Recipe for Success

Charity hopes new plan will improve its honey business

In North Lawndale, one of this city’s poorest and toughest areas, the 17 beehives situated in a small backyard are

an unexpected sight. But then, Sweet Beginnings — the charity-created honey business that relies on those hives — is unusual too. The venture was started by the North Lawndale Employment Network three years ago as a way to help former inmates establish a work history as a step toward permanent employment.

North Lawndale has no shortage of clients for its job-training programs.

Roughly one out of every four residents in this neighborhood is unemployed, a rate that far exceeds the city’s overall jobless figures. A big part of the problem is that more than half of local residents have at one time been on probation, on parole, or in jail.

While the employment network offers job-training courses, it found that many former inmates needed more than just classroom work to succeed. Because the skills that help a prisoner survive are very different from the cooperation and teamwork required in the working world, the North Lawndale network realized that it needed to start a business where the organization could supervise workers and coach them as they established a work history and learned what a real job was like.

At Sweet Beginnings, clients of the charity tend the beehives and harvest and process the honey the bees produce.

The honey the company sells has become a popular offering at local farmers’ markets. Several city restaurants and caterers have incorporated the honey into their menus, including NoMI, a high-end restaurant downtown that featured it for a month in a special Asian chicken dish. And the city of Chicago includes a jar in the official thank-you gift it sends to companies that sponsor special events.

Seeking a New Approach

But the venture has come to a crossroads. Three years after it started operations, the honey business has yet to break even, and looking at the numbers, the charity began to wonder if it was realistic to think that it ever would.

A $140,000 grant from the Illinois Department of Corrections covered start-up costs and the first year of operations, and a $93,000 grant from the City of Chicago paid for the second year. At the same time, sales of the first year’s harvest brought in just $30,000, while proceeds from the second honey harvest totaled $26,000.

And the number of people the business has been able to employ has been small.

So far, the business has provided transitional jobs, which last an average of six months and pay $7 to $9 an hour, to 21 people. All 18 people who have completed their work at Sweet Beginnings have gone on to other jobs, and none have returned to jail.

Despite the disappointing financial returns, the North Lawndale Employment Network remains convinced that Sweet Beginnings has the potential to make a real difference, so the charity has gone back to the drawing board.

“Sometimes when you have an entrepreneurial spirit, you don’t really do a lot of planning, you just get out there and do it,” says Brenda Palms Barber, the group’s chief executive officer. “So we did that for a couple years — we made it happen — and now we’ve had to go back and re-engineer the numbers, the marketing strategy, who’s buying our product, and really decide what business are we in.”

After a yearlong planning process, the charity has charted a new course for the business.

Sweet Beginnings will now focus on making soaps, lotions, lip balms, and other items out of the honey it produces, rather than selling the honey itself. North Lawndale believes it will be able to sell the personal-care items more widely and at a higher profit margin, which will allow the organization to build a sustainable business that provides an array of meaningful transitional jobs.

Breakfast Brainstorm

Each year about 200 people who have gotten in trouble with the law participate in North Lawndale’s employment programs.

The charity’s U-Turn Permitted sessions offer traditional job-skills training, like how to write a résumé and prepare for job interviews, along with courses on anger management, conflict resolution, and how to work in teams.

But participants who have little previous work history or other issues to overcome often need more than four weeks of instruction. Ms. Palms Barber estimates that more than half of the people who participate in the program would benefit from a transitional job in which they could practice the “soft skills” that allow employees to hold down a job and succeed.

A big challenge, says Ms. Palms Barber, is that the attitudes and behavior that helped prisoners get through their time behind bars are at odds with what employers are looking for.

“To not be a team player in prison is what you’re taught,” she says. “You keep to yourself. You stay low. You do your time, and you come out. So what you need in order to be successful in prison is completely opposite of what you need in order to be successful on the outside.”

To bridge the gap between jail and job readiness, the charity decided to start its own business.

“We were really forced to come up with a way to become the first employer, to establish a work history, to hire those who have special needs, who really aren’t ready for the market. But they will be,” says Ms. Palms Barber.

She considered starting a lawn-care business or an errand-and-delivery service for the elderly, but rejected those ideas knowing that some customers would be fearful of allowing former prisoners to visit their homes.

One day over breakfast, a friend mentioned that she knew someone who was a beekeeper. Maybe, she suggested, the nonprofit organization could start a honey cooperative.

“I didn’t know much about co-ops — I’m a city girl — but what made sense was honey,” says Ms. Palms Barber. “Then, as I began to do research on the idea, I thought, ‘My gosh, honey has no shelf life, so we wouldn’t have to throw away inventory.’”

Employees of the resulting honey business say the job provides more than a paycheck.

Shelby Lee Gallion, one of Sweet Beginnings’ current employees, has developed a knack for beekeeping, but he says it hasn’t been easy.

“It’s a lot to learn,” he says.

If the hives aren’t clean or if the bees get sick, it will affect the honey they produce.

“It’ll sour out, and it won’t be good,”says Mr. Gallion. “You have to constantly keep in touch with them and check up on them, and make sure that they’re getting the right treatment.”

The North Lawndale Employment Network has had some impressive help as it contemplates the business’s future.

