Industry Watch

Useful skills: A worker at what is now Momentum Enterprises, one of many social ventures in Minnesota

Building momentum

How one social enterprise is helping companies, people in need, and the economy — all at once

Fast-growing J.W. Hulme Co. is in need of skilled workers. Based in St. Paul, the longtime manufacturer of upscale leather and canvas products recently partnered with Momentum Enterprises for just that reason. The latter, based in Minneapolis, offers custom manufacturing and other services. But it's also on a mission: to hire and train people facing barriers, such as criminal histories, addiction challenges, and difficulties integrating into the U.S. workforce.

"We are developing customized training that will feed right into J.W. Hulme and the industry," says Janet Ludden, the president of Momentum Enterprises. "We can fill that need and in-source some of that labor, and their craftsmen can do the detail work."

Ludden's venture fits neatly into the emerging category of social enterprise, which differs from other organizations through three main characteristics: It addresses a social need, its commercial activity drives revenue, and the common good is its primary purpose.

"The common good is the primary purpose of social enterprises," says Kevin Lynch, executive director of the Social Enterprise Alliance (SEA). "This distinguishes it from good corporate responsibilities. A business can give back to the community but still have a primary purpose of shareholder returns."

Through partnerships with J.W. Hulme and others, Ludden hopes to build awareness in the private sector about the mutual benefits that social enterprises can create  and underscore the value of such programs for a community and local economy.

The social enterprise meme has been ascendant in recent years, both in the U.S. and internationally. Minnesota's profile in the sector grew recently when the SEA moved its national headquarters from Washington, D.C., to the Twin Cites area (Minnetonka).

When social enterprises first started emerging, they were mainly nonprofits that used business models and earned income strategies. Today, they're also represented by for-profit businesses that have a primarily social purpose.

"That social mission can be delivered in many different ways, like the people it employs, the products and services that it creates and produces, or what is done with the profits," says Lynch, who also authored Mission, Inc.: The Practitioner's Guide to Social Enterprise.

Momentum Enterprises has four divisions, each operating a different line of business:

Custom Manufacturing focuses on industrial sewing, wood fabrication, some assembly, and the cutting of leather, fabric, and other materials, as well as leather embossing.

Second Chance Recycling contracts with the City of Minneapolis and Hennepin County to recycle mattresses, plastic bags, bottles, and batteries.

Furnish Office and Home sells high-end furniture donated from the likes of Cargill, General Mills, and the Pohlad family.

BrandWorks supplies customized apparel and promotions for businesses utilizing screen and digital printing and embroidery processes, as well as e-commerce hosting services.

"Those four businesses are operating out of three sites and generate around $6 million in total sales," says Steve Cramer, executive director of PPL Inc., the parent company of Momentum Enterprises. "The essence of the social enterprise model is that it pursues a mission by being competitive in the marketplace with the goods and services it provides across market types."

Momentum Enterprises has 23 full-time permanent staff and serves 45 to 65 trainees at any one time. Those trainees are transitional full-time employees typically with the company for about nine months. A few also enroll in nine-month apprenticeship positions, for a total of 18 months.

Some workers might "graduate" to working at partner firms, like J.W. Hulme Co. For the latter, Momentum workers have been involved primarily in cutting and sewing dust bags for the finished leather goods. But with the arrival of new laser equipment at Momentum, J.W. Hulme Co. wants them to begin cutting, sewing, and embossing and debossing a variety of products and product components.

"Clearly, trainees leaving our employ will be uniquely qualified for their jobs," notes Ludden. "Hulme indicated their interest in this partnership with that in mind."

Momentum Enterprises is the result of a merger between two Twin Cities nonprofits: Rebuild Resources and PPL Enterprises. Both organizations had similar missions, were based on social enterprise work, and possessed strengths that seemed to respond well to the challenges of the other. PPL Enterprises could help Rebuild Resources grow via its approach to operational efficiency, for instance. A merger, it was decided, was the best way to accomplish the missions of each organization  and, ultimately, make a larger impact on the community.

Momentum Enterprises is no doubt helped by the fact that the Twin Cities area now hosts the national headquarters of the SEA, which will hold its National Social Enterprise Summit from May 19–22 in Minneapolis. The event will feature tours highlighting social ventures in the area, including a division of Momentum Enterprises.

The event will also host a "marketplace" area that will include some 50 social enterprises in Minnesota, among them GoBuyLocalCityKid JavaLifetrack ResourcesEat for EquityMidwest Special ServicesTasks UnlimitedGenesysWorks, and Momentum Enterprises  to name a few.

The SEA, it appears, picked a good place for its new headquarters.