The Karma Project is an independent social enterprise operating in Huronia. Their store front, Karma Marketplace, located in Pentenguishene, ON offers unique products and services not offered anywhere else in the area.
The social enterprise operates within
- art and culture; and
- food production and distribution sectors.
Products and services include a store front, which sells local art and crafts (clothing and jewellery), food (organic items), fair trade products (tea, coffee, sugar, chocolate), a community kitchen (connected to the store front), 3 acres of community garden, 3 farmers’ markets, a weekly food box program with a home delivery option, and a variety of workshops to raise awareness about healthy living. Karma Marketplace is a community hub for everything local.
1. Community Background
The Karma Project serves all of Huronia including the municipalities of Penetanguishene, Midland, Tay, Tiny, and Christian Island. Karma Marketplace is located on the southern tip of Georgian Bay in Penetanguishene, ON. Penetanguishene is a bilingual community with a population of approximately 10,000 residents. Main characteristics of the town include the presence of major industries, fixed and low-income individuals and families, demographics of the jail and maximum security mental health centre, and a skilled workforce. Residents see Penetanguishene as dispersed because it is made up of various smaller communities. Each community has their own socio-economic interests as part of the larger society of Huronia. Community characteristics that influenced the start of the Karma Project included the identified needs for local, organic, and fair trade products, the need for a resource centre for everything local, and a central space for unique products in which various communities have easy access to these resources. People running the project wanted to see consumers connect with producers again to strengthen face-to-face interaction in the community. The residents of Penetanguishene are very supportive of the Karma Project. Community members see the store front, Karma Marketplace, as something they do but the people working internally on the project feel that they are a regional body influencing the local food system work across the municipalities of Huronia. Community members and tourists who learn about this social enterprise give positive feedback about the project on a regular basis.
Karma Marketplace opened on November 1, 2007 with a 200 square foot store front downtown Penetanguishene. The store front marked the beginning of the Karma Project which was started by Erin Chapelle, a new resident of Penetanguishene at the time. The social enterprise started as a private business owned by Erin and was converted to a community-owned co-operative in 2012. Erin called upon close friends, colleagues, and local farmers to consult in the inception of the social enterprise. Community members were consulted in 2009 with new initiatives. Erin’s experience living in Latin America for seven years influenced the start of this social enterprise as she wanted to keep the values she learned in the small town of Penetaguishene: “Cultural learning affected my brain, my heart, my spirit, the way I spent money, how I didn’t spend money… coming back to Canada I didn’t want to lose that even though I knew I had to adapt again. I wanted to make sure that somehow those values would stick with me and I thought if they are a part of my everyday life then they would stick, and there came the store.” Erin wants to bridge cultures together to teach people how to get back in touch with their communities. People can get back in touch with their community by using art and food as a means of reconnection. The Karma Project is more about making sure everyone in the community has access to healthy food rather than making a profit.
While travelling through Latin America, Erin worked on writing down the mission and vision of what she wanted to see in her business approximately five years prior to opening the store front. She calls these years the “invisible root stages” of the social enterprise but the ideas have now taken hold for well over a decade. It took approximately one month after purchasing the first 200 square foot store front to transform the space. This period of time prior to opening Karma Marketplace was spent painting, hanging art, building shelves, and bringing in product to be sold. The Karma Project builds on existing strengths in the community as this social enterprise leans on other people’s best work. In addition, Karma Marketplace will sell a farmers’ product in the store front and that farmer may sell Karma’s product at their market. They promote each other’s work and build healthy partnerships to create a community space for resources. They also act as a community hub because more people are overwhelming coming to the store front for resources and information. At Karma Marketplace, they believe “what goes around comes around” which is why they stress the importance of buying local. Erin believes that change in the world at large can begin by choosing to support the community you live in.
3. Development of Enterprise and Outcomes
The store first began as a small-scale local art, crafts, and culture hub with five artists from El Salvador and five local artists in Huronia. Local food was brought into the store later on to meet market needs and to this day new products are welcomed as the business grows. Due to the increase in community needs and available resources, Karma Marketplace moved to a new 1,000 square foot store front which includes a community kitchen on one side of the building (see organizational structure for more details).
