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Binghamton’s Giving Games Award

On February 2, CEO Binghamton was awarded a $110 donation from students enrolled in the Public Service Learning Community at Hinman College at Binghamton University. Hinman College emphasizes community service and leadership, with this in mind, students participated in the Giving Games during their fall 2014 semester. The Giving Games provides participants, future donors, an opportunity to explore their own values through a discussion centered around philanthropy. The Giving Games was developed by  The Life You Can Save organization, founded by Peter Singer and grounded in the Effective Altruism movement aimed at reducing poverty and economic inequality. Students in the Public Service Learning Community were presented with two international and two local organizations and asked to make a decision about who to donate to. Students selected the criteria of which to judge each organization, engaged in thoughtful conversation, and ultimately selected a winner.

 

The CEO Binghamton office is very honored to have been selected as the winner of the local non-profit organization category. CEO edged out the competition largely due to our use of performance data and our dedication to empowering formerly incarcerated men and women to make a better life for themselves and their families through employment. In particular, the students were impressed by CEO’s use of data to make decisions and to evaluate our progress. Katie Blaine, Participant Services Manager, was joined by Andrew Mitchell, a former CEO Binghamton participant that completed CEO’s job training and placement program with a live job in March of 2014, to accept the award and thank Hinman College students. Katie spoke about what brought her to CEO and focused on CEO’s performance culture. The students then had an opportunity to hear Andrew discuss his experience with CEO as well as hear about his personal triumphs, which include holding a permanent job for over a year and getting off of parole.

 

The Life You Can Save also made a donation of about $500 dollars to CEO.
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TULSA ACHIEVED A SIGNIFICANT MILESTONE

Tulsa 500 Full Time Jobs

 In July 2011, CEO Tulsa opened its doors to provide employment assistance to people with recent criminal convictions. CEO’s program of transitional work, full time job placement and retention services create stable homes for our participants and their families. In February 2015, CEO celebrated its 500th placement into un-subsidized, full-time employment. CEO thanks our donors whose support has been vital to our success. George Kaiser Family Foundation, Edna McConnell Clark Foundation, Anne and Henry Zarrow Foundation, Inasmuch Foundation ,Tulsa Area United Way, Flint Family Foundation City of Tulsa, Community Development Block Grant (CDBG) Program.

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WIOA In Action: Center for Employment Opportunities

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BY SAM SCHAEFFER   •  

At the Center for Employment Opportunities (CEO), we work to expand opportunity by providing immediate, effective and comprehensive employment services to men and women returning home from prison. Through a combination of workforce preparation and supervised transitional work experience, our nonprofit helps people regain the skills and confidence they need in order to transition to stable, productive lives. CEO aims to connect individuals to the labor market and reduce the rate of recidivism, thereby strengthening our communities and saving millions of dollars in incarceration costs.

We believe that in today’s economy, we can’t afford to sideline any of our talent. We need everyone who can work to be out on the field, doing their part.

Each day in the United States, 2.2 million people are incarcerated, including a million young Americans under the age of 30. Every year, more than 600,000 people return home from prison. The rate of recidivism is extremely high – more than 60 percent of them will return to prison within five years.

We know that when people return home after incarceration, they face a steeplechase of barriers in connecting to the labor market. Many lack a high school diploma and work experience. Some are struggling to reconnect with family and with other issues such as sobriety and mental health. And the stigma of incarceration makes it hard to even get in the front door of many businesses. The right employment program can help.

We believe that the reauthorized Workforce Innovation and Opportunity Act, which sends about $3 billion a year to states for workforce development initiatives, could allow CEO to access federal resources and scale up our highly-effective program.

CEO has been proven through random assignment evaluation to stop the cycle of recidivism and save taxpayer dollars. Our target population is those people who are at the highest risk for reincarceration, particularly young adults ages 18-25. CEO was founded in NYC and operates in 10 cities across New York, California and Oklahoma. In the coming year will launch new operations in Philadelphia, PA and San Jose, CA.

In all of CEO’s locations, we operate the same model. CEO recruits people who have been recently released from prison who are at the highest risk of recidivism. We begin with a week-long life-skills preparation class that helps people complete a resume, practice interview skills and get ready for their new job. At graduation they are given a pair of steel-toed boots and guaranteed a position on one of CEO’s work crews performing basic labor and maintenance assignments for various public agencies and institutions. Every day, CEO’s crews are cleaning college campuses, buffing floors of public buildings and landscaping outdoor spaces. Participants generally spend 2-3 months working on a crew, gaining work experience, demonstrating their ability to participate in the full-time workforce. Once they are ready, our job developers match them with employment opportunities and each week they are sent out on job interviews until they are hired.

