she went to YTI for their pastry arts program and began to master baking. Once finished, she worked at bakeries and cafes, including Commonwealth on Queen. During this time, she began to think about owning her own business. “I feel like everyone in the restaurant industry wants to own their own business.” After planning and some research, Happy Belly Bakery was created in 2014.

However, the bakery was only a part-time business and Chelsea would only sell baked goods at the Lancaster East Side Market. An idea began to form inside her mind. For months, Chelsea had visited Philadelphia and saw the success a particular kind of bakery was having: bagel shops. “When we were in Philadelphia, I would walk into every bagel shop I could find and talk with the owners if I could.” After months of research and support from family and friends, Chelsea began planning the transition of her business to solely selling bagels and condiments with a focus on buying fresh, quality ingredients from the Lancaster community. The name would also be changed to the Harvest Moon Bagel Co.

While preparing for this transition, Chelsea knew the ASSETS Learning Circles was a perfect fit for her. While having a great deal of experience within the food industry, she still had only a smattering of experience and knowledge about owning a business. When the first Learning Circles was available, she immediately signed up. She was put into contact with professionals who had real experience and helped her immensely with multiple areas like marketing, the city’s laws, basic accounting, etc. Chelsea found ASSETS itself to be incredibly open and friendly. “I don’t think there is anything like this in many places.”

The owners of Commonwealth on Queen also helped her in starting her business by allowing her to use their oven to bake bagels and also help make the logo for her business. With the support of friends, family, ASSETS and Commonwealth, Chelsea finally officially opened the Harvest Moon Bagel Co. on Sunday, June 26th, 2016.

In the future, Chelsea wants to continue perfecting her bagels and experimenting with different flavors for her butter and cream cheese. She wants to have her own storefront in downtown Lancaster and also have the best bagels in the county while also providing a friendly, community-oriented atmosphere. 

 

Eastern Mennonite University Alumni Help Build ASSETS

Jessica King ’96, executive director of ASSETS, visits with The Stroopie Company owner Jennie Groff (right, facing) and two employees, both refugees. (Photo by Jon Styer)

WITH HOLIDAY DEMAND ON THE UPSWING, The Stroopie Company went to two shifts in early November, allowing them to churn out up to 6,000 Dutch stroopwafels (cinnamon-y, carmel-y goodies best enjoyed with a hot beverage) a week. All six workers running the show at the company’s small production facility in Lancaster, Pennsylvania, are refugees: three from Burma and three from Syria. Once a day, they sit down with the store manager, who is also a certified ESL teacher, for a half-hour English lesson.

As a certified B Corporation, The Stroopie Company measures its success by social and environmental standards in addition to the profit column – hence the language classes and $11-an-hour starting wage offered to refugees otherwise facing limited employment prospects. Alone, however, these commitments don’t solve the challenges of solvency and profitability facing any small business. To help meet them, The Stroopie Company has turned to ASSETS, a nonprofit that has worked to create economic opportunity and reduce poverty in and around Lancaster for more than 20 years.

One of the organization’s new programs, says executive director Jessica King ’96, is called the Great Social Enterprise Pitch, which offers a series of business-planning workshops to 10 entrepreneurs who prioritize social and environmental well-being. After the workshops, five participants pitch their ideas to a panel of judges and compete for more than $50,000 in cash and services.

King with Director of Development Tina Campbell ’99 (left) and Finance Director Rosanne Jantzi ’89. (Photo by Tyler Naples)

“It gave us the confidence that we had a great idea going,” says Jennie Groff, one of the company’s owners. “We really feel like we’re poised to grow.”In 2015, The Stroopie Company won the competition, coming away with donated legal services, a free photo session for a new product catalog, and cash that it invested in new equipment.

Lancaster is a welcoming and generous community that resettles more refugees and gives, on average, more to charity than anywhere else in Pennsylvania. By integrating this philanthropic impulse into a workable business model, King says, “impact businesses” like The Stroopie Company are able to fund their own pursuit of a greater good.

“[The Stroopie Company] is a means to an end. The end is about helping their neighbors have better lives,” she says. “There are a lot of ways you can do that. Making cookies is their way of doing that.

