Winner Spotlight: Twin Cities RISE!
By: Amy Millington
What if someone told you that for every $1 you invested, you could receive a return of $7.Winner Spotlight: Twin Cities RISE!24? In today’s economic climate, you may be somewhat skeptical, but probably pretty intrigued. While they aren’t making this claim to individuals like you and me (sorry to get your hopes up!), Twin Cities RISE! is demonstrating this return on investment to the State of Minnesota. They are doing this while simultaneously putting more people to work and breaking the cycle of poverty that plagues families and communities across the state.
Started by Steve Rothschild, a former Executive Vice President with General Mills, Twin Cities RISE! engages under- and unemployed adults—primarily men from communities of color—in an intensive program that trains them for, and ultimately places them in, skilled jobs. What makes the organization’s approach unique is the outcomes-based payment model it advances. After initially partnering with the state to show that a successful graduate of the Twin Cities RISE! program has $31,000 of Net Present Value to Minnesota taxpayers, the organization is now working with legislators to advance a new “pay-for-performance” method of funding. The model sets impact benchmarks and tracks participant success in exchange for state government funding. And through it, the Twin Cities RISE! team is not only able to demonstrate the ongoing quality and value of their work, but also increase interest and funding into effective workforce development strategies.
Here’s how it works. The State of Minnesota pays Twin Cities RISE! $9,000 when the program places one of its graduates in a job that pays at least $20,000 annually with benefits. The organization qualifies for another $9,000 payment if that graduate remains in the job for at least one year. That’s a small price to pay when you consider the program delivers more than $30 million in benefits to taxpayers. Through reduced welfare costs, increased taxes and reduced criminal justice costs, Twin Cities RISE! helps to turn tax users into tax payers, and helps them stay there. Taken together, that equates to a staggering 624% return on investment to Minnesota and a payback period of less than two years.
But what makes this model most incredible is the lives it changes as a result. Twin Cities RISE! primarily serves the very hardest to employ. 84% percent were unemployed at program start in 2010. For those who did report earned income, the average annual wage was $7,125. Participants also faced an average of 3 barriers to long-term employment (whether unstable housing, mental health or other serious health issues, learning disabilities, unemployment for 12 months or longer, unstable or no child care arrangements, or history of physical or emotional abuse). In addition, approximately 59% had prior criminal convictions.
From these challenging beginnings, Twin Cities RISE! helps put its participants on the path toward long-term economic independence. In 2010 alone, program graduates earned an average salary of $24,655 per year. Of these, a full 83% of participants remained in their placements for at least a year. For people who have consistently been underserved and left behind by government and business, the Twin Cities RISE! program offers much more than just a living-wage job. It breaks through generations of poverty and creates new opportunity for individuals, families and, indeed, entire communities. And, it does this all while remaining a consistently attractive investment opportunity (financially and socially) for the State of Minnesota. That is a powerful combination.
Twin Cities RISE! is now working to apply its “pay-for-performance” model to other areas around the country. It has already been specifically cited by the House of Representatives in the FY11 Labor, Health and Human Services, Education, and Related Agencies Appropriations Committee Report as a successful practice to be replicated by the Administration in its $338 million Workforce Innovation Fund that is designed to scale successful local workforce strategies. And the model has been highlighted as a demonstration project to be duplicated by the Department of Labor in pending job training legislation. We’re excited by all the progress so far, and are pleased to be supporting Twin Cities RISE! as it continues to demonstrate impact in Minnesota and beyond. We’ll be sure to keep you updated!