According to Erin, is the Karma Project is trying to achieve the “infusion of a micro economy” in Huronia through their initiatives. The core objectives of the social enterprise are providing healthy food to residents of Huronia, building community relationships to support the local food movement, and working toward creating food security in the area. At Karma Marketplace, they promote conscious consumerism because they believe “you get what you give” from your purchases. The people at Karma Marketplace believe more change “in the current the food system is needed, so that it may be more accessible, more sustainable, and more local for all eaters and producers”. The current business model for Karma Marketplace is a not-for-profit co-operative. The social enterprise moved from a sole-proprietorship business to a not-for-profit co-operative after several years of operating in 2012. They are bound by the cooperation act which is governed by a federal body. Karma Marketplace is also recognized as a social enterprise by the community. The motivation for the model is to meet community needs, have the enterprise fund themselves, and to maintain a social, environmental, and spiritual presence in Huronia. Erin hopes the future model will move to a multi-tiered cooperative so that the store may be owned by the community. Erin believes that the Karma Project is overwhelmingly meeting its core objectives. They do not feel stunted at this time but the community demand continues to grow which means more resources will be needed in the future. At Karma Marketplace, they believe this kind of growth is good. The products and services from the Karma Project reach the five municipalities of Huronia. All art, crafts, and food items are made or grown within 100 miles of the store front. All products sold in the store are either grown, value-added, and/or produced by the Karma Project in their community kitchen. The arts and crafts continue to be hand-made by the local artists from El Salvador. The major developmental milestones of the social enterprise include opening the store front, moving from a 200 square foot location to a 1,000 square foot location, the first farmers’ market opening in 2009 which had a 10 person steering committee, the integration of systems to establish a standard operating system (finances, banking, markets, profits which were once kept separate are now all interconnected), the first community garden developed in 2012 with 3 acres of land, receiving a Trillium grant to allow for first-time paid employees, and being run by a board of directors beginning in 2012. These milestones mark the growing development of the Karma Project.
4. Organizational Structure
The Karma Marketplace store front is located at 74 & 76 Main Street in Penetanguishene. There are two store fronts with separate entrances but connect together with a doorway; one side is used to sell products while the other side is a “pay what you can” café and community kitchen. Since opening the Karma Project has expanded from a store front to include various other initiatives. Off-site locations include the farmers’ markets (Friday nights in Victoria Harbour, Saturday mornings in Penetanguishene, and Monday afternoons on Christian Island), 3 acres of community garden 1km away from the store front, and a delivery service for weekly food boxes to buyers who have transportation barriers. All of these initiatives make up the Karma Project which began with the store front, Karma Marketplace. Erin is looking to expand the store front to two new locations, one in Port McNicoll in Tay Township (by February 2014) and one on Christian Island (timeline undetermined).
The ownership is currently in transition from a sole-proprietorship to a not-for-profit co-operative which began in 2012, five years after Karma Marketplace opened. The business structure includes a non-working board of directors and staff. Day-to-day management remains at staff level while major decisions are made by members of the board. Erin believes that regular interaction with the board and minutes to document approval for major items allows for transparency between Karma Marketplace and the communities connected to the project. A hiring panel is used when seeking new staff which includes Erin (the Executive Director), a board member, and a front-line staff person. This social enterprise interacts with most of the local farmers, artisans, and cooperatives in the region. Erin sits on the Steering Committee for Local Organics Food Co-ops Network (LOFC Network) which is a province wide network of food and farming related co-operatives. She has created informal partnerships with other members of the committee through meetings and conferences. Other partnerships with organizations that support the Karma Project include Meridian Credit Union, insurance through the Co-operators, and the municipality of Penetanguishene. Erin receives informal technical assistance through mentorship from local business owners and members of the community, who offer advice, openly share resources, and discuss potential next steps for the Karma Project.
According to Erin, resources such as risk management plans and code of conducts have been instrumental resources upon developing her business. Karma Marketplace received funding for 1 full-time position in which 2 employees share by working 20 hrs/week each. One person has expertise with small-scale farming and the other with cooking. This allows for the Karma Project to use funds to their fullest potential since no additional training was needed at the time of opening. A Trillium grant is currently being used to fund 6 employees in part-time positions who rotate shifts between the store front, farmers’ markets, and community garden. The part-time employees work approximately 20 hrs/week for $15/hr. There are currently no formal staff benefits but they receive products and services at wholesale prices as an employee incentive. The only turnover so far is due to seasonal work, individuals moving out of town, or individuals returning to school. Erin feels that once people become invested in the project they commit long-term. There will be further growth in the enterprise when the new locations open. Erin is hoping to have current staff move between the current location and new locations while also encouraging community members to get involved in operations. Erin, the founder of the Karma Project, volunteers full-time hours to manage all the initiatives of the Karma Project including employees and volunteers. Erin’s role as a Town Councillor since 2010 also enables her to spread awareness about her vision of a localized community. The fact that Erin is not paid allows her to also sit on the board.
