This is one case study in Impact to Last: Lessons from the Front Lines of Social Enterprise, a REDF case study initiative.
The Cara Program (TCP) is a rigorous life and career skills training, placement, and retention program working with approximately 1,000 individuals annually. TCP’s flagship social enterprise, Cleanslate Chicago, helps individuals secure transitional employment and valuable job skills in neighborhood beautification, while also serving as a catalyst for community renewal in many Chicago neighborhoods. TCP has placed over 4,800 individuals into jobs since 1991. The Cara Program’s stability and solid foundation for growth are the result of many important factors, including:
A key funder with the vision and means to push the organization forward. Entrepreneur Tom Owens was the founder and key funder in TCP’s early years, providing (to this day) an important source of flexible capital.
A renowned, transformative approach to service provision. TCP includes a number of strong cultural elements that breed an environment of both high accountability and high support, with merit-based navigation through and graduation from the program. TCP’s approach is known as a high-touch and relatively high-investment, but with deep and sustainable impact.
Reliable, quasi-governmental customers. Chicago’s Special Service Areas, similar to business improvement districts in other cities, make up over 65 percent of revenue for TCP’s largest business, Cleanslate. TCP also has several important Anchor employers, such as ABM. The commitment of these employers to train and place TCP graduates is integral to the success of the program.
TCP’s current, proven approach has remained relatively stable for the past five years since being refined through student interactions and outcomes. TCP is now working toward an ambitious goal of doubling its number of job placements by 2017. The introduction of new database and tracking systems, an understanding of program efficiencies, improved financial sustainability, efforts to diversify customers, and a strong brand identity are providing the foundation for expanded outcomes, allowing the staff and board to consider how to scale more aggressively still.
TCP works with individuals affected by poverty and homelessness—referred to as “students” in order to signify the continued learning in life. Prospective students are referred from community partners, screened and interviewed by TCP staff, and must pass a drug test and be clean and sober to begin the program (and remain in good standing). Most importantly, the student must demonstrate a clear commitment to making a change in his/her life in order to gain admission to Cara’s core programs. In TCP’s early years, attrition was a big problem. However, by focusing intently on training, retention, and the sourcing of students, the admissions process has become particularly rigorous. TCP devotes considerable resources to helping students succeed, and all students are given a “four strikes and you’re out” rule from the beginning, so those not committed to the work are asked to leave.
TCP currently operates three social enterprises:
- Cleanslate. TCP’s flagship neighborhood beautification service employs approximately 50 students at any one time and provides 200-250 transitional opportunities per year.
- TCP Staffing. A contract firm that places another 75-100 students in temporary and temp-to-perm third-party jobs.
- Chapter Two. A second-hand book collection and resale/recycling business that operates as a line of business of Cleanslate.
By way of illustrating TCP’s approach, employees at the largest enterprise, Cleanslate, are known as “interns” and come to the business primarily through TCP and a small group of trusted outside referrals. More than 80 percent of Cleanslate interns are TCP students. These workers are “more stable, do better work, and have less attrition because of the support they receive through TCP,” according to Cleanslate’s Managing Director, Brady Gott. Cleanslate interns work an average of 20 hours per week at minimum wage, although some interns with special skills, including those operating equipment, plowing snow, or overseeing projects, receive higher wages. All interns work as part of a crew, managed by a supervisor, and are evaluated at the end of every shift. On average, interns stay at Cleanslate for six months.
The Cara Program’s service delivery model includes four elements:
- Sourcing and admissions
- Life and career skills development
- Quality job placement
- Stability, retention, and advancement services.
Life and career skills development is the backbone of TCP. Every day begins with Motivations—a practice of physically gathering in a circle as a community (primarily staff and students) to directly share testimonials, provide educational insights, and draw people out of their comfort zones. As part of the life skills training, students attend classes on topics including TCP’s “Five Transformations” (Change Your Behavior, Look with New Eyes, Think Outside the Box, Don’t Relax, and Know the Deepest Truth of Who You Are), team building, conflict management, and the harder topics of forgiveness, love, and personal discovery. These classes are taken alongside career skills trainings including professionalism and customer satisfaction, resume building, interview techniques, financial literacy, and on-the-job professional development.
TCP’s program is a merit-based model, which means as long as a student remains committed to and in compliance with the rigor of the program, TCP will support them until they are placed in permanent employment. As part of the path to employment, students work through their coursework and with their coaches in order to be eligible for external placement interviews. To be considered representative of the TCP brand, students must meet certain competencies in personal presentation, attitudes, and behavior, which have effectively become a seal of approval employers can trust. According to staff, TCP is affirming that “We have vetted this person and they will honor The Cara Program and have higher retention rates than other candidates.” TCP students are hired by a range of large Chicago businesses, including ABM, Chicago Transit Authority, Eataly, and Rivers Casino.
