Construction Works trains New York City residents for Super Storm Sandy rebuilding construction jobs. With funding from the Mayor’s Fund to Advance New York City, the Center for Economic Opportunity supports four New York City nonprofit organizations in providing construction training, certification, and job placements in Sandy-impacted communities. These partner organizations are: The Center for Employment Opportunities (CEO) servicing the Rockaways in Queens, Coney Island and Gerritsen Beach in Brooklyn, and Oakland and New Dorp in Staten Island; Goodwill servicing Redhook in Brooklyn, and Queens; and Non-traditional Employment for Women (NEW) and Strive International servicing the Rockaways and Harlem.
After seven years in prison, Thomas emerged determined to attain gainful employment and reset his life’s direction. He had a hunch that the construction industry could be the ticket, but had no real idea of how to enter the field or if he could become good at the trade. His parole officer, learning of his desire, referred him to the Construction Works program being implemented by the Center for Employment Opportunities (CEO).
As soon as he could, Thomas went to CEO’s headquarters downtown and inquired about the program. Though the training had been in progress for a week, he insisted that he could make up the work. CEO’s Director of Participant Training, Alberto Gutierrez, recalls Thomas saying, “No one is going to work as hard as me.”
Thomas took the required Tests of Adult Basic Education (TABE) to prove eligibility, and jumped into the ten week intensive training. The training consists of four weeks of math “boot-camp”, two days a week, (Monday-Tuesday 9am-5pm ), then six weeks at Hostos Community College where participants gain practical hands-on skills and certifications. On the other days of the week students worked on CEO’s transitional work crews, where they gained basic work experience and a daily paycheck. At Hostos, participants engage in three weeks of plumbing and three weeks of carpentry. And though Thomas started a week late, he later held one of the highest averages in the math class. One Hostos instructor even nominated him top student.
When asked about his motivation to succeed in the course, Thomas responded, “Being down for so long, especially with my incarceration, I felt the only way that I could undergo any real change is to first change my mentality. I had to humble myself and through all the adversity, I had to continue to push forward.”
The latest state budget earmarks $30 million for the expansion of social-impact bonds, a philanthropic investment option.
Since being released from prison three months ago, Louis Rivera has found an apartment, landed a job and started applying for college. It’s a sea change for the 19-year-old, who was incarcerated for about two years for attempted burglary and had a history of dealing drugs, running with a gang and stealing. He credits a therapy program at Rikers Island provided by the Osborne Association and Friends of Island Academy for helping him get his life on track.
“I realized that I could have a better life,” said Mr. Rivera. “I learned to forgive myself for what I’d done and others for hurting me.”
Mr. Rivera’s therapy was paid for by an unusual funding mechanism known as a social-impact bond—an innovation that’s becoming more prevalent in New York social-service and philanthropic circles. Announced by the city in 2012, Rikers’ therapy program, aimed at reducing juvenile recidivism, was the nation’s first social-bond initiative.
Last December, New York introduced the first state-led plan in the U.S. It also aims to keep ex-offenders out of prison. The recently passed state budget earmarked $30 million for additional social bonds, and last month the state announced that four programs are under consideration for funding. Three are slated to work with New York City residents.
In a social bond, a government agency sets goals to fix a problem, and taps an outside expert to enlist a nonprofit to meet the objectives and raise money from private and philanthropic investors to fund the initiative. The government only repays investors if the program succeeds. If a program designed to reduce hospitalizations, for example, achieves its goal, investors will be paid with the money saved on patient care.
“These pay-for-success programs make a lot of sense because it’s an opportunity to expand social services to people who might not otherwise get them, and is an innovative structure that encourages public-private partnerships,” said Ian Rosenblum, New York state’s deputy secretary of education and economic opportunity and the point man on social-impact bonds. “This way, we are paying for results, not just paying for the process.”
Mr. Rosenblum said that in the coming weeks, the state will begin negotiating with the four contenders. He expects two or three to be selected. One program is jointly sponsored by the Children’s Aid Society and the Bronx’s Montefiore Medical Center to reduce teen pregnancy rates and improve asthma care.
