Prison Entrepreneurship Program - USA

Competition Finalist

This entry has been selected as a finalist in the
Powering Economic Opportunity: Create a World that Works competition.

PEP engages the nation's top business and academic talent to constructively redirect inmates' ambitions by equipping them with values-based entrepreneurial training—enabling them to productively re-enter society. PEP puts participants through a 5-month Business Plan Competition where they produce a full, VC-worthy business plan and presentation. After release from prison, PEP helps graduates find jobs, secure housing and provides a community of support through our network of executives, community partners and the faith community. When a graduate is ready, PEP helps them to launch their business, providing office space, bookkeeping help and a network of customers. For every 150 graduates of the program taxpayers save $5 million in future costs. Our recidivism rate is less than 10%.

About You

Organization: Prison Entrepreneurship Program Visit websitemore ↓↑ hide↑ hide

About You

First Name

Andrew

Last Name

Kramer

Twitter

PEPtweets

About Your Organization

Organization Name

Prison Entrepreneurship Program

Organization Website

Organization Country

United States, TX, Harris County

Country where this project is creating social impact

United States, TX, Harris County

Is your organization a

Non‐profit/NGO/citizen sector organization

How long has your organization been operating?

More than 5 years

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Innovation

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Entry Form title

Prison Entrepreneurship Program - USA

What change do you want to bring to the world?

PEP engages the nation's top business and academic talent to constructively redirect inmates' ambitions by equipping them with values-based entrepreneurial training—enabling them to productively re-enter society. PEP puts participants through a 5-month Business Plan Competition where they produce a full, VC-worthy business plan and presentation. After release from prison, PEP helps graduates find jobs, secure housing and provides a community of support through our network of executives, community partners and the faith community. When a graduate is ready, PEP helps them to launch their business, providing office space, bookkeeping help and a network of customers. For every 150 graduates of the program taxpayers save $5 million in future costs. Our recidivism rate is less than 10%.

What are the primary activities of your project?

The Prison Entrepreneurship Program provides entrepreneurship and character training for inmates within the Texas Department of Criminal Justice. Each participant of the Business Plan Competition writes a full business plan (mission, operations, marketing and financials) and prepares both a sales and investor presentation. Graduates also work extensively on discovering and developing the character traits necessary for success after release as well as to be successful employees and entrepreneurs.
Upon release from prison, PEP re-entry coordinators work with graduates to secure housing (PEP operates three homes in Houston and Dallas) as well as access to social services and other community resources. PEP works aggressively with graduates to help them secure their first job.
PEP supports entrepreneurs through our weekly Entrepreneurship School (eSchool), the Communitas Business Center--a business incubator operated by PEP--and partnerships with micro-lending organizations.

What is innovative about your initiative? How is it a new contribution to the field?

PEP's primary innovation is to combine the drive and success of executives, entrepreneurs and MBA students with the drive and need of inmates--usually accomplished entrepreneurs and managers themselves--to live transformed lives outside of prison.
Many programs have both an in-prison and post-release program, but few are successfully focused on entrepreneurship as the primary driver for that change.
The United States has the largest prison population in the world, and Texas the second largest population in the United States. Annual spending on prisons in the US is in the hundreds of billions of dollars. By one popular estimate, it costs as much to incarcerate an inmate as it does to send them to an Ivy League university. Despite the extremely high cost of incarceration, many states are cutting the programs that have shown the best likelihood of providing pathways out of poverty and the cycle of imprisonment.
PEP does this not simply through entrepreneurship but through community building--between two groups of people that would not usually find community: executives, entrepreneurs and convicted felons. Our hope is that by providing a pathway out of the cycle of incarceration we will inspire more and more individuals to decide that pursuing personal transformation is a worthy goal. The reality is that upon release guards are frequently heard saying, "See you soon." Our objective is to prove them wrong.

What stage is your project in?

Operating for more than 5 years

Tell us about the community that you engage? eg. economic conditions, political structures, norms and values, demographic trends, history, and experience with engagement efforts.

PEP currently works in the Texas Department of Criminal Justice with male inmates. Within TDCJ, males represent more than 90% of the prison population and represent the largest addressable market. On average, more than 40% of our graduates were convicted of violent crimes--although most inmates have committed some sort of violent crime but were not convicted--and have been to prison more than one time. 35% of our graduates are black, 40% white 25% Hispanic.
Our graduates come from an array of backgrounds, but some common themes emerge: 1) a high percentage of graduates did not have a stable, two parent home during their "transformative years." 2) The majority of graduates were under the influence of alcohol or drugs at the time they committed their crime, and usually had long histories substance use and abuse. 3) Poverty is a factor for many of the program's graduates but is not a constant. 4) Many of our successful graduates were successful "entrepreneurs" on the outside, typically running some form of illegal business or gang.

