Triple bottom line

Features - Cover Story

Nonprofit MRF operators Eco-Cycle and Eureka Recycling prioritize people, the planet and profitable operations.

February 8, 2017
Dan Sandoval

The private recycling industry continues to be a key driver for increasing recycling rates. However, the nonprofit sector has promulgated many recycling breakthroughs. For nonprofit recyclers Eco-Cycle, based in Boulder, Colorado, and Eureka Recycling, based in Minneapolis, the ability to provide recycling services while maintaining a social and environmental contract with the cities they serve demonstrates their success.

A resource conservation pioneer

Eco-Cycle says its mission is “to identify, explore and demonstrate the emerging frontiers of sustainable resource management through the concepts and practices of zero waste.” The organization says it believes “in individual and community action to transform society’s throw-away ethic into environmentally responsible stewardship.”

Recycling is an important part of the organization’s zero-waste mission. Eco-Cycle was one of the leaders of the modern recycling movement, with Marti Matsch, Eco-Cycle deputy director, saying the nonprofit established one of the first 20 curbside recycling programs in the country in 1976. In 1979, it celebrated the opening of the first multimaterial, postconsumer material recovery facility (MRF) in Colorado.

“Our guiding compass isn’t how can we make a lot of money,” Matsch says. “We start first with a vision of what we would like the world to look like; a place where waste isn’t the default. We were one of the first recycling innovators.”

Eric Lombardi, director emeritus and strategic advisor of Eco-Cycle Solutions, the nonprofit’s zero-waste project group that offers coaching and community engagement services, and the former director of Eco- Cycle, says the nonprofit is a “high-risk-taking innovator” in many ways. He says Eco-Cycle processes a more diverse range of materials than any other MRF operator in the country. And, in its 40 years of operation, he adds, the organization has never halted collection of a material.

The cornerstone of Eco-Cycle’s operations is a MRF that is owned by Boulder County and managed by Eco-Cyle under a multiyear contract. In 2015 the nonprofit processed more than 50,000 tons of recyclable materials at this MRF.

In addition to processing recyclables, Eco-Cycle provides what it calls zero-waste hauling services for businesses in two Colorado counties—Boulder and Broomfield—and operates a Center for Hard-to-Recycle Materials (CHaRM) in Boulder, which it says is Colorado’s first community recycling center for electronics and many other unusual materials.

Although Eco-Cycle’s service area is limited to Boulder and Broomfield counties, through its Eco-Cycle Solutions program, which is founded on the belief that any community can achieve zero waste in 10 years, the nonprofit provides technical support and consulting services throughout Colorado, nationally and even internationally. Through Eco-Cycle Solutions, Eco-Cycle says it is “sharing our successful programs and 40 years of hands-on experience in Boulder County.”

A relative newcomer

Eureka Recycling may be almost 1,000 miles away from Eco-Cycle, but, in many ways, it is a kindred spirit. The nonprofit says its “programs are designed to help individuals, organizations and communities understand the significance of zero waste and to provide the resources and education needed to achieve their own zero-waste goals.” Eureka says its “services and policy work present real-world solutions to the social, environmental and health problems caused by wasting.”

Eureka, which has been in operation since 2001, has at its centerpiece a single-stream MRF that is capable of processing 75,000 tons of recyclables per year. Lynn Hoffman, co-president of Eureka, says most of the material running through the MRF is collected from residents in the Twin Cities.

Additionally, the nonprofit operates a fleet of collection vehicles.

One of Eureka Recycling’s main goals is designing and implementing a zero-waste program for residents in the Twin Cities. To reach this goal, the organization’s work includes Reduce & Rethink, which examines how waste can be prevented upstream and calls for accountability from producers of packaging and products; the Twin Cities Free Market, a web-based materials exchange connecting community members who have items to give away with those who can use them; recycling services to single-family households, apartments and businesses; composting; zero-waste event services that provide event participants and planners with a firsthand experience of a world without waste and public space recycling containers that allow residents to recycle away from home; and The Recycled Paper and Compostable Product Co-op, which offers residents and businesses 100-percent-recycled content paper and certified 100-percent-compostable products.

“We just landed the two largest recycling contracts in the state—one for processing recyclables in Minneapolis, and one for both collection and processing (of recyclables) in St. Paul,” Hoffman says.

Both contracts are for five years, and, according to several sources, they should bring the organization roughly 46,000 tons of recyclables per year and have a value of more than $7 million.

Eureka has implemented its programs without financial assistance or subsidies from state or local governments, says Alex Danovitch, vice president of policy and research for the nonprofit. “The bids process is very clear,” he says. “We were chosen over national companies. Our relationship with the city is the same as with any other company.”

According to an article in the Minneapolis Star Tribune, one of the factors the city of Minneapolis used when it chose Eureka Recycling over Houston-based Waste Management Inc. for its recycling contact (which was decided in early 2016) was the environmental and social benefits the nonprofit offered. “There’s a sense that Eureka can do amazing things,” Minneapolis Council Member Cam Gordon reportedly said at the city council meeting where councilmembers voted to give the contract to Eureka. He added that the organization “can do more than just market and process our recycling, but may be a great partner in helping us accomplish our zero-waste goals.”

