On VICE’s Special Report: Fixing the System on HBO, VICE founder Shane Smith explored the American prison system with President Barack Obama and former attorney general Eric Holder. VICE is urging people — and business — to get involved and shined a spotlight on CEO as an organization making a difference by offering people with criminal records a second chance.
Together, VICE and CEO will move beyond conversation to action. With CEO’s expertise and support, VICE will be reviewing its current hiring policies and practices and identify strategies to open up job opportunities to people with criminal records. VICE will also be calling on other business leaders to do the same.
Men and women with criminal records have the skills and drive companies like VICE need, and CEO is thrilled that VICE is leading by example to mitigate the stigma of a conviction.
Coming off of their hour-long special on America’s criminal justice special, Vice is partnering with a non-profit that helps encourage businesses to hire former prisoners.Vice is working with the Center for Employment Opportunities to not only reassess their own hiring practices to make them more open to the formerly incarcerated, but to also encourage other businesses to do the same.
“Over the course of filming ‘Fixing the System,’ I met scores of men and women in our prison system,” Vice founder and CEO Shane Smith said in a statement. “The first thing that all of them told me is how impossible it is to find a job when they get out. There are lots of reasons for this, but the biggest challenge is that companies aren’t usually willing to take a chance on a person who has made a mistake, or people who have been caught up in the system. I feel strongly that the people running businesses around the United States—from small companies to Fortune 500 conglomerates—bear a responsibility to help change that.”
Vice is also dedicating its entire October print magazine issue and all 10 of its editorial online channels to issues around mass incarceration.
“There are precious few willing to stand up and say ‘we’re going to re-look at our hiring practices’,” said Sam Schaeffer, CEO of the Center for Employment Opportunities.
Schaeffer said Vice became interested in working with the center as they were filming ‘Fixing the System’, which included a visit with President Barack Obama and inmates at the El Reno prison in Oklahoma.
“As significant as (Vice hiring former inmates) is they can also be an evangelist to the business community. They can tell their colleagues in media on the broader, large scale employer sphere that this population is an asset, not a liability. They are highly motivated, deserve a second chance and with a the right support can be highly successful employees,” Schaeffer said.
Oklahoma state senators took a day-long look Wednesday at Oklahoma’s female incarceration rate, which is the highest in the U.S.
Women’s Justice Project Director Stephanie Horten said the deck is stacked against female offenders, even if they take a suspended sentence.
“What really is happening is a woman is arrested and she’s put in jail for four weeks, and during that time, if she has a job, she’s likely lost her job,” Horten said. “If she had housing, she’s probably been evicted. She likely has children; those rights may be in the process of being terminated.
“She probably has a mental health issue that’s not being treated and a substance abuse issue that’s ongoing.”
Out of about two dozen speakers, several said once women enter the corrections system, they get trapped in a cycle of going into and out of prison.
Kelley Doyle with the Center for Employment Opportunities said jobs paying a living wage and hiring convicted felons are in male-dominated fields like construction and general labor.
“Traditionally, female-dominated industries, they’re caretakers of money and of people, and those are the first things to go when you have a felony conviction,” Doyle said.
Doyle says many female former inmates end up in service jobs with low wages and few accommodations for childcare. She was among a few advocates for eliminating the checkbox on job application forms that indicate a person is a convicted felon.
Doyle said without the checkbox, employers will evaluate applicants on skills first, and most of them will still do a background check.
A Department of Corrections official told lawmakers trauma and mental health issues are common among women in Oklahoma prisons.
“Sixty-six percent of those surveyed reported some type of child physical or sexual abuse, 71 percent reported domestic violence as adults and 36 percent reported being raped as an adult,” said DOC Chief Mental Health Officer Jana Morgan.
About one in 10 female prisoners have severe mental illnesses. Morgan told senators intensive counseling before release helps cut the recidivism rate by more than half.
In 2014, there were about 130 women incarcerated per 100,000 Oklahoma residents, compared to the national average of 67 per 100,000.
Now is a good time to begin the discussion about what governments will do when PFS ventures that are financing social services end. The Center for Employment Opportunities is a pioneer in participating in PFS ventures aimed at addressing recidivism and work force development across U.S. (CEO) is dedicated to providing immediate, effective and comprehensive employment services to men and women with recent criminal convictions.
While for some early ventures, the first assessment results may be years away, we ought not put off the discussion about what happens after the last participant in a project gets services. In our case, CEO’s highly structured and tightly supervised programs help participants regain the skills and confidence needed for successful transitions to stable, productive lives for more than twenty years of experience.
In the event that a venture fails to demonstrate any change over the status quo, PFS delivers government with thoroughly measured results and ending to the ventures.