This year, CEO made 2,300 full-time job placements. These jobs reflect the labor market of each local community. In New York City, most jobs were in service and retail sector as well as the construction trades. In Buffalo, NY light manufacturing and food processing jobs were in-demand; and in San Bernadino, California, there was a high demand for logistics work.

Because of CEO, fewer people return to prison and jail and states and communities have more resources to spend on things like education, parks and healthcare. Today, the U.S. spends $64.3 billion on incarceration. That’s a huge amount of money. Studies have shown that CEO’s program not only reduces the rate of recidivism but also to saves money. For every $1 spent on CEO’s program, it saves taxpayers $3.30.

We know there are thousands more who could benefit from our program.

So far, federal workforce investment funds have not been a significant part of CEO’s funding stream. But we hope that could change under the reauthorized WIOA.

CEO can help local Workforce Investment Boards around the country meet the increased requirements for serving disconnected young adults. For the first time, WIOA permits funds to be utilized to pay for transitional work activities. This is a win-win: high-impact programs like CEO can receive support to expand access and meet more of the demand for services, and workforce agencies are positioned meet new federal mandates all while ensuring that every American has the opportunity to find their path to prosperity.

Sam Schaeffer is the executive director and CEO of the Center for Employment Opportunities, a nonprofit that helps adults who have recently been released from prison find jobs. CEO operates programs in New York, California and Oklahoma. CEO joined the Opportunity Nation coalition in 2014.

Read more: http://opportunitynation.org/latest-news/wioa-action-center-employment-opportunities/

 

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Roberts Foundation: Bay Area Grants

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OVERVIEW: The Roberts Foundation is the philanthropic vehicle of billionaire George Roberts and his wife, Linnea. The foundation focuses much of its grantmaking on the Bay Area, with education and poverty being top priorities. The foundation is also used to help support a Roberts’ founded venture philanthropy effort called REDF, which aims to alleviate poverty.

FUNDING AREAS: Education, poverty, environment, Bay Area community

IP TAKE: Roberts has been a huge funder of all the schools he’s gone to. He’s also fought poverty through his venture philanthropy outfit. But that’s not all he’s into, and more modest sums have gone to a wide variety of institutions in the Bay Area.

PROFILE: The son of a Houston oil broker, George Roberts became a partner at Bear Stearns at age 29 after graduating from Claremont McKenna in suburban Los Angeles and attending UC Hastings College of Law. In 1976, he, his cousin Henry Kravis, and Bear Stearns mentor Jerome Kohlberg broke out on their own to found Kohlberg Kravis and Roberts (KKR). Today KKR manages around $100 billion in assets.

Roberts founded the Roberts Foundation in 1985, and now runs the foundation with his second wife, Linnea, and his children. Roberts has also been involved with philanthropy through the Homeless Economic Development Fund, which supported employment-related nonprofits during the early and mid 1990s. Later this fund transformed into REDF, which since its inception in 1997, has supported 50 social enterprises that employ 9,000 people, generating more than $140 million in revenues. The Roberts Foundation supports REDF with annual funding.

In recent years, the Roberts Foundation has held around $70 million in assets and given away more than $15 million annually. The San Fransicsco Bay Area has been a high-priority funding area. In K-12 education, recent sums have gone to Sacred Heart Schools Atherton, with at least $100,000 in 2013. Modest sums have also gone to KIPP Bay Area Schools.

Most of Roberts’ K-12 education grantmaking appears to be taking place outside of the Bay Area however, where for instance Roberts’ wife, Linnea, sits on the board of Teach for America. Other K-12 sums have gone to New Visions for Public Schools in New York.

In higher education, at least $1 million went to UCSF in 2013. Smaller sums have gone to Roberts’ alma mater, UC Hastings College of Law. Outside of the Bay Area, Roberts has been an enormous funder of his undergraduate alma mater Claremont McKenna, as well as to Culver Academies, a consortium of schools in Indiana that Roberts attended. Roberts’ military background perhaps explains his recent support of the Oakland Military Institute.

Another key interest of the Roberts couple is poverty, where outfits such as outfits such as SF Food Bank, and the Tipping Point Community have received modest support in recent years. By far, though, the couple’s largest forays into this area involve their support of REDF. The fund is located in San Francisco and many of its partners are in the Bay Area. In recent years, REDF has worked with the Center for Employment Opportunities (CEO), with headquarters in Oakland, San Diego, and San Bernardino to help formerly incarcerated men and women. REDF has also worked with the Community Housing Partership in San Francisco, and Goodwill of Silicon Valley.

