Executive Summary - Nonprofit

PRISON PROFESSORS CHARITABLE CORPORATION (“PPC”)

Employer ID: 85-2603315 / Public Charity Status: 170 (b)(1)(A)(v)

Each year, more than 1,000,000 people leave state and federal prisons to resume their life in society. Typically, people with a history of imprisonment face challenges getting into the job market. Unfortunately, even in the best of job markets, they have a hard time getting on track after a journey through prison. We want to help these people enter the employment market successfully.

We designed Prison Professors Charitable Corporation (“PPC”) as a nonprofit corporation to:

Provide books and course that we publish and distribute to indigent people in jail and prison,
Provide apprenticeships and paying jobs for formerly incarcerated people,
Provide paid internships for university students that work with us on our mission of improving outcomes for people at all stages of the criminal justice systems.

Considering what we’ve learned, we’re striving to expand. To fund that expansion, we’re seeking an initial capital raise of $250,000 through donations to PPC. Those resources will provide the capital we need to accomplish several objectives. Those objectives include:

Building a temporary staffing agency to help formerly incarcerated people transition into the job market;
Building businesses that will allow us to train formerly incarcerated people for higher paying jobs;
Using social media to spread more awareness about the collateral consequences of mass incarceration;
Developing campaigns to show the influences that overuse of incarceration causes to society.

To work toward resolving one of the great social injustices of our time, we need resources to fund PPC’s startup costs, to build infrastructure, and to build a social media strategy that will bring awareness to the ways we can improve outcomes for people that have experienced the criminal justice system.

Building a sustainable enterprise will help us improve outcomes for people that have experienced the criminal justice system at every level:

Before people go into the judicial system,
While people go through the judicial system,
While people serve time in prison,
Upon transition to community confinement,
While people complete supervised release,
As people recalibrate into job market,
For people that want to pursue clemency.
For taxpayers that want to learn more about how our system operates, and how we can improve outcomes to build safer communities with less reliance on criminal justice system, or more reliance on civil procedures.

By documenting this initiative, and creating jobs for formerly incarcerated people, we will also create an awesome opportunity for sponsors to build a mitigation story of community service. Our sponsors will show how they’ve contributed solutions in response to the collateral consequences of mass incarceration.

In this era of social justice awareness, we can have an impact on changing the way our system over-criminalizes the conduct of our nation’s citizens. Too many people are going to prison for matters that would be better served with a civil response. Further, people that go into the criminal justice system find themselves marginalized as citizens, with little access to jobs, banking, and other services.

Problem

Through our work, we’ve learned that many people leaving the criminal justice system face challenges securing employment. Some employers resist interviewing people who have a history of being in the criminal justice system.

Two reasons for employer resistance include:

Business owners do not want to increase the rates they must pay for workers’ compensation insurance; they believe people with criminal backgrounds are more prone to filing claims; and
Business owners do not want higher risk levels for wrongful-termination suits and other problems that they believe may come from hiring people with criminal backgrounds.

We are convinced that by helping people obtain employment upon release from the criminal justice system, we build safer communities.

Solution:

PPC aspires to build a temporary staffing agency that operates in states where we can build relationships with employers. We’ve created digital courses to train job-candidates on the importance of developing:

The right mindset to succeed upon release from confinement.
Better written and verbal communication skills.
Better critical-thinking skills.
A stronger work-ethic.

Over time, as we create more relationships and generate more resources, we intend to operate in multiple states where we can open relationships with prospective employers. We will start in California, a state where we have strong relationships with business owners. We have had conversations with business owners that, cumulatively, employ more than 750 people.

The initial businesses with whom we’ve spoken include:

Golden State Lumber:
- Operates multiple lumber yards in the San Francisco Bay area, employs more than 500 people,

SK Labs:
- Nutrition-product manufacturer based in Anaheim, employs more than 100 people in Orange County,

Pandora Marketing:
- Marketing company based in south Orange County, employing more than 100 people.