However, in the event that PFS ventures are successful delivering public sector value and producing social impact effects, they ought to make more than a motivating commitment for government to grow interests in these interventions, and in the execution administration and management that assists them with succeeding. CEO’s evidence-based model has been proven to work effectively in high-affect neighborhoods over the U.S. to guarantee that the individuals who are in most need of another opportunity have a chance to acquire salary for their families,
In an ideal world, each new PFS venture should contain an “Achievement compact”- an a statement of intent from government to integrate successful services provider, and a execution based in subsidizing systems into continuing financing streams or new financing streams to support them.
Federal Government and The Office of Management and Budget ought to oblige those government applicants to federal PFS solicitations, point out sustainability plans for successful PFS ventures.
States ought to oblige that pertinent organizations and/or divisions of budget report on the ventures’ achievement, and disclose opportunities and impediments to accomplishing longer-term venture maintainability.
The philanthropic sector should fund technical assistance for government to help outline execution based contracts that will constrain the financial introduction of providers, and guarantee that governments are paying for impact and that services providers are delivering services successfully. CEO has been working successfully to reduce recidivism and improve employment outcomes for formerly incarcerated individuals across the nation with over 17,000 full time job placements.
At the point when feasible, government ought to structure PFS ventures so that evaluators provide early evidence to guide subsidizing decisions before financing ends.
Lastly, in the event that a map to sustainability for PFS initiatives is unclear, successful ventures won’t have the enduring effect on the social sector that we all look for.
CEO looks forward to keep participating in PFS initiatives and helping more individuals re-enter the workforce, and reconnect with their families and their communities. These PFS initiatives will benefit all by creating more tax-paying, law-abiding citizens, which will make streets safer and strengthen the nation’s entire economy.
Kelsey O’Connor, firstname.lastname@example.org | @ijkoconnor11 a.m. EDT September 4, 2015
For Sue Begg, re-entering the community after serving a prison sentence could have been much more difficult. She served 11 months in prison for felony driving while intoxicated. When she left prison, she had a place to live and a job to come back to.
“I came back to a community where people knew me and could get hired at the vet practice I started myself, and I had a lot of connections,” Begg, 65, of Ithaca, said.
However, when Begg was temporarily laid off from her job, she had to look for work again. Begg, who has a college degree, applied for about eight jobs at major retailers, filling out online applications at each, where she had to check the box that she was a felon.
After a week or so, Begg said she would get an auto reply thanking her for the application but then no other follow up. “Well, I thought that’s really weird,” she said.
Begg said she thinks after someone looked at her age — she was 62 when she left prison — and her past conviction and stop looking. They “just can it,” she said, of the application.
Jeffrey Pryor, prison re-entry coordinator for the Southern Tier AIDS Program in Binghamton, said because so many applications are online and face-to-face interaction is rare, for many people with a past conviction, as soon as they check the box, it gets flagged.
“The box” refers to the box job applicants check if they have been convicted of a felony.
“I found a lot of times when you fill out a job application when someone is formerly incarcerated, it can end up in the trash can or to the bottom of pile,” Pryor said.
Research backs that up. A Princeton University studyfound that people with a criminal record are nearly 50 percent less likely to get a call back or job offer. The same study also found race disparity in hiring people with criminal backgrounds: African American men are 60 percent less likely to get hired, and white men are 30 percent less likely to get hired.
Eliminating that box has been a topic of national discussion, and is now under consideration in Tompkins County by the county legislature. Enacting a law won’t prevent an employer from inquiring about an applicant’s criminal history, but it leaves that question for later in the hiring process.
Cities, states enact ban
More than 100 cities and 18 states have adopted “Ban the Box” ordinances. New York does not have a ban the box law, but some cities like Buffalo, Syracuse, Rochester and New York have adopted them.
Some want to see questions about a criminal past removed from employment forms and only asked later in the hiring process. (Photo: SIMON WHEELER / Staff Photo)
“Ban the Box” policies differ by city. Syracuse’s ordinance that passed in December requires the city and all contractors doing business with the city to hold the question about criminal convictions until after the applicant has received a tentative job offer. Buffalo’s policy requires not only public, but also private employers within the city, to refrain from criminal conviction-related questions before the first interview.
In the past, there have been talks of banning “the box” in Tompkins County, but only recently has the topic has progressed to a more tangible possibility. Jim Dennis, a county legislator researching the topic, is hesitant to say it’s likely just yet, though he said it’s certainly time the county look at the issue.
The issue brought before the county’s Public Safety Committee meeting Aug. 18 by Keri Blakinger, a reporter for the Ithaca Times and a Cornell University graduate who has been open about her experience serving a sentence for heroin possession. Dennis said her coming to speak and sharing her experience was important.
“It feels like a Tompkins County kind of issue,” Dennis said. “It’s time that we take a look at it.”