Currently, there are 5 people sitting on the steering committee for Karma Marketplace. In the fall, the Good Fox Box program requires approximately 50 volunteers during heavy volume times. However, on a regular basis there are approximately 30 volunteers who give their time, energy, and resources to help the project operate and be successful. In the past there were a total of 8 unpaid interns who worked for short periods of time to gain experience in the local food movement. Employees and volunteers range from 20 to 60 years old bringing in a diverse range of experiences, skills, and perspectives on community economic development. Different kinds of leadership are brought forth through cultural learning, exposure to entrepreneurial initiatives, small-scale farming, cooking from scratch and for large army groups, and a recent graduate with an educational background in food security and strategic planning. The board of directors also has diversity as it is made of various key players the community including a community representative, an ex-Credit Union representative, a local farmer, and a local teacher.
Professional development offered to the Karma Project employees include an annual trip to Toronto to visit other social enterprises carrying out similar initiatives, a September 2013 retreat for employees to help develop a strategic plan, a two-day off-site training from mental health professionals (one session on healthy diets and another on procedures for serving people with mental health which community members are also invited to), social parties twice a year (summer and winter holidays), and bi-weekly staff meetings. Different kinds of social media and marketing are employed to promote the Karma Project include: Facebook, Twitter, SNAP Magazine, Midland Mirror, simcoe.com, CNHR (Canadian Natural Health Retailer) store feature, the Karma Marketplace website, and Mail Chimp to send mass emails RE: food box program, weekly updates, and/or upcoming events.
Karma Marketplace did not use an accounting system between 2007 and 2009; it was during 2010 that Erin sought help for a bookkeeper as the social enterprise expanded. The store and farmers’ markets do not accept debit or credit; it is cash only sales. Erin is certain the accounting system does not need to evolve at this time. Below is a list of funds the Karma Project received throughout their lifecycle so far:
|2010||$4,500||Carrot Cache||Regular Operations|
|2010-2011||$6,000 (2x$3,000)||Evergreen||Regular Operations|
|2012||$141,000||Trillium Grant||Regular Operations|
|2012||$4,500||Ontario Non-Profit Co-op (ONPC)||Regular Operations|
|2013||$2,000 (2x$1,000)||Simcoe Muskoka District Health Unit||Regular Operations|
External grants were not accessed until three years into regular operations, therefore funding was not needed during the development or start-up phases. Small donations are made on a regular basis for the designated “pay what you can” product at the store front. In-kind support is provided in part to the 3 acre community garden initiative as the Karma Project is only required to pay for water costs while rent is free. Volunteers, customers, and other community members donate mason jars on a regular basis for the café. Erin would like to see an online donation option so that people unable to visit the store front can support the project from their own communities. The most important non-financial supports received come from volunteer and mentorship support. They would like to access funding support for a vehicle to make the transportation of product and food box program more manageable. In addition, Erin would like funding for an administrative employee at the store front.
For Karma Marketplace, financial sustainability means the financial capacity to manage all projects, hire long-term employees, and for the store front to fund itself. Erin feels the Karma Project is stable but if external funding was not available there would be no money to pay employees. This would mean that some people would leave and she would have difficulty in running the store front and off-site locations alone. The social enterprise currently has no debt. The building is paid for, farmers are paid by the week, artisans are paid by the day, and they do not have any loans or credit cards. Financial goals include the ability to cover all assets and resources. Karma Marketplace does not focus on monthly revenue so there is no weekly or monthly target to hit. The important part of running the social enterprise is that more people continue to access their products on a regular basis by visiting the store and purchasing product at the markets. In some ways, the financial sustainability of the Karma Project relies on the personal responsibility of community members to shop locally. The Karma Projects’ net sales from goods and services between January to December 2012 was $70,000. Net sales incorporate the “pay what you can” sales from the community kitchen. The total gross revenue for the same period is $142,500 which includes net sales, half of the Trillium grant, and SMDHU funding. As this time, the store is breaking even but the employee salaries do not break-even. A future goal of the Karma Project will be to break-even with earned revenue costs.
