Community Ventures. Community Ventures

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1 Community Ventures Community Ventures Announced in March 2012 by Governor Rick Snyder as part of his Public Safety Special Message Four Michigan Cities (Saginaw, Flint, Pontiac and Detroit) were in the top ten in violent crimes in the United States Goal To connect structurally unemployed residents to a career pathway out of poverty Launched in 2013 with a $10 million budget Goal 1,000 full time jobs, sustainable, pay living wages 1

2 Community Ventures Clients Our target population are those who have barriers to employment and are disconnected from resources. Specifically, government program participants who remain unemployed even after connecting to workforce development/training resources. Recipients of Public Assistance Benefits Ex offenders Disabled Veterans Limited work experience Limited education Typically living in poverty Recovery not reaching the poor Michigan Poverty & Unemployment Rates US Poverty Michigan Poverty US Uenemployment Michigan Unemployment Linear (Michigan Unemployment) DRAFT for discussion only 2

3 Talent ~250,000 CV eligible residents Proximity to jobs Offender status Disability Lack of education and training Limited work experience The Problem Businesses ~45,000 unskilled jobs available (MiTalent.org) Hiring practices screen people out/avoid risk Lack of job specific training resources to support unskilled talent Retention (turnover costs) Proximity to talent Community Ventures Target communities with a 20+ percent poverty rate Addresses the core problem instead of the symptoms Full time jobs, sustainable, pay living wages Advanced access to employer hiring needs Provides customized and targeted wrap around support 2 year commitment for CV participants Solves entry level talent recruitment/retention for employers Employer Resource Network (ERN), enable B2B best practices Strategic utilization of existing workforce ecosystem Avoids duplication of efforts Return on investment to stakeholders/funders Pay for performance 3

4 Community Ventures Pilot Results Program Outcomes More than 4,100 full time jobs 69% job retention rate Measured after 12 months of employment Average wage is $12.17 per hour Crime reduction in all CV communities* CV employer network of over 120 companies The breakeven point for the two year pilot (FY 13 and FY 14) was 14 months *Primary impact from MSP and local PDs. Nexteer Automotive (Saginaw) based on the positive impact of our success coaching and soft skills training program the CV employees at Nexteer have an overall retention rate of over 80 percent. YouTube video: Jeff Little Success Examples Detroit Chassis & Travis Detroit Chassis was our first company to sign on to CV and Travis is a success story who achieved 2 years of employment on May 28. YouTube video: Travis Butler 4

5 What others are saying about CV In Michigan, a program called Community Ventures not only helps place individuals in jobs but also goes further by providing a set of services that make it easier for workers to stay in those jobs, such as assistance in arranging transportation or child care in a pinch. What others are saying about CV Community Ventures represents an innovative approach to connecting structurally unemployed individuals to long term employment opportunities. The program combines elements typically found in isolation in economic development programs or workforce development programs to create a smarter system that allows for greater flexibility Professor Elizabeth Gerber, University of Michigan s Ford School of Public Policy,

6 Payback (ROI) Formula Tax Payments (income, payroll, and sales taxes less applicable credits) Ex Offenders Recidivism improvement Public Assistance Programs Cash, Food Stamps, Housing, Healthcare, Childcare Disabled (Supplemental Security Income) Community/Crime reduction Consulting Engagement Report State of Michigan Michigan Economic Development Corporation Community Ventures Program Financial Modeling and Program Optimization August 2015 Office of Internal Audit Services Jeffrey S. Bankowski Chief Internal Auditor 11 Community Ventures ROI Audit Analyzed data from 2,788 CV participants FY 13 and FY percent were clients received public assistance benefits 22 percent were ex offenders 2 percent were persons with disabilities Participants showed significant reductions in public assistance benefits The 1 year recidivism rate for CV participants was 5 percent versus 15 percent for other ex offenders The breakeven point for the two year pilot (FY 13 and FY 14) was 14 months Source: Michigan Department of Management and Budget, Community Ventures Program Audit,

7 Where do we go from here? Expand pilot to include other Michigan Communities with 20+ percent poverty rate Target annual placement of 10,000 people by 2020 Formed 501c3 Community Ventures of Michigan Targeting grants from federal government and philanthropy to match State of Michigan funds Secure long term funding via Social Impact Bonds National Scalability Why does this make sense? Poverty, crime and violence is a national problem Structural unemployment is a national issue Recidivism for ex offenders nearly 60 percent Lack of adequate transportation (proximity to suburban jobs eliminates urban talent) Opportunity to target Federal Government $$$ in collaboration with other states Supports foundations national programmatic interests Crowd funding opportunities Businesses with multi state locations view CV as a solution to their entry level talent recruitment 7

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