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Instead of Job Training, This Startup Helps Former Inmates Start Their Own Businesses

Refoundry helps ex-cons avoid low-wage jobs and learn the skills they need to be their own boss.

When Ralphy Dominguez got out of prison in 2013–ready to try to rebuild his life after an arrest for selling drugs–he applied for more than 500 jobs. No one called back. So Dominguez, who had started leathersmithing in prison, decided to start his own business selling hand-crafted wallets.

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Now Dominguez is working with Refoundry, a startup social enterprise that aims to help other former inmates do the same thing. After a year of apprentice training, the organization helps ex-cons each launch their own businesses. When Refoundry is fully running, the sale of each product will help support training, so the organization doesn’t have to rely on donations.

The founders created the organization when they saw how badly the current system works. Other organizations, overwhelmed with the hundreds of thousands of people released from prison each year, work to place people in jobs as fast as possible. Most funding is dependent on getting someone into a job.

“They’re under a lot of pressure and stress to place people quickly,” says Tommy Safian, co-founder of Refoundry. (Full disclosure: Tommy is the brother of Bob Safian, editor-in-chief of Fast Company). “So they don’t really have time to do really thorough training. And a lot of the jobs they’re placed in are low wage, low-skill, or no-skill jobs that have little if any room for advancement.”

If someone does get a job, it often doesn’t last. He says that only about 25% of former inmates are still employed after a year, and 10% after three years. Over half of all former prisoners end up back in prison in part because they can’t support themselves.

The current system also costs taxpayers money; while cheaper than the $80 billion price tag of running the prison system, federal re-entry programs alone cost hundreds of millions each year and aren’t much of a bargain if they’re not working well.

“Our government is spending a phenomenal amount of money with very little result,” says Safian. “Coming from the private sector, you look at these organizations–they’re good people, working very hard, doing the best that they can under the system in which they operate. But you’d be hard-pressed to design a worse system, and you’d never ever run a private entity like this. You’d never get anyone to invest in it.”

When former inmates are forced into a standard job market that doesn’t really want them–and can’t support them well–it’s not surprisingly that they might struggle to succeed. “In state prison, you can’t have a cell phone and can’t have email,” Safian says. “We have a guy who’s never had an email account before. How is he supposed to go and find a job, and sustain that job, when he doesn’t have those kinds of skills in his own life?”

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Instead of typical job training, Refoundry wanted to build the skills someone could use to work on their own. The program focuses on furniture, because the co-founders come from that industry. Each participant will spend a year learning how to make different pieces from reclaimed wood and other recycled scraps that would otherwise end up in the landfill. Then Refoundry will incubate the individual businesses, while continuing to provide administrative support. They’ll also help market the products coming out of the program.

“It’s almost like a franchise operation, where we keep a connection to them and help them with their administrative infrastructure–all the things businesses have to deal with that they might not be equipped to or ready to take on, and which is a lot more efficient and a lot less expensive to take care of as a group than individually,” says Safian.

The concept is based on a system that the founders have already tested. Safian’s partner, Cisco Pinedo, tried a similar approach in his furniture business during the recession. When business slowed, instead of just laying off workers, he helped train them to run businesses of their own. It worked; all seven participants are still in business, and now employ 150 others in South Central Los Angeles.

It’s also something that could easily be applied to other products. “We’re doing this in furniture because we’ve been in the furniture business,” he says. “But it’s a widget. You could do it with anything.” Their goal is to create a model that other organizations can replicate and adapt.

Refoundry is currently raising funds on Kickstarter to expand its program and rent its own space to serve as a hub for each incubated business.

About the author

Adele Peters is a staff writer at Fast Company who focuses on solutions to some of the world's largest problems, from climate change to homelessness. Previously, she worked with GOOD, BioLite, and the Sustainable Products and Solutions program at UC Berkeley.

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