TCP’s approach is considered a high-touch, high-impact intervention in the world of workforce development, and represents a relatively significant investment as a result, at approximately $6,500 per employed student.
TCP was created in 1991 by Tom Owens, an entrepreneur and former IBM executive, after he sold his own PC leasing business. Owens was eager to make a difference in his community, and having befriended Mother Teresa over the years, was also committed to rolling up his own sleeves. At the suggestion of an influential network, the Coalition for the Homeless, Owens created TCP—attempting to fill a void in the services landscape by serving people who were determined to enter the workforce, but lacked the opportunity to do so because of homelessness and poverty. In the early days, Owens drove from shelter to shelter to meet with women eager to work, and then leveraged his professional network by sending them out for interviews with old work colleagues.
Owens incubated the organization within Catholic Charities for a few years before deciding it was time to grow TCP by diversifying revenue and building organizational capacity. He provided $400,000 in seed capital and hired TCP’s first CEO, Eric Weinheimer, to lead this strategic growth. TCP operated out of a convent on Chicago’s West Side from 1996 until 1999, when it became a 501(c)(3) organization. Over the next 15 years, Weinheimer and Owens honed an increasingly disciplined focus on job retention and preparing students with the life skills necessary to succeed in a competitive business environment.
Creating an Identity
TCP’s current model has evolved over time. When Weinheimer was hired in 1996, there was significant participant attrition and he realized some type of core training would be necessary to prepare participants for permanent jobs – which led to the creation of the training department. The training curriculum has also been iterated and improved upon with feedback, primarily from TCP students (and their employers) and by observing behaviors and outcomes.
In 2001, the programmatic practice known Motivations became an integral element. Every day at TCP starts with Motivations—a gathering primarily of students and staff, but also of visiting customers, service providers, and guests. Key stakeholders like customers and funders that have observed and participated in Motivations emphasize how moving it is, which exemplifies TCP’s focus on personal transformation. TCP’s training program is not just about job skills, but also socio-emotional health, in order to “quiet the noise of life” while pursuing a career, explains TCP President and CEO Maria Kim. TCP’s provocative, non-traditional workforce training – classes on love, forgiveness, and even job termination—differentiates the organization and provides the backbone of success. By creating “chaos” in the safe environment that is a classroom, TCP finds that students are more ready to tackle life and work with confidence, says Kim.
Growing the Social Enterprise Model
Cleanslate, TCP’s first social enterprise, was created in 2005 to deliver neighborhood beautification services in communities in search of revitalization, while also providing critical skill building opportunities for those toughest to employ. Cleanslate has expanded its portfolio over the years and now provides services such as street cleaning, snow removal, graffiti removal, power washing, and landscaping. Approximately 65 percent of Cleanslate’s revenue comes from Special Service Areas (SSAs)—quasi-governmental entities that use tax dollars to provide neighborhood services, including beautification.
For the first five years, TCP and Cleanslate worked hand-in-hand, each sometimes leading and sometimes following, as is necessary when managing the “mission versus margin” tension and opportunity. As with many start-ups, Cleanslate operated with significant subsidy and, by 2011, had borrowed up to $1 million from TCP to continue operations. However, the closeness between the two organizations created problems, particularly in the areas of culture and operations. Although Cleanslate was legally separate, it still operated effectively as an extension of TCP. Case in point: Cleanslate interns were answerable to TCP and, during this initial phase, could be pulled back into the parent organization at any time in order to pursue job placement opportunities, creating uncertainty and instability in overall staffing. Cleanslate staff were also required to attend all TCP meetings, making it difficult to focus entirely on clients.
While not one of TCP’s current enterprises (the business has since folded), TCP’s second social enterprise, 180 Properties, was created in 2009 as a property preservation joint venture with another local nonprofit, with the goal of responding to the foreclosure crisis. During the first two years of operation, TCP invested heavily in the business, raising approximately $2.3 million in grants with a joint venture partner, as well as assisting in securing $1.5 million in loans. The funds supported 180 Properties’ early-stage growth and provided space for staff of both the enterprise and TCP to work through a range of challenges and business model readjustments, including placing more emphasis on industry expertise.