The bonds will never replace private fundraising and government aid, nonprofit executives say, because not all social programs have quantifiable results. Experienced charities with a history of success are sought after for partnerships.
“This is paying for us to do what we do,” said Sam Schaeffer, chief executive of the Manhattan-based Center for Employment Opportunities, which is running the New York state program for ex-offenders set up by Social Finance U.S. “It is fairly low-risk for us.”
Known as CEO, the nonprofit has a proven track record of reducing recidivism and finding employment for the previously incarcerated through counseling and job training. That can help solve a costly problem for the state. New York released nearly 24,000 people from prison last year, and 41% of those formerly incarcerated return within three years. It costs $60,000 annually to imprison someone in New York state.
Under the terms of the agreement, CEO expects to work with 2,000 individuals and seeks to reduce their recidivism rate by at least 8% and boost their employment rate by 5 percentage points.
If the project cuts recidivism by 15% and increases employment by 5 percentage points, the total public-sector savings would be $17.2 million, according to a state spokesman. Investors would be paid $15.7 million, representing a 4% annualized return on their investment.
Bank of America Merrill Lynch raised $13.5 million from more than 40 individuals and philanthropic foundations to fund the five-and-a-half-year-long program.
“We were hearing from our clients who wanted investment options that would represent their values,” said Liam O’Neil, managing director and head of the markets group for Bank of America Merrill Lynch.
The payoff isn’t huge: Returns on investment are capped at 12.5%. Mr. O’Neil expects it will likely be more mid-single digits. Meanwhile, the Rockefeller Foundation agreed to guarantee 10% of the $13.5 million so investors won’t lose everything if the program fails.
NORMAN — The Cleveland County Board of Commissioners listened to a presentation Monday to consider partnering with a nonprofit that provides employment opportunities for prison inmates re-entering the community.
Patrick Viklund, Center for Employment Opportunities metro area director, said they partnered with the city of Moore in August, with participants aiding in tornado recovery efforts.
Two of the workers removed debris, weed eated, mowed, cleaned out ditches and cut down trees and limbs over the winter to make sure roadways were safe, Viklund said. The third worker is with Habitat for Hum
“We provide them comprehensive employment services,” he said. “While they’re doing that, we actually help them find full-time employment.”anity rebuilding homes that were affected by the tornado.
The participants are employed through the nonprofit to do various jobs in the public works departments, such as streets, parks, groundskeeping and beautification.
“We would love to partner with Cleveland County, if possible,” Viklund said.
The cost of one worker is $175,000 per year, which includes the wage of the participant, salary of a full-time supervisor, workers’ comp and liability. The organization provides a monthly invoice to their partner providing the amount of hours worked and tasks that were completed to be reimbursed.
Viklund said usually they are able to subsidize 30 to 40 percent of that cost through fundraising, grants or other types of funding.
With Oklahoma topping the nation’s charts in incarceration, often being No. 1 in the country for women’s incarceration and usually in the top 3 to 5 for men’s incarceration, partnering with Oklahoma communities was a natural fit, he said.
A big benefit for the organization is that the participants are on probation or parole. They may have a GPS monitoring system, and if any problems arise or they lose track of someone, the organization can reach out to the probation or parole officer and let them know what’s going on, Viklund said.
“Social finance” has a good chance of joining this list. In essence, these are fledgling financings that aim to tap global capital markets to help fund nonprofit programs dealing with some of society’s most intractable problems, from reducing chronic homelessness to therapeutic services for incarcerated youth. The big, tantalizing idea is that social finance could become a force for greater efficiency and effectiveness in tackling the roots of poverty.
The first financing was sold in the United Kingdom in 2010 and the tactic has since spread to Australia, Canada, and the U.S. (The Federal Reserve Bank of San Francisco has put forth a 147 page booklet of collected essays [PDF].) The basic concept is that investors earn a return only if the nonprofit program succeeds at meeting measured goals. The pay-for-success formula asserts a market discipline that rewards effective nonprofits, which will then find it easier to raise further funds from satisfied investors.
