The Charles Stewart Mott Foundation

Location: Flint, Michigan 

Assets: $1.67 billion (1996) 

Major Program Categories: Civil Society, Environment, Flint, Poverty 

Case Study Focus: Sectoral Employment Initiative, Poverty Program 

Contact: Jack Litzenberg, Program Officer 
email: Jlitzenberg@mott.org 

1200 Mott Foundation Bldg. 
Flint, MI 48502-1851
phone: 810-238-5651 
fax: 810-766-1753
web site: www.mott.org

For two decades, the Charles Stewart Mott Foundation has used its program resources to address issues of community revitalization, economic development and poverty. In the 1980s and into the 1990s, as part of its community revitalization program, the foundation focused on youth employment and training, and more recently supported the development of the school-to-work movement. 

The foundation's sectoral program is rooted in the enterprise development program of the mid-1980s. Jack Litzenberg, the program officer who has guided the development of the foundation's program from those days to its current incarnation, traces the Sectoral Employment Initiative back to his discovery of a program in New York, Cooperative Home Care Associates (CHCA). 

Through colleagues in Flint and New York, Litzenberg learned of this worker-owned home health care business incubated by New York's Community Service Society as he identified enterprise models for funding, including worker-owned coops. Mott made the first grant to the Community Service Society for CHCA and has actively participated in its growth and development for more than a decade. 

Meanwhile the program officer responsible for the foundation's youth employment and training program was working with a Detroit organization, Focus:HOPE. Focus:HOPE had long-standing relationships with the auto industry and had developed training strategies to meet the anticipated short-term labor demands of that industry. 

Mott provided support to a Focus:HOPE affiliate company, High Quality Manufacturing (HQM) that assembles engine harnesses. HQM targeted welfare recipients, and like CHCA, was organized as a cooperative. Litzenberg acknowledges that while there was something about both projects that appealed to him, and he sensed that there was some relationship between the two, he couldn't quite articulate the commonalties at the time. 

Connecting the Dots

And he realized that some of the strategies and results observed at CHCA were also present at Focus:HOPE. The critical similarity seemed to be that both were highly integrated into the industry with which they were working. Focus:HOPE was a training program highly valued by the Big Three automakers. CHCA was growing in strength as a competitor with home health care employers in the Bronx and Brooklyn. 

Over time, with few other examples to draw on, Litzenberg and others involved in this work further refined their understanding of what was occurring at CHCA and Focus:HOPE. Focus:HOPE was working to create job-seekers who would be competitive for specific skilled occupations in the auto industry, while CHCA was improving the quality of jobs to which low-income people already had access. In other words, CHCA was using its power as a competitor to change job and industry standards and Focus:HOPE was creating a competitive workforce for jobs in a high-wage industry. 

As his thinking developed, Litzenberg began to look for, and funded whenever possible, other sectoral initiatives. The approaches were quite varied, which was appropriate because the focus at the time was on learning as much as possible. The strategies being proposed and funded focused on economic development, i.e., creating environments that would nurture increased or more productive economic activity in certain sectors of the economy. An emphasis on jobs was yet to come. 

Two Reports on Sectoral Strategies

Grants were ultimately made to two organizations. The Boston-based Mt. Auburn Associates was chosen to generate the report on publicly-sponsored sectoral initiatives, while the Aspen Institute was chosen to generate a report on privately-sponsored initiatives. 

These reports were critical because they unveiled a dichotomy parallel to Litzenberg and Elliott's debate. The Mt. Auburn report underscored that public agencies were mainly pursuing sectoral strategies for economic development purposes. On the other hand, the Aspen report revealed that community-based nonprofits were primarily using sectoral strategies for job development. Ultimately, the Aspen report proved to be the basis for the program Mott would put together over the next couple of years. 