If Tompkins County were to institute a policy, it would be applicable for people applying for county positions, of which there are about 700, Dennis said. He also plans to discuss getting the City of Ithaca on board. The law would carry no weight on private employers.
Job equals stability
Finding a job is one of the most important things for people coming out of prison, Pryor said. Having a job provides daily structure and some degree of autonomy.
When someone has a job, they are 85 percent less likely to go back to prison or violate parole, Pryor said, citing statistics from the Center for Employment Opportunities in Binghamton.
Pryor would like to see “Ban the Box” policies instituted everywhere. “We definitely need it,” Pryor said.
In Broome and Chemung counties, there has been no such movement. However, there are programs and resources available to people with past convictions in the region, like the Southern Tier AIDS Program, the Center for Employment Opportunities in Binghamton. In Ithaca, Opportunities, Alternatives, and Resources provides services.
Studies have found that people who have served prison sentences are likely to wind up back in jail or prison. In a 2005 study of 404,638 prisoners in 30 states by the National Institute of Justice, researchers found that within five years of release, 76.6 percent of released prisoners were arrested again.
The purpose of Center for Employment Opportunities is to give people an opportunity for employment and upward mobility, Katie Blaine, participant services manager at the center, said. People who are working are more likely to be productive members of society, she added.
“This affects everyone. Crime affects everyone,” Blaine said. “I think it’s really important to be supportive of the population because if we’re not then — and people don’t have just any support system from the community in general — they’re more liable to fall back into old habits.”
Center for Employment Opportunities in Binghamton provides work for people on parole and also coaches them in interviewing, resume writing and other job skills. If a person with a criminal conviction gets an interview, the agency coaches the applicant to be honest about the past conviction.
The majority of people leaving jail or prison have trouble finding jobs, Deborah Dietrich, executive director of Opportunities, Alternatives, Resources of Tompkins County, said.
“This is a very difficult employment region to begin with,” Dietrich said. “Many many people are overqualified for the work they’re doing because they’ve fallen in love with the area and so they stay.”
Even for people with four-year degrees, it’s a saturated labor market, Dietrich said. “You throw into that a high school diploma and even a series of minor misdemeanors, your chances of getting anything above an entry-level job diminish very quickly,” she said.
Opportunities, Alternatives, and Resources of Tompkins County: (607) 272-7885 or www.oartompkinscounty.com/.
Southern Tier AIDS Program: (607) 798-1706 or www.stapinc.org/.
Center for Employment Opportunities: (607) 722-1839 or http://ceoworks.org/.
t’s time to start talking about what governments will do when pay for success (PFS) projects that are funding social services end. While only a handful of projects are currently in progress across the United States, a robust pipeline could result in several more launching over the next year. Many will feel like pilots, as government, providers, intermediaries and investors are still gaining familiarity with this new contracting mechanism. Immediate challenges will likely center around setting up referral pipelines, designing evaluation methodologies, and making necessary mid-course project corrections. While for these early projects, the first evaluation results may be years away, we should not put off the conversation about what happens after the last participant in a project receives services. We need to keep discussion about program sustainability front and center.
If a project doesn’t show any improvement over the status quo, PFS provides government with rigorously measured results and a sunset to the project (exemplified by recent news on the first PFS project at Rikers Island, which found no reduction in recidivism so was ended). This is unlike government programs that fund identical services year-after-year regardless of impact and a success in itself, a win for taxpayers and society. However, when a PFS project does demonstrate impact, there are important questions about how to sustain service delivery post-financing. One option is “refinancing,” where government renews the PFS contract with new investment to continue or further grow the intervention. This could be a sensible path for smaller deals that providers and government want to take to scale with second round of investment. Another logical next step for successful projects could be to establish a new performance-based contract with government to provide services at scale in an ongoing way.
However, ultimately the PFS field should aim to have long-term effect on government contracting behavior—shifting procurement toward evidence-based interventions and adopting a sustained focus on measuring impact. If PFS projects are successful in delivering public sector value and producing social impact, they should create more than an incentive—indeed, truly an obligation—for government to expand investments in these interventions, and in the performance management and measurement that helps them succeed. Projects that have demonstrated success could move from a PFS contracting design financed by outside investors to performance-based contracting in which government pays directly for results.
Ideally, each new PFS project would contain an “achievement compact”—a statement of intent from government to integrate successful services, providers, and performance-based funding mechanisms into ongoing funding streams or new funding streams to support them (see below). Procurement rules and a lack of long-term appropriation authority may limit the specific commitments governments can make. This should not stop government, however, from expressing its intent to double down on what works.