If mainstream investors end up embracing these securities, global private capital should come to the $300 billion philanthropic marketplace—welcome money in an era of tight government budgets. “What motivated us to be involved are the long-term prospects for the creation of a new market,” says Andrew Sieg, head of Global Wealth and Retirement Services for Bank of America Merrill Lynch (BAC). Adds Paul Bernstein, chief executive of Pershing Square Foundation: “This is an innovation in its early days—worth pursuing.”
Social finance is at the experimental stage. These are complicated financings that currently rely on such investors as foundations and venture-like philanthropies that are willing to earn below market-rate returns. Some recent financings act more like fixed income securities while others offer equity-like characteristics.
Take the recent $13.5 million offering funding a five-and-a-half-year effort by the Center for Employment Opportunities (CEO) to provide reentry employment services for 2,000 former prison inmates in New York City and Rochester, N.Y. The initiative represents a partnership between government (New York State and the U.S. Department of Labor), the nonprofit sector (Social Finance, an organization focused on nurturing the sector and CEO) foundations (Robin Hood Foundation, Rockefeller Foundation, Pershing Square Foundation, and others) and the private sector (Bank of America Merrill Lynch and Chesapeake Research Association). The federal and state government will make outcome-based payments when CEO achieves certain benchmarks. Investors will earn a return at that point. The investment may be worthless if CEO doesn’t perform well.
On Fridays, people recently released from prison head to Center for Employment Opportunities in New York City for an orientation session. It’s the start of a year-long relationship in which they work on a transitional work crew, learn how to search for a job with a criminal conviction, and figure out how to hold down steady employment.
“People who are at the highest risk are closest to release [from prison]. If you can get over that hump, we think that’s keeping people from re-offending,” says Marta Nelson, Executive Director of CEO New York City.
While the program may seem like any other recidivism prevention initiative, what makes it a one-of-a-kind is how it’s funded: by private, high-net-worth investors.
How do you give to a good cause and make money at the same time?
Bank of America Merrill Lynch and Social Finance Inc. say it is through “social impact partnerships.”
The new funding concept raises money for non-profits while investors have an opportunity to earn returns on their investments rather than make straight charitable donations. Social Finance is a nonprofit that arranges funding for social causes.
“Social impact partnerships can transform the way important social causes are funded,” says Liam O’Neil, head of markets group at Bank of America Merrill Lynch.
Merrill Lynch and Social Finance recently used the financing method to raise $13.5 million to fund a jobs program for recently released prison inmates in New York City and Rochester, N.Y. Money was raised from 40 individuals and foundations to pay for a work re-entry program. Investors had to meet the same qualifications as private equity investors, including having at least $10 million in investable assets.
The investments will pay for the Center for Employment Opportunities to fund a jobs program aimed at reducing inmate recidivism, which often reaches 75 percent.
The program is being conducted in two phases, with half of the investment funding the jobs program for 1,000 released inmates and th e other half for 1,000 to be released in two years. The success of the program will be measured by the decrease in the number of bed spaces for returning inmates.
We are pleased to report that two major Social Impact Bond (SIB) transactions over the past several weeks have galvanized the sector and made the US market the world’s largest in dollar terms. First was the successful launch of the $13.5 million New York State Social Impact Partnership, a landmark initiative driven by Social Finance, to expand the evidence-based program of the Center for Employment Opportunities, supported by Bank of America Merrill Lynch and other partners (see feature in sidebar). This project was the culmination of a 15-month process that highlighted both the opportunities and challenges of creating a financial market for social outcomes. It was the first state-led SIB (featuring both state and federal governments as payors), and the first SIB to incorporate a randomized control study as the basis for investor payments. Perhaps even more striking, it is the first SIB to leverage the distribution platform of a major financial institution to reach broader pools of impact investors, an important milestone for the SIB market and the wider impact investing community.
