Poverty In America: The Struggle To Get Ahead
3:26 pm
Thu July 12, 2012

Turning Trash Into Cash To Help Nation's Poor

Originally published on Thu July 12, 2012 5:10 pm

The bad economy has hurt many nonprofits around the country, even as demands for their services have grown. That's certainly the case in Reading, Pa., which has been labeled the poorest city in America, with a poverty rate of more than 41 percent.

Now, one local nonprofit, Opportunity House, hopes to salvage some of its services by salvaging junk.

Looking For Help

Opportunity House has provided day care, housing and other services to low-income families in Reading for many years. Because of state budget cuts in Pennsylvania, the nonprofit now gets less money to subsidize round-the-clock day care for parents who might not otherwise be able to work. To make matters worse, enrollment in the day care center is down because unemployment is so high, leaving the nonprofit with a $335,000 deficit.

As a result, the charity's president, Modesto Fiume, did something he hoped he'd never have to do: He laid off 20 percent of his staff.

"It was an absolutely horrible, horrible experience," he says.

Seventeen low-wage workers, including teacher aides and assistant teachers, lost their jobs. Fiume knows that most of them will have a hard time finding other work.

"It was a lot of tears and a lot of people upset because some of these people had worked with us for a number of years," he says.

Fiume has also had to cut back day care services on Sundays. He says donations and volunteers help his organization make ends meet, but not nearly enough. Like many nonprofit leaders, Fiume is desperately looking elsewhere for help.

The Junkyard King

One place he's looking is clear across the country, where another charity uses junk to help support services for the poor.

At a 26,000-square-foot warehouse in Oakland, Calif., a worker with thick gloves puts a stripped-down box-spring mattress on what looks like a big meat slicer at a deli. As he pushes the mattress forward, the metal springs are sheered off the wooden frame.

"He just literally pulled about a hundred staples out of that piece of wood," explains Terry McDonald, who oversees the operation. "But he did it with that machine in just a few seconds."

McDonald is known to some as "the junkyard king," because he spends so much of his time trying to turn America's waste into cash. But his real job is executive director of the St. Vincent de Paul Society of Lane County in Eugene, Ore.

The nonprofit has turned mattress recycling into a big business that supports services for low-income families. It's the largest mattress recycler in the country. With one facility in Oakland and another in Oregon, it recycles about 175,000 mattresses a year.

McDonald holds up a piece of quilted cloth and foam that's been stripped from one of the mattresses in the Oakland warehouse.

"That material is recycled into commercial carpet," he says. "The next layer underneath, that is generally a polyurethane foam pad, and that's recycled into residential carpet pad."

McDonald says about 90 percent of a mattress can be recycled into something else and sold.

Reinventing The Model Of Help

Mattress recycling is only one of many businesses, or social enterprises, that McDonald runs. St. Vincent de Paul Society of Lane County also operates thrift shops, repairs appliances and makes furniture — anything McDonald can think of to use stuff that other people discard.

And the payoff is big. These enterprises raise enough money to cover more than half of the Oregon charity's $24-million-a-year budget.

"The model is that if there's an opportunity to add value to something, let's do it," says McDonald.

That model is getting lots of attention these days, as nonprofits struggle to survive. The Robert Wood Johnson Foundation has given McDonald a half-million dollars to spread the word. He's already helped set up mattress-recycling operations in Orlando, Fla., and Bridgeport, Conn.

Now, he's talking to Opportunity House and officials in Reading about how they too might tap into trash.

Fiume, Opportunity House's president, says a recycling facility would create "meaningful" jobs that pay above-minimum wages and provide health benefits. That would mean a lot in a city that's been bleeding jobs for years. Fiume knows it could also make Opportunity House less dependent on donations and government funds.

"If you want to survive as a nonprofit and you want to continue to meet the needs of the folks who are most in need of support, then you have to kind of reinvent yourself," he says. "So that's what we're doing."

Fiume is now trying to figure out the next step: where to get a warehouse, equipment and startup funds. For a nonprofit more accustomed to helping the poor than running a business, it's a whole new world.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.

As we continue our series this week on poverty, we return to Reading, Pennsylvania, which has been labeled the poorest city in America. People there are hurting. Opportunity House is an organization that's supposed to help. It provides low-income families in Reading with day care, housing and emergency shelter. But Opportunity House itself is also hurting.

