When Kabira Stokes worked as a senior field deputy for the city of Los Angeles’ Council President Eric Garcetti in 2005, she started to notice some major issues with crime in the city.
“There’s gang involvement and the issue of mass incarceration,” she says. “It’s a cycle of violence, getting into jail and coming out. You notice when people come home from prison, there are no job opportunities for them, so they go back to whatever got them into prison in the first place. That to me seems unfair. If they’ve done their time and paid their debt, shouldn’t they have the opportunity to get back into the workforce, support their families and have meaning through work?”
Seeing this cycle of recidivism in her community, Stokes resolved to address this problem by creating work opportunities for people coming out of the criminal justice system. Initially, she wasn’t sure what kinds of jobs to offer this population, but after attending an event where Indianapolis-based electronics recycler RecycleForce presented on how it was offering work to formerly incarcerated people, she realized that this could be a good avenue for incarcerated personnel in her community as well.
Stokes toured RecycleForce’s facility and received pointers from the nonprofit on how to start a business in the electronics recycling industry. She says Los Angeles didn’t have enough electronics recycling businesses at the time, so a startup in this sector would help fill that gap.
Stokes adds that electronics recycling isn’t “rocket science,” either, making it a good fit for formerly incarcerated workers. “It’s a low barrier to enter for folks who don’t have a lot of education,” she says. “I also liked that there was opportunity for advancement in jobs for people. You can start on the demanufacturing floor, but you can also learn how to repair computers or get into data destruction.”
In 2011, Stokes launched Isidore Electronics Recycling (today known as Homeboy Electronics Recycling). The business is unique in that it’s a social enterprise—a for-profit business with a specific social mission that’s factored into business-related decisions.
“The ultimate goal is to scale our impact by scaling our business, but we also want to employ more people who face employment barriers—that part’s about transforming lives,” says Chris Zwicke, chief operating officer at Homeboy Electronics Recycling, on being a part of a social enterprise. “We want to evangelize that you can do social enterprise. You can have business that creates social good.”
Stokes adds that she decided early on that Isidore Electronics Recycling would not offer jobs to anyone who committed identity theft or similar crimes because of the nature of the work, but she did want to offer second chances to all other people coming out of the criminal justice system.
“I decided early on that we were all about giving opportunity,” she says.
Stokes says she partners with nonprofits to recruit formerly incarcerated people who are ready to work. She notes that some of her first formerly incarcerated employees came from an LA-based nonprofit called Homeboy Industries, which serves high-risk, formerly gang-involved men and women. Homeboy Industries is a 501(c)(3) nonprofit that connects these people with social enterprises, like Isidore Electronics Recycling, that serve as job-training sites. It also offers gang rehabilitation and re-entry programs, such as education, substance abuse and mental health services, tattoo removal and legal help.
Stokes admits that she and her team had a big learning curve upon first entering the recycling industry. However, she says one of her first employees had taken a lot of electronics courses while in prison and he also had a bachelor’s degree in a related field. She notes that he was especially helpful in the early days of the business.
Additionally, Stokes and her team decided to apply for R2 (Responsible Recycling Practices) certification within the first few years of operation. Isidore Electronics Recycling received the certification in 2015.
“A lot of companies wait [to get R2 certified] until they get larger,” Stokes says. “But I found [the application process] really helpful. It almost gave us a blueprint and guidelines of policies and procedures to run a safe, responsible business. We definitely built the plane as we flew it, but we figured it out.”
Finding adequate space for the business also was challenging early on. The business started by using a corner of an American Apparel warehouse in Los Angeles. When it outgrew that space, it moved to a warehouse in the Lincoln Heights neighborhood of Los Angeles.
Only five months after relocating, though, an electrical fire destroyed that site. With that incident, Stokes says she and her team were unsure whether they would recover, but she says her team was dedicated to the cause of providing electronics recycling and helping offer second chances to formerly incarcerated personnel. And, in a matter of days, another warehouse popped up for the small electronics recycler to use.
“There was this sense of we were very lucky,” she says. “It’s amazing we survived.”
Stokes adds that since starting in 2011, her business has continually achieved year-over-year growth, hitting $1 million in annual revenue in 2018. Homeboy Industries acquired Stokes’ business in 2016, which helped to streamline hiring processes.
The company then rebranded to Homeboy Electronics Recycling. Zwicke says it’s the same business, but it’s part of a bigger organization that offers social services to formerly incarcerated people.
“Being part of Homeboy Industries, our employees can access other services,” Stokes adds. “We used to scramble to help them. Now, an amazing nonprofit helps them.”
