|
|
|
|
|
|
|
|
For many years, the Department of Labor has emphasized the importance to YouthBuild grantees not to rely on Federal grant funding for sustainability. YouthBuild grant organizations need to plan ahead for the possibility of a period without Federal YouthBuild funding or some other portion of funding support that may be inconsistent. The strongest organizations are those that have multiple funding options that they can control and grow independently of Congress or private foundations. This month’s newsletter highlights some of the innovative sustainability approaches savvy YouthBuild programs have used successfully. ~ Jenn Smith, National YouthBuild Director, U.S. Department of Labor
|
|
|
|
|
|
|
Sustaining and Growing Your YouthBuild Program: Developing Resources Beyond Government Grants
|
|
There are many ways in which YouthBuild programs can develop long-term funding strategies that allow for sustainability. The challenge for many YouthBuild programs is that external funding opportunities may be tied to program expansion (e.g. number of participants served), development of programming that targets a new population or issue, or requires an infrastructure (e.g. development department or large donor base) that many organizations do not have. In addition, government and private funding ebbs and flows with increased competition for ever shrinking dollars.
Considering these realities, YouthBuild programs (or their sponsoring organizations) should consider developing self-reliance models which allow for long-term sustainability and growth. New funding streams that are not reliant on external funders allow for a growth mindset, as opposed to a survival mindset. They also provide flexible funds, whereas most government and philanthropic funding restricts how dollars can be spent. Additionally, these strategies support diversification of funds in the organization’s portfolio.
YouthBuild sponsoring organizations have typically utilized one of three models to grow and sustain their funding: earned income business, social enterprise, and pay for success.
Earned Income Business
Also known as fee for service or income producing business, this model is the “easiest” to understand and build from. It is a payment model in which services are unbundled and paid for separately (e.g. handyman business) or the type of business that generates income for goods and/or services (e.g. museum store, hall rental).
Questions organizations need to ask themselves when considering this model include:
- What services, products, etc. does your organization already produce or have in place?
- Does your organization have a lot of community foot traffic?
- Do you have access to a labor pool?
- Does your organization have any special expertise or skills that you can market/sell?
- Does your organization have facilities/equipment you can rent out?
- Can you spin off ideas from your organization’s mission?
Social Enterprise
The Social Enterprise Alliance defines social enterprise as “organizations that address a basic unmet need or solve a social or environmental problem through a market-driven approach.” (Social Enterprise Alliance, “What is Social Enterprise?,” https://socialenterprise.us/about/social-enterprise/, viewed November 2019.) There are three models of social enterprise:
- Opportunity employment: organizations that employ people who have significant barriers to mainstream employment
- Transformative products or services: organizations that create social or environmental impact through innovative products and services
- Donate back: organizations that contribute a portion of their profits to nonprofits that address basic unmet needs
Most nonprofits will look at the first two models of social enterprise, with the third primarily a for-profit model.
Questions organizations need to ask themselves when considering this model include:
- Do you have capacity to learn all aspects of social enterprise: asset identification, objective evaluation, market research and feasibility, customers and competition, costing and financing, sales planning, and business planning?
- Is your organization ready to move to an entrepreneurial mindset?
Pay for Success
According to the Urban Institute, “Pay for Success” or PFS, is an innovative financing mechanism that shifts risk from a traditional funder (usually a government) to a new funder (usually a private organization or nonprofit). Private investors or philanthropies provide up-front capital to implement or scale an evidence-based social program. If an independent evaluation shows that the program achieved the agreed-upon outcomes, then the traditional funder repays the new funder’s investment with interest. This method can provide for an opportunity to scale or implement new programs that may fill gaps in currently available systems or programming.
Questions organizations need to ask themselves when considering this model include:
- Have you established, or do you have the capacity to establish, partnerships with potential “investors?”
- Do you have the cash flow/credit line that is needed upfront for such an undertaking?
- Do you have the infrastructure to support this as well as meet the outcomes attached to the program?
- Are you willing to be part of a highly evaluated/structured model?
Ultimately, YouthBuild programs looking to implement one of the above funding models must do the following:
- Research the model structure you want to undertake. Understand all the potential challenges and pitfalls. Do you have the support, infrastructure, and long-term business mindset for the undertaking?
- Talk with others who have undertaken/implemented the model.
- Be candid with board and staff about the model.
- Tap into expertise.
Be sure to check out our upcoming webinar, Sustaining and Growing Your YouthBuild Program: Developing Resources Beyond Government Grants. This webinar will focus on how YouthBuild programs can sustain and grow by developing self-reliance through social enterprise, earned income business, and pay for success. An overview of these models will be presented, as well as examples of how some YouthBuild programs and their respective organizations are developing and/or implementing them. Joanna James, Executive Director of Project REBUILD, Brian McMahon, Deputy Director of Operation Fresh Start, and Jennifer Lawrence, Executive Director of the SEAT Center, will share working examples of sustainability models they utilize, and provide information on how to develop and implement these models in other YouthBuild programs.