Environmental conservation and animal rights is also another interest of the Roberts Foundation. This may be in part due to Roberts’ first wife, Leanne, who was a prominent board member of the San Francisco SPCA. Robert and Leanne’s son, Eric, who is listed as a Vice President at the Roberts Foundation, assumed the board seat at SPCA that was occupied by Leanne. In 2009, the SF SPCA opened the The Leanne B. Roberts Animal Care Center.

In 2012, a little under $500,000 went to the Ark Watch Foundation in Northern California, whose mission is to “improve the welfare of animals in need within the U.S. and Canada.” $700,000 also recently went to Del Monte Forest Conservancy in Pebble Beach “which conserves, acquires and enhances lands dedicated to open space within Del Monte Forest.” Smaller sums have also gone to Eagle Eye Sanctuary Foundation in San Francisco.

In arts and culture, the Roberts couple has supported outfits such as the San Francisco Museum of Modern Art, San Francisco Symphony, San Francisco Opera, and the SF Ballet. SF Ballet received $5 million alone in 2012. Linnea sits on the board at San Francisco Museum of Modern Art. In health, recent sums have gone to the UCSF Cancer Center, which received at least $1 million in 2013.

PEOPLE:

  • George R. Roberts, President
  • Linnea C. Roberts, Vice President
  • Eric B. Roberts, Vice President
  • Mark B. Roberts, Vice President
  • Courtney A. Roberts, Vice President

CONTACT:

The Roberts Foundation
2755 Campus Drive, Suite 240
San Mateo, CA 94403

Read more: http://www.insidephilanthropy.com/fundraising-bay-area-grants/roberts-foundation-bay-area-grants.html

 

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Here’s What You Need To Know About the Roberts Foundation

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The Roberts Foundation is the philanthropic vehicle of billionaire George Roberts and his wife Linnea. Roberts and his wife are based in the Bay Area where Roberts serves as Co-CEO of a firm he founded called Kohlberg Kravis Roberts (KKR). Linnea, meanwhile, works as an Advisory Director in investment banking for Goldman Sachs.

In recent years, the Roberts Foundation has held around $70 million in assets and has given away more than $15 million annually, with the Bay Area being a high-priority funding area. This funder doesn’t have a website or any clear way for grantseekers to get in touch, so it will be a tough nut to crack. That said, here are a few must knows:

1. Fighting Poverty in the Bay Area is A High Priority

In recent years, outfits such as SF Food Bank, and the Tipping Point Community have been funded by the Roberts Foundation. But the main way the couple fights poverty in the region is through REDF, which seeks to fight poverty in the Bay Area and beyond by connecting “people to jobs,” and tapping into social enterprises. In recent years, REDF has partnered with the Center for Employment Opportunities (CEO), with headquarters in Oakland, San Diego, and San Bernardino to help formerly incarcerated men and women. REDF has also worked with the Community Housing Partership in San Francisco, and Goodwill of Silicon Valley.

It’s worth noting that prior to founding REDF, Roberts also created the Homeless Economic Development Fund, which supported employment-related nonprofits during the early and mid 1990s. As for REDF, its website claims that it has “supported 50 social enterprises that employ 9,000 people, generating more than $140 million in revenues.”

2. Supporting the Environment and Animal Rights Appears to Be a Longtime Interest

Roberts’ first wife, Leanne, was a prominent board member of the San Francisco SPCA and the Leanne B. Roberts Animal Care Center at the SPCA is named after her. These days, Robert and Leanne’s son, Eric, sits on the board of the San Francisco SPCA. While it’s unclear if the Roberts Foundation has pumped money into the SF SPCA in recent years, sums have gone to the Ark Watch Foundation, whose mission is to “improve the welfare of animals in need within the U.S. and Canada.” Another $700,000 also recently went to Del Monte Forest Conservancy in Pebble Beach “which conserves, acquires and enhances lands dedicated to open space within Del Monte Forest.”

3. Roberts’ Education Philanthropy is Centered on His Alma Maters

Roberts attended UC Hastings College of Law, which has received modest sums in recent years. This pales in comparison to the millions he’s pumped into his undergraduate alma mater Claremont McKenna College, a liberal arts college a couple hundred miles to the south in Los Angeles Country. Still, in recent years military academies in the Bay Area such as the Oakland Military Institute have received support. This may be because Roberts attended a military academy himself in Indiana.

Roberts and his wife have also modestly supported KIPP Bay Area Schools, and Sacred Heart Schools Atherton. K-12 Education reform might become more of priority for the funder, however, because Linnea sits on the board at Teach for America.