“It’s a low barrier to enter for folks who don’t have a lot of education. I also liked that there was opportunity for advancement in jobs for people.” – Kabira Stokes, founder and CEO, Homeboy Electronics Recycling
Homeboy Industries works with several LA-area businesses to teach ex-cons job skills to help them enter the workforce.
“We’re more of a ‘graduate’ employer [for the program],” Zwicke says. “People who graduate the program can come work here as full-time employees, but we do get some employees who are at later stages of the training program, too.”
Currently, Homeboy Electronics Recycling has 10 trainees in addition to 28 full-time employees, some of whom graduated from the Homeboy Industries program.
“I’m proud of our growth,” Stokes says. “We’ve grown every year, added business lines, got more into data destruction, more into being able to offer inventory management for people.”
Data destruction demand
Homeboy Electronics Recycling currently offers electronics recycling, secure destruction, electronics repair, electronics resale and prop rental services. Stokes says she started the business by offering just recycling and resale, but eventually the company started performing data destruction jobs. She says adding all the other services happened organically as more customers approached the firm.
“As our clients had needs, we’d step up to meet them,” she says.
The company operates out of two facilities—one in downtown LA to offer front-end services and some demanufacturing work and another facility in South Gate, California, to bale plastic and process materials. Zwicke says the latter location just started operating this year, and it will be third-party audited this June.
“There are some advantages to having our front-end services being close to downtown LA and having some of our processing work further away, where it’s not as expensive,” he says. “Homeboy Industries is right downtown near Union Station, so it helps to be close so they can travel back and forth.”
With fluctuating commodity values, Zwicke says Homeboy Electronics Recycling has become less reliant on scrap sales.
“There is so much commodity exposure,” he says. “Most of the commodity outputs from an electronics stream have either stayed flat or gone down, while minimum wage has gone up by about 80 percent. Over the same period, commodity values are going down. That’s a very challenging condition to operate in.”
The company sells most of its scrap domestically. Zwicke says Homeboy Electronics has a partnership with Hewlett Packard (HP), Palo Alto, California, as part of its closed loop manufacturing process. Zwicke says Homeboy Electronics Recycling sends HP specific recovered plastics that the manufacturer reprocesses for use in new HP products. Also, he says Homeboy Electronics Recycling charges more for recycling services and focuses on diversifying its revenue stream to grow in tough market conditions.
Data destruction is growing for Homeboy Electronics Recycling, making up about 20 to 25 percent of its business. The company uses an AMS 300 from Ameri-Shred, Alpena, Michigan, to shred thousands of hard drives daily. Zwicke notes that this is a compact shredder that his team will take out to customer sites to shred hard drives on-site. He adds that Homeboy Electronics Recycling subcontracts for several other recyclers as well in this area.
“That’s part of our value proposition,” he says. “We’ll bring it out, you can watch us do this and then there’s no chain of custody. Beyond just giving them a report, they can sit there and watch it happen.”
Leaving an impact
Homeboy Electronics has helped numerous people get on their feet after being incarcerated. Zwicke says the company has had a handful of its formerly incarcerated personnel get promoted to leadership roles. He says Xuong “X” Cam, triage supervisor at Homeboy Electronics Recycling, is a good example of that. Cam first joined the company when it was still Isidore Electronics Recycling in 2014 after getting out of prison; but, over the years, he received promotions as the company grew.
“He has seniority now and is an important part of our business,” Zwicke says.
Stokes adds that she has seen her employees reach amazing milestones, such as paying off child support, getting off welfare, getting a driver’s license for the first time or receiving supportive housing. She says employees also learn to have integrity while with the company.
“Back when we first began, we did a job where there were some cash registers we took in,” Stokes says. “The guy who was taking it apart was formerly incarcerated. He alerted us and said, ‘I’m finding some money in here.’ We told him, ‘Thank you for being honest with us; this is fantastic.’ He said to us, ‘Listen, I think this is the first time I’ve ever been honest at a job.’ That’s a big deal.”
Homeboy Electronics Recycling also co-founded Impact Recyclers in 2018, which is a group of social enterprise, certified electronics recyclers that have the shared mission of employing people facing barriers to work. Companies involved in Impact Recyclers create jobs for people with systemic problems, such as those who come out of incarceration, have gang affiliations, are formerly homeless or have disabilities.
He says companies that want to create jobs for people with systemic problems come with unique challenges.
“It’s not an easy bolt-on to offer these jobs,” Zwicke says. “It ultimately has to be integrated in the culture of the company.”