Share the story of the founder and what inspired the founder to start this project

PEP was founded by Catherine Rohr in May, 2004 after an Easter visit to a prison outside of Houston, Texas. Catherine, a New York City resident, was persuaded to attend prison by a close friend but had very low expectations for the trip: in fact, she expected to see "caged animals." To her surprise, instead she found men who desperately wanted and needed support to live transformed lives. Catherine's professional work in investment banks and private equity had trained her to evaluate entrepreneurs and she immediately recognized an untapped pool of entrepreneurs sitting (she would say wasting away) in prison. Being something of an entrepreneur herself, she immediately started to work with some of the men on putting together a business plan and at the end of her trip promised to come back with some executives. From that our Business Plan Competition was born. Catherine's insight to bring executives with her was born from her experience listening to other entrepreneurs say that they had had success, now they were looking for significance, but they wanted to use their years of experience as business people for good.
The other important insight of the program was that providing inmates with a business plan and good will was not enough for them to make it on the outside. So PEP has provided a high level of re-entry services, we call it "doing life together," for our graduates.
Quickly thereafter, Catherine quit her high paying private equity job and officially founded PEP. This year, PEP will celebrate 7 years of operations and more than 700 program graduates.

Social Impact

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Please describe how your project has been successful and how that success is measured

PEP measures success in a number of ways:
Recidivism: PEP's return to prison rate is significantly less than 10% within three years of release, compared with 24.3% for the State of Texas and a national average of 40%.
SROI:Based on our 2010 scale of operations, tax payers save more than $5 million in future incarceration costs alone for each 150 graduates of the Business Plan Competition--a 300% return on investment. In 2011, PEP's released graduates are expected to earn more than $14 million, $4 million of which is expected to be returned in the form of income, sales and other taxes.
Employment: 99% of PEP graduates are employed within 90 days of their release--for released inmates in Texas less than 50% are employed within one year of release.
New Business Creation: Of 570 released graduates since 2004, more than 90 have started 80 businesses, 60 of which are still in operation today. 74% of PEP businesses are still in operation after more than 24 months.
Volunteer Service: PEP also provides a meaningful way for entrepreneurs, executives and MBAs to use their business skills and experience: in 2010, about 500 volunteers provided more than 10,000 hours of service.

How many people have been impacted by your project?

1,001- 10,000

How many people could be impacted by your project in the next three years?

1,001-10,000

How will your project evolve over the next three years?

Over the next three years, PEP will triple the size of our programs--from 120 graduates in 2010 to more than 300 graduates per year by 2013. This will demonstrate that we can operate at a scale sufficient enough to begin expanding to other prisons and states. We have already begun looking into partnerships with private organizations or other nonprofits for effective ways to expand and scale our operations. We also intend to continue to develop the services we offer to released graduates looking to start and expand their business. Our funding model will change as we begin to move from private donations to an earned income model supported by organization owned and operated businesses that also employ graduates of the program.

Sustainability

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What barriers might hinder the success of your project and how do you plan to overcome them?

PEP's three year strategic plan (2011-2013) aims to help prove the sustainability and scalability of our model, including building as many replicable elements as possible to position us for future growth beyond our current operations.
PEP is a resource and time intensive program--we expect to work with our graduates for at least one full year and in many cases for many years. Our primary constraints at this point are: sustainable funding, volunteer relationships and participant recruiting.
PEP is working to provide more sustainable funding through the creation of earned income businesses which can also employ our graduates. We are working to maintain a large, diverse volunteer pool by working with the faith and business communities, especially those organizations who have an interest in strategic partnerships.
We are working to recruit more participants in the program by changing some of the entry requirements, providing a broader range of basic and advanced training opportunities and working with the wardens, chaplains and educators inside of the prison system. PEP employs a full-time recruiter who goes to most of the prisons in the state.

Tell us about your partnerships

PEP's most important partnership is with the Texas Department of Criminal Justice and the private prison operator, the GEO Group. Without the permission and support from both of these organizations, PEP would not be able to operate its programs. PEP has written support from both organizations to help us expand and continue our programs.
Outside of prison, PEP relies on a number of program partnerships, some formal and others more informal, to help us support our work. We work with local organizations to help with everything from clothing to employment, substance abuse programs to basic medical care. PEP works extensively with the faith communities in Houston, Dallas and around the country to support our work--both as financial contributors, but more importantly as resources for our graduates after release. The faith community also provides a high level of volunteers to the program each year.
PEP has a non-exclusive written partnership agreement with the Dallas-based PLAN Fund, a micro-credit lending institution to provide small to medium sized business loans to our graduate entrepreneurs. We are also looking for other lending partnership opportunities, especially within the banking and investment communities.

Current annual budget of project, in US dollars

More than $1 million

Explain your selections

PEP has primarily been sustained through the generous support of foundations, individual donors and corporate gifts. We are currently 100% privately funded, although we have a strong partnership with the Texas Department of Criminal Justice. Foundations make up about 50% of our gifts and individual donors and corporations make the the rest. PEP receives some earned income from the operation of transitional homes in Houston and Dallas. Within the next three years, we intend to shift an increasing amount of our funding to earned income businesses that PEP operates. These businesses are expected to provide income to fund the organization and also provide jobs for our graduates. By the end of 2011 we will have launched our first venture. We have formed a separate entity, Communitas Ventures, Inc. to operate those businesses for PEP.