4. The Couple Has Also Supported Arts and Culture

Roberts and Linnea have supported outfits such as the San Francisco Museum of Modern Art, San Francisco Symphony, San Francisco Opera, and the SF Ballet. SF Ballet received $5 million alone in 2012. Linnea sits on the board at San Francisco Museum of Modern Art. In health, recent sums have gone to the UCSF Cancer Center, which received at least $1 million in 2013.

Read more: http://www.insidephilanthropy.com/bay-area/2015/1/28/heres-what-you-need-to-know-about-the-roberts-foundation.html

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Rotary Club: CEO Official Presents Skills Needed for Entry Level Jobs

2/3/2015

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What kind of skills do unemployed individuals with recent criminal convictions need to get back on track?

That was the topic of this afternoon’s presentation at the Rotary Club. Katie Blaine, who’s a manager at the Center for Employment Opportunities talked about the soft skills that these individuals need to obtain entry level jobs–  things like cooperating with supervisors, putting forth effort, being on time, and personal presentation.

CEO provides employment services for unemployed individuals with recent criminal convictions.

According to the CEO, 89% of people who violate parole are unemployed at the time of the violation.

“Many times they return to the same neighborhood that they left, it’s very easy to fall back into old habits. So what we want to do is show our participants that there is another way you can be a productive member of society through work,”  said Katie Blaine, Participant Services Manager for CEO.

Blaine also says that the unemployment rate for individuals returning from prison is 56% and that they face many challenges.

Read more: http://www.wicz.com/news2005/viewarticle.asp?a=36817

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CEO gave a presentation to the Binghamton Noon Rotary Tuesday

02/03/2015 05:11 PM

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Binghamton (WIVT) – A local non-profit organization has helped over 150 ex-cons find work since its founding in 2012.

The Center for Employment Opportunities, or CEO, gave a presentation to the Binghamton Noon Rotary Tuesday.

Participant Services Manager Katie Blaine said people with criminal convictions face a variety of obstacles to finding work beyond just their records.

She said they often lack proper training or transportation and often live in impoverished neighborhoods.

Blaine said society is safer when ex-cons find work and leave behind a life of crime.

“89% of individuals who violate probation or parole are unemployed at the time of violation. That’s why it’s just so important that when folks are returning home from jail or prison that we give them an opportunity for employment,” she said.

Blaine also said programs like her’s are cheaper for society as it costs $60,000 a year to house someone in jail.

CEO often hires people themselves and provides soft training in how to develop relationships with bosses and co-workers.

Read more: http://www.binghamtonhomepage.com/story/d/story/center-looks-for-employment-for-ex-cons/23493/gysgoSiKckq9nqeuiek8eQ

 

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Transitioning from prison to paychecks

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February 3, 2015

By Kerry Longobucco

Binghamton, NY  Officials from the Center for Employment Opportunities, or CEO, spoke out Tuesday on the importance of finding work for people who have recently been released from prison.

Representatives of CEO spoke at a lunch hosted by the Binghamton Rotary Club #64 about their mission to provide recently convicted individuals with the training they need to transition from public assistance into permanent jobs.

“There are so many individuals that are affected by incarceration,” said Katie Blaine, CEO project services manager, “the individuals themselves, their families, and the community.”

Blaine added 98 percent of people who violate probation are unemployed when the violation occurs.

Officials said people who have recently been in prison often cannot find work, due to their criminal history, lack of transportation, and a lack of jobs in poverty stricken areas.

Individuals are hired by the organization to work in its office building. It focuses on job training and skills, like cooperation with coworkers and supervisors, and effort at work.

CEO employees said people with permanent jobs are less likely to return to prison, and are more prepared to build a stable future for themselves and their families.

Read more: http://www.wbng.com/news/local/Organization-helps-people-transition-from-prison-to-paychecks-290694421.html

 

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American Express Foundation Invests in High-Performing Leaders at the Center for Employment Opportunities

NEW YORK, New York, Jan.22, 2015– American Express has awarded the Center for Employment Opportunities (CEO) a grant to launch the National Reentry Leaders Program, a new initiative to cultivate emerging leaders at CEO to galvanize community support for reentry policy and programs.

“Leadership development is critical to our own company’s success, which is why we’re committed to helping nonprofits do the same,” said Timothy J. McClimon, president, American Express Foundation. “We aim to support best-in-class nonprofits that are tackling tough social issues and give them resources to invest in emerging leaders who will propel them toward their vision.”

CEO is a leader in nonprofit performance management and the organization’s outcomes reflect this reputation. Since 1996, CEO has secured over 18,000 full-time job placements for formerly incarcerated individuals in ten cities across New York, California and Oklahoma. CEO’s impact has been proven through rigorous, independent evaluation to increase public safety, save taxpayers’ money, and put people on the path to economic stability — all at the same time.