Revision and Rethinking of the Program’s Building Blocks
Faced with new opportunities and challenges, TCP spent late 2009 to 2011 reexamining its relationships with both Cleanslate and 180 Properties, as well as the connections between the two enterprises. Updates were made at both businesses to allow for growth in all areas.
In late 2011, TCP determined that, in order to succeed sustainably, Cleanslate would need to operate as competitively as its commercial peers. Dwindling government grant funding for transitional jobs compelled Cleanslate to pursue a self-sustaining revenue model without capital infusions from TCP. The ensuing process—dubbed “the remix”— has ultimately resulted in a stronger, more independent Cleanslate, better positioned to meet its operational needs by generating revenue. The process entailed: • Hiring a new managing director
- Changing the pay and benefit structure of Cleanslate employees
- Lowering expectations for the provision of transitional employment (while still sustaining opportunities for over 200 TCP students per year)
- Improving focus on metrics and the business model
The transition was challenging. Longstanding program staff and managers worried there was a risk of losing focus on social mission. However, new Managing Director Brady Gott successfully led Cleanslate to break even financially by 2012 while providing 250 transitional jobs in total for TCP’s target population.
Internal and external challenges in the property preservation space led 180 Properties to restructure in 2011. These challenges included:
- The loss of 180 Properties’ Anchor customer
- The robo-signing crisis in late 2010, which put a temporary freeze on foreclosures
- Difficulties creating an efficient staffing structure for good times and bad
- The unexpected need to pivot from highly transactional work to light rehabilitation
- The impact on cash flow caused by the ensuing transition from transaction-based billing to work-in-progress billing
The setbacks proved too much for 180 Properties to overcome. While the joint venture partner worked with 180 Properties to revitalize the business, there simply was not enough capital to sustain it, leading to its bankruptcy in August 2014. While 180 Properties did not achieve the outcomes TCP had hoped for, many positive and pivotal lessons came from the experience:
- The business preserved more than 5,000 homes per year, creating hundreds of safer passageways in communities most stricken by the blight of foreclosure and helping to stabilize and reclaim neighborhoods truly block by block.
- It employed more than 62 temporary interns and 49 permanent workers facing the highest obstacles to employment (recent incarceration, chronic unemployment and homelessness, and limited education). • TCP students were employed long-term for the most part and acquired marketable skills leading to subsequent work.
- Staff learned to deal with issues related to the concentration of revenue and business infrastructure that are now being applied to Cleanslate and other social enterprises. SSAs are a critical, Anchor customer for Cleanslate, for example. However, their financial well-being is closely tied to the ebbs and flows of government budgets. Increasing revenue from other sources—and reducing the portion of Cleanslate’s income from SSAs to 50 percent—is of the highest priority.
The foundations for scale: A proven model based on years of learning
TCP’s development in the last five years has been characterized first by consolidation, then by growing confidence in a business model that—despite 180 Properties’ difficulties—includes large and active social enterprises, strong retention numbers, and solid operational infrastructure, providing an important stream of intelligence. With a focus on metrics, TCP evaluates students daily; keeps a close eye on funding diversification; and tracks every placement by type, industry, and date. According to a major funder, TCP has more effectively communicated outcomes in the last few years.
In 2012, TCP adopted an ambitious strategic plan to double the number of jobs created in five years: a target of 3,500. Although placement numbers jumped in 2013 and 2014 and the goal remains attainable, a number of factors will determine whether TCP succeeds by 2017:
- Growth of social enterprises. In 2013, TCP Staffing was created as a response to the need for a more agile workforce in a still volatile economy (TCP Staffing was the third enterprise created by TCP overall and is the second still in operation). TCP Staffing is a triple win for the organization: it gives firms access to a quality talent pipeline, connects students to temporary opportunities where they gain valuable work experience, and generates earned income for the organization. TCP added a fourth, separately-branded social enterprise in 2013, Chapter Two, which operates as a subsidiary of Cleanslate (and remains TCP’s third enterprise still in operation). Chapter Two is a book recycling business that provides students with the opportunity to use computer skills as well as build experiences in inventory/ warehouse management and logistics.
- More strategic client partnerships. Cleanslate’s dependence on SSA customers is one reason TCP is working hard at developing a more diversified base of clients. TCP Staffing is similarly concentrated, providing over 50 percent of its placements to one partner organization. Addressing the need for diversification is essential.
- Differentiation in training/inventory management. TCP is a training program for students, but also a pipeline of candidates for job placements. On occasion, TCP has an “inventory problem,” Kim explains, with student skills mismatched to the demands from partner companies. By better targeting skills to high-growth |industries, TCP will be able to more readily fill job openings.
