A Cleveland Success Story

A new economy grows in the shadows of the Republican National Convention

by David Brodwin

As Republicans gather in Cleveland, it’s easy to miss an important experiment taking place a few minutes away from the convention center. Evergreen Cooperatives – an unusual worker-owned business – is emerging from its startup phase. It brings an innovative model of job creation with the potential to scale up and improve lives across America.

Evergreen got its start in 2008, when the Cleveland Foundation brought local leaders together to improve lives for low-income residents of the depressed local economy. The founding institutions (which locals call “anchor institutions”) include the Cleveland Foundation, Case Western Reserve University, University Hospitals, the Cleveland Clinic and local government.

Rather than pour grant money into conventional anti-poverty programs, the anchors sought to create jobs that would fund themselves without ongoing subsidy. But they rejected the conventional strategy of luring employers with tax breaks; these deals often go bad. Instead the anchor institutions sought a “sustainable business model, one that could be replicated and expanded,” according to Tom Zenty, CEO of University Hospitals, one of the anchors as well as an important customer of Evergreen.

Initially, Evergreen took on the challenge of providing laundry services to local hospitals. Cleveland is a major medical center, with University Hospitals alone needing more than 3 million pounds of linen cleaned each year. The startup team integrated social responsibility and environmental sustainability into the business plan:

  • A lower-income inner-city workforce – the business was designed to employee people with limited education, limited work experience and in some cases nonviolent criminal records.
  • A co-op ownership model – teaching and training workers to think like owners, giving them a financial stake in the business and an opportunity to create some wealth for themselves.
  • A sustainability focus – An LEED-certified facility that avoids toxic cleaning chemicals, reduces waste and lowers carbon emissions.