The Aspen Report

The 1995 Aspen report defined sectoral employment development this way: "A sectoral employment program targets an occupation within an industry, and then intervenes by becoming a valued actor within that industry - for the primary purpose of assisting low-income people to obtain decent employment - eventually creating systemic change within that occupation's labor market." The Aspen authors also identified the strengths and weaknesses of targeting, intervening, focusing on a low-income constituency and using a labor-market orientation. They then described the evolution of sectoral employment development projects. This included the process of selecting industries and occupations on which to focus, systemic influence on regional labor markets, and, finally, replication.  The authors raised several thematic questions that would face practitioners at each stage of development. Finally, the report concluded that sectoral employment development was still nascent (in 1994-95), and that "further experimentation and assessment [were] necessary so that sectoral initiatives [could] grow in number, attract more resources and expertise, and develop a common language allowing practitioners to share and contrast their experiences."

More information is available in the Sectoral Development Strategies chapter.

Sectoral Employment Development Learning Project

• Document and evaluate selected employment development programs in both quantitative and qualitative terms; 
• Inform the practice of participating agencies; and 
• More fully describe and document how sectoral employment development projects are distinct from other employment and training initiatives. 

• By working on both the supply and the demand side of a particular occupation and industry labor market, sectoral programs achieve greater results in terms of long-term economic returns to workers or trainees and long-term economic returns to industry. 
• By acquiring specialized, current knowledge on industries and occupations, sectoral programs are positioned to offer state-of-the- art training to new or current workers in skills areas that industry needs. 
• Sectoral programs demonstrate to industry leaders and others that low-income or otherwise disadvantaged individuals can and do perform well in demanding jobs. These demonstration efforts lead, over time, to broader labor market change and more inclusive hiring practices within the local industry. 
• One of the principal ways that sectoral programs achieve their results is by being a "key player" within a particular occupation/industry sector. Being a key player means that the program, or leadership of the program, commands respect within the industry, is believed to understand it well and is considered an expert, and has the power to influence a broad set of actors. 

Designing a New Sectoral Development Program

Mott has typically accepted, reviewed and funded proposals on a rolling admissions basis, and the foundation's initial approach to sectoral employment development was no different. However, following the Aspen report, Litzenberg says he was "underwhelmed" by the proposals he received. Mott did award grants to two new efforts. First, Litzenberg provided support to Texas Interfaith Education Fund to work with community organizations in a number of cities and towns in Texas and the Southwest to apply the lessons generated from Project QUEST, a nationally-recognized sectoral development project in San Antonio, to their local labor markets. 

The second new grantee in the sectoral development area was the Center for Community Change (CCC), funded to work with community-based organizations in its informal network. Litzenberg's interest in working with CCC was learning how to successfully initiate sectoral strategies "from scratch." CCC is working with several groups around the country analyzing their communities' labor markets and developing sectoral strategies to respond to particular local issues. 

Beyond these fledgling efforts, few new models were emerging for inclusion in the Sectoral Employment Development Learning Project. In addition, Litzenberg was curious about how practitioners' approaches had been influenced by the Aspen Institute report. He decided to issue a Request for Proposals. It was, he says "a marketing strategy," designed not simply to invite proposals, but also to market the concept among employment and training, community and economic development practitioners. 

The RFP was issued to all the of Private Industry Councils in the country, community colleges, Historically Black Colleges and Universities, and the mailing list of the National Congress for Community and Economic Development, among others. While Litzenberg remains a bit skeptical - "I don't feel we were prescriptive, which is my one worry about RFPs" - he acknowledges that Mott received interesting proposals from organizations and projects with which he was unfamiliar. 

Mott's Sectoral Employment RFP

Purpose: To invite proposals to establish sectoral initiatives in rural and urban settings designed to link low-income people to decent employment. The RFP categorized two possible approaches to sectoral development - expanding the number of jobs within the sector (sectoral economic development) or affecting a sector's supply of workers (sectoral employment development).  Scope: Up to 10 grants total, five in either category. $4.5 million available in total, with grants ranging from $300,000 to $450,000 each. Three-year grants to run from 1998 through 2001.  Absolute Requirements: Target a low-income population, target only one occupation and choose only one of the strategic paths. Sponsoring organization must be a 501 (c) (3).  Mott's RFP used the parameters set forth in the 1995 Aspen Institute report. The RFP therefore required that applicants' projects  Go beyond targeting a goal of systemic change; in other words, the project should result in changes in the way the targeted labor market recruits, hires, pays or promotes low-income individuals; and  Include an explicit strategy to become a key actor in the regional labor market.