Another important recent development was the transition in 2014 from Weinheimer to Kim as President and CEO, and from Tom Owens to Bill Conroy as Board Chair. Kim was Chief Operating Officer prior to the transition and had been overseeing the organization. For board members and funders alike, Kim’s experience as COO was reassuring, and her transition has been seamless. As Board Chair, Conroy enjoys Owens’ deepest confidence as he brings fresh energy to tackling some big strategic questions.
Performance and Impacts
TCP measures financial and social success in several ways. TCP’s social performance focuses on three key metrics:
- Number of permanent and temporary placements per year
- Quality of placements (based on hourly wage and hours worked)
- One-year job retention
Since 1996, TCP has worked to craft an effective model of training and job placement. Student retention, job placements, and wages earned are the three metrics used to measure achievement. Data in recent years shows improvement on all three indicators, which is encouraging as the organization looks to meet its five-year job creation goal set out in 2012.
TCP continually assesses the effectiveness of the program by measuring its ability to meet the needs of three customer groups: students looking for jobs; employers seeking qualified candidates; and communities seeking safe, clean, and vibrant neighborhoods for raising families. In fiscal year 2013, TCP students placed in permanent jobs worked 443,949 cumulative hours, earned over $4 million in wages, saved an average of $620, and paid nearly $100,000 in taxes. Eighty percent of students were in permanent housing 12 months after coming to TCP, compared to 30 percent at admission. Cleanslate employees helped revitalize local communities by collecting 1,457 tons of waste and plowing 40,796 tons of snow.
At the halfway point of its current strategic plan, TCP is tracking well on job placement/ retention and has raised $3.7 million of a total $5 million fundraising goal. For many years, TCP was dependent on a handful of funders, with the Owens Foundation making up at least 20 percent of the organization’s support until 2004. All organizations seek a healthy mix of revenue as a pillar of sustainability, and in TCP’s case, achieving diversification has been a standout achievement (and remains an important measure of financial health).
Along with revenue diversification, TCP tracks several other financial metrics for the purposes of providing insight into its own sustainability. Staff also measure the direct margin, net income, and net operating surplus for each enterprise, building on the experience of tracking this information for Cleanslate.
In TCP’s own telling, the organization is 18 months away from proving the scalability of its model, both to itself and the outside world. Staff are highly motivated to reach TCP’s five-year goals and will have doubled the rate of job creation in the previous decade if successful.
TCP staff are also being challenged as never before by the board, including on the question of scale. According to Conroy, the board’s current struggle is to decide “How hard do you push given the good work [staff] is already doing?” The board sees its revitalized role as seeking a new level of achievement, but also working to put the support systems in place that will allow for future growth, in part by fundraising for a larger cash balance with the goal of giving Kim and her team the financial breathing room to think strategically.
As staff and board look beyond 2017, Kim is considering a three-pronged approach to exporting and integrating TCP’s model in and around Chicago and to other US municipalities:
- The launch of an institute, where individuals would spend an intensive amount of time with TCP in Chicago learning the model
- A more intensive internship form of training, with third-party organizations in search of workforce development solutions embedding staff within TCP for several months in order to learn the model
- Wholesale exporting, whereby TCP would modularize the services they offer for agencies looking to build on the work they are already doing
In terms of TCP’s plans to replicate its social enterprises in new locations, Kim cites the danger of failing to assess whether the desired market already possesses the necessary resources and ample competition. “We don’t want to supplant what already exists. We want to go in and say ‘Where are the gaps, and how can we help fill them?’”
There are a range of strategic questions that remain unanswered and are the subject of concerted reflection and planning at TCP:
- Impact. Although the organization creates jobs for thousands of individuals, what is the measurable impact when considering there are hundreds of thousands more individuals in need, in Chicago alone?
- Replication. What are the essential elements of the model that must be maintained in any replication, and the elements that could be adjusted per market, thereby reducing costs?
- Employee supports. Is there more that could be done to adjust the intensity of the engagement with students, in response to their differing and evolving needs?
TCP has a significant, demonstrated impact on the lives of individuals, particularly when measured by retention rates according to the organization’s funders. However, the deep obligation that staff and the board feel to serve more students underlies a relentless effort to continue to scale. In founder Tom Owens’ words, “In Chicago, there are 600,000 people living below the poverty level. We’ve provided help to 5,000, maybe assisted 30 to 40,000, including families, but we haven’t scratched the surface. We need to be able to describe the TCP mission as a fight against extreme poverty.”