Lumber Not Liquidators: The Warehouse that's Saving a Milwaukee Neighborhood
America’s “independent sector”—its civil society—is the best-funded and most robust in the world. It consistently develops new and effective approaches to some of the nation’s most serious social problems. Since 2001, the Manhattan Institute has sought to identify and recognize some of the most promising social entrepreneurs and the new non-profits they’ve founded, based on their own original ideas. The more than 50 winners of the Richard Cornuelle award, named for the writer who coined the term independent sector, have addressed challenges as diverse as teaching English to new immigrants, building facilities for charter schools, helping older Americans “age in place,” developing science and engineering curricula for high schools, and helping African-American college students continue through to graduation. Most are supported entirely by private philanthropy. This is the first of four columns in which I’ll profile this year’s winners of the Cornuelle award.
Milwaukee's Community Warehouse saves lumber, lives and a neighborhood.
Milwaukee zip code 53206 holds an unenviable designation: a greater percentage of its population has been incarcerated than any other in the U.S. Its far from unique in the city, though: There are, in fact, 26,000 ex-offenders in Milwaukee, a city with a total population of just 600,000. By the age of 34, 62% of African-American men in Milwaukee will either be in jail or have served time in jail. While the overall unemployment rate in Wisconsin is less than 4%, the city’s black unemployment rate is, at 19%, the highest among all 50 states. What's more, many return to neighborhoods on the city's North Side which are physically and, one might say, spiritually dilapidated.
It's the sort of situation that can seem impervious to improvement. That, however, is not the sort of sentiment that occurs to Nick Ringger, who leads an institution addressing the areas ills, both physical and human. The Community Warehouse formula can seem simple--but it's original and powerful. Its warehouse--a recycled one-time tannery building on the Menominee River-- is filled with top-quality, donated construction materials--from lumber to dry wall--and staffed by ex-offenders, there to find both employment and purpose. As Ringger puts it, “We look at assets—products and people—that others don’t see.” That means that surplus construction materials that formerly took up space in landfills, in the hands of small neighborhood contractors, become valued tools for improving homes. And the "background-challenged" individuals who unload, sort and sell them (at below-retail prices), learn the habits of work and personal responsibility.
CEO Ringger became the first paid director of the Warehouse, founded in 2005, two years ago. That he'd find himself working in Central City Milwaukee cannot be said to have been obviously predestined. Raised on a farm in Indiana, a crisis of faith in high school resulted in his excommunication from the family’s Mennonite church. Marrying right after high school, he worked as a farmer while also starting a trucking company and a sporting goods store, eventually entering college at age 26—a Bible college in Alaska. Bringing along his wife and five children, they lived in the Alaskan bush, they home-schooled the children before moving back to Indiana to complete his studies because the Bible college wouldn’t allow him to complete his degree quickly enough. “I get bored easily,” he deadpans.
He would go on to combine the Bible and business--graduating from the Dallas Theological Seminary, where his family made ends meet by living in the sort of inexpensive but dangerous neighborhood he's now working to heal.. He finished the four-year seminary degree in two years before moving back to Indiana to take a pastor's position, starting a successful home-building business on the side--setting the stage for his faith-inspired work at the Community Warehouse, itself founded by a group of Christian Milwaukee businessmen who believed, as one puts it, in "the dignity of work".
Community Warehouse may not, at first, remind a visitor of Costco--but like the retail giant it's not only clean and well-organized but it's a members-only retail store. The members, in its case, are inner city Milwaukee property owners. It boasts some 2,000 members, almost all African-American or Hispanic, living in economically-distressed, inner-city Milwaukee. Its members include local do-it-yourselfers (such "family members pay a $25 annual fee) and "commercial" members, who pay $150 per year. One key target group: the many small landlords who own most of the rental housing stock in these neighborhoods, where rental incomes may not be sufficient to maintain aging properties to code. The Warehouse is a discount Home Depot: it offers rock-bottom prices on entirely new, donated building merchandise. These materials include paints (many are “mis-tints”), lumber, roof shingles, doors, windows, plumbing fixtures, flooring, etc. Most are still in their original packaging.