Related Resources
Earned Income Business
Society for Nonprofits
Social Enterprise
Social Enterprise Alliance
Building the Employment and Economic Self-Sufficiency of the Disadvantaged: The Potential of Social Enterprises
The Seven Pillars of Social Enterprise Success
Pay for Success
Nonprofit Finance Fund: Pay for Success
Foundational Concepts and Terms of Pay for Success
|
|
State Level Certification and Licenses
The Council for Community and Economic Research released a blog post on November 7, 2019, “New Data on the Attainment of Certifications and Licenses,” which highlights state-level data on certification attainment. Additionally, the post indicates that “[w]hile non-academic credentials are not as common as a college degree, they do boost employability and earnings, providing opportunities for those with and without a college degree to advance their career. Attainment of certifications and licenses increases by education level and is associated with higher earnings. The full blog post, as well as an interactive state map, can be accessed here.
|
|
Consumer Financial Protection Bureau Youth Employment Success Cohort Opportunity
CFPB is seeking ten programs from across the country serving out-of-school youth ages 16-24 that are interested in starting or expanding initiatives on financial capability for young adults participating in job readiness programs. The Consumer Financial Protection Bureau (CFPB) is looking for youth employment programs that would like to join CFPB’s 2020 Youth Employment Success (YES) cohort. This cohort will focus on integrating financial capability products and services into youth workforce programs. CFPB provides support in the form of technical assistance, not grant funds, to participants.
Between January and August 2020, CFPB will provide technical assistance to ten youth workforce programs to support the integration of financial capability products and services within each program.
The project will include three phases:
- Discovery: Cohort members will explore young people’s financial strengths, challenges, and opportunities, and identify where, when, and how young people can be connected to financial products and services within the current program workflow.
- Design: Cohort members will tailor financial products and services to young people’s goals, needs, and life experiences.
- Pilot: Cohort members will pilot the delivery of new or improved financial products, services, or other supports to young adult participants.
During each phase, the Technical Assistance team will provide information, tools, and resources to support the cohort member in advancing their goals. Specific activities will vary depending on the goals, interests, and needs of cohort member organizations and the youth they serve. Cohort members will receive five learning community webinars and one in-person training at each of the cohort member’s organization.
Through this work, CFPB hopes to:
- Gain a better understanding of youth participant’s financial challenges and opportunities.
- Increase young adult’s awareness of and access to quality, tailored financial products and services that meet their needs (e.g., via a checking account, payroll card, or financial coaching).
- Equip young people who are participating in youth employment programs with tools and resources to navigate financial decisions and knowledge of where to turn for reliable financial information and support during and after they exit the program.
- Identify opportunities and resources to support broader system-wide adoption of financial capability services and approaches that support young people in learning about and gaining access to financial products and services that work for them, with a particular emphasis on learning about payroll cards and receiving feedback on a beta version of a financial decision-making tool for young people related to paying for transportation, which is currently under development. This tool was designed based on extensive input and feedback from the broader youth employment field.
Organizations that meet the following criteria will be considered for selection:
- Mission alignment: Offer year-round job training programs to economically vulnerable out-of-school youth ages 16-24 who are entering the workforce. A demonstrated interest in integrating financial capability offerings to young adult participants.
- Organizational capacity: Capacity to dedicate staff time to engage in biweekly technical assistance calls (approximately 2 hours per month), complete program discovery and design activities in between TA calls (approximately 5-10 hours per month), and participate in a 3-5 hour in-person training for staff between February and June 2020.
- Target population: Service at least 500 traditionally underserved and economically vulnerable young adults
- Youth engagement: Have established structures and communication channels to solicit input from young adult participants.
- Partnerships with financial institution(s) or payroll card provider(s): Have established relationship(s) with financial institution(s) or payroll card provider(s) to help young people manage wages or stipends.
- Willingness to pilot beta version of transportation decision-making tool: Several tools and resources will be provided for training. Among them, selected sites will commit to pilot the Bureau’s new transportation decision tool with young adult participants. This tool is under development based on feedback from youth job training programs which identified the need.
In addition to the criteria above, CFPB will consider the following factors to create a diverse cohort of youth workforce programs: program service area and location type (e.g., rural, suburban, or urban); program affiliation (e.g., nonprofit, government, trade association, etc.); relevant partner organizations; current financial capability program offerings (e.g., financial education, financial coaching, or savings opportunities); means of measurement (i.e., types of outputs and outcomes collected to track progress); and methods of payment for youth for work or training (e.g., direct deposit, payroll cards, etc.).
If you think your program and participants would benefit from technical assistance on integration of financial capability for young adults, please email Empowerment@cfpb.gov with a Letter of Interest by COB December 30, 2019. Organizations must include two points of contact (primary and secondary) in submissions as well as information about their eligibility for selection.
For more information on integrating financial capability into youth employment programs, please see the youth employment page.
|
|
Are you registered for the YouthBuild CoP?
|
|
|
Visit the CoP for access to more resources.
|
|
|
|
|
|
 |
|
|
|
|
|