New York State Senator Daniel Squadron has been a champion of using evidence to inform government funding decisions and believes PFS projects should chart a future course for how government funds social-sector innovations: “Pay for success exists because too often government needs a push to innovate. When that innovation works, we should double-down, not move on. Proven programs that have already paid for themselves and improved lives are exactly where government must invest. An achievement compact can give service providers confidence that government will stick with programs that work and push government to do what we should do anyway.”
Transitioning to Performance-Based Contracts
Advancing this compact will be one challenge; designing effective performance-based contracts for the field of human and social services will be another. Many providers already have such contracts, and they carry their own sets of advantages and risks. Providers need contracts that offer enough working capital to run services and eliminate any perverse performance incentives. Government will also need to select performance metrics that projects can achieve over a relatively short time. It is not politically practical to wait 15 years to see if an early childhood intervention results in college matriculation. Determining near-term outcomes that predict long-term impact requires strong evidence, and may require additional evaluation and research. Finally, our own PFS experience has shown that strong collaboration with government improves program performance. Ensuring that government is not merely a passive consumer of services, but rather an active collaborator in performance management and measurement will be equally important.
Below are a set of policy recommendations that can help us work toward institutionalizing this compact—and setting up effective performance-based contracts—to change how government contracts for services.
The Office of Management and Budget (OMB) should require that government applicants to federal PFS solicitations detail sustainability plans for successful PFS projects. Ideally, they would agree to the achievement compact or articulate their own vision for achieving sustainability.
OMB should investigate how, on a federal level, it can provide preferred federal contracting status to successful projects supported by federal PFS investments. Additionally, it could create a federal schedule of “proven” interventions that federal and state agencies, as well as cities and counties, can purchase directly to achieve specified outcomes.
Similarly, states could provide preferred contracting status to those with PFS or other performance-based funding experience.
States should require that relevant agencies and/or divisions of budget report on the success of the projects, and explain opportunities and limitations to achieving longer-term project sustainability. When shared with a legislature, this could help create enthusiasm for continuing projects post-PFS.
States should create commissions or other mechanisms to monitor active PFS projects in their state. Commissions should include executive and legislative membership, as well as representation from the provider, intermediary, and evaluation communities. States should charge these commissions with sharing data and lessons from PFS projects, building coalitions and public engagement, and actively working for the uptake and sustainable funding of successful projects.
A significant amount of investment in PFS transactions comes from philanthropy, and the field is uniquely positioned to push for deals that contain the achievement compact. Philanthropic organizations should indicate to all levels of government that the compact is an important part of any transaction they are investing in.
The sector should fund technical assistance for government to help design performance-based contracts that will limit the financial exposure of providers, and ensure that governments are paying for impact and that service providers are delivering services effectively.
To support these performance-based contracts, philanthropy can help build the government’s capacity for ongoing performance management—the hallmark of all successful programs. This includes ongoing data collection, analysis, and course correction after a provider begins delivering services.
Evaluation and Evaluators
Government needs results in hand before it can make informed future funding decisions. Too frequently, funding ends years before evaluators can complete assessments that require long-term follow-up. When possible, government should structure PFS projects so that evaluators provide early evidence to guide funding decisions before funding ends.
These recommendations reflect the multiple stakeholders who are necessary to both actualize a PFS project, and sustain it financially and programmatically. PFS projects take big teams to pull off, and lots and lots of time and money. To date, there has been strong agreement that the investment is worth it. That’s because the payoff is so big: PFS provides an opportunity for government to pay for what works, while giving best-in-class providers the opportunity to deliver evidence-based programs. This is a unique opportunity to change the way government supports social services. If we don’t chart a path to sustainability for PFS initiatives now, successful projects will not have the lasting impact on the social sector we seek.
– See more at: http://ssir.org/articles/entry/after_pay_for_success_doubling_down_on_what_works#sthash.PYP8ip8o.dpuf
When the concept of Pay for Success (PFS) was introduced in the United States in 2010, Nonprofit Finance Fund (NFF) recognized its potential to improve the lives of people in need while addressing significant shortcomings in the way social services are funded. Five years later, it has become clear that PFS is just one example of a larger shift on the part of government, business and philanthropy toward paying for what works. With this shift comes the potential to better understand the true costs of achieving positive social change, catalyze investment in proven and innovative social programs, and improve the long-term financial sustainability of organizations working to address critical social issues.
Pay for Success projects currently underway across the country are addressing pervasive and complex issues and bringing services to people who need them most, from homeless families to teens struggling to graduate high school and individuals aiming to re-enter the workforce with skills that enable long-term self-sufficiency.
NFF’s work in the PFS field includes helping service providers, philanthropic and other private investors, and governments understand and build readiness for participation in a U.S. social sector where providing and accessing capital is increasingly tied to the achievement of meaningful and measurable outcomes. To that end, we are committed to analyzing and sharing the successes, opportunities, challenges and failures of PFS efforts to accelerate adoption of approaches proven to improve lives and communities.