“CEO’s ability to deliver high-quality services as we have expanded our national footprint is driven by the alignment of talent and mission,” said Sam Schaeffer, Chief Executive Officer and Executive Director of CEO. “The American Express Foundation’s generous support will allow us to invest in our national leaders and drive impact in the 10 cities around the country where we work.”

The National Reentry Leaders Program kicked off Tuesday, January 20 with a weeklong leadership development conference at the Robin Hood Foundation’s headquarters in Manhattan and will conclude this Friday. Speakers include members of Robin Hood’s fundraising team, known for building an unmistakable brand and wildly successful donor cultivation strategy; Allison Fine, author of the award-winning Momentum: Igniting Social Change in the Connected Age and bestselling The Networked Nonprofit; partners from AchieveMission, and several leading experts in the reentry and criminal justice communities. Approximately 20 national delegates will convene for the program.

*******

About American Express
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress,foursquare.com/americanexpress, twitter.com/americanexpress,and youtube.com/americanexpress. Key links to products and services: charge and credit cards, business credit cards, travel services, gift cards, prepaid cards, merchant services, corporate card and business travel.

American Express: Developing New Leaders for Tomorrow
One of American Express’ three philanthropic platforms is Developing New Leaders for Tomorrow. Under this giving initiative, which recognizes the significance of strong leadership in the nonprofit and social sectors, American Express awards grants focused on training high potential emerging leaders to tackle important issues in their communities. More than 15,000 emerging nonprofit and social sector leaders worldwide have benefitted from American Express leadership programs that address the growing deficit of leadership talent in the nonprofit sector.

About the Center for Employment Opportunities (CEO)
CEO is a national organization dedicated to providing immediate, effective and comprehensive employment reentry services to individuals with recent criminal convictions. Since its inception, CEO has helped secure over 18,000 jobs for formerly incarcerated men and women. In an independent study funded by the U.S. Department of Health and Human Services, CEO was proven to reduce recidivism by up to 26% for those who participate in our program.

CONTACT
Beth Kempner, Director of Public Affairs
212-612-5144
bkempner@ceoworks.org

 

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Rebuilding Lives, Reducing Costs: Social Impact Bond Finances Jobs Over Jail

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BY  DECEMBER 23, 2014

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The snow was blowing and it was in the 20s on Wall Street on the day after New Year’s but dozens of mostly young, mostly black, and mostly unemployed men showed up for job training and placements on the first working day of 2014.

The men, all recently released from prison, were making an investment in their own future. They were eager to enroll at the nonprofit Center for Employment Opportunities, better known as CEO, which operates out of the 18th floor of a building in the heart of New York City’s financial district.

Other, more familiar, fixtures on Wall Street — including former Treasury Secretary Larry Summers — are making an investment in the young men as well.

The ex-offenders lining up for employment help were among the first of 2,000 CEO clients in New York City and Rochester whose job training costs are covered under a “pay-for-success” contract financed by private investors. Bank of America Merrill Lynch offered the investment to its private banking clients, Between Thanksgiving and New Year’s Eve last year, more than 40 high net worth investors committed $13.5 million.

If enough of the formerly incarcerated men stay out of prison, the investors stand to recoup their principal and plus a return that can range between 5 and 12.5 percent. If CEO’s program fails to significantly reduce recidivism (with at least an 8 percent reduction in jail and prison days), investors will lose up to 90 percent of their money.

Risks are privatized and gains are socialized. That’s a new model, one harnessing private capital to serve the public good.Tracy Palandjian, CEO, Social Finance

Pay-for-success contracts, colloquially known as “social impact bonds,” are attractive to cash-strapped states and cities because they are obligated to pay only when the results are proven and the savings are realized. For investors, the investment proposition might more accurately be called “repaid-for-success.” Private investors provide the upfront risk capital to finance the preventive services. They get their capital back, plus a financial return, out of the government’s avoided costs from a successful intervention.

The contract, issued by the state of New York, is not the first pay-for-success contract, but it is the first to be offered directly to individual qualified investors. In earlier deals, institutional investors, like Goldman Sachs, backed social impact bonds with their own capital; the New York State contract is the first test of private investor interest in financing this new way to deliver preventive social services. With a minimum investment of $100,000 and a five-and-a-half-year lockup, the private investors committed an average of $300,000 each. The whole deal was brokered by an innovative nonprofit called Social Finance, which has helped bring the pay-for-success model from the U.K. to the U.S.

“The idea that there may be a different way to attract new capital, coupled with ways to improve the actual results, was naturally attractive,” says Paul Bernstein, who invested as executive director of the Pershing Square Foundation, Karen and Bill Ackman’s philanthropic vehicle. Bernstein says Bill Ackman, known as an activist investor who makes big bets, took a personal interest in the innovative structure as a way around government’s seeming inability to adequately fund even proven prevention techniques.

