ABJ scoured the nation for success stories to share in our special section dedicated to Americans working hard during this economic crunch to launch their small businesses. And then we came across a
successful Wall Street executive turned philanthropist Catherine Rohr who believed in giving people second chances. Find out why she founded the Prison Entrepreneurship Program and how it is turning heads—in a good way.
There ARE A few things that wheelers and dealers have in common with business executives. A passion to succeed, strong work ethic and persistence—all of these attributes make a great leader but it really comes down to making choices: good or bad.
That’s what Catherine Rohr realized while working as a private equity banker and venture capitalist in New York City. During her visits to Texas prisons with colleagues, she uncovered the powerful entrepreneurial drive of many inmates. And through the compassionate eyes of Rohr, she envisioned a group of individuals eager to transform their lives but had little resources to help them reach their potential. That’s when she decided to do something profound and deeply ingrained in her belief.
The following month, Rohr left behind her New York career and financial stability, moved to Texas started a one-of-a-kind “behind bars” business plan competition. Her resolute efforts were geared toward channeling the entrepreneurial passions and influential personalities of the inmates—intentionally recruiting former gang leaders, drug dealers and hustlers. And it’s working. A new class of entrepreneurs is emerging.
How it all began
In an agreement with the Texas Department of Criminal Justice, Rohr was able to work with the inmates behind bars meanwhile, recruited fellow executives on the outside to host a “Business 101” panel in an institution. In September of 2004, just four month later, a one-of-a-kind “behind bars” business plan competition began.
Her efforts were geared toward channeling the entrepreneurial passions and influential personalities of the inmates—intentionally recruiting former gang leaders, drug dealers and hustlers. The formal Business Plan Competition, which turned into a two-day event, got the attention of national media, including The Wall Street Journal.
About 55 inmates pitched their business concepts to a nationwide executive judging panel. The inmates averaged a Grade 7 level of education and many had never touched a computer. Even still, the overall event’s success was the birth of something special—an innovative re-entry program for inmates.
How PEP works
Officially launched in 2005, the Prison Entrepreneurship Program (PEP) offers a unique educational opportunity to each carefully selected inmate who completes a business plan, including 12-month Excel operating budgets and financial analysis, and delivers a professional investment presentation to executives. In other words, these Wall Street executives volunteer their time to assist with the programming and running the programs.
More importantly, however, these executives are part of a network within PEP along with Rohr who work as connectors—to unite CEOs, investors and graduates through entrepreneurial passion to incite measurable change. The so-called “risk-taking advocates,” PEP dares to tap into America’s most overlooked talent pool: influential convicted felons.
But Rohr soon realized that while the prison business classes were an effective means of equipping these men with entrepreneurial and business skills, the curriculum didn’t address the most critical issue: most men re-entering communities from prison are lacking even the most rudimentary resources.
A window of opportunity
The main turning point for Rohr herself was the resignation of her position as a private equity investor and venture capitalist in New York to devote her efforts fully to building PEP. Rohr has since stepped down from her post. While PEP recruits its new leader, the organization’s COO Phi Tran is now acting CEO. He and his highly esteemed staff including, Development Manager Andrew Kramer, along with an extensive network of business executives facilitate each class and mentorship opportunity. “We work with MBA students from about 34 different programs across the country. For the purposes of e-school, it’s the University of Dallas in Irving and another university in Houston,” explains Kramer. He is referring to PEP’s re-entry program for the selected entrepreneur candidates who must attend a 4 to 5 month weekly program hosted by the University of Dallas in Texas.
Through Rohr’s network of high rollers, the executives come in early and commit over the long-term to assist with anything from the programming to running the actual programs. “Our executives are also our volunteers, essentially. But we also do a lot of work within the church community, in speaking to the congregation and through direct solicitation,” tells Kramer.
But Kramer is adamant to point out one thing. “We don’t actually encourage our guys to start a business when they first come out of prison; we help them find jobs and stabilize their lives,” explains Kramer. Instead, a graduate starts a business when he’s usually had a few years to stabilize his family situation and finances. “There are a couple of different ways we help,” he says.