We are pleased to share this blog post as the first in a series featuring early leaders in the Pay for Success field. This series aims to provide insight into Pay for Success projects and amplify lessons learned. As early projects progress, we believe that sharing the experiences of participants is the best way to facilitate improvements in future outcomes-based efforts so as to refine the financial and structural mechanisms of such projects and accelerate the benefits of outcomes-based approaches. These blogs will keep the perspective of service provider organizations central to the ongoing discussions of the opportunities and challenges of Pay for Success projects, and the extent to which they merit continued exploration as a tool for responding to persistent social, economic and health challenges in the communities that these organizations exist to serve. Ultimately, the future of Pay for Success as one type of contracting and financing tool is far less important than its role in the movement to improve how we achieve, and pay for, positive social change. We look forward to continuing this conversation with these blogs, as well as through the resources on our PFS Learning Hub.
As part of our work in Pay for Success (PFS), with support from the Rockefeller Foundation and the William and Flora Hewlett Foundation, Nonprofit Finance Fund (NFF) convenes discussions among funders interested in furthering the Pay for Success field.
On April 14, 2015, NFF sat down with two partners in the New York Increasing Employment and Improving Public Safety Pay for Success Project: Sam Schaeffer, the CEO of Center for Employment Opportunities (CEO), the service provider in the project; and Steven Lee, Managing Director of the Income Security Portfolio at the Robin Hood Foundation, an investor in the project and a long-time philanthropic supporter of CEO. We were also joined by Woodrow “Woody”McCutchen, Vice President, Senior Portfolio Manager at the Edna McConnell Clark Foundation (EMCF), also a long-time philanthropic supporter of CEO.
The importance of relationships in PFS projects was central to the conversation. Specifically, we discussed the relationship between the nonprofit and philanthropic sectors in catalyzing readiness for PFS participation, and how PFS projects can deepen, and change fundamentally, the relationship between the nonprofit sector and government. Other themes that emerged were the role of evidence in shaping PFS projects, and sustainability of PFS projects after the project term.
In this three-part blog series, we take a closer look at the New York State PFS project and focus on three main themes: first, the investments made in CEO leading up to their involvement in a PFS project; second, the motivations of CEO as service provider, and Robin Hood as an investor, to participate in a PFS project; and third, the experiences to-date of these partners in the PFS project and the implications of these experiences for the future.
Project overview: Increasing Employment and Improving Public Safety in New York
The $13.1 million New York State project was the third PFS project in the United States and the first conducted at the state level. In line with CEO’s broader mission, the project is designed to reduce recidivism rates among formerly incarcerated men by increasing employment after their release from state prisons.
Upfront investment provided by private investors through the PFS financing mechanism will allow CEO to serve an additional 2,000 formerly incarcerated individuals over the course of four years. The evidence-based intervention delivered by CEO serves recently incarcerated individuals within the first 90 days after their release from prison and combines intensive job readiness classes, paid transitional work opportunities on one of CEO’s work crews performing maintenance and labor for public sector customers, permanent job placement support, and job coaching and retention support for the first year of employment. The project aims to reduce recidivism and increase employment among this group when compared to a group considered to be at similarly high risk of returning to prison. Investors will be repaid their principal, plus some return, if and when target thresholds for reductions in recidivism and/or increases in employment are achieved. The potential rate of return to investors increases if CEO’s outcomes exceed the threshold for repayment. Funds for repayment are committed up front by the federal and New York State Departments of Labor.
Pay for Success projects present an exciting opportunity for service providers to further their missions and access new, and often more flexible, resources to support their work. But, there are significant hurdles that organizations must clear in order to be good candidates for PFS investments in the current landscape.
PFS projects involve rigorous evaluation of the outcomes delivered by the project intervention. Generally, this requires a high level of sophistication from nonprofit service providers, including: the ability to deliver, with fidelity, a well-developed and tested service model that has demonstrated positive impact; the systems and human capital to collect and use program data to manage performance; and the risk tolerance to engage in an unproven model of program financing and contracting. Thus, for many service providers, the path to PFS project readiness is a long one.
For CEO, this journey started in 2004, when the organization chose to participate in a randomized control trial (RCT) to determine its program’s effectiveness. The RCT results, released in 2012, demonstrated that CEO’s program produced significant reductions in recidivism, and that this impact was greatest for individuals that were considered to be at highest risk of returning to prison based on a number of factors, including age and number of prior offenses.
Sam Schaeffer is quick to disabuse anyone of the notion that solely this RCT prepared CEO for PFS, though it did play a crucial role in positioning CEO for the opportunity and increasing investor confidence (as discussed in the forthcoming second blog post of this series). Rather, in addition to the evidence, he highlighted the crucial philanthropic investments in CEO’s core program, as well as the supporting organizational infrastructure, which enabled CEO to continue to implement performance management systems and develop a culture of, and commitment to, continuous improvement and refinement of its model using real-time program data.
