Prison entrepreneurship programme
In 2004, at age 27, Catherine Hoke left a career in venture capital and private equity to pursue founding the Prison Entrepreneurship Program (PEP) , a nonprofit organization that serves men in the Texas prison system. PEP has been nationally recognized for its groundbreaking results among its now 1,300+ graduates:
100% of PEP graduates are employed within 90 days of release from prison; in fact, graduates average only 20 days “from prison to paycheck.” They have achieved that employment metric every month since May 2010.
PEP graduates have an $11.50+/hour average starting wage (60% above minimum wage).
Nearly 100% of PEP graduates are still employed after 12 months (compared to a nearly 50% national unemployment rate among ex-offenders).
More than 200 businesses have been launched by PEP graduates, including six that generate over $1M in gross annual revenue.
PEP graduates have an exceptionally low <7% three-year recidivism rate (compared to the national average of nearly 50%);
The programme (or versions of it) has spread around the world including the UK.
So what is the programme?
This varies per country but in general, it starts with a selection process - which candidates have the work ethic and the commitment to succeed in the programme? In the USA, they select 500 each year from more than 10,000 candidates. Then training commences - a character development leadership programme and business education. Each student is required to conceive a business that they would start upon release, researching the logistics of competing within the chosen industry, writing a complete business plan for launching their business and then pitching the plan many times. After completing the immersive and intense in-prison programme, participants graduate in a formal ceremony held within the prison, attended by family and friends and are given recognised certificates.
Family members are provided with information about PEP, updates on the class’s progress, tips on how to manage their loved one’s release, information regarding the reintegration process, resources for forgiveness and acceptance, and any questions the families might have are answered.
Let's look at a case study from Germany:
In April 2009, Bernward Jopen, a serial entrepreneur in Bavaria with experience in the telecommunications and IT sector, read an article about the Prison Entrepreneurship Program in Texas. So inspired was he by its achievements that he immediately booked a flight to visit the programme, spending a week there familiarising himself with its ins and outs. Bernward and his daughter Maren then set up a prison entrepreneurship programme known as 'Leonhard' – named after the patron saint of prisoners, Leonard of Noblac, who famously asked the Frankish King Clovis for the right to liberate prisoners worthy of forgiveness.
Despite initial skepticism towards the idea from criminal justice practitioners, in 2010 Bernward and Maren put €50,000 of their personal savings towards getting the programme off the ground. They approached the Bavarian Justice Ministry with their idea, and soon afterwards held their first course in a prison with seven participants.
Leonhard now run their intensive 20-week programme biannually in Stadelheim prison for 15 to 18 male prisoners selected from Bavaria’s 36 prisons. After just six years, Leonhard is able to boast several success stories – including one graduate with businesses in everything from search engine optimisation and marketing to plumbing and fibreglass production – and a reoffending rate of just 11% compared to the German national average of 46%. While only around a third of graduates immediately start businesses, 60% go on to secure a job or commence further education within two months.
And in the UK?
Startup is a charity established in 2006 which helps female prisoners set up businesses after their release. The programme was founded by Juliet Hope, an ex-investment banker at Rothschild Asset Management; its staff includes individuals with a mixture of both business and criminal justice backgrounds.
Since its inception, Startup has provided business support to over 1200 ex-prisoners and ex-offenders, with only one recorded reoffender among those that started businesses. The charity uses the 4-2-1 model, in which clients begin to receive support while still in prison (outcome one), with half of these going on to develop a business plan (outcome two) and a final cohort that receives grant funding and additional mentoring to start a business (outcome three). Startup participants are vetted solely based on their ideas, business acumen and motivation, not the nature of their crime.
One of Startup’s most unique features is its peer mentoring scheme, whereby the programme’s successfully self-employed clients give personal support to current participants. In Juliet’s experience, having a criminal background with similar challenges to face in common makes a big difference to mentoring. Examples of sectors in which Startup clients have succeeded include web design, bookkeeping, chocolate making, beauty, floristry, jewellery design and personal training, among many others.
In late 2016, The Centre for Entrepreneurs won funding from the Ministry of Justice to deliver a prison entrepreneurship programme at HMP Ranby in Nottinghamshire. The programme will be delivered in partnership with NBV Enterprise Solutions. The programme will prepare a select group of prisoners to start businesses that will support them financially after their release and prevent them from re-offending. The first part of the programme will take place over approximately 12 weeks, with weekly sessions held by a professional NBV business coach. The second part will take place after release, with participants supported by NBV with advice, equipment or collateral as they launch and grow their businesses. The programme will be comprehensively evaluated upon completion to determine its impact on prisoner outcomes, with successful results used to inform the establishment of further PEPs.
Returning to Catherine Hoke, who was a founder of the original PEP in USA. She moved on in 2010 to found Defy Ventures which works with ex-offenders in several US states to become entrepreneurs.
She says, "These people are called by society 'ex-offenders', a word that I hate, because I say, 'Aren't we all ex-offenders? Isn't that why we have the Kingdom of God and we're all ex-somethings?' Many of our biblical heroes are actually criminals, right? David, Paul and Moses all on murder. But do we ever think that Jesus was actually a convicted criminal, although he was innocent. If he was coming into society today, he would have a rap sheet and he would be considered an ex-offender. I'd like to ask all of you, what would it be like if you were only known for the worst thing that you've ever done? Think of the labels that come with that, and think of the opportunities that you would lose in your life and the shame that you'd be covered in."
Defy Ventures is Catherine's 2.0 effort to do PEP, this time working with released men and women who have exited the prison system. They served 300 people in 2015 who competed for $100,000 in start-up financing in front of top venture capitalists. The employment rate is 95%, the recidivism rate is 3%. Graduates have reported an 83% increase in income. Defy have financed and incubated more than 100 businesses. In 2016, they hoped to serve 500 or more entrepreneurs in training as well as expanding nationally with funding from Google.
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