Further, Earning Freedom, a California subchapter-S corporation that Michael Santos created to address the collateral consequences of mass incarceration has two for-profit subsidiaries:

Prison Professors, and
Compliance Mitigation.

The subsidiaries work with a business-to-consumer market, a business-to-business market, and a business-to-enterprise market. Together, the entities are part of an ecosystem we’re creating to provide solutions to collateral consequences of mass incarceration. In our view, those collateral consequences include:

Obstacles to entering the employment market,
Obstacles to accessing financial services.

The nonprofit entity, Prison Professors Charitable Corporation will expand its mission to provide jobs for formerly incarcerated people that we will hire through the staffing agency we’re building. Further, we are creating internships to teach skills that formerly incarcerated people can use to transition to higher income levels. While working to create our system, we will simultaneously work to resolve other collateral consequences, such as access to banking and financing for people that have gone through the system.

Funding:

Our team at PPC has launched a fund-raising initiative to cover costs that will allow us to become operational and sustainable. We initially set a goal of raising $250,000. Since then, we’ve raised our funding quest to $500,000, assuming we achieve specific milestones.

Depending upon the amount we raise, we will provide apprenticeship programs for other formerly incarcerated people and document their progress. As of June 20, 2021, we have received the following commitments:

Jerry Lundergan: $10,000 (Received)
Jim Patterson, $25,000 (Received)
Jerry Lundergan, $12,500 (Received)
Anonymous (at request of donor) Foundation, $10,000 (Received)
Jerry Lundergan, $12,500, Pledged to send
Dr. Schlomo Schmuel, $25,000+ on or before August 1, 2021

As of July 10, 2021, the balance in our nonprofit bank account is $51,861

As we grow, we will need additional resources. The initial funds we have in place will allow us to pay insurance premiums, bonds, and to hire support staff. We will also need resources to fund payroll and administrative costs while we await revenues from customers that hire the labor our temporary-employment agency will provide.

As the founder of the nonprofit, assuming the board approves, Michael Santos makes a commitment to provide a loan of up to $100,000 to the nonprofit if we need additional resources to become operational. Michael Santos has already invested more than $10,000 to develop the nonprofit. Once the nonprofit builds a larger resource base, Michael Santos will ask the board to repay the documented expenses he has made to launch the nonprofit.

Value Proposition:

The following factors convince us that we’re in a unique position to build and operate this venture.

First, we have an extensive library of digital courses that will help job candidates develop the right mindset to succeed. More than 100,000 people in jail and prison currently use digital courses we’ve created. All of our courses offer training on the path that other people have used to prepare for success.

Second, the leadership behind PPC has experience overcoming the challenges that accompany a criminal conviction. Members of our team served time in prison but emerged to build strong and successful careers. We have credibility with the group we serve.

For more about our management team, see Business Overview: Management Team section below.

Third, as a nonprofit, we will offer labor to companies at breakeven levels. We will seek relationships with business owners and sponsors that want to contribute to our mission of resolving a social injustice—the collateral consequences of mass incarceration. The manner in which we intend to contribute solutions to collateral consequences include:

Providing more learning materials to people in jails and prisons,
Opening employment opportunities for formerly incarcerated people,
Opening relationships with financial institutions to help formerly incarcerated people resolve access to banking services,
Using social media to bring more awareness of injustices of mass incarceration,
Creating pathways for formerly incarcerated people to restore their reputation and obtain professional licenses,
Assisting to resolve other collateral consequences of mass incarceration.

The sponsors and business owners with whom we’ve opened a dialogue understand the ripple effects of mass incarceration and the social purpose inherent in our mission. They want to become part of the solution. As such, those business owners have agreed to collaborate with us in providing jobs, but also in opening relationships with other business owners that may agree to support our efforts.

Once we’ve built the infrastructure, we will need marketing materials to help us open relationships with halfway houses, jails, prisons, and social-service agencies. Those institutions will provide us with a supply of labor that we can place into the employment market.

