You heard it here first, the Obama Administration will be investing heavily into the nation’s future by spending your (future) tax dollars on further developing renewable energy, retrofitting federal buildings to be energy efficient, and upgrading the nations’ energy and transportation infrastructure.

To quote President-elect Obama, “However we got here, the problems we face today are not Democratic problems or Republican problems. The dreams of putting a child through college, or staying in your home, or retiring with dignity and security know no boundaries of party or ideology.”

Friends, we must all participate in building up America, again, to be the leader that the world expects and demands.  We must lend our support (time, money, expertise and skills) to the endeavors that move the United States and world in the right direction.  Be sure to communicate with your representatives in Congress to tell them about the problems and your communities face.  Our government officials need our input as leaders can not lead without the feedback from their followers.

Also, be active in reviewing the legislation that eventually is proposed in Congress.  It may contain provisions that do not move America in the right direction.   Tell our government leaders your opinion.  This, my friends, is more valuable than voting and you have earned the right to voice your opinion.

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Remember any of the last 1000 articles you read in the paper? I rest my case.   Read an article that you will never forget, guaranteed.

To stay true to my promise to highlight a great program each week. The great program of the week is Civic Ventures. I will now move on to some thoughts I have had.

Business entrepreneurs move society forward, continuously pushing the envelope of productivity through continuous innovation. Research shows that what drives entrepreneurs isn’t money as much as challenge and achievement.

In past posts, I have made it clear that I am for ethical individuals seeking a single bottom line. Taking into account the realities of the world, human nature and history I can’t in my wildest dreams or most sincere logic conclude that double-bottom line companies will on average ever achieve the same positive social impact as ethical single-bottom line companies. This does not mean I am against double-bottom line companies. What I am for is - every person’s talents, motivations and abilities being aligned with their actions and creations so as to produce maximum positive value to society. So for some, a double-bottom line approach may make more sense than a single-bottom line. But the large majority of people’s talents, motivations and abilities will be better aligned and maximized in a demanding, profit-maximization environment. Just to be clear - if a person has impeccable character - all arguments that would suggest that a double-bottom line model is superior then go away. I can back that up, but won’t go into it now. Here is the kicker and my main point: A person with impeccable character will have a greater positive impact with a profit maximization mentality than a double bottom line mentality. So if you’re a good person then a single-bottom line may be the best way to go? If your motive for having a double-bottom line is to show that it is actually more profitable to take a double-bottom line approach then you’re really focused on profits and therefore have a single-bottom line approach after all.

A  while back I read a comment in the comment section of an article “MBAs Gone Wild” in the Stanford Social Innovation Review that did a decent job of supporting my point:

“Here’s a suggestions to those large companies and business schools who may be thinking of how to increase the pro bono work of their MBAs to help out nonprofits. Why not take all that wonderful expertise and take a look at the internal business practices of the for-profit sector? How can the MBAs on your staff help you figure out a way to pay your low-wage workers more? Or how to reduce your environmental impact? Or how to prevent, rather than cause a large-scale mortgage crisis? That would lighten the work load of the nonprofit sector tremendously!”

If philanthropists want to maximize their social impact, their impact has to be related to creating and supporting an ideal environment for ethical, single-bottom line entrepreneurs.

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est. May, 2004

The principle measure of success for prisoner re-entry programs is the recidivism rate (the rate at which prisoners return to prison for any reason). PEP only works with Texas prisoners. While Texas has a recidivism rate of 28.3% (2001) and the U.S. has a recidivism rate of 67.5% (1994) for prisoners who left prison within a 3 year period, PEP’s is about 5% . PEP works inside prison where they are to a large degree not wanted, and have extreme accountability requirements from the prison. Here are the stats:

PEP RESULTS (AS OF JULY 1, 2008)

Total graduates: 370
Recidivism rate: less than 5% (Measured since the program’s inception for all participants who graduate PEP’s inside program, regardless of their participation in the free world.)

Employment rate: more than 97% of graduates are employed within four weeks of release
Average number of days to gain employment: 22
Average starting wage: $10.51 per hour
Number of businesses started: 43

Executive volunteers: 1,000+
MBA volunteers: 400+ from 22 MBA programs
PEP lifetime cost per head: $13K
National average annual cost for incarceration: $21K

A little more context: Another prisoner re-entry program, InnerChange achieved a rate of about 8% for prisoners released within a 2 year period. As I have done more research, almost all re-entry programs will cite statistics only for prisoners who complete their programs. It isn’t unreasonable for these programs to put a large number of prisoners through a strict interview process, and after only a percentage get in, have only 40 to 50% actually complete the program. So, most programs are not working with “lost causes”. One other point to consider is: typical protocol for releasing prisoners is not very tough to improve upon - it is atrocious. I am somewhat surprised the recidivism rate isn’t 80 or 90% nationally.

In spite of all the wrong implications one could take from the data , context and caveats - PEP outperforms almost all re-entry programs and does something that no other re-entry program does: rather than seeing inmates as a societal problem to be solved, it literally sees them as opportunities. It recognizes many prisoner’s potential to be ridiculously successful legal entrepreneurs. This isn’t as much a reformation program as it is a “reach full potential” program. This is why, this program comes out on top. Just start thinking of the added benefits: Prison entrepreneurs are much more likely to hire other prisoners from all those other workforce development prisoner re-entry programs. A reasonable venture capital model could result in PEP becoming 100% financed by PEP graduates. Etc. In fact I predict within 15 years time PEP will become self-sustaining with thousands of prisoners not only off the taxpayers’ bill but private “outside” funders’ bill as well. Former inmates funding responsible, profitable, PERMANENT re-entry - I think it can be done.

Once again, I hope you will forgive me for copy/pasting text; this time from PEP’s website: www.prisonentrepeneurship.org (Why try to write something that’s going to be worse?):

PEP’s team recognizes that prison is a storehouse of untapped potential. Many inmates come to prison as seasoned entrepreneurs who happened to run illegitimate businesses. For the truly reformed prisoners, once equipped with education and life skills training, the ROI potential for these men, their families and communities is limitless.

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I have to agree with Tom Friedman, author of “The World is Flat” that Endeavor’s model is “the best anti-poverty program of all”.

Endeavor’s goal in a nut shell is: to create as many good jobs in emerging markets as they possibly can. The model is simple: provide high-potential entrepreneurs in emerging countries with everything that Venture Capitalists provide the most innovative entrepreneurs in America - minus the capital.

Endeavor’s “mentor capitalist” model breaks down economic and cultural barriers through rigorous screening and strategic advising from a network of world-class business leaders. With their guidance, 266 Endeavor Entrepreneurs have created 79,000 jobs and generated $1.9 billion in revenues.

It’s ingenious and hands down the best bottom-up strategy that a non-profit can use to leverage free-market capitalism in emerging and developing countries. Endeavor’s model fully embraces the truth that the wealth of nations resides in our minds. The explosion in the world’s wealth is simply a product of man’s innovations - a product of his mind. With that said, capital is of course absolutely essential to scale a company quickly, but to think capital first is not the right paradigm. Capital will follow work ethic and innovative excellence.

As a side note Goldman Sachs just released a white paper on July 7, 2008 - “The Expanding Middle:
The Exploding World Middle Class and Falling Global Inequality” (FT commentary).

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