Move to help ex-offenders launch their own businesses
Asset manager Meridian agrees to undertake pilot program in Maryland
While serving a stint in prison for drug distribution six years ago, Robert Wilson began developing his plan. He would form a nonprofit to buy a few vacant houses, renovate them and turn them into transitional housing for ex-offenders, with counselors and other employees to help them readjust to society.
Out of prison for about a year now, Wilson, 69, plans to pitch his plan soon to Meridian Management Group, an asset manager that typically invests in minorityand women-owned small businesses with the help of state funding.
Maryland lawmakers passed legislation last session requiring the Department of Labor, Licensing and Regulation to develop a pilot program to help ex-offenders start their own businesses. But the effort was never funded, and instead Meridian, which gets about $1.5 million from the state each year to invest in small businesses, agreed to undertake a similar program.
“We specialize in dealing with entrepreneurs and companies that can’t fund themselves through conventional means,” said Stanley Tucker, the president and CEO of Meridian. “They can’t go to banks for their needs. That’s our niche.”
Ex-offenders face barriers to employment because of their criminal records, and state and local governments recently have attempted to address the issue with legislation. For instance, in 2014 Baltimore’s “Ban the Box” legislation barred employers from asking about a candidate’s criminal history until after a conditional job offer was extended.
State Sen. Catherine E. Pugh, who sponsored the legislation passed last year, said she was inspired by an experience she had five years ago while campaigning. She stopped in an automotive repair shop at the corner of Gwynns Falls and Tioga parkways and asked the owner if she could put a sign up in his window. The owner told her he remembered her because she spoke at his graduation from GED classes while he was in prison. She had told his graduating class that they should start their own businesses if they had the capacity to do so.
“Rarely does someone walk into a business and ask about your background,” said Pugh, a Baltimore Democrat who is now running for mayor. “They want to know about the quality of service.”
While the Department of Labor, Licensing and Regulation was required by Pugh’s legislation to start a pilot by Jan. 1, 2016, agency officials said they never got the needed funding.
“She had a great idea, but we haven’t heard back about the funding so we can’t move forward,” DLLR spokeswoman Maureen O’Connor said.
The agency is committed to helping ex- offenders and oversees an array of other programs, including an internship for inmates at Vehicles for Change, a nonprofit that fixes up cars and sells them to those who can’t afford to buy one. After hearing about the legislation, Tucker reached out to Pugh and offered to help. Meridian, which manages a mix of economic development and private equity funds, has a $20 million fund made up of state money and the returns from 30 years of investing in small businesses.
The company agreed to run what would serve as a de facto five-year pilot program that could serve as a guide for more permanent programs later, Pugh said.
Kelly M. Schulz, the DLLR secretary, said she was open to that.
“I’d be willing to say it may not take five years in order for them to come to us and say this is plan where we can provide a valuable service to ex-offenders,” Schulz said.
Wilson, who said he spent seven years in prison, said many people he was in prison with don’t think about the possibilty of starting their own businesses.
“You’ve got a lot of people that jump over entrepreneurship and become employees, and they don’t even think they can actually do that kind of stuff,” he said. “Some people don’t have the energy or the motivation to become entrepreneurs.”
Wilson said his circumstance was different because he’s owned several businesses in his life, including barbershops, a bailbond company and a corner store.
Tucker said Meridian is working with Morgan State University’s Entrepreneurial Development and Assistance Center to identify potential candidates who have business plans and will make pitches to Meridian. Tucker said they hope to have a group of 10 candidates and invest in about seven of those.
“If it makes sense and we feel comfortable with it, we make an investment,” Tucker said. “We want to help these folks become productive citizens where they can develop a business, to hire, ideally, other offenders.”
Tucker said Meridian also will train those applying on how to put together business plans and execute their strategies.
“They think these guys won’t give them a chance,” Tucker said. “You want them to become productive citizens, and they need the appropriate training to do that.”
“We want to help these folks become productive citizens.” Stanley Tucker, Meridian Management