Business Overview

PPC seeks financial sponsorship to expand its services. When we organized PPC as a nonprofit entity, we stated that we exist to provide books and courses to people in the criminal justice system. In response to the injustices that we have seen in the employment market, we seek to expand our mission. We want to contribute solutions to resolve bigger societal problems.

As stated above, our current plan is to launch a temporary staffing agency. Strategically, we will start in California. As we build our processes, procedures, and relationships, we will expand to other states.

Members of our leadership team have extensive expertise in the following disciplines:

Law,
Accounting,
Business,
Human Resources Management,
Business Development,
Entrepreneurism, and
Project Management.

Our leadership team includes both paid and non-paid team members, as follows:

Non-Paid Team:

Michael Santos serves as the PPC Executive Director, a non-paid position. Bad decisions made during the recklessness of youth led to an arrest in 1987. Michael served 9,500 days, or 26 years, in prisons of every security level. While incarcerated, Michael:

Earned a bachelor’s degree with a specialty in human resources from Mercer University.
Earned a master’s degree in interdisciplinary studies from Hofstra University.
Authored seven books and prepared for a life of contribution.

In August of 2013, Michael concluded his obligation to the Bureau of Prisons. That same month, he began teaching as an adjunct professor at San Francisco State University. While working as a professor, Michael began to create a library of digital courses to teach people in prison how to prepare for law-abiding, contributing lives.

Since 2013, Michael has opened relationships with agencies and organizations for the purpose of distributing the digital learning resources he created. Michael opened relationships with prison administrators, jail administrators, probation officers, federal judges and other government officials. As a result of those relationships, more than 100,000 people access Prison Professors’ courses in jails and prisons across America.

Michael has built a career advocating for people involved at all stages of the criminal justice system. Whether a person is on pretrial supervision, on trial, the sentencing phase, incarceration, supervised release or on the other side of the journey, the body of work that Michael created can help. He is passionate about creating strategies to overcome the collateral consequences of mass incarceration. His authenticity gives hope to other people at any stage of the journey.

Carole Santos (Non-paid administrative support):

Carole married Michael Santos in 2003 in a prison visiting room, 10 years before Michael concluded his obligation to the Bureau of Prisons. While Michael concluded his final decade in prison, Carole worked alongside him, helping him to prepare for his successful return to society. She simultaneously advanced her education, eventually graduating with a master’s degree in nursing from the University of San Francisco. Carole now works full time with Michael’s for-profit enterprises under the Earning Freedom umbrella of companies.

Justin Paperny (Non-paid fund-raising support):

Justin has a degree in psychology from the University of Southern California. Justin previously worked as a licensed stockbroker and financial services professional. A bad decision led him to federal prison, where he served an 18-month sentence. While serving his sentence, Justin met Michael Santos and together they laid the groundwork to build a consulting practice. More than 1,000 people have hired the consulting firm to assist them in preparing for best outcomes through their journey in prison and beyond.

Full-time and Partially paid Formerly incarcerated Team:

Mike Berlon (Administrator):

We hired Mike Berlon as a full-time person to coordinate the necessary infrastructure. Mike Berlon has an undergraduate degree in political science, and a law degree. He worked for 20 years as a defense attorney, and once served as the Chairman of the Democratic Party of Georgia. Like every other person associated with our group, Mike served time in federal prison; he understands the ancillary consequences of a criminal conviction.

Francis O’Reilly (Administrative support):

Francis has a law degree, an MBA and an undergraduate accounting degree. He worked as a lawyer for more than 30 years and also as a CPA for more than ten years. Problems with the government led to his serving time in federal prison. Francis has the skillset to assist our team with the development of the nonprofit.

Lawrence Hartman (Administrative support):

Lawrence Hartman is a graduate of Columbia Law School and a former lawyer. A conviction related to violating securities laws resulted in a 10-year prison term. Upon his release, Lawrence began working with Michael Santos to build Compliance Mitigation, a venture to help business owners create risk assessments and avoid government investigations with more effective compliance training.