“If you really want this thing to scale and create a new funding model, you had to build a commercially viable approach, and they did that by bringing in BofA,” Bernstein says. As for the investment, he says, “It’s clearly not going to offer the best return you could get on any investment, but it’s a viable part of a diversified portfolio.”

Velocity is an ‘aha’ moment. It’s very different than a grant in which the money is gone.Surya Kolluri, Bank of America Merrill Lynch

Other investors include the Utah philanthropist James Sorenson’s Sorenson Impact Foundation, the Robin Hood Foundation and the Laura and John Arnold Foundation. “Pay-for-success is a funding arrangement that allows governments to make risk-free investments in an effort to improve citizens’ lives and ensure that taxpayer dollars are allocated in the smartest, most efficient way,” said Leila Walsh, a spokeswoman for the Arnold Foundation, who added that any returns would be reinvested in future projects to scale up those that prove to have impact.

Performance-based contracting is common in areas such as energy efficiency, in which predictable savings allow energy service companies to guarantee their results. But they’re new for social services, where conventional budgeting processes generally pay for services, not outcomes. To government bureaucrats, a reduced number of prison bed-days is at least as appealing as a lower electricity bill.

“What’s most exciting intellectually is that the investment alpha is directly and explicitly linked to the social impact achieved,” says Tracy Palandjian, the chief executive of Social Finance. “It’s the very betterment of lives — the person getting a job, keeping a job, staying out of trouble — that is the source of the investment returns via government savings.”

Life Skills

For social service providers, social impact bonds represent a sea change not only in the amount, but in the kind of available capital. Payment in advance eliminates the challenge of meeting expenses while waiting for government reimbursement. Since investors are repaid based on outcomes, not inputs, unrestricted funding is not tied to specific program components and can be spent on what works best. With costs covered in full, providers can focus on services, not fundraising. All of that is intended to help high-performing nonprofits with proven interventions thrive, not merely survive.

At CEO on a recent day, dozens of men cluster around tall bistro tables with bright green chairs in the glass-enclosed reception area, waiting for their next work assignments. The agency runs its own social enterprise and contracts with city agencies and other companies to provide transitional employment that builds basic work skills and habits.

Before they go out to work, however, CEO helps the men identify their own motivations in a one week Life Skills Education class. In two classrooms around the corner from the reception area, two Life Skills sessions are underway: one for younger participants ages 18-25, the other for older participants, some of whom have served sentences for more serious offenses, including murder and armed robbery.

In the first classroom, students are reading from an essay by basketball star Michael Jordan. “Everyone had a different agenda for me, but I had my own,” reads one young man. Heads nod around the room. One student jokes his mother wanted him to be a basketball player. He wants to start a clothing line.

“I just don’t want to go back to jail,” says another.

In the other classroom, an instructor named Mary is leading about 20 men through a set of short, direct questions. “What is your goal when you leave this class?” Some of the responses, hesitant and mumbled sound like lines the men may have heard from others: “To better myself.” “To take care of myself and my family.” “To be a positive member of my community.” Mary keeps pushing.

One man, wearing a collared shirt and glasses, lifts his head. “To get a job,” he answers. Bingo.

“Today is graduation day,” Mary says, as she distributes certificates and hugs. “Today marks something you started and something you finished.”

The men will receive a badge, work boots, and their first assignment as official employees of CEO. Each employee is responsible for signing up for transitional job placements and can work at those sites for up to 75 days before moving into a permanent job placement. CEO seeks to place graduates in full-time jobs, ranging from the retail sector to food service to the construction trades. While challenges will remain, these are important steps on the ladder toward economic security and self-determination.

Measuring Outcomes

An ounce of prevention is worth a pound of cure, or punishment. As measurement methods improve, social impact bonds are being developed for early childhood education, foster care, asthma, diabetes, and many other challenges.

Prison recidivism has been an easy and obvious target for the first social impact bonds in both the U.S. and the U.K. Reduced recidivism means dramatic savings in prison occupancy, victim assistance, and other social costs. Determining whether an individual is or isn’t in prison is binary, rather than the shades of gray that can color program results in other areas. The average number of days of incarceration per person is easily measured, as are the state’s financial savings.

CEO estimates intensive job support for people coming out of incarceration saves $60,000 per individual per year. New York state, for example, was willing to pay about half of that, or $85 for each bed-day saved. High levels of incarceration, particularly of young black men, is an increasingly charged issue in local and national politics, but pay-for-success financing transforms it into a rational calculation.