The Robin Hood Foundation has been supporting CEO’s program since 2003. Early on, Robin Hood chose to target its grant dollars to bolster CEO’s job retention and follow-up services, because the foundation uses one-year job retention as one of the primary markers of success for all of the job training and placement programs it funds as part of its mission to reduce poverty in New York City. Until that point, CEO didn’t have dedicated resources to allocate to long-term job retention services, because its training program was primarily funded by public funding sources which focused on initial job placement rather than retention and wage growth as markers of success.
Interestingly, the RCT did not demonstrate significant long-term job retention outcomes for individuals served by CEO. However, during the study period and since its conclusion, CEO has been making continuous tweaks and improvements in its job retention efforts with Robin Hood’s steady philanthropic support. Based on their internal data, CEO knows that long-term job retention rates for participants placed in the unsubsidized workforce have more than doubled in the past ten years, and this additional layer of impact is something that CEO is aiming to demonstrate as part of the evaluation of the New York State PFS project.
Around the same time that CEO undertook the RCT, the organization was approached by the Edna McConnell Clark Foundation (EMCF) for support to undertake strategic planning and theory of change work. Woody McCutcheon recalls how impressed he was that an organization would voluntarily subject itself to the rigors and risks associated with an RCT, and how that seriousness of purpose that CEO demonstrated motivated EMCF to invest in the organization’s strategic work. CEO’s theory of change work, funded by EMCF, was conducted with an eye towards future replication and scaling of CEO’s model. In 2011, CEO received a $6 million, three-year Social Innovation Fund award from EMCF, and became a True North Fund grantee. These funds provided the growth capital for CEO to replicate its program model outside of New York State for the first time. In 2013, EMCF followed up with an 18-month, $750,000 investment.
Throughout this period, Robin Hood Foundation and EMCF also funded crucial data management systems and human capital investments at both the leadership and front-line staff levels. In total, these two foundations invested nearly $25 million in CEO in the ten years prior to the launch of the Pay for Success Project. This is not an insignificant sum, but it is worth noting that the organization was, and remains, funded primarily by public grants and earned income from contracts for its transitional work crews.
Nonetheless, Sam Schaeffer posited that CEO’s investment in data and performance management was one factor that set them apart during the service provider selection phase of PFS project construction, and related what he saw as a pivotal moment in the early genesis of the PFS project and their selection as the project’s service provider: when Social Finance, the project intermediary, was conducting due diligence on service providers, CEO was able to generate a requested data report on past performance in 20 minutes.
This performance management capacity built the confidence of project stakeholders that CEO would be able to handle being involved in the project and replicate past performance. Further, the data generated by CEO’s performance management system was central to the project design, as was the evidence from the RCT. CEO’s program was found to have the greatest impact for the recently released and highest-risk individuals, so that is the entire service population in the PFS deal. And, the target outcomes for reductions in recidivism and increases in employment are built on CEO’s past performance. This helps mitigate the level of performance risk in the project, and helped CEO, the state and investors get comfortable with the project.
The ability of any service provider to participate in PFS projects, and by extension other outcomes-oriented financing or contracting arrangements, requires commitment to and investment in processes that enable continual learning about program effectiveness. Likewise, it requires investment in human capacity to deliver programs and manage to results, as well as systems to track performance management.
Philanthropy can play a critical role in readying service providers to participate in PFS financing arrangements by providing long-term investments in core programs as well as more episodic strategic investments in organizational infrastructure, strategy and human capital.
Providers with access to data that demonstrates the efficacy of their own program or intervention with a specific population are better positioned to participate in the design and implementation of outcomes-based contracts. Having an active role in program design may prove critical to success in PFS project implementation.
The next installment of the blog series will explore the relationships that led to and have been strengthened by the PFS project in New York State.
Douglas Duncan makes a new life for himself in Brooklyn, New York, on July 18, 2015. (JENNIFER BROWN / For The Inquirer)
Douglas Duncan went to prison at age 24 for robbing three Manhattan doughnut shops with a kitchen knife. He left 16 years later with a master’s degree and no idea of how to find a job.
“Sing Sing gives you a lot of time to think and plan.” he says. “I just didn’t know how I was going to go about it. Who was I going to contact?”
But staffers at a nonprofit coached him on job interviews, perfected his resume, and – in the crucial first weeks out – got him work in landscaping. They helped him get an interview at a Long Island agency that works to curb youth violence. A year later, he still works there as a counselor.
