ABQ / Santa Fe News

For Profit? Non Profit?

Social Venturing Benefits Albuquerque Manufacturer

By Emily Esterson , 10-17-05

In the old space assembling mosaics for Erin Adams

Later this week, Southwest Creations Collaborativewill celebrate its grand re-opening in the newest hot neighborhood in Albuquerque, Wells Park.

A plain brick factory-esque building on Fourth Street in not-so-savory but changing Wells Park has colorful, Hispanic symbology painted on its facia. Canopy lights make the building look more a new set of artists' lofts rather than an actual working factory.

Behind the nifty facade touches is an even more interesting story—a social experiment that seems to be well on its way to long term success. Southwest Creations is also the first investment of Social Venture Partners New Mexico, a group of "engaged grantmakers" who not only give money to organizations, but offer their own business acumen, connections, even engineering skills to nonprofits.

On Oct. 21, Southwest Creations Collaborative will open its new home to the public for a fiesta, hosted by Lt. Gov. Diane Denish. Inside, you can see efforts of social entrepreneur Susan Matteucci, who's shepherded Southwest Creations from its original home in the basement of the San Jose Parish to its current place on gentrifying Fourth Street.

Southwest Creations Collaborative is a nonprofit, although its work (contract sewing and assembly) and client list is no different from that of a for-profit contract manufacturer. It has a "double bottom line" agenda, says the company's press kit: The first is to run a successful contract sewing and handwork business; the second is to provide jobs and grow the quality of life for its employees. Matteuci says they funnel revenues back into the business and the training Southwest Creations offers its employees.

The group connected with Social Venture Partners about a year ago, knowing they needed to move, but strapped and frustrated in their efforts to expand. SVP, which is one in a network of 18 affiliated SVP organizations, including chapters in Boulder, Seattle, Denver, Vancouver, BC, Austin and Boston, helped Matteucci move the company to the larger space by giving them a $20,000 grant which helped them purchase the building. SVP also helped them redesign their manufacturing line.

SVP's basic philosophy isn't just to write a check to a nonprofit and forget about it until tax time. Instead, the entrepreneurs, investors and business professionals who form the local group commit $5500 a year to the SVP fund, but more importantly, you have to be willing to get your hands dirty in the running of a non-profit. Locally, the chapter is started by Alice and Trevor Loy (disclosure: Trevor Loy is founder of Flywheel Ventures, which is an investor in New West). Grants to nonprofit organizations range from $5000 to $25,000, and include the help of SVP's philanthropist members.

Each project has a couple of lead partners who serve as conduits to the broader network of expertise SVP offers. For Southwest Creations, lead partners John Gerhart, a principle with Miox Corporation and Entrada Ventures, and Julie Brown, a WESST Corp. board member and entrepreneur, brought a mix of skills from engineering to small business real estate funding. If the nonprofit has specific needs, the lead partner searches out the experts in the network of 22 SVP partners (eleven couples).

Not just any nonprofit can apply. SVP is just as picky about its investments as venture capitalists are about their fundings."We look for smaller organizations, budget- and staff-wise, with the potential to scale or replicate. They must have strong leadership, an entrepreneurial vision and executition plan, and they should be a really good fit with what we have to offer and what they need," says Alice Loy. "We shy away from any organization that seems too interested in the money. What we bring is expertise. Our partners want to be involved with the organizations."

Southwest Creations Collaborative was an ideal fit for SVP's first project. The organization operates just like a for-profit business, with a bottom line and contracts to chase and sign, plus marketing and sales operations typical to a for-profit manufacturing business. But it lived on the margins--first in the basement of San Jose Parish, then in a cramped space on Woodward Road. It employs women to do handwork and sewing for clients such as Sud Chemie, a French company that makes the packaging for "dessicans," the little silicon preservatives in electronics and other packages, in Belen, NM. They also do assembly for Magic Cabin dolls, and mosaic layout for local tile artist Erin Adams Design.

The business employs 35 women, many of whom have been with the company for years, if not since its inception. For its social mission, it provides childcare (the new building has a spacious day care center and appealing playground out back), GED classes, English, health education, and other programs to help its employees. And SCC's 99 percent retention rate would make most manufacturing businesses insanely jealous. Matteucci says offering onsite childcare for 25 cents an hour, classes, and good wages (employees make over $9.00 an hour) mean her employees stay. More importantly, she says, the employees make decisions as a group. "It gives them a dignified voice here."

SVP did its part by providing lots of technical assistance. Specifically, former Intel engineer, Gerhart found three Intel engineers to help Southwest Creations design its manufacturing space to be as efficient as possible. Other SVP members help the organization find the building and work on marketing materials for SCC. The nonprofit also has vastly tightened down their mission: Instead of taking any old job that comes across the transom, they've focused on doing handwork that requires customization—Erin Adams' mosaic designs, for example. Adams (now a neighbor to SCC in Wells Park) sends over the plans, and SCC employees painstakingly place each of the tiny tiles into their corresponding spaces.

As for the next steps for both organizations, SVP will continue to help SCC, while the other partners look for more nonprofits to embrace. For its part, SCC hopes to be build its business so it is a self-sustaining nonprofit. "We want to get to the point where we don't have to raise money," says Matteucci. On Friday, the lead SVP partners, Southwest Creations, and the community will come together to celebrate their successes from 4:00 to 6:00 at their new location: 1308 4th Street NW.

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