The state of New York can repay the investors’ capital, with a modest premium, and still save millions of dollars in the long run. (It doesn’t hurt that the U.S. Department of Labor will cover the repayment for service delivery taking place in the first two years, under a pilot program to test these kinds of financing arrangements.) That doesn’t account for the improved prospects of the target population and the community at large.

Investors will start to receive repayments if the project reduces the number of nights the clients in CEO’s target group spend back in prison by at least 36.8 bed-days per person, or 8 percent, compared to a similar group that does not receive CEO’s services. If performance exceeds those thresholds, investors can earn up to 12.5 percent after five and a half years. Once the minimum is met, investors get 100 percent of the state’s savings until their capital is repaid, then split additional savings 50-50 up to the cap. If reductions are even more dramatic, the state keeps the additional savings. Most observers expect returns in the mid-single digits.

The program must also show a 5 percentage point increase in employment, perhaps the key determinant in staying out of prison. In New York state, an estimated 44 percent of formerly incarcerated individuals on parole who are unemployed return to prison within two years. For those with part-time unemployment it’s 29 percent, and for those with full-time employment, it’s 23 percent.

Pay-for-success contracts are not appropriate for bleeding-edge innovation; they typically work best to scale up proven, battle-tested interventions. CEO has honed its four-step process of life-skills training, transitional job training, full-time placement, and job retention over 35 years. A random-assignment trial in 2004 found that CEO’s program achieved a 16 to 22 percent reduction in recidivism for recently released participants; some high-risk groups showed even better results. Employment results were less conclusive in the original evaluation, but CEO’s internal data shows that additional post-placement counseling consistently boosted job retention over the last 10 years. With pay-for-success funding, CEO offers such follow-up help.

“The pay-for-success contract looks at, ‘What is the benefit? What is the cost?” says Marta Nelson, who previously headed CEO’s New York City office. “The benefits outweigh the costs, so let’s pay what it actually costs.’” This shift is significant, as organizations like CEO can be paid adequately to deliver the comprehensive suite of services clients actually need.

Perhaps even more important, the contract is driving increased cooperation between the Department of Corrections and CEO. The data shows that CEO is particularly effective with high-risk clients that it can reach as soon as possible after release. In the new program, the participant meets jointly with a parole officer and a CEO outreach worker in the very first weeks after release. That “match candidate” meeting is intended to convey that the candidate has been selected for a program specially tailored to his needs.

“We message it in a very positive way,” Nelson says. “And because it’s parole, there’s an element of a ‘special condition’ that conveys that you are required to go to the program. That combination gets people to walk in the door.”

More broadly, the shared incentives mean state officials are eager to see the program work. CEO and state officials zip spreadsheets back and forth monthly, or even weekly, tracking enrollment rates to assess if the project is attracting the desired participation.

“Under an old contract, government is buying a service. They are worrying about whether you are sending in the forms, that you are not over-spending the budget. They are looking at expenses and services and not the bigger picture,” Nelson says. “Once this is put in the frame of a benefit to the state, it opens it up to a much more collaborative way of working with the state.”

The shift from measuring activities to measuring outcomes should be welcomed by top-tier social service providers that have evidence-based, rigorously evaluated models for long-term positive behavior change in high-risk, high-cost populations. But accountability and measurement should also shake out non-performers. Agencies that deliver mixed results or low repayment rates for investors are not likely to be selected for follow-on pay-for-success contracts.

CEO is confident it can replicate the results from its earlier random-assignment evaluations. “There’s a risk we won’t, so we could suffer,” Nelson says. “If we don’t succeed, it’s going to be on the front page.”

Road Show

If it all sounds complicated, it is. In the summer of 2012, New York asked for proposals to take advantage of the U.S. Department of Labor money to test social impact bond financing for job training programs. Selected to design and manage the project, Social Finance identified CEO as the provider of choice. In April 2013, the state legislature agreed to double the length of the program from two years to four years, supplementing the federal funding with state money.

Brace Young, a former Goldman Sachs partner and chair of Social Finance’s board of directors, helped bring Bank of America on board. After several meetings, Andy Sieg, BofA’s head of global wealth and retirement solutions, told Young, “This is fascinating. I don’t know what it is, but I’m willing to dedicate a couple people from my team.”

Rockefeller Foundation, a leader in promoting the social impact bond model, agreed to provide a 10 percent first-loss guarantee for all but the philanthropic investors. That provided modest reassurance for investors but is far lower than the similar guarantees extended in other social impact bond offerings. “We didn’t want heavy-duty training wheels, but the market wasn’t ready for a completely naked vehicle,” says Palandjian of Social Finance.

