In 2008, after 25 years in the telecommunications industry and in need of work, Bill Morris took a job as a program manager for Community Intersections (CI) in Colorado Springs. CI is a local service provider to the Resource Exchange, the local community center board serving people with developmental and other disabilities in the Pikes Peak region of Colorado. Morris soon observed that many adults with developmental disabilities (as unpaid volunteers) displayed strong aptitude and interest in the disassembly of electronics—at that time donated by the public. Convinced that this activity could be developed into a vocational opportunity for a workforce facing more than 80 percent unemployment in Colorado, Morris proposed a work skills and paid employment program in partnership with GRX, an electronic waste (e-waste) recycler based in Denver. In November 2008, the program was launched to employ four disabled adults who disassembled desktop computers into constituent base materials. Payroll was totally funded from the sale of those materials and from proceeds from consumer recycling drop off fees.
In September 2009, Morris had a chance meeting with Tony and Mary Fagnant, owners of Qualtek Manufacturing in Colorado Springs, who were working on an idea to open an electronics recycling business in an empty warehouse they owned. Discussions quickly led to an agreement that this location could become a new locally owned and operated home for the CI employment program, under the name Blue Star Recyclers. Morris was hired as president in November 2009, and during the first quarter of 2010, the leadership team and six disabled adults moved over to Blue Star from GRX.
Blue Star’s operating model is to focus solely on the disassembly of computers into their base commodity materials, which are then sold and processed for re-manufacture. Other e-waste (e.g., computer monitors, keyboards, etc.) is sent off to larger commercial electronics recyclers for processing. Several large national recyclers have been willing to offer Blue Star special pricing for handling this general e-waste material, recognizing the special nature of Blue Star’s business model, and helping it to maintain a competitive position in the market. In some cases this has been possible by allocating subsidies received by these larger recyclers from electronic equipment OEMs like Samsung and Hewlett Packard.
In June 2011, Blue Star received determination from the IRS to become a 501(c)(3) nonprofit organization. The Fagnant family donated its entire investment of more than $200,000 to Blue Star, and made another $30,000 donation in late 2011. Today, Blue Star employs 17 staff in its Colorado Springs operation, 11 of whom are people with developmental handicaps. Morris estimates the total social return on investment is approximately $20,000 per worker per year in terms of reduced taxpayer support, for people who would otherwise be essentially unemployable and totally dependent on government benefits. These workers have reacted to their new status as genuinely productive members of the economy with near-100 percent attendance records, no lost-time accidents, and remarkable levels of productivity and attention to detail.
In addition to these social and economic benefits, Blue Star’s environmental impact is also significant. Recycled material volume rose from 670,000 pounds in 2010 to more than 1.2 million in 2011. To date, the organization has processed more than 3 million pounds of e-waste and has moved into a new 12,000 square foot facility as of August 2012. The company has recently added a fluorescent bulb recycling service, based on a grant from Rotary to purchase the bulb-crusher. Book recycling capability will be added in Q4 2012 along with electronics testing and refurbishment activities, adding an additional two jobs for people with disabilities. It should be no surprise that the compelling nature of Blue Star’s social mission gives it a powerful edge in winning work from new customers.
So successful did this imaginative model prove to be that in July 2011, Morris was able to secure an $89,000 award from the Colorado Department of Public Health and Environment’s Recycling Resource Economic Opportunity grant fund. This allowed Blue Star to create VERN—Vocational Electronics Recycling Network—as a way to replicate its proven model and provide smaller cities and rural communities in Colorado and potentially elsewhere with a viable and ongoing e-waste recycling option.
Using proceeds from this grant and the Colorado Springs operation as a template, VERN worked with local community service organizations in La Junta, Cañon City and Pueblo to establish an ongoing electronics recycling program, assist in the selection of appropriate disabled workers, and set up an initial marketing effort. To date, these three initial VERN operations have added 10 jobs for individuals with developmental disabilities. Each program is locally owned and operated with multiple stakeholders—including for-profit business partners, municipalities and school districts, and disability service organizations. Every VERN member community contributes a wide range of in-kind resources in support of their program. Says Morris, “It’s important for them to have skin in the game to underscore that this is a social entrepreneurship business model and not a charity endeavor.” All three communities now have vibrant ongoing e-waste solutions modeled after Blue Star’s own operation that simultaneously provide local vocational training and jobs for people with disabilities in their communities.
Alamosa has just recently come online to process e-waste from a six-county rural area of southern Colorado, adding an additional four jobs, and Blue Star expects to bring Wheat Ridge and Woodland Park, Colorado, and Ogallala, Nebraska, into the VERN program before the end of 2012. Boulder, Colorado, and Casper, Wyoming, are also interested, and inquiries have been received from upstate New York and even Australia.
With the completion of the initial CDPHE grant-funded project, Morris is actively seeking additional grant funding from foundations and elsewhere to boost the expansion of VERN throughout Colorado and nationally. The large for-profit e-waste recyclers require very large volumes to feed their business models and concentrate on the largest metropolitan markets, ignoring smaller markets and leaving most small cities (populations under 100,000) and virtually all rural communities without an ongoing e-waste recycling solution. Correspondingly, unemployment for people with disabilities is much higher in these same areas. This is why smaller communities are already enthusiastically embracing the VERN model.
Communities wishing to join VERN typically raise money from local government and private sources—sometimes supplemented with state grant funds—to get the ventures established. Blue Star’s role in getting these ventures off the ground is now therefore less financial in nature and increasingly focused on providing expertise, in the form of feasibility studies, grant-writing assistance and identifying and training a productive workforce of disabled individuals. Blue Star receives modest fees for all of these up-front services, which are used to help balance the books of the core Colorado Springs operation and provide funds for marketing and promoting the VERN model.
In June 2012, Blue Star Recyclers was awarded the Colorado Association for Recycling’s “Outstanding Outreach Award.” It offers a recycling solution for obsolete electronic equipment in rural communities, preventing thousands of tons of toxic e-waste from being dumped in U.S. landfills or developing countries, and ensuring that the constituent materials are recycled responsibly into a variety of other products. Not only that, it is providing genuinely productive jobs at market wage rates for an increasing number of underprivileged people who otherwise would be placed in “programs” at taxpayers’ expense at a time when local government budgets are stretched to breaking point. Importantly too, revenues from operations fund up to 70 percent of the organization's financial needs, which fosters a strong commercially driven culture throughout the company and its workforce.
It is a shining example of what social entrepreneurship can accomplish in providing a market-based service while addressing the social and environmental needs of our planet.