Innovative recycling program coming to Chestnut Hill
by JAMES STURDIVANT
In the dog-eat-dog world of business, some ideas are just garbage.
At least that's what two Germantown Academy graduates, Patrick K. Fitzgerald and Ron Gonen, are hoping. Their Blue Bell-based startup, RecycleBank, is banking on the idea that people will gladly recycle if given the right incentives, and they're bringing a pilot program for what they hope will become a nationwide model to Chestnut Hill.
"We asked ourselves, how can you be socially responsible and have a good return on your investment?" Gonen told the Local last week.
Gonen, who is from the Northeast, and Fitzgerald, who grew up in Jenkintown, answered that question by spending a year working out a business model and designing a bar-code tracking technology that could be retrofitted to recycling trucks. Their idea was good enough to convince Columbia Business School, where Gonen was a graduate student, to become a partner. Since then, the Coca-Cola Company, Sneaker Villa, the Greater Philadelphia Chamber of Commerce and Blue Mountain Recycling have signed on to the venture, which these two veterans of Manhattan high finance characterize as a way to "enjoy the rewards of environmentalism."
It works like this. Households receive a 36-gallon recycling container stamped with a bar code (no fee is charged, and there is no need to separate items or bundle newspapers). The amount each home recycles is recorded and translated into a dollar amount that can be redeemed as coupons -- $5 off a purchase of $25 or more, $10 off a purchase of $50 or more, or $20 off a purchase of $100 or more -- at participating local businesses. Customers get the coupons by logging into the company's Web site using a username and password.
The idea is that businesses benefit from the publicity, and municipalities benefit tremendously from lower fees to landfills and by earning money from recycled materials (RecycleBank is paid a portion of the money the city saves). The tracking system also provides data on how much a given area is recycling, allowing for more efficient, customized pick-up schedules and targeted informational campaigns.
According to Gonen, Philadelphia dumps 750,000 tons of garbage a year, paying $54 per ton to the landfill. That adds up to over $40 million dollars a year paid out by the city.
"Most of that could be recycled," he said.
Gonen added that he expects the program to create new jobs at the Blue Mountain recycling center in South Philadelphia, which he calls "probably one of the most progressive recycling centers in the country."
City recycling coordinator David Robinson said that the pilot program would include 6,000 homes in Chestnut Hill and Oak Lane. The start date is tentatively set for Jan. 17, when 700 homes will see the first of three initial pick-ups. Affected residents will be receiving a mailing in addition to the information that will come with the new containers.
Robinson said the streets department was already researching ways to increase the city's dismal recycling rate. Several focus group studies indicated only incentive programs or fines would spur people to recycle.
"We asked them if saving [the city] money and saving the planet would get them to do it, and the answer was like, 'yeah, right,'" he said.
The department realized that enforcing fines would be difficult, and was considering various incentive ideas when they were first approached by RecycleBank.
"In walked these two gentlemen about a year ago. They gave me the plan, and I called senior [streets department] staff right away. It's a brilliant combination of classic retail marketing and city service," Robinson said.
Gonen and Fitzgerald picked the Chestnut Hill and Oak Lane neighborhoods as locations for the pilot program for different reasons. Oak Lane was chosen because it recycles at the average city rate of 5 percent, Gonen said, giving a good indication of "what a full roll-out would look like in the city." He said that Chestnut Hill, which recycles at a higher than average rate for the city but below the state average, was chosen because it is an environmentally and socially conscious community.
Germantown Avenue was another draw.
"We like the fact that Chestnut Hill has a commercial sector running right through it," Gonen said. "One really nice thing about the business community is how close-knit it is. When we went to Rugmaven [to arrange for their participation] they called other businesses about it."
Gonen said that "about 20" local businesses were participating in the coupon program, including Rugmaven, the Chestnut Hill Cheese Shop, Hill Company, Starbucks, Mango and the Trolley Car Diner. The Web site for local users is expected to be launched this week, and can be accessed at www.recyclebank.com.
Aside from the hometown draw, Gonen said that he and Fitzgerald decided to launch the idea in Philadelphia because of its relatively low recycling rate and a "progressive" attitude toward recycling within city government.
"A lot of people said 'you guys are nuts for bringing it to Philly,'" Gonen said. The enthusiasm of Robinson and streets commissioner Clarena Tolson, however, convinced them that Philadelphia was the right place to go, and they have high hopes that this enthusiasm will be matched by the recycling public.
"We reward you financially when you recycle ... [and] you can measure the value of being community-focused," he said.