In Philadelphia, where the prison population is over capacity and 40 percent of those released go back to jail within a year, city officials say they want to invest in a program like the Center for Employment Opportunities, the one that helped Duncan.
It’s a proven model for reducing recidivism rates. Philadelphia, though, wants to fund it in an unconventional way: by tapping private investors who would cover the cost and be paid back by the government only if the program succeeds.
If it falls short, those investors, not taxpayers, would take the loss.
The model, known as Pay for Success, is a complex, bureaucratic process with the potential for straightforward, human outcomes. Pay for Success programs are being used to target teen pregnancy in Washington; to reduce homelessness in Cleveland; and to reduce asthma among low-income children in Fresno, Calif. In Pennsylvania, Gov. Wolf is interested, too.
If the programs hit their goals, the investors would get their money back, plus an additional return paid from what the government saves through the overall benefit, such as reduced use of beds in prisons or homeless shelters.
“The providers get the money up front, which is what they need in order to do their operations and to do them well,” said Maia Jachimowicz, Mayor Nutter’s policy director and part of a team that has been studying the model. “The city government kind of has this risk-free investment.”
A British experiment
The first Pay for Success program, also known as a social impact bond, was launched in 2010 at a prison in Britain with the goal of reducing recidivism rates by 7.5 percent. Talk of trying a recidivism-based Pay for Success program in Philadelphia comes as advocates are questioning whether the city can reduce its prison population enough to not build a replacement for the 140-year-old House of Corrections, which is outdated and over capacity.
The British experiment created buzz among nonprofits and public officials. In the United States, eight Pay for Success initiatives have launched, all since 2012.
Philadelphia began looking into it after Nutter and an aide learned of it at separate conferences and, intrigued, asked their staff to learn more.
Ideally, Pay for Success benefits everyone involved, from participants (like Duncan), to the government, to investors. But that only happens if an independent audit shows the program hit its goals.
That didn’t happen in the first U.S. attempt, which failed to reduce recidivism among youth at New York City’s Riker’s Island jail and was discontinued this month.
Pay for Success advocates say they can learn from that attempt.
“This model is working the way that it should,” Jachimowicz said. “If you’re not meeting the targets, the program will end and the government won’t pay.”
Investors might see it differently.
Peter York, CEO of Algorhythm, a Philadelphia tech company that helps nonprofits measure their impact, said he has concerns about whether investors will remain interested long-term. He said the model may trigger questions about whether a program hits its goals by design, or chance.
“Instead of fighting over paying for stuff up front . . . we’re parlaying that debate now to the end,” he said.
If that leads to an investor not getting a return, even though a program appeared to succeed, York said, it could “throw the whole investment community into a little bit of a tailspin.”
For now, though, the concept has intrigued those who want to make a profit but also do something positive with their money. Investors in Pay for Success have ranged from wealthy philanthropists to Goldman Sachs to the Reinvestment Fund, a Philadelphia nonprofit that targets capital to revitalize low-income communities.
The Reinvestment Fund, whose investors range from large institutions such as the William Penn Foundation to individuals investing as little as $1,000, has already backed one Pay for Success program and is exploring other partnerships, according to Andy Rachlin, the group’s managing director of lending and investment.
Rachlin said Pay for Success is opening new doors for the Reinvestment Fund, which historically has put its money into brick-and-mortar ventures such as new schools or affordable housing. He said Pay for Success makes it possible to invest – beyond pure philanthropy – in curing social problems.
“It makes these things that have previously not been investable, investable,” he said. “Which is really powerful.”
Wolf signals interest
Every $1 spent on transitional employment programs such as the one Philadelphia is considering brings $1.70 in value through reduced use of correctional facilities and increased tax revenue, among other things, according to a study commissioned by the city.
But in the case of Philadelphia, much of that savings would go to the state due to the large number of Philadelphia inmates sent to state-run prisons. For that reason, the city has high hopes of recruiting a crucial partner on the project – the state – and in May submitted a proposal to Wolf’s office.
The governor, coincidentally, signaled interest in the Pay for Success model earlier this year by asking municipalities if they had suitable projects.
“We feel like the stars are aligning,” Jachimowicz said of the timing.
A partnership would have to be approved by both the state legislature and City Council. Jeff Sheridan, Wolf’s spokesman, said that he couldn’t comment on Philadelphia’s proposal but that the state wants to move forward with a Pay for Success partnership soon.
Katie Martin, deputy policy director in the mayor’s office, said city officials are hoping the state will try out the concept here.
“Philadelphia is a world-class city and should be on the cutting edge,” Martin said. “We are the type of city where new ideas, new programs, and new initiatives should be started.”
President Obama visited Oklahoma this week for the third time. His first two visits were related to something our state is well known for: oil and tornadoes. This week’s visit also related to something Oklahoma is well known for — incarceration.
