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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.

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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“For every thousand hacking at the leaves of evil, there is one striking at the root.”

- Henry David Thoreau

Do the research, and you will find that perhaps the most famous and best documented non-profit program for helping first-time pregnant mothers in the country is the Nurse-Family Partnership. I realize it is a little lazy to not pull out the most impressive points and bullet them for everybody, but I don’t want to deprive you of the discovery as you research this program a little bit yourselves. I hope you will forgive me.

I do have a couple comments that I’d like to add.

I went to a short meeting at the Brookings Institute on Economic Mobility in America several months back. The usual, never ending political leanings and debates the came out of the discussion were interesting, but can become very tiresome. Nonetheless, I got one nugget that has really stuck with me.

During a discussion in one of the panels about K-12 education and whether or not it is really the great equalizer or the great “de-equalizer” in America a panelist said: (paraphrased) “Whether or not a child graduates from High School is determied by the 6th grade.” I have no idea why somebody would say the 6th grade. Very strong arguments can be made supporting the claim that whether or not a child graduates from High School is determined before they are even born. This is one of the reasons I am such a big fan of the Nurse-Family Partnership. They are truly one of the few programs working at the roots through long-term, fairly intensive parent education.

Read up and be inspired: Nurse-Family Partnership

“The highest degree of charity—above which there is no higher—is he who strengthens the hand of his poor fellow Jew and gives him a gift or [an interest-free] loan or enters into a business partnership with the poor person.” - Maimonides, Ladder of Tzedakah

Maimonedes, who lived from 1135AD to 1204AD, is well known as the first person to write a systematic code of all Jewish law, the Mishneh Torah. One of his small contributions, cited among donors who have researched how they might best give their money away, is his hierarchy of giving known as the Ladder of Tzedakah. “Doing business with the poor” is just one of the many ways that the highest level of charity is translated and written. The common thread in all translations is to help the poor become self-sufficient.

There are 110,000 people in Zimbabwe who are dependent on the nonprofit CARE who are not getting the food they need each month since the crackdown of Mugabe on international aid flowing into to Zimbabwe. Although it is probably no longer fair to pick on CARE for irresponsible giving it demonstrates what food aid programs have done for many years: created dependency. If CARE had rejected federal aid a long time ago, as they are now, Zimbabwe may have 110,000 self-sufficient people who are better able to weather the current political storm.

I have made the point in past posts and will continue to make the point many more times - the single most charitable thing anybody can do is to start a ridiculously profitable, innovative and responsible company. The other point I will never grow tired of reiterating is individuals are corrupt not corporate structures.

So what is the positive news in this post? Where are the positive people?

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I keep seeing the words “inclusion” and “inclusive” when talking about helping people who have disadvantages take part in the bounty that capitalism has to offer. (American Heritage Dictionary: captialism: An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.) There is something about allusions to people being excluded that is so disempowering. Every time I read about people being excluded in America I wince and find it very hard to swallow.

I’ll be the first to admit that I have had many advantages in life - opportunity after opportunity to make myself more competitive in this capitalistic market place. Am I disadvantaged in some ways, yes, but nothing like people who have been abused as children, or people who have severe cognitive, physical or psychiatric disabilities. As people with “obvious” disabilities sometimes like to point out - we all have disabilities (weaknesses), it just so happens that we have disabilities that are more obvious, extreme and rare. Even if you don’t agree with this, there is a very good chance that all people at some point in their life will acquire a disability through aging or injury. Main point I am trying to make is I like the word “disadvantaged”. Capitalism is competitive and everybody has to be aware of their strengths and weaknesses - it is often helpful to work from a vantage point of reality.

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