6. Challenges and Successes
The first challenge and barrier in operating the business, according to Erin, is that the concept of social enterprise itself is hard for people to understand. Often people will ask the employees of Karma Marketplace: “why are you doing this?” when trying to grasp the mission and vision of the Karma Project. She feels the mission is very clear but what the project is hoping to achieve on a larger scale (food security) is not. Slow growth is another challenge for Erin and her employees because they do not have as many products coming into the store as they would like. The team at Karma Marketplace overcomes barriers by using flexibility, honesty, creativity, and partnerships in the business. Erin expresses that overcoming barriers also means taking risks in all of the initiatives they have in place. A major risk Karma Marketplace took was introducing the “pay what you can” model but so far it is very effective. This model reads as follows on the business wall:
- Please choose YOUR appropriate portion, which caters to your specific needs and reduces our waste. Go for seconds rather than “too big” firsts!
- Please consider our pricing suggestion. We have chosen to include them, after studying similar kitchen that have decided to offer a suggestion, too.
Karma Marketplace believes that “the pay-what-you-wish model aims to foster a fair and relative exchange, allowing eaters to determine their contribution to the meal (and its farm-to-fork journey).” Essentially, it is a “social experiment” that depends upon everyone along the food route. Erin sees the model as an uncommon approach to business and community but with great potential for sustainability once their mission is understood. The biggest improvements to the business occurred after receiving a large amount of funding to hire part-time employees and developing a strategic plan. Having employees on board the social enterprise enabled Erin to spend less time at the store front and more time at the off-site locations. The management and employees will build a 5-year strategic plan by September 2013. This is a major stride in improving the business as it will allow for succession planning, long-term implementation of ideas, and a rigorous business plan that will hopefully make them a strong leader in social enterprise in the future. Ideas are always in flux so it is the goal of the Karma Project to continue to meet community needs by adapting and changing with them. The Karma Project takes pride in their social mission for providing customers with local, organic, and fair trade products. Erin states “the more people know why we’re doing things… they’ll realize that we are talking about feeding our communities and going back to being resilient and being able to sustain ourselves.” She goes on to say “people will start to invest in a different way, and I don’t mean dollars. I mean when they hear what we are doing and they see us week after week at the markets and they visit the garden, this is how they really see how we are growing food so cleanly. I think that’s when they start to feel like part of the Karma Project and that their purchase matters.”
The main priority for the Karma Project is following through with the social mission. Erin’s ultimate goal for the social enterprise is to help create food security through their initiatives: “I would really love to see food security be part of everyday life and part of everyone’s vocabularies so they can work towards it.” There are many ways people can contribute to the social welling being of a community but it is “through the local food movement that we can mend the broader social fabric by working together”. Other priorities at the top of the list include a cultural mission and an environmental mission.
The food that is grown by Karma in the community garden would not be as compelling to purchase if it were sprayed with chemicals so being organic is important to their market. “Food is about culture” and this representation is evident at the store front, in the community garden, and at the farmers’ markets. Huronia has a rich history of culture with a Francophone, Anglophone, and Aboriginal and Métis presence. Erin expresses that “maintaining food is a piece of the puzzle and maintaining an identity and culture is important.” Two priorities that Erin has identified for Karma Marketplace are long-term employment and more employee opportunities for training and professional development. Her goal is to make sure employees do not stay in static positions, but rather have exposure to various training sessions to expand their skills and experience as much as possible. She hopes that people committed to the Karma Project will educate others using the knowledge they have learned through their first-hand experience.
Erin is working to achieve many outcomes for the people she works with, the organization, and the communities impacted by the Karma Project. For the people she works with she is striving to create meaningful, valuable, and community-minded work with fair wages. Volunteers are encouraged to participate in program initiatives to create food access points while customers are eligible to use their own plots of land within the community garden. For the organization, it is Erin’s dream to see the longevity of the co-operative approach of Karma Marketplace. She sees her social enterprise as a young organization with a lot of young staff connected to the Karma Project; she believes these people will see the co-operative move forward. For the community, the Karma Project hopes to create inclusion, food access, and the reconnection of community members. Organizational outcomes resulted when the market transitioned from a business to a co-operative with a board of directors. Financial outcomes resulted when they tapped into grant funding which allowed for paid employees. Social outcomes include the number of people the Karma Project reaches through products and services in Pentanguishene, and the rest of Huronia.
