As a microlender, Galen Gondolfi of St. Louis-based Justine Petersen knows there is no substitute, when trying to help a family stabilize their finances, for actually showing them some money.
That’s why he thinks the agency’s new effort in partnership with the U.S. Small Business Administration (SBA) and the W.K. Kellogg Foundation has the potential to actually help a very vulnerable group of people: ex-offenders.
“I think this program is dynamic and unique and poised to be successful because capital is involved,” said Gondolfi, senior loan counselor and chief communications officer at Justine Petersen.
The new program is the Aspire Entrepreneurship Initiative, a $2.1 million partnership to expand access to entrepreneurial education and microloans for formerly incarcerated individuals, with a specific focus on those who are parents. Initial rollout for the initiative is planned for St. Louis, Detroit, Chicago and Louisville.
“Not to disparage other programs, but a bevy of efforts to help ex-offenders don’t have at the end an opportunity for participants to borrow money,” Gondolfi said. “Capital is lacking in most programs. There is a lot of coaching and education and putting people in seats, but no capital. This is different.”
In the partnership, Justine Petersen will provide the entrepreneurial education program, the SBA will work with microlenders to make capital available for program participants (as well as oversee strategic planning for the pilot initiative and evaluate its effectiveness), and the Kellogg Foundation will put up the money and provide matching revolving loan funds.
The partnership is a pilot initiative, but Justine Petersen is on familiar ground.
“We’ve done this,” Gondolfi said. “This is not new territory. Justine Petersen has a proven track record of empirically, tangibly loaning dollars to people in need.”
According to its most recent published annual report, in 2014 the micro-lender provided $13.6 million in loans to 800 micro-enterprises. Nearly two-thirds (64.5 percent) of those dollars were loaned in the St. Louis metro area, and that number goes up to three-fourths (75.6 percent) when you factor in the Metro East. Providing loans in the pilot’s other target cities also would not be new, as Justine Petersen has fostered loans in 14 states.
The Aspen Institute reported a 96 percent survival rate for businesses that received Justine Petersen loans in 2014. And the Aspire Entrepreneurship Initiative is certainly intended to create new businesses, but its focus is closer to home.
“This began with the Kellogg Foundation wanting a robust program with an emphasis on parents – participants must be parents,” Gondolfi said, with an emphasis on parents with children from birth up to 8 years old.
“This is very much about stabilizing family budgets and households. It’s not only about empowering individuals, it’s about empowering the family unit and helping children to develop and hoping to stabilize households early in the development of children.”
According to the SBA, an estimated 60 percent of formerly incarcerated individuals remain unemployed one year after their release, raising the risk of recidivism and resulting in lost lifetime earnings. This cycle has major implications for American families, as nearly half of all U.S. children have at least one parent with a criminal record.
In 2015, SBA expanded its Microloan Program to small business owners currently on probation or parole. This partnership expands on that policy change to give parents the opportunity to generate income and create economic prosperity for their families, the SBA said.
“It is vital that parent returning citizens have the opportunity to create economic prosperity for their families,” La June Montgomery Tabron, president and CEO of the W.K. Kellogg Foundation, said in a statement.
“One path to that success is creating more opportunities for entrepreneurship by opening access to the capital and training needed for parents to become small business owners in their communities. By giving parents a second chance, we are also giving their children an opportunity to succeed.”
For more information, contact Tamra Thetford of Justine Petersen at 314-533-2411 extension 105.