Dean Answari (Administrative support):

As a former government contractor, Dean has an MBA and a high skillset as a process engineer. Authorities convicted him of a white-collar crime, and he served a six-month term of home confinement and community service, which he completed with our organization. We’ll use his talents to outline our agency’s process.

Tulio Cardozo (Administrative support):

While serving a prison term for a non-violent drug offense, Tulio trained himself in computer programming. Since his release from prison in 2012, Tulio has developed expertise as computer programmer and IT specialist. He has devoted his career to helping people in prison and beyond develop technology skills. We will rely upon Tulio to build a website that both employers and collaborative partners can use to track our progress.

Alap Shah (Administrative support)

Alap has a medical degree and he worked as a podiatrist before authorities charged him with a process-related crime. He served a three-year sentence. While on home confinement, he will work with us in developing a social-media strategy, and also in coordinating tasks for university interns that help us to spread awareness on the injustices of mass incarceration.

Tina Pelagi (Administrative support)

Tina Pelagi served 12-years in prison for a white-collar crime. While on house arrest, she will work with us on graphic design and on social media tasks to spread awareness of the work that we do to improve outcomes for people in the criminal justice system. We will document her progress, and all of the progress that people make while working with our team.

Together, our team will work to:

Ensure full compliance with all applicable laws and regulations.
Obtain all requisite permits and licenses.
Prepare reports and funding requests.
Establish employer pricing strategy.
Create hiring plans.
Establish employee pay structures and benefits.
Develop employee policies and guidelines, and requisite employee training programs.
Develop marketing and advertising strategies for the agency.
Develop a public relations strategy, including plans for community outreach as needed.
Draft and review contracts for employees and companies who will hire our employees to ensure a clear agreement regarding rights and responsibilities.
Review all staffing agency contracts and agreements, including location leases, equipment leases, etc.
Establish protocols for employee virtual skills training as well as in person training when applicable.
Source necessary office equipment and software as needed.

Non-paid Advisory Board/Sponsors:

Mark Belter: Entrepreneur, business leader

Rich Folk: Business executive at Pandora Marketing

Roman Hossain: Business executive at Pandora Marketing

Agustin Huneeus: Business executive at privately held companies (Proposed board member)

Scott Laney: Professional sales leader

David Litman: Real estate entrepreneur, investor

Jerry Lundergan: Business executive at privately held companies, and author of Hard Work and Goodwill—one of our lesson plans.

Lee Nobmann: Business executive at privately held companies

Adam Owens: Business executive at privately held companies

Jim Patterson: Business executive at privately held companies (Proposed board member)

Sitesh Patel: Business executive at privately held companies

Juan Ribas: Business executive at privately held companies (Board member)

Dr. Schlomo Schmuel: Business executive at privately held companies (Board member)

Harold Sosna: Business Executive at privately held companies

Bo Wilson: Business executive at privately held companies

Bill Taylor: Business executive at public and privately held companies

Key strengths of our business model include:

Ability to leverage educational assets for job-training;
Track record of working in jails, prisons, and social service agencies;
Relationships with employers;
Breakeven pricing strategy; and a
Dedicated management team.

Business Overview: Leveraging Our Education & Training Assets

PPC’s has full access to the existing library of proprietary digital training and education programs courses available through Prison Professors. Our learning management system will issue certificates of completion to people that complete our video training and written exercises. Job candidates will develop a strong foundation for success after prison. If the Earning Freedom companies incur costs in creating the Learning Management System to distribute the content to the PPC, it will charge a below-market rate to the PPC to provide the technology service.

Business Overview: Next Steps

If PPC secures sufficient funding, as determined by the Board of Directors, the PPC will reimburse the Earning Freedom Corporation for the startup costs that Earning Freedom Corporation has been advancing to launch this venture. Those costs are less than $15,000 and financial records will document those costs.

To launch this new, expanded arm of the Prison Professors Charitable Corporation, we will use the remaining resources to fund the infrastructure of our project. We will need to show that we have sufficient resources in the bank:

To hire a full-time manager to organize the nonprofit,
Pay all fees associated with licensing, insurance, and administrative costs to launch,
Show that we have sufficient capital to begin marketing to halfway houses for a labor supply,
Pay the support staff that will help us build the infrastructure.
Fund the initial payroll until we become a self-sufficient agency.