“It’s amazing to see the kind of impact that [employers] can have on the lives of people around them, their neighbors and their employees, regardless of what their business is. It’s the spirit of ‘how’ they do it,” King continued. “It might not be all that bright and shiny, but it really matters to people. That’s what really gets me excited.”

Through its various programs, ASSETS provides training and lending to entrepreneurs from underrepresented groups as well as the impact businesses committed to social and environmental goals. During the most recent fiscal year, it supported the creation of 40 new businesses and more than 70 jobs, provided loans or long-term training to more than 150 entrepreneurs, and involved nearly 1,500 businesspeople and community members in other programs and events.

“We believe in the power of business to transform our communities for good,” says Tina Campbell ’99, director of development. “But we are also convinced that it must be equitable transformation – that all races, ethnicities and cultures must be included for true economic development to happen in our own communities.”

According to board member Kevin Ressler ’07, an important part of this vision has been ASSETS’ expanding focus over the past several years to supporting impact businesses in addition to entrepreneurs from underrepresented groups.

“This work breaks down the barriers of ‘us’ and ‘them’ and begins to see that ‘we’ is our only hope moving forward to maintain a country full of communities that don’t just co-exist but co-create and thrive together.”

Since 2008, The Stroopie Company has employed 16 refugee women in its kitchen. Many have used it as both a landing and a launching pad, a welcoming place to build experience and improve their English before moving on to other things. Recently, when a TV news crew stopped by for an interview with one of the Syrian workers, Groff called in an employee who’d just left to provide some translation help. Watching from the sidelines, Groff was struck by the poise and fluency the former employee had developed, at least in part, right there in the stroopwafel kitchen.

“She came here hardly wanting to say anything. To be able to see how she’s leaving us – it just was hugely encouraging,” says Groff. “That is totally what motivates my husband and me. It is just so rewarding to see our refugee employees come in and gain confidence. You can just almost see it happening before your very eyes.”

Top 10 Milestones at ASSETS in 2016

First of all, THANK YOU to everyone who made 2016 a great year for ASSETS. We couldn’t have done this without you. We’d like you to help us celebrate some of our highlighted moments of 2016:

  1. We opened the Women’s Business Center and hired Melisa Baez as the first director of the Center! The Women’s Business Center at ASSETS is developed in partnership with the Small Business Administration to assist small business owners who are starting or expanding their small business.
  2. Two clients became certified B CorpsThe Lancaster Stroopies Company and Two Dudes Painting. B Corps certification is geared towards for-profit companies to meet rigorous standards of social and environmental performance, accountability, and transparency.
  3. ASSETS became a certified SBA Microlender.
  4. We hosted two Cultivate Lancaster events, with a total of over 300 people in attendance.
  5. For our third annual Great Social Enterprise Pitch, we sold out the entire Ware Center!
  6. We launched the ASSETS Business Directory features the businesses of our wonderful clients.
  7. ASSETS is honored to have won the Samaritan Counseling Center Business in Ethics Awards.
  8. Our Director of Programs, Jonathan Coleman, received the Lancaster Chamber of Commerce Young Professional’s Network (YPN) Innovation Award.
  9. Our Director of The Women’s Business Center, Melisa Baez, received MEDA’s “Ten Young Women Changing the World” award.
  10. And….. ASSETS helped over 40 businesses launch!!

Thank you so much to everyone. W wish you a wonderful and prosperous 2017!

 

 

Building Blocks of an Equitable Economy

We have been talking a lot here at the ASSETS office about building an equitable economy. We have been talking about important building blocks needed for an equitable economy.  Blocks like:

  • Customers, who are willing to make just, socially and environmentally choices in the goods and services they buy.
  • Business owners who are willing to pay their employees higher wages so that they can thrive, even if that means they don’t make as much of a profit as their competitor next door. They know that business as usual is getting us nowhere and they are committed to doing things differently.
  • Employees who, when offered meaningful employment, can build wealth and move themselves out of poverty.
  • Investors and donors, who are committed not just to a financial return but to a social return on investment.

We can’t build this new world without you.

By donating to ASSETS, you’re helping to provide resources, connections and support to small business.