Nationally Recognized Program Has Incentivized More Than 1,000 Businesses to Hire Nearly 2,000 New Yorkers Who Have Served Their Time
Governor Andrew M. Cuomo today announced updated placement numbers and other significant accomplishments in connecting formerly incarcerated men and women to jobs since launching the Work For Success program two years ago. The successful pilot program, which has had 1,015 businesses hire a total of 1,646 formerly incarcerated people to date, will now transition to a standard state-wide model for how public safety and employment agencies engage the formerly incarcerated.
“Under the Work for Success initiative, we are developing stronger, safer communities while encouraging economic and job growth,” said Governor Cuomo. “Providing training and jobs to formerly incarcerated New Yorkers not only reduces rates of recidivism, but also strengthens families, stabilizes local communities and jumpstarts local economies. The success of our pilot program has set a strong foundation for future participants, and we will continue to work with employers across the state to provide opportunities for those New Yorkers working to rebuild their lives.”
Since its inception in 2012, Work For Success has worked to improve the process by which those who have served time in prison are trained and are connected to businesses looking to hire. The initiative matches selected higher and lower risk individuals to the right employment program after incarceration. In turn, New York businesses gain qualified and appropriately trained applicants, at no cost to them, along with tax credits and access to federal bonding for those that hire. Additionally, preparing and connecting formerly incarcerated individuals to jobs saves businesses and taxpayers’ money and helps local and regional economies thrive. The overall goal is to curb recidivism by reducing poverty and joblessness among the formerly incarcerated.
Accomplishments TO DATE
Since he took office, Governor Cuomo’s top priority has been getting more New Yorkers back to work, with particular focus on helping people who are often harder to employ, including veterans, at-risk youth, the long-term unemployed and the formerly incarcerated, find employment. He launched Work For Success in In February 2012 to identify strategies to promote productive employment for formerly incarcerated people. The Governor tasked the Department of Corrections and Community Supervision and the Department of Labor to work directly with community based organizations led by Center for Employment Opportunities to develop a comprehensive state-wide approach that provide job skills and other training to the formerly incarcerated.
At the 2-year anniversary of the program, Work For Success has led to a paradigm shift in how New York State assists the formally incarcerated and connects them to jobs. It has specifically:
Developed and Implemented Client Matching. As a result of an extensive examination of the capabilities of individuals who are incarcerated, the State developed and implemented empirically-based tools to assess offender risks and needs which enabled the State to begin matching the right offenders to the right programs. As of May 2013, a risk/needs instrument has been deployed in all reception centers and community supervision field offices, providing the Department of Corrections & Community Supervision with an Evidence Based tool for identifying vocational training and other needs to be addressed during incarceration and in the community. In addition, the State is now developing Case Plans for all offenders allowing them to identify specific employment goals they can work towards while incarcerated. The information on the Case Plan is transferred to the community upon release allowing parole officers to make the appropriate referrals.
Launched an Offender Employment Specialist Program (OES). All of the state’s 96 Career Centers now retain an Offender Employment Specialist, who specifically is trained in employment services for formerly incarcerated individuals. Formerly incarcerated individuals assessed as “low risk of reoffending” and having “low barriers to employment” are sent to Department of Labor Career Centers for job training and placement assistance. At the same time, higher risk individuals with higher barriers to employment receive more intensive employment services through existing programs in the nonprofit community that specialize in serving people with criminal convictions.
Created a Partnerships to Identify Key Job Openings. The Center for Employment Opportunities, on behalf of Work for Success, received a grant from the Rockefeller Foundation to work with the Governor’s Regional Economic Development Councils to map projects across key regions, identify job openings that are suitable for formerly incarcerated job seekers, and understand the skills and abilities necessary to perform the jobs so that the proper vocational skills and training programs are provided to individuals both while they are in prison and when they return to the community. The Departments of Corrections and Community Supervision and Labor are similarly engaged in a partnership to refer high-risk parolees as part of the Pay for Success project, which engages recently released offenders to an employment program, the Center for Employment Opportunities. Approximately 102 offenders have already been identified as potential participants; DOCCS will client-match and refer 2,000 offenders to the program over the next four years.
