Written by Marcia Pledger
Published: Sunday, October 10, 2010, cleveland.com
http://www.cleveland.com/business/index.ssf/2010/10

Editor's Note: I enjoyed Ms. Pledger's article because we know Gus Turner and his sister and they are fine people. But I liked it even better because Gus and Greg Jacobs remind me that entrepreneurs fill gaps in government support, and usually more effectively. [more]

Entrepreneurship looked to as a way forward for ex-inmates
By Marcia Pledger

CLEVELAND, Ohio -- For nearly 10 years, Augustus Turner had a lot of time to ponder an American dream that he refused to believe was out of reach because of a big mistake and a permanent label.

Turner was a prison inmate, hoping to run his own business after serving time for drug trafficking.

He knew the odds weren't good. Although 97 percent of prisoners are eventually released, only 53 percent find work, and a far smaller share start their own businesses.

"What I learned from the streets is how to hustle," said Turner, 39. "You can dream. You can pray. It all starts there. But you have to actively make it happen."

And he did. Today, Turner operates Masterpieces, a 10-year-old art studio, tattoo shop and silk-screening business on the West Side of Cleveland.

Turner made his dream happen through sheer perseverance, but a growing movement across the country is trying to train released convicts to achieve success as entrepreneurs.

Northeast Ohio might be lagging behind the trend. A few people here are trying to make a difference, but no coordinated effort has emerged to help parolees stay out of prison by starting businesses.

More than 700,000 people will be released from the nation's state or federal prisons this year. About two-thirds will wind up back behind bars within two or three years.

Government, private-sector officials and academics seem to agree that a job helps keep an ex-prisoner from returning to the penitentiary. And nobody disputes the challenges of becoming employed.

For instance, studies in Milwaukee and New York found that a criminal record reduces employment opportunities by 50 percent for white people and 64 percent for black people -- at a time when jobs are already scarce.

More than 60 percent of employers surveyed in the 2002 Multi-City Study of Urban Inequality (MCSUI) reported that they would "probably not" or "definitely not" hire applicants with criminal history records.

The answer might be entrepreneurship, according to a 2007 national report from the Prisoner Reentry Institute at John Jay College of Criminal Justice. "Venturing Beyond the Gates" is considered the most extensive recent study on successful re-entry to society through entrepreneurship.

Only a handful of entrepreneur-loan programs exist for ex-prisoners. And communication is virtually nonexistent among them, according to the study.

The most notable and biggest prison entrepreneurship program is in Texas, with offices in Houston and Dallas. Former Wall Street investor Catherine Rohr founded the program in 2004 after she toured a prison and decided that executives and inmates had more in common than most would think. Both know how to manage others, and even the most unsophisticated drug dealers understand business concepts like competition, profitability and proprietary sales channels, said David Joekel, executive relations manager at the prison program.

Hardened criminals including murderers, thieves, drug dealers and gang leaders from more than 60 jails in Texas are invited to apply each year. Those selected are transferred to one correctional facility, where they learn entrepreneurial skills as well as strategies for finding a job. With private funding, MBA students as mentors, a highly selective admissions process and stringent pre- and post-release programs, ex-prisoners have started about 60 businesses in the program's six years.

So far, 600 inmates have graduated. In the last two years, 98 percent of the graduates have found decent jobs within three months of release, with an average starting salary of $10.75 an hour. The program continues to gain momentum and interest from volunteers including business, government leaders and dozens of MBA programs, because of a return-to-prison rate of less than 10 percent for the graduates.

The program got a $50,000 grant from the Kauffman Foundation because it made sense economically and contributed to society. The foundation supports entrepreneurial programs worldwide.

"When you consider the costs for incarceration combined with recidivism rates, clearly traditional rehabilitation methodologies aren't preparing individuals for a productive return to mainstream society," said Thom Ruhe, director of entrepreneurship at the Kauffmann Foundation. "With employment challenges, creating a job for themselves may be the only viable option for ex-offenders. Why not give them skills to build a business for themselves and others?"

At 72, serial entrepreneur Sandra Martin began Reentry Central, a national news and information website focused on entrepreneurial education and funding opportunities for ex-prisoners.

Martin said she launched the site because, as a landlord, she increasingly met ex-prisoners telling her they couldn't rent apartments because of felony convictions. After careers in publishing, venture capital and direct mail, the Connecticut businesswoman now spends time trying to get micro-lenders to consider worthy ventures of ex-prisoners.