By supporting the work of ASSETS, you’re helping us help local business owners create more good jobs in the community.  By investing in ASSETS you’re investing in an avant garde idea that flips the traditional business model on its head.  Because you know that the world needs new ways of doing things.

This matters because a good job is the surest path out of poverty.  And locally owned businesses – especially those who intentionally measure and improve their business practices – create the most jobs and economic benefit in a community.

Will you help us build this new world by donating to ASSETS today?

A gift from you would mean that ASSETS could work with more people like Olayinka & Saba, the owners of Melanin Essentials and the winners of the 2016 Great Social Enterprise Pitch. They believe that by helping women of color transform the way that they treat their skin and hair, providing good jobs to single mothers and combating the environmental and bodily hazards of chemical ingredients, they are not only generating a profit for themselves, but also helping to change their community.

With you, we’ll have all the blocks we need to make our local economy more equitable for everyone.

Thank you for considering this request!

The Responsibility of Businesses in the Trump Economy

When young people move into adulthood and out of home for the first time, there is a predictable response to the lack of structure that had previously been provided by parents.

For the newly unhindered, that freedom is exhilarating — all-night parties, new clothes and dinners purchased on that first credit card as well as a choice about whether to attend class or not.

With the possibility of massive deregulation, the Donald Trump political era is likely to bring some profound changes to our political and economic system.

For the newly unregulated, that could mean a level of freedom — and peril — similar to the example of the college freshman.

Case in point, if the cabinet nominees of the president-elect are confirmed, we will have a labor secretary who is an ardent and vocal opponent to workers’ rights and a head of the Environmental Protection Agency who is strongly aligned with oil, gas and coal interests and vehemently opposed to regulatory oversight.

Whether you love these choices or hate them, there is no denying that there will be deep and long-lasting effects of the desired policies — or lack thereof — that are being proposed.

As a business community, we are being “pushed out of the nest,” whether we like it or not.

Herein lies the challenge: if the regulations go away, are we going to act like the 18-year-old in his/her first semester at college?

If the EPA ceases to exist or at least decreases its environmental regulations, will Lancaster’s farms and production facilities allow our air, waterways and forests to be irreparably damaged by choosing short-term profits at the expense of long-term environmental stability?

If workers’ rights are subverted, will local businesses use that opportunity to exploit employees, further exacerbating poverty and economic inequality in our community?

Are we going to overindulge, or are we going to consider the full, long-term impact of our actions and business decisions?

If we enter a new era of an unfettered business rights and limited regulation with a short-term mindset —similar to that college freshman — we could very likely lose much of what makes Lancaster such a desirable place to live.

Our natural places and our water sources could be negatively impacted, and our air quality could continue to decline.

We may see more Lancastrians dealing with the reality of living in poverty and economic distress, which tends to result in more crime, higher incarceration and associated costs, and decreased educational attainment, among other outcomes.

Importantly for the businesses themselves, we also will see a community in which potential customers have less expendable income to spend in local businesses.

Our call to Lancaster’s businesses is to be the responsible college freshman who attends every class, studies hard and considers the future impact of their decisions.

Let’s make a decision, here and now, to protect our air quality, our waterways and our forests from degradation.

Let’s treat our employees with the respect and decency that we would want to be treated with ourselves, including ensuring them a livable wage.

Let’s not make the dwindling government programs or nonprofit sectors clean up our messes.

Let’s keep the messes from happening in the first place by considering the social and environmental impact of the business decisions we make.

More than 40 studies from sources including the Economist, Harvard Business Review and Deloitte all say that higher corporate standards around environment, social and governance practices reduce the company’s financial risk and create greater profitability.

The Trump economy is here for the next few years, so regardless of mandates from Washington, D.C., let’s continue to show this community, and the world, the long-term view, ethics and responsibility for which Lancaster businesses are known.

Evidence shows that this will have a positive return on investment for both our businesses and the community.

Jonathan Coleman is director of programs for Assets, a Lancaster-based nonprofit that works to create economic opportunity and cultivate entrepreneurial leadership in order to alleviate poverty and build vibrant, sustainable communities.