Income Before: $18,000. After: $85,000. Does Tiny Nonprofit Hold a Key to the Middle Class?
By Steve Lohr
Jukay Hsu is an enthusiastic Amazon backer. He wanted the company to build a big new campus in New York and participated in wooing it. He met with Amazon executives and appeared in a video pitch, and his tech-training program for disadvantaged New Yorkers was cited in the city’s written proposal to the company.
But Mr. Hsu said he also understood the local resistance to Amazon, and why it had won out.
“I believe tech can be a road to the middle class for large numbers of Americans,” said Mr. Hsu, a co-founder and the chief executive of Pursuit, a nonprofit social venture. “But there’s real skepticism about that among people who see the winners in technology as a small network of the privileged.”
He is using Pursuit, housed in a former zipper factory in Long Island City, the Queens neighborhood where Amazon had intended to locate, to try to prove those skeptics wrong.
The venture is a small yet innovative player in a growing number of nonprofits developing new models for work force training. Their overarching goal is upward mobility for low-income Americans and the two-thirds of workers without four-year college degrees.
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Pursuit, according to its donors and to work force experts, stands out for the size of the income gains of its graduates and its experiment with a kind of bond to finance growth. It is a program worth watching, they say, and beginning to attract attention nationally.
About 85 percent of Pursuit’s 300 graduates have landed well-paying tech jobs within a year. They work as software engineers both at major corporations like JPMorgan Chase and at start-ups like Oscar Health. They earn $85,000 a year on average, compared with $18,000 before the Pursuit program.
“That jump in income is powerful and extraordinary, really closing the prosperity gap for people,” said Wes Moore, chief executive of the Robin Hood Foundation, one of Pursuit’s financial supporters.
The group is similar in many ways to larger regional and national initiatives like Opportunity@Work’s TechHire, Year Up, Per Scholas and the Markle Foundation’s Skillful.
The groups all focus on careers in technology because the jobs are plentiful and pay well. They measure success by the number of people placed in jobs and propelled into the middle class. Traditional government-funded job training programs tend to focus more on how many people sign up for courses.
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Pursuit, by design, seeks people with the “highest need” and potential, but it is selective, accepting only 10 percent of its applicants. Its outreach relies heavily on presentations at public housing buildings and libraries, and word-of-mouth referrals.
The program is free for the participants, who can attend either weekdays or on evenings and weekends. No previous coding experience is required.
Max Rosado heard about the Pursuit program from a friend. Intrigued, he filled out an online form, and made it through a written test in math and logic, interviews and a weekend workshop with simple coding drills, joining the 10-month program in 2016.
At Pursuit, Mr. Rosado, who has a two-year community college degree in liberal arts, got an intensive immersion in programming languages, concepts and projects. But the curriculum also covered so-called soft skills like making presentations, working in teams and writing résumés and thank-you notes.
Today, Mr. Rosado, 30, is an engineer at GrubHub, the meal delivery service, working on its smartphone software. In his previous jobs, in back office and sales associate roles in stores, he earned $15,000 to $20,000 a year. He makes nearly $100,000 now, he said.
Before Pursuit, Mr. Rosado, who is married with two young children, did not have enough to get by, living temporarily with relatives and sometimes in homeless shelters. Today, he and his family live in a two-bedroom apartment in the Bronx. Restaurant meals, movie outings with his children and a vacation to Florida last year are now within reach.
“Those are amenities that I never thought were possible before,” he said.
More than half of Pursuit fellows, as the venture calls its students, are on public assistance of some kind. Its classes are nearly half women, in contrast to many tech-training programs, which usually have far more men than women.
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Pursuit screens applicants for many characteristics, but those mainly fall into two categories: problem-solving skills and perseverance. The program, Mr. Hsu said, looks for people who are hungry and determined, willing to put in the time and effort to become a software developer, but also able to adapt to new and unfamiliar environments.
“We’re asking a person to make a huge change in life trajectory,” he said. “Are you up for that? All-in for the long term?”
The emphasis on long-term results is the reason Pursuit bills itself as a four-year program: about a year in the immersive program, and three years of mentorship.
“If we’re just focused on the front end, getting that initial job, that’s a mistake, a very lazy metric,” Mr. Hsu explained.
He said his life experiences helped him empathize with the challenges that Pursuit fellows faced. His family emigrated from Taiwan when he was 3, and his father abandoned the family soon after. His mother is a psychiatric social worker in Queens.
Mr. Hsu, 34, attended Stuyvesant High School, an elite public high school in Manhattan, where he was student body president. He then graduated from Harvard, majoring in economics.
While many of his Harvard classmates headed to Wall Street, Mr. Hsu signed up for the Reserve Officers Training Corps. He led combat patrols and economic development projects in Iraq.
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When Mr. Hsu returned in 2011, Mayor Michael R. Bloomberg’s administration was promoting technology initiatives and education as a key to the city’s economic future. Mr. Hsu and another Queens native, David Yang, met and decided to pursue the opportunity to bring some of that to the borough, setting up their civic tech venture, then called Coalition for Queens.
They huddled with local officials, worked on a strategic plan and tried to rally support at meet-ups. Pursuit’s long-term vision is of “an inclusive tech community,” which would include building an incubator and investing in local entrepreneurs. They set up a for-profit arm for those activities, but those are more distant goals.
The immediate need, they saw, is for work force training.
“Building community is great, but people need skills,” Mr. Yang said. Its first class, in 2013, had just 24 people.
More than a dozen institutions support Pursuit’s work, including family foundations, the New York City Council, Salesforce, Google and Walmart.
But Pursuit is also a financial innovator, as it seeks funds beyond philanthropy to fuel its expansion. It calls its financing mechanism a bond — one for each annual cohort of fellows.
Begun in 2017, the Pursuit bonds have helped it double the number of people in the program. An investor is paid back by an income share agreement: If graduates make more than $60,000 a year, they agree to pay 12 percent of their income to the investors for three years.
To date, the principal investor in the Pursuit bond has been the Inherent Group, which also helped design it. The group invests in companies focused on environmental and social change and has a foundation.
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So far, the graduate placement rate exceeds Inherent’s assumptions, the default rate is lower, and the average salary of the repaying graduates is more than $85,000. The effective interest rate on the bonds is 6.6 percent, said Tony Davis, chief executive of Inherent.
Mr. Rosado, the GrubHub engineer, who is making income-share payments, views them as a fair bargain.
“It assists the next generation of Pursuit fellows to join the tech industry,” he said. “And I’m still making way more than I did.”
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