Martin said the difference between an everyday citizen and a felon often amounts to one poor decision. She sees entrepreneurship as an option because it gets around employers who won't hire felons.

"The advent of computer search technology has made even the smallest criminal sanction a lifetime sentence and is, day by day, creating a lifelong handicap for thousands of our citizens," she said. "One of the few ways around that is to become an entrepreneur, if you've got the talent and the energy."

Anthony DiVincenzo, 41, of Independence is another example of how former prisoners can head down the right path by starting their own businesses.

DiVincenzo lost his home and business in 2005 when an all-night cocaine party led to a three-year stint in the Richland Correctional Institution in Mansfield. Before he went to prison, he ran his own autobody shop in Hinckley for four years.

"I lost it all," he said. "I filed bankruptcy and had a foreclosure on my 11-car garage business. My wife left me. I could have made it into a country song.

"I looked for a job for six months when I was released from prison and nobody would hire me. I had to start my own business.

"Don't get me wrong, I have a lot of experience, so I was offered $50,000 a couple times from auto dealerships, but as soon as they found out I had a felony, they couldn't walk me out the door fast enough."

For the last two years, DiVincenzo has operated his own business, J.C. Auto Body LLC. He works out of friends' garages, primarily in Cleveland suburbs, often going to homes and businesses for pickup and delivery service.

"I took all kinds of life skills and addiction recovery classes and even a computer class [in prison], but there was nothing available for entrepreneurship," DiVincenzo said. "Just about every man I met in prison was thinking about starting their own business when they got out. They know they face more roadblocks and prejudices with employers."

Entrepreneurship programs for ex-prisoners are almost nonexistent in Ohio -- despite an apparent need. With one in 25 adults under correctional control -- prison, jail, probation or parole -- Ohio ranks among the nation's five worst states. In 1982, the figure was 1 in 116 adults. The average cost to house an inmate is $79 per day, or nearly $29,000 per year, according to the Pew Center on the States.

The Ohio Department of Rehabilitation and Correction operates no entrepreneurial programs in prisons -- only educational, vocational, job training and apprenticeship programs.

"While there are no specific programs geared solely toward entrepreneurship, if approached by an individual or organization to provide such programming we would be certainly willing to look at the proposal for consideration," said JoEllen Smith, a department spokeswoman.

Cuyahoga County has one of only two government-funded re-entry offices in the state. Director Luis Vasquez suspects it's because about 8,000 people are released each year from state prison to this county alone. That's not including federal prison or county jails.

But none of the office's programs are geared toward entrepreneurship. Vasquez said he's interested in developing social entrepreneurship programs that would entail partnerships with nonprofits and philanthropic groups.

"A substantial number of ex-offenders have reached out to our office seeking help in getting businesses started," he said. "I think it's important that we explore entrepreneurship for a population that historically encounters difficulty in obtaining employment."

Greg Jacobs in Akron is one of the individuals who have been trying to fill in for the lack of government programs. He is trying to get government contracts and grants for his nonprofit and for-profit business ventures, both called Felons for Hire.

Jacobs created a board that includes businesspeople such as an insurance representative and a physician. His 4-year-old training programs teach felons trades such as installation of drywall, windows and floors; woodworking; carpentry; and catering.

About 30 percent of the people in his programs want to start their own businesses, and he helps them get federal ID numbers, workers' compensation, insurance, licenses and bonding.

"I show them how to build their credit by being trustworthy and paying their bills and taxes," he said. "A lot of them say they want to start their own businesses, but they don't want all of the responsibilities. You can't have it both ways."

Jacobs, 57, served time twice. Once was when he says he was a teenage "common thief." Several years ago, he went back to prison for income tax evasion. That's when he decided to get his life together and help other felons.

He didn't want a business name that used the word "hope" in it, because he says the public writes off people who have paid their debt to society. He also wanted felons to know he's serious about helping them get experience to find jobs or create their own. It took him seven months just to get the name registered as a nonprofit organization, he said.

"People have said things to me like, 'You might as well have called the business "liars for hire." ' That's because society believes in double jeopardy. But people can change," he said.

"You've got to learn how to outsmart the crime," Jacobs said. "I teach people how to fish instead of buying them a sandwich. If the fish ain't biting -- change the bait."

http://www.cleveland.com/business/index.ssf/2010/10