How do you plan to strengthen your project in the next three years?

PEP is operating with a three year plan that began in 2011 and will continue through the end of 2013. Within that time we will triple the number of graduates from our Business Plan Competition, but we will also add additional services to help better address the needs of our graduates. Our program already provides a comprehensive training and case management program but in order to expand we will need to address the following issues: we currently limit enrollment in the BPC to men with a high school diploma or GED. Because of severe budget cuts to the prison education program and a need to expand our applicant pool, we will begin working with men who do not have GEDs to help provide them as a prerequisite for starting the Business Plan Competition. We have begun moving towards an earned income business model, and will continue to improve the services we provide to our entrepreneurs. Finally, we intend to add a third Texas city to our case management program.
We intend to add a small amount of staff to the organization, but at this time we are looking for ways to increase our economies of scale and prove the sustainability of the program. We already saw substantial declines in our "cost per head" in 2010 and expect further declines in 2011.

Challenges

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Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Restrictive cultural norms

SECONDARY

Underemployment

TERTIARY

Lack of skills/training

Please describe how your innovation specifically tackles the barriers listed above.

Employment is a leading factor in predicting recidivism rates: one study suggests that 89% of rearrested offenders were unemployed at the time of their rearrest. Many employers are unwilling or hesitant to hire formerly incarcerated individuals out of perceived safety issues. PEP trains our graduates in basic business skills, provides them with a number of soft-skills and helps to ensure that they have the work ethic it takes to be successful. We also employ two job developers who work with volunteers and employers to allow our graduates to interview for jobs. On average, more than 50% of released inmates have not had any employment within one year of release. For PEP graduates, 99% are employed within 90 days of release, and we are working to reduce that time to first job.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

Other (please specify below)

SECONDARY

Enhanced existing impact through addition of complementary services

TERTIARY

Grown geographic reach: Within host country

Please describe which of your growth activities are current or planned for the immediate future.

Our primary objective in scaling our operations at this point is to prove the sustainability and replicability of our programs. By that we intend to triple the number of graduates we serve each year, fully utilize all the existing beds within the Cleveland Correctional Center (520 beds), and fully meet all of our graduate's needs after release.
We are increasing our existing impact by broadening our educational opportunities (offering both GED and college-level courses through the College Level Examination Program (CLEP))as well as expanding our entrepreneurial services. Broadened education opportunities will make us more attractive to a larger potential applicant pool (approximately 30,000 qualified inmates currently) and extend the time that graduate entrepreneurs can work with PEP.

Do you collaborate with any of the following: (Check all that apply)

Technology providers, NGOs/Nonprofits, For profit companies, Academia/universities.

If yes, how have these collaborations helped your innovation to succeed?

Our largest partner is the Texas Department of Criminal Justice. Our database to track participants, volunteers and donors is donated each year through Salesforce.com. We work with a number of other non-profits to provide services to our graduates (clothes, employment training, etc.) Our single largest corporate partner is the private prison operator GEO Group, although we work with an number of smaller private companies for employment opportunities. Finally, our post-release entrepreneurship school training programs were developed by two universities and updated by Accenture consultants. We have a active MBA correspondence program to help with the business plan development, and two academic deans serve on our advisory boards.

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140 weeks ago said: As someone who has not only studied criminal justice, corrections, and law enforcement for several years but also as a former ... about this Competition Entry. - read more >
141 weeks ago said: For over 15 years of my life I committed numerous crimes. I spent 12 years of my life in and out of prison. Since P.E.P came into my ... about this Competition Entry. - read more >
141 weeks ago Carl Pfaffenberg said: The phrase "life changing" is an over-used description for many encounters we have. However, when it comes to P.E.P. it is an ... about this Competition Entry. - read more >
142 weeks ago said: I participated in two days of events in 2010 and was thoroughly impressed with both the program and the outcomes. The men were genuine ... about this Competition Entry. - read more >
142 weeks ago Austin Parry said: There needs to be a way that this PEP program can be duplicated around the world. The conventional prison model is not truly ... about this Competition Entry. - read more >
142 weeks ago said: I visited PEP as an executive judge and wound up writing a long-form article on this remarkable organization: ... about this Competition Entry. - read more >
142 weeks ago said: I totally believe that this is the best program that could ever happen to the prison system. I personally am effected by this program ... about this Competition Entry. - read more >
142 weeks ago said: I completely agree with Nicolette Moore that the the results from this beautiful program are priceless. As a graduate of this program my ... about this Competition Entry. - read more >
143 weeks ago said: I am infinitely grateful for PEP and all they have done to help me reintegrate into society and become a better man. They are a ... about this Competition Entry. - read more >
143 weeks ago said: I am infinitely grateful for PEP and all they have done to help me reintegrate into society and become a better man. They are a ... about this Competition Entry. - read more >