It’s no secret that Oklahoma incarcerates more women per capita than any state and is consistently among the top four states for incarcerating men. The governor’s recent memo to the Department of Corrections to allow early release credit accumulation for individuals convicted of 85 percent crimes is an indicator that state leaders recognize this statistic is damaging to Oklahoma. However, any meaningful attempt to change the rates of incarceration must aim to reduce the number of people returning to incarceration after release. As citizens of Oklahoma, we must reflect on how we support individuals returning home, since more than 90 percent do.
Individuals who come home from prison are at a high risk to reoffend, particularly if they’re unemployed. A job not only provides crucial income to a person and his or her family, it also instills confidence and a feeling of self-worth and dignity. Unfortunately, according to the Department of Labor, 60 percent of employers would not consider hiring an applicant with a criminal history.
Instead of excluding individuals with convictions from the labor force, how might we reimagine a context in which these same individuals are viewed as resources that can be used in the
The Center for Employment Opportunities (CEO), which operates in Tulsa and Oklahoma City, offers comprehensive employment services exclusively for individuals with criminal records at their most vulnerable time — within 90 days of release. CEO provides an on-ramp for individuals to connect to the world of work. Participants work on one of CEO’s crews, completing beautification, maintenance and construction projects for public-sector customers. They are paid daily, taught how to manage earnings, how to work as part of a team, and most importantly the value of work. CEO uses this experience to market participants to permanent employers, using the workers’ demonstrated experience and reliability to defuse the negative impact of a criminal conviction.
In the past three years, CEO has employed 753 people in Oklahoma. Perhaps even more exciting than the jobs themselves is that the CEO model has been proven to reduce recidivism by as much as 22 percent through rigorous evaluation.
As support grows nationally and statewide for criminal justice reform, we should remember that a critical component to reducing the rates of incarceration is increasing the likelihood of success for people who are leaving the justice system. Helping individuals get a job is one of the most basic ways we can begin to change the narrative around former offenders. Allowing individuals to gain access to the labor force will not only help employers, but also the communities and families to which people return.
Doyle is Oklahoma state director of the Center for Employment Opportunities.
On Tuesday, President Obama laid out a path for criminal justice reform in America.
Quoting Republican Senator Rand Paul, the President reinforced the consequences of a failing justice system that “costs the taxpayers money, without making them any safer.” Yet even more importantly, the President also highlighted the fundamental inequities of our justice system, “African American and Latino men and women make up 30 percent of the [US] population, but they make up 60 percent of our country’s inmates. About 1:35 African American men, 1:88 Latino men is serving time right now. Among white men, that number is 1:214…And one of the consequences of this is, around one million fathers are behind bars. Around one in nine African American kids has a parent in prison.”
The President asked, “What is that doing to our communities? What’s that doing to those children? Our nation is being robbed of men and women who could be workers and taxpayers, could be more actively involved in their children’s lives, could be role models, could be community leaders, and right now they’re locked up…”
Charting a path forward, the President laid out some basic principles for reform — in the community, in the courtroom, and in the cell block.
The Center for Employment Opportunities (CEO) has been working for more than twenty years to prepare formerly incarcerated men and women to thrive in our economy. CEO works in high-impact neighborhoods across the U.S. to ensure that those who are in most need of a second chance have an opportunity to earn income for their families, gain the skills needed to build a career, and lead their communities. And it turns out, preparing someone for the world of work can help them become contributing members of their community and help them avoid returning to incarceration.
The President’s historic visit to a federal prison in Oklahoma yesterday shined a national spotlight on CEO’s effectiveness.
“While the data are mixed for many re-entry programmes, some highly structured initiatives, such as CEO, have been shown to reduce recidivism as well as costs to the taxpayer,” stated the Financial Times in an article covering the President’s visit.
CEO provides an on-ramp for individuals to connect to the world of work. Program participants get ready to offer their talents and meet the needs of local businesses by working for CEO as part of a work crew completing maintenance, landscaping, and construction projects for customers. While working for CEO, participants are paid at the end of each shift and see first hand the value of hard work. CEO then uses this experience to market participants to local businesses, using the workers’ demonstrated experience and reliability to diffuse the negative impact of a criminal conviction.
Darnell Banks, 29, was referred to CEO by his probation officer. He is focused on supporting his three children and earning enough money to “stay out of trouble.” When he was told that President Obama would be visiting the same prison he once did time in, the Financial Times reported that “he laughed. ‘I’m not going back to that place,’ he says. ‘I don’t care if the president is coming, I’m not going back.’
We applaud the President for his leadership. We urge him to keep a strong focus on jobs as a centerpiece to criminal justice reform. It is not only good for our economy, but it’s a smart, evidence-based solution to ending the revolving door of crime and incarceration.