Leveraging change where the market has failed

No matter what your position on crime, whether law and order or reform and rehabilitation – just about everyone knows that if we don’t get people to work after they serve their sentences, we are unlikely to change the unfortunate and costly reality that the US has 5 % of the world’s population and 24% of the world’s prisoners.

We want people to pay the price for crime.  We want to feel safe.  We also enjoy stories of redemption and transformation.  But for very practical reasons businesses offer few opportunities for people who have been in prison to get jobs, which we know from evidence is the greatest way to firmly break the cycle of crime and incarceration.

Two recent articles showcase the two sides of the coin. – “Imprisoned, Rehabilitated and Unemployed”, a distressing tale of a man imprisoned years ago who has worked for decades since then to prepare to be a firefighter with no luck due to that mark on his record.  Meanwhile, “Why I Hire Convicts and Former Gang Members” spotlights Electronic Recyclers International (ERI) founder and CEO John Shegarian who affirms the benefits of giving people a second chance.   Knowing about ERI’s overall commitment to employment of people with barriers, a few months back REDF helped broker a new business relationship between St. Vincent de Paul of Alameda County and ERI.

Ultimately, REDF’s work will have its most powerful impact when private sector businesses begin to incorporate the lessons of the social enterprises we work with into the management and hiring of their front line workforce.  Namely: people with tough histories are fully able to turn their lives around and become excellent employees given the chance to work, and management practices that foster their success.  Hiring these individuals and successfully managing them will reduce the high costs businesses pay now for all the churning at the front lines of their workforce.

That’s why we were heartened to note that REDF was featured in the San Francisco Business Times Annual Bay Area Giving Guide read by business leaders throughout the SF Bay Area.  We hope that many of them consider new partnerships with REDF and with job-creating social enterprise — incorporating them into their supply chain, while also supporting and investing in social enterprise growth.

Last note – a provocative piece in Friday’s Wall Street Journal, about Carlos Slim and his assertion that private sector job creation is the best anti-poverty strategy, asks if wealthy individuals accomplish more by investing in new businesses rather than funding philanthropy.

I would say philanthropy has leveraged powerful change where the market has failed.  As an example, REDF and others have demonstrated definitively that young people and adults who have been homeless, or in prison, or have a mental illness can work and want to work.  However millions of them are unemployed even in the best of times because the private sector does not provide them a way to enter the workforce.  This results in taxpayer, family, and personal costs that are avoidable.

Private philanthropy is the fuel that creates the nonprofit-run social enterprises that in turn create jobs and are willing to take the initial risk to hire these individuals and get them ready for private sector employment.  Thousands of people are in the workforce as a result – more every day.  What do you think?  Where and how is philanthropy most effective in solving problems?