Jobs for the Future

NONPROFIT INVESTOR I N D E P E N D E N T R E S E A R C H F O R P H I L A N T H R O P Y

Nonprofit Investor Research | nonprofitinvestor.org

SUMMARY

JFF identifies, develops, and promotes new education and workforce

strategies. Partnering with dozens of local, state, and national

organizations, JFF creates and implements strategies that offer

academic acceleration to struggling and out‐of‐school youth and

adults, helping them learn college‐ and career‐ready skills.

STRENGTHS

▲ Large, multistate programs. JFF helps implement and support

several large, multistate programs that not only touch tens of

thousands of individuals, but also allow lessons to be drawn from

significant sample sizes and a diverse range of communities.

▲ Strong partnerships significantly increase scale and impact. JFF

partners with local, state, and national organizations to manage and

support dozens of programs. This allows the organization to build

scale and leverage national expertise and experience for local impact.

▲ Impressive national donor base. JFF’s national donor base

includes some of the nation’s top foundations and investors, which

underscores the organization’s strong programs and financial health.

▲ Strong balance sheet. JFF maintains a strong balance sheet with

few liabilities, large cash balances, and significant pledges receivable.

CAUTIONS

▼Organizational and impact transparency. JFF has weak

organizational transparency and little quantification of impact (offers

primarily single‐program case studies), making it difficult to assess

the organization and its overall effectiveness.

● High M&G expense. The organization has a fairly high (and

increasing) proportion of Management & General expenses. This is

primarily salary related, which has been going up due to expansion.

RECOMMENDATION: HOLD

JFF’s programs reach nearly 200 communities across 41 states, offering

thousands of Americans the opportunity to improve their education and

succeed in a global economy. But JFF’s lack of organizational and impact

transparency makes it difficult to assess financial red flags—as well as

overall program results—and leaves enough questions unanswered that

we rate it a HOLD until additional information is made available.

Jobs for the Future (JFF) Nonprofit Investor Rating:

HOLD Mission Statement

Jobs for the Future seeks to accelerate the educational and economic advancement of youth and adults struggling in today’s economy. Financial Overview

$ in MM, Fiscal Year Ended September 30

2008 2009 2010

Revenue and Support $27.5 $15.0 $25.2

Operating Expenses $24.2 $27.9 $24.3

% of Total:

Program Expenses 84.2% 82.0% 81.2%

G&A 13.7% 16.3% 17.3%

Fundraising 2.1% 1.6% 1.5%

Year Founded: 1983

Contact Details

Jobs for the Future 88 Broad Street, 8th Floor Boston, MA 02110 +1 (617) 728‐4446 http://www.jff.org/ EIN: 06‐1164568

Analyst: Sandy Gill

Peer Review: A. Lee, K. Chao Publication Date

January 6, 2011

Jobs for the Future | Nonprofit Investor Research 2

OVERVIEW OF JOBS FOR THE FUTURE ACTIVITIES

Jobs for the Future started in 1983, when Arthur White, cofounder of the marketing/research firm Yankelovich, Skelly

and White, teamed up with Hilary Pennington to improve the quality of America’s public education systems and the

skills of the nation’s workforce. Today, JFF continues creating educational and economic opportunity by managing and

supporting more than a dozen programs and initiatives in 200+ communities nationwide.

Vision: By 2020, JFF, working with its partners, is committed to doubling the number of low‐income youth and adults

who attain postsecondary credentials. To achieve this vision, JFF combines research, practice, and policy to provide a

unifying voice advocating for the transformation of the education and workforce development fields.

To accomplish its goals, the organization focuses on four primary program areas.

Pathways to Postsecondary

• Goal:Graduate all high school students college ready

• Mission Statement: Improve educational options and prospects of young people who have disengaged or disconnected altogether from the educational system

Example Programs:

• The Early College High School Initiative:Gives underrepresented, low‐income students in 212 schools across the country the chance to earn up to two years’ worth of college credits while still in high school, tuition free

• Back on Track/GED to College: Program is growing a new pathway that provides students who have dropped out with the skills to succeed in postsecondary education

• The Institute for Student Success: Prepares small school developers, leaders, and teachers to implement innovative strategies and techniques that have led to college readiness at University Park Campus School. The institute is a partnership of JFF, UPCS, and Clark University

Building Economic

Opportunity

• Goal: Support low‐skilled workers through career advancement

• Mission Statement: Develop ideas and programs that increase opportunities for low‐income individuals to move into family‐supporting careers and help meet the growing economic demand for knowledgeable and skilled workers

Example Programs:

• Connecting Literacy and Work: Advances low‐skilled adults in their careers by linking adult literacy programs to workforce initiatives in five communities

