West Sixth Brewery models “pay it forward” business philosophy

February 1, 2015

When four partners bought the Bread Box building and started West Sixth Brewery nearly four years ago, they said they wanted to do more than make money and good beer. They wanted to make their community a better place to live.

The partners donate 6 percent of profits to charity, plus make other donations and host monthly fundraisers where a different non-profit group receives 6 percent of sales. Last year, the company’s giving totaled about $100,000, partner Ben Self said.

“We expect that to increase significantly” this year, Self said, thanks to a quarterly program built around sales of the newest of West Sixth’s four canned beers, Pay it Forward Cocoa Porter.

pifWest Sixth will present a “big check” Wednesday to GreenHouse17, formerly called the Bluegrass Domestic Violence Program. It is the last of six non-profits getting checks as part of the program launched in September, when Pay it Forward Cocoa Porter began distribution statewide and in Cincinnati.

West Sixth wants to keep GreenHouse17’s award amount a surprise until Wednesday, but partner Brady Barlow said it would be larger than the others. “Lexington is a very thirsty town,” he said.

Other regional awards ranged from $800 to more than $5,000 each in Louisville and Cincinnati. The amounts were based on sales in each region.

The other recipients were Appalshop, the arts and media non-profit in Whitesburg; New Roots of Louisville, which provides fresh produce to needy neighborhoods; Community Action of Southern Kentucky; the Owensboro Humane Society; and Community Matters, which works in Cincinnati’s Lower Price Hill neighborhood.

Here’s how the program works: West Sixth donates 50 cents from each Pay it Forward six-pack, which retails for $9.99, to a non-profit organization “making a difference” in a community where the beer is sold. In all but the Louisville region, West Sixth’s distributors match the donation, for a total of $1 a six-pack.

Each can of Pay it Forward has a website link (Westsixth.com/pif) where customers can nominate a non-profit. Regional winners are selected each quarter by a democratic vote of West Sixth’s 32 employees, so the number of nominations made for each organization doesn’t matter.

Nominations for the first quarter 2015 awards are due Monday, and the brewery staff will meet Tuesday to choose the winners.

There is nothing new about business philanthropy. Most companies do something, some in substantial amounts, depending on their size and profitability.

But West Sixth is an example of a new trend, especially popular among some young entrepreneurs, that has been called Conscious Capitalism. Community responsibility is integral to the business model.

Conscious Capitalism acknowledges that businesses have an impact on and a responsibility to their communities and the environment. It is about serving all stakeholders, not just shareholders. That means three bottom lines, rather than just one: profits, people, planet.

“For us, that means everything from being environmentally sustainable to using local ingredients whenever possible and supporting the organizations doing great work in the communities we’re a part of,” Self said.

The partners’ philosophy extends beyond their core beer business, which is housed in the Bread Box, an 90,000-square-foot 1890s building at the corner of West Sixth and Jefferson Streets that used to be a Rainbo Bread factory.

In addition to the brewery and taproom, the Bread Box houses shared office space for non-profit organizations; artist studios; Broke Spoke, a non-profit community bicycle shop; and FoodChain, an urban agriculture non-profit.

There also are several like-minded businesses there: Smithtown Seafood restaurant; Magic Beans coffee roasters; and Bluegrass Distillers. The building also houses a women’s roller derby league.

Self said the company’s business model isn’t just about altruism: it is also good for business.

“I think there’s no doubt” that community involvement has boosted sales, Self said. “I don’t think we’re bashful about that. And by making a situation that can be a win for the community organization as well as the business, it’s something that can be done longer term.”

West Sixth’s sales have risen from 2,000 barrels in 2012 to 7,000 in 2013 and 11,000 last year. The company plans to add canned seasonal beers this year.

“Kentucky has been really supportive of us from the beginning,” Self said.

West Sixth plans to continue reinvesting in that support.

“If you take care of your community,” Barlow said, “your community will take care of you.”

Lexington-based CivicRush is new social network for good deeds

November 5, 2012

Good ideas can come from strange places. This one came from playing FarmVille, the online simulation game that Facebook users either love or hate.

Andrew Beck, vice president of software consultant Metaformers Inc., was showing the game to President Ed Bouryng, and they were discussing the digital currency system that players use to operate imaginary farms.

“After I stewed a bit, I thought, what about a digital currency that can only be used for charity, a digital civic currency?” Bouryng recalled. “Then we started looking at providing individuals a way to use social networking as a way to get out into the community and get things done.”

The result was CivicRush, a new Metaformers subsidiary based in Lexington that launched Oct. 12 with a party at Cheapside that raised $14,000 for charity. Initially focused on the Bluegrass region, the company plans to expand across the nation within a few months. So far, CivicRush has only 1,000 registered users, but the company has yet to begin marketing.

“We think it could be very big,” Bouryng said. “We have a number of new innovations here.

“We think having a single place where charity, business and individuals can get together to make change for their community is very exciting.”

CivicRush.com is a free Web site that allows individuals to make and manage financial donations to charity, as well as be paired with volunteering opportunities and build a “civic résumé” of their activities. The company also will provide donation management services to companies and charities.

“One of the complaints of social networking is you develop a lot of relationships, but they’re thin, they’re virtual,” Bouryng said. “CivicRush is designed to get people to use the power of digital socialization, but get out in their community and make things better.

“You can socialize around the good deeds you do for your community.”

When users set up profiles, they list their skills and causes they support. They can search for organizations, events, volunteer opportunities or “needs” they can help meet. They also can follow organizations and create events.

“We take an online dating engine, and we apply it to getting out into your community,” Bouryng said.

Users can donate money by purchasing CivicRush’s online currency, called “Civ,” even through payroll deduction if they wish.

Each Civ is worth a dollar. Civs can be assigned to any government-registered charity, allowing users to manage all their giving without having to go to multiple Web sites and entering personal information in each. At the end of the year, they get a single tax statement from CivicRush’s non-profit affiliate, Civillos.

Charities pay a fee of 1 percent to 3 percent when they redeem donated Civs, which Bouryng said basically covers the cost of bank and credit card fees. Bouryng said CivicRush’s revenue stream will come from additional services that businesses or charities can choose to purchase.

“All of that right now is in the development phase,” he said when asked for specifics. “We’re looking at ways to engage businesses that have charitable programs.

“We still need to find ways to make this project self-sustaining. It’s a longer term play because the initial services are all free.”

The company hopes to be self-sustaining, if not profitable, within 18 months, he said.

Metaformers, headquartered in suburban Washington, D.C., has based some operations in Lexington since 2006, when the company was hired to fix the city’s dysfunctional new financial management system.

Metaformers’ core business is designing human resources and supply chain management solutions for clients.

When the company was considering where to develop CivicRush, Bouryng said, “We were initially thinking the D.C. region. But when we started to look around at the talent pool, we found that for the tool we were using … Lexington had a very strong skill set.”

He said Metaformers was able to assemble a “world-class” development team under Lexington software designer Todd Willey.

CivicRush has 12 employees, but Bouryng said that could grow to between 20 and 100, depending on the success of its national rollout.

CivicRush occupies the top floor of the historic McAdams & Morford building on West Main Street, and Bouryng expects the company to remain in Lexington.

“We’ve had a lot of success here; I like the city, I like the people,” he said. “It has a great climate for business.”