Private funding for PEP comes from corporations at 10 percent, individuals at 30 percent and private foundations around 60 percent. Government funding is not solicited nor is provided. For the time being, PEP is able to succeed without taxpayer dollars, which keeps them efficient and lean.
Once the participants complete e-school, they are eligible for a certificate and $500 reimbursement for any start up costs they have incurred including continuing education. “We have a very limited pool of loan funds for up to $2,000 to help guys buy tools and equipment,” tells Kramer. Most of the graduates from PEP’s programs start low-entry, less capital intensive businesses ($5,000 or below start up costs), such as carpet cleaning or tree trimming.
The organization is particularly proud that around 13 percent of all donations to PEP are from graduates of our program. Here’s a rundown of the figures and numbers over the past three years:
2007: $1.6 million
2008: $2.5 million
2009: $1.6 million
Forecast for 2010: $2-2.1 million
Every year, PEP recruits from about 50 to 60 units across the state and transfers successful candidates to the Cleveland unit. “We have one full-time recruiter who travels across Texas and selects these guys; we work for men who have demonstrated they are ready to change. We say, we don’t work with criminals; we just work with changed men. We only work with guys are 100 percent committed. Without PEP they are never going back to prison,” explains Kramer.
Candidates are recruited based on three demonstrated characteristics:
1) Commitment to personal transformation
2) Work ethic
3) Entrepreneurial ability
4) Do they have the work ethic, the drive, the intelligence to start, run and grow a business?
The simple fact is that in Texas, it costs anywhere from $15,000 to $20,000 to incarcerate an individual and the statistics show that 30-60 percent of inmates within the system will return to prison within three years of their release. From PEP’s point of view at least, they’ve identified a group of men out of each prison population who want to succeed but they probably don’t have the training, resources, or too many barriers, or need help knowing what it is that is stopping them. “We give them the tools to succeed so that they can choose not to return back to prison,” tells Kramer.
When posed with loaded questions about the morality and ethics over running such programs in the first place, PEP answers with one simple response. “There is a benefit to society because [these men] won’t commit crimes and will come back into society as positive citizens—as taxpayers not tax burdens,” retorts Kramer.
“These individuals are reintegrated and grow awareness; more importantly, their children are at a higher risk of developing similar bad behaviors and becoming imprisoned if they remain in prison without this opportunity. That’s important to have them integrated back to family life,” explains Kramer.
Evidently, the benefits extend beyond what the program offers and what advice the executives give. It goes beyond the walls of the prisons and opens a window of opportunity. “These men demonstrated they can cause a lot of damage but they can also turn around and do positive, successful things with life,” he says.
Headquartered in Houston, PEP also has an office in Dallas. Remote employees were at once located outside of the state, nationwide, but now PEP focuses its efforts in the state of Texas. Through December 2007, the main prison where PEP did most of its work was offered at the Hamilton Unit in Bryan, Texas. Beginning with Class VIII in January 2008, PEP now operates exclusively at the Cleveland Correctional Facility in Cleveland, Texas. The 520-bed minimum to medium security pre-release facility is operated by a private management company, GEO Group, Inc.
Although the organization has received numerous requests to expand its programming into other states, PEP is currently focuses on its operations in Texas and the development of an out of prison program this year. “After we have our statewide Texas operations running more efficiently, we may try to expand to other states with large prison populations, such as California and New York,” the PEP has stated on its website.
While there is a mentoring program, it is still in development. “It’s one of our strategic goals to focus on for 2010,” tells Kramer. “The focus would be more on the mentoring program outside of prison as well as developing mentoring capabilities throughout the program. Originally we’d work exclusively with MBA programs, now, as of last year, we opened it to all networks—advisors programs (help with research for writing plans), MBA. This starts while on the inside. When they get out, we help them form mentoring relationship with each other.”