Carla Javits is the CEO of REDF, a venture philanthropy that invests exclusively in social enterprises. Since its founding, REDF has invested in 215 social enterprises in 30 states and Washington, DC.
Economists estimate that over a lifetime incarceration reduces white male earnings by 2%, Latinx by 6%, and African Americans by 9%. There’s a huge gulf there. There are various estimates that the loss of lifetime earnings for formerly incarcerated people of color is roughly $300,00 to $500,000. Almost a half a million dollars that people fail to earn, just because of incarceration. Many employers don’t hire—and in some cases, can’t hire—people with a record, and that is a huge barrier.
Incarceration has a dramatic effect on a person’s economic prospects or economic mobility and the prospects of their children for greater economic mobility. If a parent or breadwinner’s prospects for work and economic wellbeing are severely compromised, so are those of their family and children. There are, however, ways to help improve the economic stability of the formerly incarcerated and their families, starting with employment social enterprises.
Employment social enterprises offer opportunity, income, and a support system
Employment social enterprises offer employment and on-the-job training to Americans who are so-called “hard-to-employ.” These organizations provide a living wage during training and then help transition workers to conventional employment.
One thing I’ve seen over the years is how these social enterprise organizations recognize and appreciate that the people they’re working with are talented and have a lot to offer. This is hugely important for the formerly incarcerated. These organizations have a high level of respect and care, in addition to giving former inmates or the unhoused immediate income.
These social enterprises not only offer income and job training, but also wraparound support to address the complicated issues that people face if they’ve been incarcerated or had a difficult time in the past. That unique combination of factors can assist people in really transforming their lives. Project Return, a non-profit in Nashville, has a social enterprise called PRO Employment that functions like a temp agency. PRO helps the formerly incarcerated gain work experience and provides transportation, necessary tools and clothing, and then works with a bank to ensure that workers can cash their paychecks free of charge. PRO Employment works with Project Return to help find participants full-time employment after three months.
There are hundreds of organizations like this throughout the United States. They specialize in doing the important work of providing paid employment, support services, and on-the-job training that explicitly helps people who have come home from incarceration or homelessness get jobs, keep jobs, and move on into the mainstream of the economy.
One of our partners at REDF, Center for Employment Opportunities, focuses on maintenance work. They’re in a dozen states. They serve thousands of people a year. But it’s not just job training. They provide paid employment, they pay daily, they assess people’s capabilities every day, and they support people to address some of the issues and challenges they have. They help them move on.
There’s a non-profit based in Denver called Women’s Bean Project that employs women making delicious soup mixes, cornbread mixes, and more. They do in-reach to the local women’s jail and help women whose sentences end in 120 days get into their employment programs.
As always, innovation bubbles up from the community level, and the founders of many social enterprise organizations are innovators who have an entrepreneurial background and are coming up with solutions to problems that are otherwise overlooked. Social enterprise organizations are part of the solution to giving the formerly incarcerated a path to stability, but we need it to happen at scale. And for it to happen at scale requires multi-sector partnership. We need the business community, the government, non-profits, philanthropy, and the community to work together in order to make this happen. Every level of the government needs to be involved: Federal, state, local.
The good news is that while we wait for the government to catch up, we’ve seen success with all the social enterprise organizations we’ve worked with. A 2015 study explored whether participants at these social enterprises had higher employment and better life stability one year after they began their social enterprise jobs. The results were stark: employment rose from 18% to 51% and monthly income rose from $653 to $1,246. Beyond that, participants had reduced reliance on government assistance programs and more stable housing. A cost-benefit analysis of REDF’s portfolio conducted by MJS found that every dollar that the portfolio enterprises spent generated $2.23 in societal benefits, more than doubling the initial investment.
Ultimately, the government is responsible for reducing the number of people who are being incarcerated. But we also need to help those who are incarcerated connect and reintegrate into the mainstream economy before and upon release. We need investment in employment social enterprises as part of the workforce system. It’s one thing we know works.