The Boeing Company, which moved its headquarters to Chicago in 2001, took on the planning process as a staff volunteerism project, with employees throughout the corporation lending their expertise. And Jennifer Henderson, a social-enterprise consultant and chairwoman of Ben & Jerry’s Homemade, volunteered to advise the organization.

Ms. Henderson believes the change in focus, from selling honey to selling honey products, makes sense financially and will also help the charity better carry out its social mission.

Market research the charity conducted found that the profit margin on honey is about 12.5 percent, she says, but by turning that honey into soaps, candles, body scrubs, lip balms, and lotions, the margin rises to roughly 80 percent.

At the same time, the new focus also will help the organization meet its social goal of creating more jobs for former offenders.

“You don’t need a lot of beekeepers,” says Ms. Henderson. The switch to personal-care items, however, will create new jobs in production, shipping, and even product design and development — and valuable new training opportunities.

A transitional job packing and shipping Sweet Beginnings products, she says, could put a convicted criminal on the path to eventually working for UPS or Federal Express.

“Those are very good jobs,” she says. “They’re jobs that pay decent wages and great benefits.”

Hotels and Airports

The question of how to distribute Sweet Beginnings products was an important focus of the planning process.

North Lawndale hopes to open a kiosk at Chicago’s O’Hare International Airport and possibly at Navy Pier, a popular tourist destination, as well as start a Web site to sell its honey products.

The organization also plans to approach the Hyatt Corporation, whose corporate headquarters is also located in Chicago, with miniature versions of the personal-care items that the hotel chain could stock in its rooms.

The business is also looking into creating “re-entry bags,” which would include Sweet Beginnings products, other toiletries like toothpaste and shaving cream, and condoms, which it could sell to the Illinois Department of Corrections to give to people who are leaving prison.

North Lawndale estimates the cost of carrying out the new strategic plan at $500,000. The charity has already won a $300,000 grant from the Illinois Department of Corrections.

Having spent a year examining issues like marketing, profit margins, brand identity, and governance matters, the organization is in a much stronger position than it was to build a successful social enterprise, says Ms. Palms Barber.

“All of those questions are much higher level than what we ever considered when we set out,” she says. “It’s making sure that we actually have a product that is going to sustain itself and be the response to this problem that we want it to be.”

With the new plan in place, she says, the business hopes to grow to 100 employees in 10 years.

New Structure

While the charity is confident about its plans, it took steps to protect itself in the event the business fails.

Until recently, Sweet Beginnings had operated as a program of the North Lawndale Employment Network, but the group decided to spin the business off as a separate legal entity that is wholly owned by the charity.

“We wanted to create a fire wall between the profit generation of Sweet Beginnings and the North Lawndale Employment Network,” explains Ms. Palms Barber.

Even with the new structure, the two entities will remain closely connected. Sweet Beginnings, she says, will probably call upon the charity’s expertise to provide coaching services for the ex-offenders it employs. The business will reimburse the charity for such work.

The North Lawndale Employment Network was honored in August for its innovative approaches to serving formerly incarcerated people when the organization was named one of the inaugural winners of the MacArthur Award for Creative and Effective Institutions.

The award came with a $400,000 grant, which the organization will use to retire debt it incurred when the charity was formed and to set up a cash reserve.

The network’s “almost exclusive focus on the hardest to serve” is one of the characteristics that distinguish the group from other organizations that prepare people to seek and keep decent-paying jobs, says Spruiell Weber White, a senior program officer at the John D. and Catherine T. MacArthur Foundation, in Chicago.

“There tends to be a focus on people who need the least help first in order that these programs can achieve the benchmarks and goals that are established over the short-term when they receive foundation or public-agency grants,” he says.

Challenges Ahead

The life stories of the three men now employed by Sweet Beginnings show the obstacles many former inmates are up against — but also the optimism they and the North Lawndale Employment Network bring to the challenge.

Mr. Gallion, 22, who finished serving a nine-month sentence for a drug offense last year, has three daughters. He wants to save money so they can go to college.

In and out of jail since the age of 17, Gerald M. Whitehead, now 49, figures he has spent more than 20 years of his life incarcerated. Out of prison for the last eight years, he came to the North Lawndale Employment Network hoping to get help improving his reading and writing skills.

Now, when he finishes work at Sweet Beginnings at 3 p.m., Mr. Whitehead goes to a literacy program recommended by the charity. He hopes one day to get his high-school-equivalency degree.

Since getting a job with Sweet Beginnings in August, Anthony D. Smith has thrown himself into his work.

This fall he came up with a homemade solution to protect the hives from mice trying to get through hive openings in their search for warmth during the cold Chicago winter.

The hives have openings that allow the bees to get in and out. Using wire cloth that the bees — but not the mice — could still get through, he suggested, the workers could fashion inexpensive opening protectors, rather than ordering them from a catalog.

But at age 31, Mr. Smith has spent almost half of his life behind bars. In May he was released after serving more than 14 years for armed robbery and home invasion.

“Sometimes you feel discriminated against, due to the fact that you can’t get a job,” he says. “Some people may look at your background and say, ‘We don’t want to hire you. We don’t want to put too much trust in you.’”

But Mr. Smith doesn’t hesitate when he says he won’t be one of the many former convicts who end up back in prison.

“It’s definitely not an option for me,” he says. “You can’t ever take two steps back.”