• Jobs to Careers: Advances the skills and careers of frontline health care workers through work‐based learning at 17 sites across the country. JFF is the National Program Office for the initiative

• Green Pathways: A partnership of JFF with the AFL‐CIO Working for America Institute and Wider Opportunities for Women, is building career opportunities for unemployed and disadvantaged individuals in five cities seriously affected by the economic downturn

• The National Fund for Workforce Solutions: Involving more than 200 foundations and 900 employers, supports regional partnerships that benefit employers, their employees, and their communities through hundreds of local partnerships. JFF is animplementation partner

Creating Successful

Transitions for Youth

• Goal: Focus higher education on college success

• Mission Statement: Develop ideas and programs that strengthen opportunities for youth to succeed in post‐secondary learning and high‐skilled careers

Example Programs:

• Achieving the Dream:Helps 130 community colleges develop and implement strategies to improve student success and build a culture in which decisions are based on data about student achievement. JFF leads the state policy strand, involving 16 states

• The Developmental Education Initiative: Includes an ambitious, three‐year effort led by JFF to use policy levers to dramatically improve student success in developmental education in six Achieving the Dream states

• Breaking Through: A partnership of JFF and the National Council for Workforce Education, enables adults with little education to prepare for and succeed in college technical programs at 33 community colleges in 18 states

• Career First : A high‐quality pathway that improves postsecondary outcomes for older youth, ages 18‐26, and results in career‐track employment in high‐demand, high‐wage occupations

Policy Solutions / Other

• Goal: Accelerate opportunity through policy solutions

Example Programs:

• JFF advocates for key federal and state education and workforce policies that support the design, testing, and implementationof programs that move the country toward the goals of College Ready, College Success, and Career Advancement. Policy and practice go hand‐in‐hand to create an environment of educational and workforce opportunity


PROGRAM RESULTS AND EFFECTIVENESS

Because JFF works in partnership with dozens of other organizations on numerous initiatives across the nation, it is

difficult to quantify overall program results. While the goal of doubling the number of low‐income youth and adults who

attain postsecondary credentials would be a sure sign of success, this long‐term vision is unlikely to be met quickly or

easily. Consequently there is no information currently available to evaluate the organization’s overall effectiveness.

While we note that information for a more holistic evaluation would be preferable (and we suggest the organization

may find it helpful to provide such figures), many of the programs that JFF supports can be analyzed on a standalone or

case study basis. One such case study is the Achieving the Dream program and the State of Florida.

Case Study – Achieving the Dream & the Florida Community College System (FCCS)

Program / Partner: Achieving the Dream – a national non‐profit and multiyear initiative that helps community college students succeed through completing courses, earning certificates, and earning degrees. The initiative covers more than 100 colleges in 24 states.

JFF Role: JFF coordinates the effort to improve policies in 16 states participating in the initiative. JFF also co‐leads the national policy effort and participates in engaging the public and developing knowledge around the role of community colleges. In this role, JFF selects a lead organization in each state, makes grants to those organizations, and helps leadership teams from each state to set agendas for policy change

Case Study:Florida Community College System (FCCS), 2004 –Today

Conclusion:The program successfully helped Florida launch a sweeping seven‐year effort to increase college readiness. While the outcomes of this work will be unknown for several more years, the process that Florida undertook in developing its reforms stand out for its clarity of vision, responsiveness to evidence and strength of leadership within federally funded assessment consortia

Setting: In 2004, Florida’s two‐year college system chose to participate in Achieving the Dream. A list of work plan priorities was created including (among others): (1) using state student data system to promote institutional and state strategies to improve student outcomes, (2) improve the alignment between high school graduation requirements and successful transition into college‐level courses, and (3) set standards on the student learning outcomes that each student should be able to demonstrate upon completion of the general education discipline requirements

Situation: After enrolling in 2004, the staff from the Division of Florida Colleges began to look at a rich data set tracking every individual from their entry into the education system to their exit, and into the job market. The data painted a disappointing portrait showing that a large proportion of students who had passed Florida’s Comprehensive Assessment Test in high school were not passing college placement tests. The results laid the groundwork for a new round of education reforms in Florida, this time aimed at increasing college readiness and college completion.

Results:Seven years later, what began as a simple data inquiry has resulted in a major realignment of expectations for learning across Florida’s educational systems.