While it may not receive subsidies from the communities it services, in late 2016 Eureka Recycling received a $9.9 million financial package from RSF Social Finance, which worked with participating lenders Calvert Foundation and the Closed Loop Fund. The money will go toward purchasing additional equipment for its MRF as well as for a new transport collection fleet. Eureka says the investments will enhance its service to residents and further demonstrate that waste is preventable, not inevitable.

“In the last 18 months, we’ve reviewed upwards of 150 proposals asking for over $350 million for recycling infrastructure,” says Rob Kaplan, managing director of the Closed Loop Fund, in a news release announcing the funding. “Eureka is the model we compare these applicants to because it demonstrates the heights recycling can reach with the right operations and business model.”

While competing with national companies for accounts is challenging, Danovitch says Eureka is focused on issues such as providing a living wage with benefits to its employees, revenue sharing with the city and ensuring that the nonprofit maintains its contract as a social enterprise. “Lots of things that we introduced 15 years ago have become standard,” he says of Eureka’s approach.

Eureka says its recycling contracts benefit the community, including by tapping local end markets as much as possible.

Danovitch adds that the benefits of recycling are not just financial but also environmental. “You have to change the definition of profits from just money,” he says.

Subject to market forces

Both organizations say that even though they are nonprofits, they are affected by market conditions just as any private recycling company is.

“Certainly, Eco-Cycle is affected by global market fluctuations, just like everyone else in the business,” says Eco- Cycle’s Lombardi. “But, because we are a social enterprise and operate with a ‘triple bottom line,’ meaning we value people, the planet and the profits that we reinvest in our communities, we are committed to producing social and environmental benefits, regardless of whether the markets are up or down. Our business practices and our goals as a social enterprise are interdependent.”

Eureka Recycling is processing recyclables from two of the largest cities in Minnesota, and the organization says it is intimately aware of market conditions. “We invest a lot in material quality,” Danovitch says. “We can understand the impact of how you recycle and why you are recycling. But at the end of the day, you have to be competitive with prices.”

As with commercial recycling companies, Eureka and Eco-Cycle are concerned about producing bales of quality recyclables and doing so as efficiently as possible.

Danovitch says the residual level at Eureka’s MRF is roughly 5 percent, well below the U.S. average of 17 percent.

“The quality is better,” Hoffman says of the bales Eureka produces. “Like everything else, we have a triple bottom line,” she says of the nonprofit’s MRF operations. “We don’t see how fast we can run the line. We aren’t pushing how much tonnage we can run.” And, because of this, “We get bumped up to the top of the line because of the quality,” she adds.

Despite this approach to its MRF operations, Hoffman says, “lots of people don’t know we are a nonprofit.”

Eco-Cycle also says that because it is a nonprofit social enterprise, people sometimes mistakenly assume it doesn’t understand the business of recycling.

However, the Colorado-based nonprofit says that because it is a social enterprise, it takes the hauling business and the operation of the county MRF very seriously. Eco-Cycle strives to make its business activities succeed because these activities support its mission and provide funding to support community-based education and outreach.

“We look to change the rules on how we handle recycling. We then create the infrastructure to make it happen,” Eco-Cycle’s Matsch adds.

Because it operates a zero-waste model, it makes money selling recyclables instead of on waste disposal. When Eco-Cycle measures return on investment, it’s not just about money, however; it’s also about the number of public school students it reaches through zero-waste education programs, the volume of hard-to-recycle materials diverted from the landfill, the number of local communities that start curbside recycling and composting programs and other metrics that support its overarching mission.

Representatives of Eco-Cycle say, despite the nonprofit’s evolution and success over the last four decades, it still operates on a shoestring budget, pouring any money from its recycling and environmental efforts back into its programs.

A larger goal

Although Eco-Cycle and Eureka Recycling are ostensibly MRF operators, both non profits consider achieving zero waste as their true goal.

Part of Eco-Cycle’s mission is to identify, explore and demonstrate the emerging frontiers of sustainable resource management through the concepts and practices of zero waste. Eco-Cycle has developed the Zero Waste Colorado campaign, saying that increasing recycling and composting rates will benefit local economics as well as yielding environmental benefits. Zero Waste Colorado is working to help communities, businesses, institutions and nonprofits recycle more.

Eco-Cycle says recycling is one of many ways to reach zero-waste, while Eureka says recycling is essential to achieving this overarching goal.

“We are a zero-waste nonprofit, but we also are a recycling company,” Eureka’s Hoffman says. “You can’t get to zero waste with just recycling, but you need recycling to get to zero waste.”

Eureka Recycling’s Danovitch notes that the nonprofit’s efforts are paying off as more corporations are starting to embrace sustainability and zero-waste concepts. “We are encouraged when we see manufacturers putting effort into being more sustainable.”

Hoffman adds, “Zero waste started with radical environmentalists. But now businesses are starting to recognize that resources they depend on are finite.”

Eco-Cycle says the zero-waste concept is being embraced by some of the top corporate officials in the country, with Lombardi noting Dow Chemical in particular.

“The V.P. of Dow is happy that there is grassroots activities because we have been able to put pressure on them,” he says. “They wouldn’t be rewarded if it was internal. We have watched the last 20 years as corporations have greened up. There is a whole financial incentive and an employee engagement to our efforts.

“Now, our local governments can learn from corporations on how to green up their operations,” Lombardi says.

The author is senior editor of Recycling Today and can be contacted via email at dsandoval@gie.net