In the third part of our series, NPR's Pam Fessler reports on efforts to salvage services for the poor by salvaging junk.

PAM FESSLER, BYLINE: Many families in Reading rely on Opportunity House, people like Tracy Boggs, single mother of two. She lost her full-time job a few years ago. Now, she tries to make ends meet by cleaning stores. Opportunity House helps her with housing and day care.

TRACY BOGGS: If they weren't here, I don't know where I'd be. I would be, I don't know, probably in a gutter somewhere.

FESSLER: But, like Tracy, Opportunity House is also feeling the squeeze. Pennsylvania has cut its budget. And the non-profit group now gets less money to provide round-the-clock day care for parents who might not otherwise be able to work. To make matters worse, enrollment is down because unemployment here is so high.

So the group's president, Modesto Fiume, recently did something he hoped he'd never have to do. He laid off 20 percent of his staff.

MODESTO FIUME: It was an absolutely horrible, horrible experience.

FESSLER: Seventeen low-wage workers - teacher aides, assistant teachers - people Fiume knows will have a hard time finding other jobs.

FIUME: Really, it was a lot of tears and lot of people upset, because some of these people had worked for us for a number of years.

FESSLER: He's also had to stop offering day care on Sundays, all to make up a $335,000 deficit. Fiume says donations and volunteers can fill some of the gap but not nearly enough. So, like many non-profit leaders, he's desperately looking elsewhere for help.

(SOUNDBITE OF MACHINERY)

FESSLER: Which brings us to this unlikely place clear across the country, a 26,000-square foot warehouse in Oakland, California. A worker with thick gloves has just put a stripped down box-spring mattress on what looks like a big meat slicer at the deli.

(SOUNDBITE OF MACHINERY)

FESSLER: As he pushes the mattress forward, the metal springs are sheered off the wooden frame.

TERRY MCDONALD: He just literally pulled about a hundred staples out of that piece of wood. But he did it with that machine in just a few seconds.

FESSLER: That's Terry McDonald, known to some as the Junkyard King, because he spends so much of his time trying to turn America's waste into cash.

MCDONALD: And he repeats the process for the next one.

FESSLER: But McDonald's real job is director of the St. Vincent De Paul Society of Lane County, Oregon. It's a non-profit that provides services for tens of thousands of low-income residents. It's also the largest mattress recycler in the country. With a facility here and another in Oregon, McDonald recycles about 175,000 mattresses a year. He holds up a piece of quilted cloth and foam that's been stripped from one of them.

MCDONALD: That material is recycled into commercial carpet. The next layer underneath that is generally polyurethane foam pad, and that's recycled into residential carpet pad.

FESSLER: He says about 90 percent of a mattress can be recycled into something else and sold. But this is only one of many businesses or social enterprises that McDonald runs. There are thrift shops, appliance repairs, furniture production - anything to use stuff that other people discard. The big payoff? These enterprises raise enough money to cover more than half of the Oregon charity's $24 million a year budget.

MCDONALD: The model is, is that, well, if there's an opportunity to add value to something, let's do it.

FESSLER: And that model is getting lots of attention these days. The Robert Wood Johnson Foundation has given Terry McDonald a half million dollars to spread the word. He's already helped other nonprofits set up mattress recycling in Orlando, Florida and Bridgeport, Connecticut. He sees potential everywhere.

Walking through the Oakland warehouse, McDonald points to bins piled high with books.

MCDONALD: That's our book recycling program and CDS and VHS, that we do a few thousand tons of those.

FESSLER: Now, he's talking to Opportunity House and Reading officials about how they too might tap into trash. Modesto Fiume is definitely interested.

FIUME: Because that will bring jobs, meaningful jobs, jobs that pay you know, a decent - not minimum wage, maybe 12, $13 an hour, with health benefits.

FESSLER: And that means a lot in a city that's been bleeding jobs for years. Fiume knows it could also make Opportunity House less dependent on donations and government funds.

FIUME: If you want to survive as a nonprofit, and you want to continue to meet the needs of the folks who are most in need of support, then you have to kind of reinvent yourself. So that's what we're doing.

FESSLER: Fiume is now trying to figure out the next step - where to get a warehouse and equipment and start-up funds. For a non-profit more accustomed to helping the poor than running a business, it's a whole new world.

Pam Fessler, NPR News. Transcript provided by NPR, Copyright NPR.

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