With our funding commitment, we expect to complete the following tasks, within 90 days:

Restate the corporate by-laws and articles of incorporation with appropriate state and federal agencies to announce our expanded mission and funding expectations.
Create an accounting bookkeeping system to comply with GAAP expectations.
File necessary state permits and licenses, as determined by our leadership.
Prepare all tax and other forms required of temporary employment agencies.
Draft contracts for employees and the companies who will hire our services.
Establish a website and other virtual environments for engagement with employees and businesses.
Source and set up all office related equipment and software.
Develop marketing and advertising materials and strategy.
Set up worker’s compensation insurance as needed
Set up general liability and other insurance.
Set up a payroll vendor relationship.
Set up a hiring plan for additional staff and consultants.
Establish initial pipeline for first employee hires.
Establish initial pipeline of jobs from companies partnering with PPC.
Set up bank accounts and monitor startup expenses.
Finalize pricing strategy by industry.
Create reporting documents that show progress, as well as financial expenditures.
Set up visual deck and marketing materials that explains our model to prospective collaborative partners, stakeholders, and sponsors.
Create transparent reporting mechanisms.
Start internships for formerly incarcerated people and college interns.

With all of the above tasks completed and initial funding in place, we will begin job training and placement, documenting our progress on the website.

FINANCIAL OVERVIEW

We are seeking to raise $250,000 in incremental stages. Those funds will cover PPC’s startup costs to build infrastructure, and to build a sustainable enterprise that will help us improve outcomes for people that have experienced the criminal justice system.

To build our temporary-staffing agency, we anticipate higher costs than typical staffing agencies. Our costs will be higher because we will deal with the complexities of working with bureaucracies of the criminal justice system. In many ways, they create obstacles that block pathways for formerly incarcerated people to transition into the job market. Further, we anticipate higher costs on workers’ compensation insurance and higher overhead costs to triumph over the collateral consequences of mass incarceration. We will invest resources to develop intern programs that document how we’re training people and live-work projects that will build case studies. All of these efforts will require financial resources, and we’ll continue to build.

To make a difference, and document the process, we need sufficient capital in the bank to hire a team, and to document the team’s progress.

Startup Costs

Startup costs in the industry can be divided into two categories: infrastructure and initial operations.

1-Infrastructure

We identify infrastructure costs as the expenses necessary to build this venture, including:

Reimbursement of Earning Freedom setup costs: $10,000 (estimated)
Legal and accounting expenses to restate the non-profit mission: ($2,000)
Business Licenses and fees ($1,000)
Computer equipment & basic software ($5,000)
Industry Software (HR, Accounting, Payroll, Testing & Training, Compliance, Etc.) ($3,000)
Virtual and/or physical office(s) set up ($3,000)
Worker’s Compensation Insurance set up and bonds ($15,000)
Other Insurance ($2,000)
Phones & Customer Service Systems ($2,000)
Marketing & Advertising ($3,000)
Develop Marketing Materials ($2,000)

Estimate: $48,000
Year One Operations:
Operations Manager ($50,000 salary to start, rising to $60,000 with milestone achievements—estimate)
Other staff /temporary help-if needed
Miscellaneous, unanticipated expenses

As far as insurance, we note that we are still investigating all of the policies PPC will need. However, it is likely we will need at least:

Commercial general liability (CGL) insurance
Employee theft and crime coverage
Employment practices liability insurance (EPLI)
Professional liability insurance
Workers’ compensation and
Property coverage

2-Operational Costs

After building the infrastructure, PPC will require working capital to advance payroll, anticipating a lag between invoicing clients and receiving their payments. According to industry research, this lag can be as long as 60 to 90 days. While PPC intends to seek up-front deposits from its initial commercial clients to minimize this issue, at the earliest stage, we will need to advance at least some payroll.