But make no mistake: the Community Warehouses is run by a businessman--as a business. Sales revenues run $80,000 to $100,000 per month--close to covering all operating expenses. Various side businesses have evolved along with the retail shop, depending on particular inventories. Workers build cabinetry (for kitchens, baths), pre-hang doors, and install concrete kitchen counters in many colors.
How do they get it all? CEO Nick Ringger says that they are “glorified beggars.” If so, they're more successful than most. Dozens of Milwaukee wholesalers and retailers--from chain store giants Sam's Club to local firms such as O'Leary's Plumbing and Heating-- donate materials. They in the store sells for at least 50%, and often 75%, off original pricing; "We have more product than we can manage,” according to Ringger. That's led to plans to open a second warehouse in a 19,000 square foot former thrift store. By helping neighborhood landlords upgrade their apartments, Ringger has first-hand reports of happier tenants who take better care of the apartments and stay put longer, a win for landlords as well.
Ironically, CW has donated products such as reams of new carpet to the local prison. But that does more than help it with occasional surpluses--it's helped it build a link to programs aimed at helping those being released from prison do another sort of building--that of new lives.
Starting with the hiring of one formerly incarcerated employee, CW decided to create an employment program, one that offers training on the job as well as role models (a mix of employees who are not ex-cons) and spiritual support. Currently there are 30 employees, two-thirds of whom are “background-challenged.” Over the past two years, a total of 62 employees have worked at CW. Eighty percent are still employed. One is attending college. Only one is back behind bars. .
A visit to the Warehouse, a former tannery located in a warehouse district underneath a highway overpass, reveals a workplace of amazing calm. Ringger and his staff know many of the customers and great them warmly. One of the original background-challenged employees, Jacob Maclin, is the director of life transformation where he teaches “guys about trust, teaches them that people care. [I also] remind them that they do not want to go back to their old life.” Ringger leads a weekly, optional Bible study. Classes are offered during working hours on financial skills such as banking and budgeting and how to settle child support and past-due fines.
The contrast CW presents with the ongoing violence in urban Milwaukee cannot be overstated. During a recent spurt of particularly severe violence, for 8 out of 9 weeks, one or another CW employee lost a family member to either unexpected death or deliberate murder. The board donated funds so that one employee could bury his 23-year-old(murdered) son. One employee told Ringger, “[CW] is the only place in my life where I feel safe.”
With a second, larger location set to open, this time on a busy commercial strip of North Milwaukee, CW expects to double its impact with a wider assortment of building materials and a larger workforce (8-12 new employees). The longer-term goal is five locations throughout the city. Ringger, always full of ideas, has his eye on city-owned, abandoned homes near the new shop. He is hoping to raise funds to buy one of the homes and train the men to renovate it to serve as transitional housing for new hires just out of prison, perhaps ultimately re-selling the home and doing the same thing again.
Another Ringger original: to prepare those who have trouble reading to take the driving license test, helping them, he says, get past “a source of shame, a feeling of failure to be an adult.” Poor schooling and undiagnosed learning issues are some of the many reasons that only 6% of the formerly incarcerated in Milwaukee have a driver’s license.Nor does Ringger envision Warehouse employees spending their careers there. (Ringger fears that "unhealthy charity hurts people's dignity.") In an effort to reach more of the formerly incarcerated and to open up jobs more quickly, CW is rolling out a new, time-limited 18-month hiring program that will teach job skills and build solid work history—but with a goal of job placement in the private sector rather than long-term employment with CW.
The Community Warehouse story is, then, one in which construction materials that formerly took up space in landfills become valued tools for improved homes. Ex-offenders learn the habits of work and personal responsibility. In neighborhoods marked by unemployment, violence and dilapidated homes, it manages to address them all.
This piece originally appeared at Forbes.com
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Howard Husock is the Vice President of Research and Publications at the Manhattan Institute. From 1987 through 2006, he was director of case studies in public policy and management at Harvard University’s Kennedy School of Government.
This piece originally appeared in Forbes