Launched Inter-Agency Vocational Training. State Labor Department teamed up with State Department of Corrections and Community Supervision to train and place people exiting the state corrections system in employment. The first program of its kind in the nation, the State Labor Department has identified demand occupations for which DOCCS is implementing training programs.
Created Resume Templates for All Applicants. The State has developed a resume template for select formerly incarcerated people to assist them in translating the vocational skills they learned during incarceration into employment skills.
Improved Accessibility of Vital Records. Since individuals require proper identification to secure employment, the State embarked on an effort to ensure that formerly incarcerated people can more easily obtain vital identification documents.
Launched a State-wide Public Education & Outreach Program. The State engaged in a state-wide public education and outreach program to inform businesses about the benefits of hiring formerly incarcerated individuals in their neighborhoods. The outreach included mailings to employers, presentations to chambers of commerce and public service announcements.
Increased Accessibility of Services. As a result of extensive marketing and revamping of services, there was a 50% increase in the number of formerly incarcerated individuals (i.e. 3,000 individuals) seeking career placement and training services offered by State.
State Labor Commissioner Peter M. Rivera, said, “Working with our partners at the Department of Corrections and Community Supervision and in the community, we have built a successful infrastructure to help formerly incarcerated individuals find a job. A job is vital to dramatically reducing the risk that these individuals will return to prison. We recommend that business owners and hiring managers to explore how Work For Success can help their business.”
Department of Corrections and Community Supervision Acting Commissioner Anthony J Annucci, said, “When an inmate enters our system we begin the mandatory evaluation to determine the programs, education and training that will best prepare them to return home under supportive supervision and less likely to revert to criminal behavior. When they are successful it is a win for the offender and for the state.”
Sam Schaeffer, CEO of the Center for Employment Opportunities, said, “Work for Success marks a profound change on how the public and private sectors help formerly incarcerated men and woman find employment. This initiative represents the very best of government, non-profits and outside experts working together to solve a common challenge. I applaud co-Chair Deputy Secretary Alphonso David as well as former co-Chair Mindy Tarlow for taking on this critical agenda.”
In 2013, New York was recognized for its groundbreaking work pairing the formerly incarcerated with employment by the United States Department of Labor, the United States Department of Justice Bureau of Justice Assistance, the Council of State Governments Justice Center and the Annie E. Casey Foundation at a national conference on bridging reentry and workforce development.
Michael Thompson, Director, Council of State Governments Justice Center, said, “We are excited about the pioneering efforts underway in New York State because they take the most recent science about what we know works to reduce the likelihood of someone reoffending and what works to improve employment outcomes and translate those concepts into policy and practice. We will be tracking progress closely because we think state and local governments across the US, and the reentry field generally, will learn a lot from what New York is doing.”
New York State maintains its dedication to helping all individuals connect to jobs – especially those who face barriers to employment. Employed citizens are responsible citizens who contribute to our communities. This is particularly true for formerly incarcerated individuals, whose recidivism can cost the state more than $40,500 per person per year.
As part of the transition from a series of pilot efforts into a new standardized and statewide program of matching the right individuals to the right programs, the Department of Corrections and Community Supervision and the Department of Labor are now working together to ensure that inmates and parolees have the skills they need to obtain jobs and the opportunities they need to find jobs in the community.
Further, New York State was awarded one of six grants nationally to upgrade and improve its vocational culinary arts programming and its computer support training programs. A culinary arts program is now underway in seven prison facilities focusing on employment skills needed to work in the Accommodations and Food Services sector and a program to train inmates in computer services is now operational in five facilities. Efforts will focus on offenders who are considered at higher risk for recidivism and have an identified need for both employment services and an interest in these types of jobs.
Employers interested in learning more about the tax credits and the hiring program should visit www.workforsuccess.ny.gov or call 1-888-469-7365.
A Buffalo not-for-profit that specializes in employment services for those recently released from prison, more than $4 million in total wages have been earned by its participants since its launch in 2009.
That is according to the Center for Employment Opportunities.
The organization says since then, more than 800 have enrolled at the center, and more than 650 jobs have been filled by participants.