The project reaches approximately 100 people (per market/per day) in the community at 3 farmers’ markets which run on Fridays, Saturdays, and Mondays. Cultural outcomes resulted from the initiatives to identify and bridge the cultural diversity in the region. Karma Marketplace held an event in 2011 called “Winter Lore” which allowed community members to explore cultural roots and to see how food represents culture and art. Each participant ate a culturally diverse 3-course meal prepared by a local Penetanguishene restaurant. All tickets earnings went back into the organization. Environmental outcomes resulted from their work in the community garden and running workshops to educate others about safe preserving, cold food, and keeping the environment clean when growing food. The Karma products are unique because the items are grown in the community garden then produced in the community kitchen by the cook. Karma Marketplace produced their own line of products and began branding them in 2012 to push forward their objective of conscious consumerism. The people invested in the project want consumers to think about their purchases while keeping in mind sustainability, health, and local markets. Karma Marketplace works hard at avoiding competition by not duplicating any products already on the market. Unique products include preserves such as mushroom ketchup and drunken radish pickles. Four fresh items that sell out at every farmer’s market include things such as garlic skeet pesto, lemon sunflower dip, marinated mushrooms, and green goddess salad dressing. These are their most popular products.
8. Lessons Learned
Erin has been running Karma Marketplace and the other Karma Project initiatives for over 6 years. Even though she believes the organization to be “young” she shares several tips and lessons for anyone thinking of starting a social enterpris:
- Be honest: with yourself, your staff, your board, about your finances and debt
- Be flexible: remember that business is not going to give you exactly what you want, go with the flow, roll with the punches, keep an open mind, be able to alter your plans, remember
- Partnerships, partnerships, partnerships: lean on friends, colleagues, organizations, and committees, be a strong partner for others, seek advice and mentorship when you need to, trust your partners and supporters
- Love your municipality and public sector: these groups are not obstacles, follow the rules, gain support, seek their help for word of mouth promotion and funding awareness
- Stay within your means: don’t be bigger than your pocket books
- Shop local: support your community because they will give back
Other factors that have been crucial to Erin’s success with Karma Marketplace include patience, maintaining vision, using integrity, accepting slow growth, and sticking to your values. No matter the circumstance the Karma Project will not push their mission to make a product fit. Sometimes this means that the store front will miss out on carrying items, such as organic product, because it is not available in local markets. But if it does not fit it does not fit. Erin also gave some advice for people to improve the ability for social enterprises to develop. She expresses the importance of start-up and mid-life funding and the need for better terminology when it comes to social enterprise. Promoting a better understanding of what social enterprise is across the province would be an important awareness campaign which would benefit all businesses. Some negative aspects of running a social enterprise, according to Erin, include that there are limited resources in the community for co-operatives and a lack of training opportunities for managerial positions. Nonetheless, the dedication Erin has to the Karma Project is phenomenal. The positives associated with running the social enterprise is knowing they acted with integrity, that everything they sold, and every dollar they earned, that day was done through kindness, generosity, and compassion in support of their local economy in Penetanguishene. Knowing they did the right thing day after day outweighs all of the hardships that come with running a business.
In one year, the Karma Project will have their first elected board of directors, implemented a strategic plan, added a new store location in Port McNicoll of Tay Township, added a second community garden in the region, and hopefully obtained a business vehicle. They would also like to see an online donation option which could increase their funds by reaching more people. In five years, the Karma Project hopes that each of the communities it impacts will be on their way towards food security in Huronia. According to Erin, this is more of a municipal or community-driven goal but they want to see food security as a result of Karma’s influence. By this time they hope to be financially stable without the use of external grant funding. Karma Marketplace donated $500.00 to an event in the past in support of the community market in Penetanguishene. A long term goal is the hope to have a large enough capacity to fund other groups well beyond this amount who are working toward the same goals and/or in social enterprise. Erin believes that all elements of the Karma Project could be replicated in other communities who are in need of local food, art, crafts, and fair trade products. The employee skill sets, board of directors, branding, farmers’ markets, store front, and community garden are all resources that could be accessible to all. She is hoping to influence people in other communities to do some of the same things the Karma Project is doing. People reach out to Erin and her staff on a consistent basis asking how they started their social enterprise, what their secrets are, and how everything works smoothly. Erin thinks an exact replication of Karma would be difficult to achieve but she does think what they are doing can still be spread across the region. If the community need and resources are available there is no reason a store front, a community garden, farmers’ markets and their various other initiatives could not exist.
The information for this case study was collected through an interview with Erin Chapelle, founder of the Karma Project. Erin’s travelling experience and vision for a sustainable community provides us with a unique perspective on the local food initiatives she now manages in Huronia.
Author and Interviewer: Jessica Davis, Community Development Analyst, at United Way Greater Simcoe
Case Study Completed September 2013
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