From the April 2008 issue of Entrepreneur

The day before he pitched to the city of Philadelphia, the local paper coincidentally ran a front-page story exposing the gross amount of money being wasted as a result of the city not having a comprehensive recycling program. "We told them we'd increase the recycling rate," says Gonen. Within three months, a pilot program was up and running.

This is how it works: RecycleBank provides homes with large carts in which to throw all recyclables. Each container has a radio frequency identification chip, which is read by the trucks picking them up. Information on how much each house has recycled is sent back to RecycleBank and converted into reward points. Those points can then be redeemed at hundreds of stores, including Starbucks and Whole Foods.

"I feel you should look at your footprint in life and see the impact you're having on the world," says Gonen, 32. A former consultant, Gonen wanted to prove that being socially responsible could be a moneymaking endeavor. In 2004, he launched his company on the belief that giving people the motivation to recycle along with the right tools would change their behavior.

The service is free to the homeowners. RecycleBank generates its revenue by receiving a percentage of the money the cities save by producing less landfill waste. For example, Wilmington, Delaware, used to spend $3 million a year on storing its residents' landfill waste. Recycle-Bank has diverted about half of that yearly waste to date.

Customers can keep track of their reward points and their environmental footprint through RecycleBank's site. In aggregate, Gonen says his customers' recycling has saved more than 227,000 trees and 15 million gallons of oil and has diverted more than 19,500 tons of material from the waste stream. In addition, recyclers have redeemed more than 3 million reward points.

Currently, the company operates in Delaware, Massachusetts, New Jersey, Pennsylvania and Vermont. "We quickly saw demand from all over the country," says Gonen, "but we needed to work out the kinks in the model so when we were ready to scale, we could actually deliver." Gonen feels he's ready now and plans to expand across the nation this year.

JJ Ramberg is the host of MSNBC's small-business program Your Business and co-founder of GoodSearch.com.