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Bob Moon: It seems appropriate on this holiday to spotlight a special breed of start-up enterprises: Social entrepreneurs who use their work to try to fix what might be wrong with the world. A while back, we came across one Robert Chambers. As a man in his 60s, he was old enough to be enjoying a carefree retirement, but still keeping busy. He was tackling a gripe that was left over from his working days and still bugging the heck out of him, and he swore he was going to fix it.
Reporter Steve Tripoli put together this report from the Marketplace Entrepreneurship Desk.
STEVE TRIPOLI: Robert Chambers’ post-retirement career was born at a New Hampshire car dealership a while back. He was working there one morning when the sales force was called together. A $1,000 bonus was offered to anyone who could sell an older car with 70,000 miles on it. Shortly after that a young woman walked in, a single mother earning $11 an hour. The salesman steered her to the “bonus car.” She bit on a high price, but then was told there’d be a problem getting financing. Chambers picks up the story.
ROBERT CHAMBERS: She had gone through a divorce and had ended up with some credit issues. So she was financed at a very high interest rate, and she was sold a very expensive warranty on the car. And when she drove off this car was financed over a five year period of time, which is typical, but I knew that that car would be dead in three years or would have significant mechanical problems. And when the business manager walked out of the office he and the salesperson high-fived each other, because the dealership had made $5,000 profit off of this woman. And I just couldn’t stand it anymore.
Chambers says unsophisticated working people get shafted on used cars all the time. What irks him even more is that they can often get new cars for the same overall cost, but no one tells them that’s possible. So Chambers chose not to retire after leaving car sales, even though he was well set from owning several businesses. Instead he channeled his frustrations into cooking up a new business called Bonnie CLAC. CLAC stands for “Car Loans and Counseling.” It gives lower-income people two things they rarely get on big purchases: the bargaining clout of a group, plus a heavy dose of guidance.
VERDINA MEKIC: Do you know what was the interest rate on your car loan before, when you purchased your Toyota?
At one of Bonnie CLAC’s seven New Hampshire offices counselor Verdina Mekic runs a mandatory financial literacy course for clients. On this day she’s educating a young couple about the hidden ways car costs add up.
MEKIC: If you have let’s say 10 years old car that constantly needs repairs, the average repair would be 140 a month. This 140 a month . . .
The couple shoot each other knowing glances. They’ve already been burned by repairs on their clunker. Robert Chambers learned long ago that lousy car deals can sabotage a struggling family’s shot at getting ahead. Workers can’t get to work when old cars fail, so they’re losing pay at the same time they need repair money. That triggers other financial pressures.
CHAMBERS: It’s a kind of a circular trap that they can’t get out of, and they can’t go to buy the new car because they don’t have the credit, and also because they’re never introduced to that new car because the dealership doesn’t make enough profit.
But a good car can reverse that cycle. So Bonnie CLAC brokers the purchase price, loan and extended warranty on clients’ cars. It also insists on high-mileage vehicles. Best of all, it’s struck a deal with a regional bank so clients with less-than-pristine credit can get low-cost financing. Bonnie CLAC clients get prime interest rates and Chambers brags that losses from these supposedly risky loans have been microscopic.
CHAMBERS: Our success rate is better than commercial lending. On a portfolio of $10 million with 985 clients, we’ve lost $46,000.
It turns out Robert Chambers isn’t just some wacky oddity among could-be retirees. A San Francisco-based non-profit called Civic Ventures recently made him a finalist for its “Purpose Prize.” It rewards social entrepreneurship by people over 60. Civic Ventures head Marc Freedman says many retiring Baby Boomers are itching to make a difference, just like Robert Chambers did, and now they have the means.
FREEDMAN: This generation is better educated. They have more financial resources. They have a longer life expectancy, and I think that they have higher expectations about what’s possible in this stage of life, and many of those expectations are focused on the greater good.
Freedman expected a few dozen nominees for last year’s first Purpose Prizes. More than 1,200 stories about social entrepreneurs over 60 rolled in.
Back in New Hampshire, Robert Chambers is just warming up. He’ll start expanding Bonnie CLAC across New England in January. If that works, a large foundation has promised to help him go national. So at 63 Chambers says he’s having too much fun to retire, and making too much of a difference.
I’m Steve Tripoli for Marketplace.
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