On the K‐12 side, the changes include:

• Raising curriculum content standards in all subjects

• Adding a college‐preparation indicator to the K‐12 accountability system

• Offering college placement exams in eleventh grade

• Adding brush‐up courses in the senior year to help students avoid developmental courses in college

The colleges’ innovations include:

• Working with K‐12 and university instructors to develop new Postsecondary Readiness Competencies and aligning them with the Common Core State Standards

• Developing and implementing a new, customized placement test—the Postsecondary Education Readiness Test (PERT)—based on the Postsecondary Readiness Competencies, to replace Florida’s version of the ACCUPLACER

• Restructuring the developmental education sequence to consist of two levels each of math, reading, and writing at every college

• Developing diagnostic additions to PERT to provide more detailed analysis of individual students’ remediation needs in math, reading, and writing

• Designing modularized remedial courses tailored to students’ specific learning needs to accelerate student progression and reduce costs

For informational on additional programs that JFF currently supports visit: http://www.jff.org/projects/current.

FINANCIAL OVERVIEW

The majority (~85%) of JFF’s revenues are sourced through contributions from large foundations and government

agencies, with the remainder coming from program services and investment income. While support from program

services has increased regularly for the last two years, there was a significant dip in contributions in 2009. Due to a lack

of MD&A associated with the tax form 990, it is unclear whether this drop was due to the economic downturn or simply

part of a normal course business cycle in which pent up program dollars were flowing through. At this point, we identify

it as an area of caution but currently believe that it was a normal business cycle given: (1) the immediate rebound in

contributions in 2010, (2) the large cash balance in 2008 which may have been purposely burned off, (3) the relatively

stable of level of pledges/grants receivable, and (4) the decreasing spend on fundraising over the past two years.


Expenses have remained fairly stable over the past three years, with a slight uptick in 2009 in both program‐related and

general costs. Within program expenses, grants to partner organizations and programs comprise approximately 30% of

costs. The steady increase in Management and General Expenses as a percentage of total is somewhat worrisome and is

something to keep an eye on in the future. These costs are largely salary‐and‐benefits costs incident to the

organization’s expansion (from 99 employees in 2009 to 116 in 2010), including an increase in “Key Employees” from 3

in 2008 to 12 in 2010. While this is slightly misleading, as there were at least five individuals receiving more than

$150,000 in annual compensation not listed as “Key” in 2007, it is indicative of a management‐heavy cost structure. This

high cost may be justified given the high‐end consulting nature of JFF’s work (where higher compensation prevents

employees from being poached by for‐profit industry), but it is certainly a red flag that warrants further investigation in

the future. Though currently very small, one other expense item to keep an eye on is direct lobbying expenses. These

have essentially doubled from $28,957 in 2008 to $51,957 in 2010. While still small, donors should realize that a growing

portion of spend is on unidentified and unexplained direct lobbying costs.

The health of JFF’s balance sheet remains one of its strong points. With nearly $10MM in cash and investments, and

twice that in pledges and grants receivable, JFF seems well positioned to cover outstanding liabilities, as well as meet

expense obligations for well over a year. Given the organization’s donor base and proven ability to raise funds, the

overall financial health of JFF is not in question.

2010

25,179

2009

14,983

2008

27,488

Contributions

Program Revenue

Investment Income

Other Revenue

Revenue Breakdown

Expense Breakdown

$ in ‘000

24,260

20102008

24,193

2009

27,883

Program Expenses

Fundraising

Management & General

Fiscal Year Ended September 30 2008 2009 2010

Support Revenues

Contributions $24,460,340 $11,873,197 $22,024,091

Program Service Revenue 2,119,534 2,622,851 2,983,907

Investment Income 854,043 308,026 128,602

Other Revenue 54,515 178,699 41,933

Total Support Revenue 27,488,432 14,982,773 25,178,533

Expenses

Program Expenses $20,371,923 $22,877,286 $19,709,327

Management & General 3,307,043 4,555,151 4,192,902

Fundraising 514,205 450,072 357,562

Total Expenses 24,193,171 27,882,509 24,259,791

Program Costs as a % of Total Expenses 84.2% 82.0% 81.2%

G&A as a % of Total Expenses 13.7% 16.3% 17.3%

Fundraising as a % of Total Expenses 2.1% 1.6% 1.5%

Revenue Less Expenses 3,295,261 (12,899,736) 918,742

Abridged Balance Sheet

Cash and Investments $19,532,305 $9,174,948 $9,813,092

Pledges / Grants Recievable 25,600,738 19,024,009 21,995,805

Other Assets 2,641,425 8,738,277 3,841,636

Total Assets 47,774,468 36,937,234 35,650,533

Total Liabilities 3,486,646 5,549,148 3,343,705

Net Assets/Fund Balances 44,287,822 31,388,086 32,306,828

Source:

IRS Form 990 (Tax)

While all of JFF’s programs aim to improve education and employment opportunities, the program spend breakdown

provided in the Form 990 shows that the organization splits its focus fairly evenly between school age youth (Successful

Transitions) and those already out in the workforce (Building Opportunity). Without management’s discussion and

analysis, it is difficult to explain the breakdowns of non‐grant and grant related spend, as well as program revenue.