Making the First Selections

• Ability to identify the systemic change sought. Even if the long-range goal was ambitious and not totally within their control, the strongest applicants could articulate optimum success. 
• Quantifiable goals proportionate to Mott's proposed investment. 
• Ability to convey knowledge of, and a history of working with, the customers to be served. 
• Demonstrated employer involvement. This included evidence that program sustainability had been considered and that employers were committed to its ongoing success. 

A Look at Mott's Grantees

• The nationally-recognized Project:QUEST in San Antonio, which plans an expansion of its work with the healthcare industry to increase the number of competitive candidates available to fill nursing, technician and medical records positions. Other grantees whose work will target health care occupations include the Arkansas Enterprise Group based in Arkadelphia and the New Hampshire Community Loan Fund based in Concord. 
• Primavera Services which serves the homeless in Tucson, Arizona. Mott's grant will support the expansion of Primavera Works, a nonprofit, temporary-employment agency that serves as a broker between homeless individuals seeking work and employers seeking day laborers. Primavera Works will incorporate a more traditional temporary employment agency strategy, eventually helping individuals to build consistent occupational experiences that will lead to full-time employment. Working Partnerships USA in San Jose, California is also working with the temporary workforce - in this case, clerical workers in the Silicon Valley. 
• Essex County College, a two-year higher education institution based in Newark, New Jersey. The college is planning a program that will increase access to entry-level information technology jobs for African-Americans and Latinos. 
• DARE (Direct Action for Rights & Equality) in Providence, Rhode Island, a community-based action organization that has developed impressive expertise on child care. DARE is developing a nonprofit program intended to both increase access to child care jobs for low-income people and reshape the occupation to increase its quality and benefits for employees. 
• ARCH Training Center in Washington, DC, which has developed, with several other organizations including the Washington Bar Association, a training program to increase young African- Americans' access to legal support occupations. 
• Industrial Retention and Expansion Network (WIRE-Net) in Cleveland, Ohio, a nonprofit economic development organization that has developed an initiative to meet the needs of its primary constituents - manufacturing sector employers on the city's west side. The WIRE-Net project is designed to restructure the system of training and employment for the machine trades and provide access for low-income inner-city residents. Training machinists and other technical workers for the manufacturing sector is also the focus of the grant to Philadelphia Area Accelerated Manufacturing Education. 

Evaluation

• Increase the probability of success among the grantees and the initiative as a whole; 
• Enhance each organizations' long-term capacities; and 
• Provide evidence to practitioners and policymakers about the effectiveness of sectoral strategies. 

P/PV's evaluation will be guided by two primary questions: 

• What impact do the programs have on the individuals they serve, particularly in terms of employment and earnings? 
• What impact do the programs have on the targeted employment sector?

• Track participants' progress through the programs, including program intake, attrition and placement rates; 
• Track the progress of a large sample of participants from their entry into a program through one year after their placement in a job; and 
• Conduct case studies to capture the early changes among employers and other key industry players. Mott and P/PV acknowledge that major systemic changes will not emerge for several years after a program intervention begins, but they do believe that it will be possible to assess whether (and how) an industry has begun to respond to nontraditional, disadvantaged workers. 

• Personal and other characteristics of demonstration project enrollees; 
• Characteristics and strategies of the sponsoring organization; 
• Participants' service plans and records; 
• Participants' education and employment characteristics upon exiting the program; 
• Participants' status at the one, three and four-month intervals following job placement; and 
• Changes in the regional labor market of the project's targeted industry sector. 

Communicating Success

All of the RFP respondents, along with the foundation's sector grantees, will be invited to be learning community participants. In addition to the web site and the development of written materials, Mott will support a national conference on sectoral employment development at least bi-annually over the next four years. The first was held in 1998. 

Final Thoughts

Litzenberg believes in the value of demonstration research, despite philanthropic community skepticism about the currency of demonstrations in a policy environment primarily geared toward social program budgets. 

Finally, Litzenberg credits the creative leadership of Mott President Bill White with the cutting-edge quality of this and other aspects of the foundation's work. "Bill gives us [the program staff] the room to take risks. We could not have taken this multi-phased journey from the early grants to CHCA and FOCUS:Hope to such a significant demonstration research project without his willingness to take a chance."