Some of the negotiations were tough. CEO sought assurances its current donor list wouldn’t be cannibalized for the new investment vehicle. Investors wanted assurances that fickle future legislators wouldn’t renege on commitments. State officials sought a higher bar before payments are triggered. “You have to have a lot of room to make sure that even at the bar the investor is comfortable with, the state is saving a lot of money,” Palandjian adds.

Measurement is key. The New York State Department of Corrections and Community Supervision will evaluate a randomized control trial that compares the employment and recidivism outcomes of the 2,000 participants served by CEO with a control group referred by parole officers to traditional service providers. An independent validator, Chesapeake research associates, provides an additional layer of review.  (One complication: Members of the control group may enroll in CEO’s services through other channel, which can be accounted for in estimating the impact of the project using statistical methods; however, if the enrollment rate in the control group exceeds a threshold, evaluators can instead use a historical baseline to determine whether the conditions for repayment have been met.)  Investors will get quarterly updates on the project’s performance.

In all, it took 15 months to bring the many parties and moving parts together and finalize a 130-page contract between the state and Social Finance, with CEO as a subcontractor.

Through the fall of 2013, Bank of America arranged a series of meetings between clients, their financial advisors, and the Social Finance team to drum up interest in the private placement. The complicated financial vehicle was unfamiliar to most investors. The first question asked of Palandjian in almost all the meetings: “Can you tell me again how this works?” The second question was often, “How do you measure it?”

For Bank of America, devoting hundreds of hours to a tiny deal only made sense as a way to dip a toe in the water of impact investing, an emerging must-have practice area for all major wealth managers. BofA offered the social impact bond specifically to its private banking clients with more than $10 million in investable assets.

“Our clients want it,” concludes Surya Kolluri, Bank of America Merrill Lynch’s managing director of policy and market planning. The 2014 U.S. Trust Wealth and Worth Survey found that half of high-net-worth investors consider environmental, social and governance (or ESG) issues to be an important part of investment decision-making. Kolluri says that over time, social impact bonds could become a key element of the “S” in ESG. That provides plenty of room for growth: BofA’s ESG investment platform represents approximately $8 billion in client assets.

“Was the investor investing because it was comparable to other private equity investments or because it was a better way to do social impact?” Kolluri says. “I would conclude that it was because it’s a better way to do social impact.”

The key selling point, he says, was “velocity,” the fact that the social impact bond could repay investors, who could then recirculate their money into additional social, or other, investments. “Velocity is an aha moment,” says Kolluri. “It’s very different than a grant in which the money is gone.”

Simply having that conversation helped BofA strengthen its relationships with clients. Financial advisors are eager for anything that enables them to differentiate themselves from the competition and get closer to clients and their families

“It’s not about share of wallet, it’s about share of mindset,” says Jackie VanderBrug, the U.S. Trust executive responsible for developing the firm’s sustainable investing strategy. “It’s going to be a very small percentage of their portfolio. But it’s going to be a big percentage of what they talk about around the Thanksgiving table with their grandkids.”

As investor interest grows, the pay-for-success model has the potential to scale up much more dramatically than either government spending or traditional charity. Already, more than $50 million in private capital in the U.S. has been mobilized through pay-for-success contracts targeting early childhood education in Utah and Chicago, as well as recidivism in Massachusetts and New York City, in addition to the New York state contract.

Since the first deal closed, New York has announced four finalists to its request for proposals for partners on additional pay-for-success initiatives in early childhood and child welfare, health care, and juvenile justice. CEO, Social Finance, and another California partner are pursuing an additional pay-for-success project in San Diego. “Any place where you can invest a dollar of prevention today to save more dollars downstream is an appropriate allocation,” Palandjian says.

More broadly, if the New York state deal signals a wave of private investment in social impact bonds, it could usher in something like a new social contract, aligning private capital and the common good. In an earlier era, proven approaches, often developed by nonprofits, could be taken to scale by government agencies that would implement them more broadly. With public budgets under severe constraint, private funding needs to fill the gap. Once the savings are proven with private investment at risk, government can incorporate the solutions into normal budget processes.

“In the global financial crisis, taxpayer funds bailed out some large financial institutions,” Palandjian says. Social impact bonds flip that paradigm on its head. “Here, risks are privatized and gains are socialized. That’s a new model, one harnessing private capital to serve the public good.”

DISCLOSURE

This article was produced with support from Ascend at the Aspen Institute, and is included in the report, “The Bottom Line: Investing for Impact on Economic Mobility in the U.S.” 

Read more: http://impactalpha.com/rebuilding-lives-reducing-costs-social-impact-bonds-finance-jobs-over-jail/

 

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