Running a Business After Doing Time

2-24-2009 National:

THIS year, nearly 700,000 people will be released from state or federal prisons. They will join the worst economy in decades, many of them with limited education and little or no legitimate employment experience. And a criminal record will make it that much harder to find a job.

Yet newly released prisoners need to work, not just to support themselves or their families, but also because having a job correlates with staying out of trouble. One study, in December 2006, found that 89 percent of people who violate the terms of their parole or probation were unemployed.

In the past few years, several programs have been introduced to teach prisoners, who may have problems finding traditional employment after their release, how to work for themselves.

“We try to help these guys realize that the skills they already possess from illegal ventures have real value in the business world,” explains Catherine Rohr, founder and chief executive of the Prison Entrepreneurship Program, based in Houston. “Major drug dealers are already proven entrepreneurs.”

The program, usually called P.E.P., works with men incarcerated in Texas and spends about $15,000 on each graduate. Last year, it raised $2.5 million from private sources. Ms. Rohr, a graduate of the Haas School of Business at the University of California, Berkeley, started P.E.P. in May 2004, when she was 27. She said she left a $200,000-a-year job in private equity when her Christian faith led her to embark on a life of service.

Prisoners accepted into the five-month P.E.P. program attend class for 35 hours a week. Curtis Hogue, a former securities analyst, teaches an intensive M.B.A.-style curriculum, with lessons in finance, accounting, marketing and sales. Several dozen executives and business students volunteer as guest lecturers or as judges at a competition for the best business plan.

A few days each week, Ms. Rohr teaches a course on character development. She stresses what she calls “consequence trails” and encourages students to recognize the suffering and pain unleashed in the wake of bad decisions.

Ms. Rohr says she believes the focus on character is essential. Without it, the program might, as she puts it, “take an old dope dealer, equip him with a skill set and help him to become a better dope dealer when he gets out.”

P.E.P. also sponsors comprehensive post-release programs for its graduates in Houston and Dallas. Services include housing, free or low-cost dental and medical care and an evening entrepreneurship school taught by volunteers who also serve as professional mentors.

Since the program’s inception, 441 men, roughly a quarter of whom had been incarcerated for violent crimes, have graduated. Just over 8 percent have returned to prison — nationally, the recidivism rate exceeds 25 percent.

A low recidivism rate can be a misleading measure of success, warns Shawn Bushway , a criminologist at the School of Criminal Justice at the University at Albany. Prison-based work programs can be effective, he explains, but their success may say as much about the cross-section of participants as the programs themselves.

Ms. Rohr happily acknowledges cherry-picking the most talented prisoners who want to change their ways. She says that P.E.P. accepts only about 20 percent of its applicants. Moreover, fewer than half the students accepted last year graduated from the program. Most graduates put their business skills to work for someone else, but 57 men have begun their own businesses. These range from painting and automotive repair to catering; 32 of the 57 businesses are still operating.

One of the entrepreneurs is Nathan Dangerfield, owner of Promised Land Lawn Service in Houston. Mr. Dangerfield, who was released from prison in October 2006, after serving 21 months for possession of a controlled substance with intent to distribute, started the business in March 2008. A low-interest $2,000 loan and a $500 seed grant, both from P.E.P., financed the company.

Mr. Dangerfield, who has two part-time employees, declined to disclose current revenue, but says he hopes to gross $250,000 this year by expanding the number of commercial customers. He consults weekly with a mentor he met through P.E.P. Mr. Dangerfield calls the program “the best opportunity I could have had at a second chance.”

ANOTHER P.E.P. graduate, Jeffrey Doucette, began Save the Day Restoration and Carpet Care, in Wylie, Tex., in December. He was released from prison in January 2008, after serving 42 months for drug dealing, and says P.E.P. gave him not just business knowledge, but also honesty and integrity. “If I don’t clean the spot of carpet behind a door, I can’t live with myself,” he said.

Many in the corrections business are wary of entrepreneurship programs, according to Deborah Mukamal, director of the Prisoner Reentry Institute at the John Jay College of Criminal Justice. Entrepreneurs must thrive in unstructured environments, and many ex-offenders do better with more structure, she says. In addition, failure rates among new companies are high.

Ms. Mukamal nonetheless commends P.E.P. and similar programs, like the Coffee Creek Prison Project in Wilsonville, Ore., and the Workshop in Business Opportunities in New York, which offers a course to introduce inmates to the basic concepts of owning a business.

“These are new, bold ideas,” she says, “and there are too many people going into prison and coming home not to try new ideas.” ..Source.. by Leslie Berlin