However, we wanted to provide all of the information available related to direct program spend and focus, and to


highlight this as another area meriting additional analysis in the future in order to understand trends within the

organization’s activities over time.

2010 Program Break Detail

10%

Building Opportunity

4%

Pathways to Postsecondary Policy/Other

34%

Successful Transitions

52%

Policy/Other

26%


69%


5% Successful Transitions0%

Program Expenses (Excluding Grants) Grant Expenditures

8%


3%

Pathways to Postsecondary Policy/Other

44%


44%Policy/Other

12%


28%

Building Opportunity23%


37%

Total Program Expenses Total Program Revenue

Successful Transitions Building Opportunity Pathways to Postsecondary Policy/Other Total

Program Expenses (Ex. Grants) $7,185,604 $4,615,613 $1,340,640 $565,172 $13,707,029

Grants 1,581,330 4,121,187 279,781 20,000 6,002,298

Total Program Spend 8,766,934 8,736,800 1,620,421 585,172 19,709,327

Program Revenue 378,224 850,036 689,836 1,107,744 3,025,840

Net Expenses $8,388,710 $7,886,764 $930,585 ($522,572) $16,683,487

FUNDING

One of the most impressive aspects of JFF that we wanted to highlight is the organization’s long and impressive list of

donors. This large base of contributors not only helps provide financial stability, but also speaks to the type of

sophisticated, national support JFF can mobilize for its programs.

Major national donors to JFF include:

The Annie E. Casey Foundation, Bank of America Charitable Foundation, Bill & Melinda Gates Foundation, The California

Endowment, Charles Stewart Mott Foundation, Dollar General Literacy Foundation, The Ford Foundation, The Harry and

Jeanette Weinberg Foundation, The Hitachi Foundation, John S. and James L. Knight Foundation, The Joyce Foundation,

Lumina Foundation for Education, MetLife Foundation, Microsoft Corporation, The Prudential Foundation, The Robert

Wood Johnson Foundation, U.S. Department of Labor, W.K. Kellogg Foundation, The Wal‐Mart Foundation


TRANSPARENCY

As mentioned earlier in this report, JFF’s single greatest weakness tends to be its lack of transparency and reporting.

While the organization does file timely 990s, the documents are not available on the organization’s website. Additionally,

neither annual reports nor performance updates are available to the public, making it difficult to evaluate JFF beyond

the most basic outside‐in diligence into trends within the form 990s. On the results side, the individual program case

studies are thorough and helpful. But without wider analysis showing the impact of JFF’s programs on graduation rates,

income levels, etc., it is impossible to know if the organization is effecting the changes necessary to achieve its vision of

doubling the number of low‐income youth and adults who attain postsecondary credentials. Without such metrics, it is

also impossible to show accountability, as well as the social impact of dollars spent.

THIRD PARTY RATINGS

Charity Navigator gives JFF an overall score of 59.84 out of 70.00, resulting in a 3‐star rating (out of 4). JFF

achieves a 60.76 (a 4‐star score) for Financial and a score of 59.00 for Accountability & Transparency. We note

that JFF fulfills all of Charity Navigator’s requirements for information provided on the Form 990 found on the

evaluation checklist, but only 2 of 5 for website information (e.g., has board members and key staff, but does

not provide a donor privacy policy, audited financials, or the Form 990)

Philanthropedia’s expert network rated JFF a “2010 Top Non‐Profit” under the category “National Workforce

Development” (ranked third among the 17 rated as such), with 53 experts viewing JFF as the nonprofit with the

most impact in its field, while 2 experts disagreed with that assessment

o Strengths include:

Impactful initiatives characterized by a flexible and collaborative approach that leads to further

sustainable practices

Strong and experienced senior leadership in the workforce development and school‐to‐work

field; good at working in partnership with foundations, local governments, and school systems

Very professional and committed staff with a long history of providing great research, education,

and consulting services, as well as expertise and influence in D.C.

o Areas for Improvement include:

Cost structure could be improved – high overhead rate

Should increase the amount of credit given to the partners they work with

Spread too thin – additional staffing / resources are needed in areas including: (1) day‐to‐day

project/initiative management, (2) outreach and marketing of case study and program materials

and (3) engagement with various multi‐state groups in research and focus group work

GET INVOLVED

Donate: https://www.justgive.org/basket?acton=donate&ein=06‐1164568

Media Inquiries & General Questions: PR Director Jeff Landis, [email protected]; [email protected]

Job Openings at JFF: Human Resources, [email protected]

DISCLOSURES

Sandy does not have any affiliation with Jobs for the Future and has never made a donation to the organization. NPI

analysts and NPI as an organization do not receive any form of compensation from reviewed charities.

Jobs for the Future

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