The Easter Seals wants its slice of the paper shredding industry.
The Hartford-area charity, dedicated to giving disabled people independence and dignity, founded a secure document paper shredding company to diversify its revenue to beyond the donated dollar.
EnviroShred employs the disabled, helps them learn to be employees and be productive in a work environment, making it a double bottom line venture whose success is measured both in dollars and in training.
This social entrepreneurship is a growing trend among charitable organizations, said Allen Gouse, executive director of Easter Seals Capital Region & Eastern Connecticut.
“When you think about independence and self-sufficiency for disabled people, it is not some medical miracle; it is a job,” Gouse said. “These people are learning to do a job that realistically they could be doing tomorrow at a manufacturing site.”
Easter Seals founded EnviroShred in 2009, but the company more than doubled its production after relocating in January to a larger facility at Prestige Park in East Hartford. The company collects secure documents from clients; workers sort white paper and colored paper, and then shred the paper into bales.
In addition to the revenue from clients, EnviroShred sells the bales back to the paper industry at $300 per ton for white paper and $200 per ton for colored paper. The company’s output is 19 tons a month.
Secure paper shredding is a relatively young industry that took off in the past few years, said Elaine Smith, vice president for Secure EcoShred, a Midwest company that started shredding in Connecticut six years ago.
New state and federal legislation requires more documents to be secured, so more companies want to shred, Smith said. With identity theft growing as an issue, more people are keeping their private information out of the wrong hands.
With Secure EcoShred vying with for-profits commercial firms such as Shred-It and The Shredding Source in a competitive Hartford market, Smith questions whether Easter Seals has an unfair advantage.
“They are shredding as a business and putting the money back into Easter Seals,” Smith said. “They are making a for-profit to pour money into a not-for-profit. How is that legal?”
It is, Gouse explains. While EnviroShred is operated for profit, it is part of Easter Seals’ nonprofit mission and serves as a training and rehabilitation program under the charity. Because its parent is nonprofit, EnviroShred does not pay income taxes and doesn’t pay sales tax on anything purchased for the operation.
All the money made from EnviroShred benefits Easter Seals programs, such as medical rehabilitation programs, Gouse said.
The Hartford-area Easter Seals has run for-profit training and rehabilitation businesses since its inception in 1948 under the company Resource Enterprises.
Resource Enterprises operates under the same mantra as EnviroShred — teaching people with disabilities how to be productive employees. The company morphed several times over the years to accommodate business needs.
Employees at Resource Enterprises formerly built Allen wrench kits, for example. Today they build flashlights for forest firefighters to wear on their helmets, a job that requires complex wiring, electrical and soldering work.
“The problem with easy tasks is they don’t help much with the mental, emotional and physical rehabilitation, so complex tasks work much better,” said John Jezowski, chairman of the board of trustees for Easter Seals Capital Region. “It is unbelievable to see the gratification, and it goes back to the core principle of providing dignity for people.”
Resource Enterprises employs 60 disabled people, and EnviroShred has 15 disabled employees and one non-disabled sales manager.
Disabled employees are paid one of two ways, both based on the federal prevailing wage for the work they are doing. Under piece-work reimbursement, workers are paid based on the number of products they produce. Under the percentage reimbursement, workers receive a percentage of the prevailing wage based on their productivity.
The highest paid disabled worker earns $18 per hour, Gouse said.
Just like any business venture, EnviroShred comes with its own risks and the Easter Seals board considers those when starting any new venture.
As a new business, the money coming in from EnviroShred isn’t a significant portion of the Easter Seals’ budget, Gouse said, but has the added benefit that comes from training the disabled to be productive employees.
“Hopefully, there is no limit to other opportunities in the future, but we want to be choosy,” Jezowski said.
EnviroShred’s prices are competitive, Gouse said, but just below the competition so the company can grow. For potential clients using other shredding companies, EnviroShred offers a 10 percent savings for those that switch.
“It goes toward a business that is finally becoming very lucrative,” Gouse said. “Now, one of the major players in the area is Easter Seals.”
