Marketplace: Profiting from helping planet, people
July 1, 2011
Basin-resident Greg Spencer is a former attorney specializing in corporate mergers and acquisitions. Several years ago, he and a friend started Salt Lake City-company Blue Source to fight global warming from a business approach. That led to a new idea: selling wood stoves to profit from carbon credits.
Spencer, who lives in Willow Creek Estates, and Neil Bellefeuille in Colorado, founded The Paradigm Project out of their homes two years ago.
Together, they hired someone to invent a new wood stove that used less fuel and emitted less smoke. Then they found manufacturers in China and Kenya to produce the product, hired salespeople to find buyers in Kenya, and distribution experts to deliver it.
They don’t hold a patent on the stove, and don’t profit from its creation or sale. They have contracts granting them rights to the carbon credits earned by reducing emissions, Spencer explained.
Those credits also allow the company to subsidize the price of the stove and sell it below cost to poorer customers.
This business model for philanthropy allows the company to attract both donors and investors. From a social responsibility perspective, the plan helps people in numerous ways. From a business perspective, investors are seeing 20 percent returns or better.
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"It’s a hybrid. We’re creating some new territory. We’re a business that is attacking some of the most significant social problems of our time," Spencer said.
Why stoves? Because the smoke from cooking over wood fires is killing almost 2 million women and children a year with lower respiratory problems. Sitting in a hut while mom cooks is the equivalent of smoking 40 cigarettes a day, he said.
To fuel the fires, women are walking up to 10 miles a day to collect wood, which usually comes from cutting down forests. Spencer said his stoves give these families better health and allow them to save money and time by reducing the amount of wood needed.
Why distribute the stoves through a for-profit business model? Because it’s sustainable, Spencer said. It’s hard to raise donations for philanthropic causes, and trillions in donations to Africa have been squandered.
The Paradigm Project puts people to work building, selling and distributing the stoves, which in turn benefit struggling families. giving a return to investors, the company can tap into deep pockets.
The company is registered as a "low-profit, limited-liability company" and works with non-profits. A donor can feel good that profits from the stove are recycled back into the program so their money keeps on giving. An investor can feel good that they’re also helping the environment and the developing world.
An independent European auditor determines how many carbon credits The Paradigm Project deserves, and then the company sells those credits on the open market usually to American charities that purchase credits to help fight global climate change, he said.
They are on track to produce 5,000 stoves a month by the end of the year and are hoping to expand sales into other parts of Africa and into South America.
The Paradigm Project