CHARLES G. FHU iw June 9, 1994 Dr. James Buchanan Center for the Study of Public Choice George Mason University 4400 University Drive Fairfax, Wt 22am Dear Jim, I would like to take a few moments to introduce a program that the Charles G. Koch Charitable Foundation has been supporting for the past three years. As you know, society faces many challenges today, such as poverty, violence, and crime. These problems are tragic not only for those unfortunate members directly affected, but for the remainder of society as well. We are all faced with decreased safety, heavier tax burdens, and a less productive population. Despite massive spending and government intervention, the problems grow. We believe that we need to invest in market-based programs that effectively address these challenges, harnessing the sources of success in society. One promising approach is the Young Entrepreneurs program, developed by Steve Mariotti, founder of the National Foundation for Teaching Entrepreneurship. The Young Entrepreneurs? mission is to enable at-risk youth to break free ?'om the cycle of poveny by exposing them to basic business concepts. After receiving this background, the students obtain practical experience by planning. establishing and running their own businesses. This unique program provides an opportunity to learn about and participate in the market, and to experience ?rst hand its potential for solving many of today's most pressing problems. The program follows the old adage, ?If you give a man a ?sh. he can eat for a day. If you teach a man to fish, he can eat for a lifetime.? The Young Entrepreneurs program embodies much of the market-based management philosophy that Koch Industries, Inc., and the Charles G. Koch Charitable Foundation have been studying and developing for years. This philosophy, and the Young Entrepreneurs? cunieulum, focus on those concepts central to operating any successful venture, whether it is foo-pro?t or not-for pro?t. Students learn the ?rst concept, social eoordination, as they create peace?il, productive relations with their communities by establishing businesses within them. Students learn the vital role of private property, and experience economic opportunities and responsibilities, by owning their products and businesses. Rules of just conduct are demonstrated as students Ieam that cooperation, humility, ciidlity, honesty and reliability attract customers. The bane?ts of dispersed knowledge are highlighted as students learn to appreciate their oust unique knowledge of 1 STREET SUITE i DC EUGUS Fl?l?ntt: Fox: 203842466? HARLES G. KOCH I FULINDATION I mstomer needs and the unique skills they possess for satisfying them. Finally, the Young Entrepreneurs? program establishes bene?cial incentives to master these cows, since students own their own businesses and keep their pro?ts. They learn that by helping others, they help themselves. In contrast, most government programs offer incentives for young people to remain dependent on welfare. The Koch family?s deep commitment to and continuous support of trinket-based solutions ?ts well with the Young Entrepreneurs? mission to teach and encourage at-risk youth. The Kochs have been involved with the Young Entrepreneurs program for the past three years, reaching out to over 1,125 students thus far. The Young Entreprenwrs of Wichita program, sponsored by the Charles G. Koch Charitable Foundation, is now in its third year, and the Young ofMinneapolis program, sponsored Re?ning Company, is now in its second year. The newest Young Entrepreneurs program, located in our nation's capital, is sponsored by the David H. Koch Charitable Foundation. I have enclosed articles about the Wichita, Mimteapolis, and Washington programs and hope that after reading about the Young Entrepreneurs around the country, you will share my enthusiasm. If you are interested in learning more, I would be happy to send you ?irther information. Sincerely, 1x194 Richard H. Fink President Enclosures I STREET ?115512 SUITE 300 1' WASHINGTON, DC 2&305 Pitt}! 1C: 2?l2l3424til? I Fax: 202842-435? mg?! E?t FEE: 55:52? Eli! g: {if Koch mrbadism business program: mason Apt! 7. 1992 Hui has l? W??w 10 TB The Hashington Post Thursday, February 24. 1994 By Susan Herendsen ma an Students from six DJC. schools are .'tng a chance to buy low and 3.31] high in courses designed to launch them as bust. l- ness The program-?gives students 'conli-l dense in themselves and teaches them - basic business skills that the};I will need to get Jobs when they graduate. supporters . said at a news coruerenoe last week. The David H. Koch Charitable satin: ?rst two years with a $1 million grant. soother nonpro?t group, the" National Foundation for Teaching Entrepreneur- ship. designed the courses and trained the teachers. - The project is a ?perfect example of the old biblical adage: If you give a man a ?sh. he will eat for a'dav. Hpouteacha 'man to ?sh. he will eat for 'a lifetime." said David Koch. exemtive vice president . of Koch Industries and head of the diar- . -itahle foundation. The teaching foundation believes that I New Program Gives~ Students the Business HineJuniorl-ligh School studentsare participating in?ihe clashes.r along with high school students from . Anannstia' . Bell Multin?niral andtheOptionaScho-oL Nnelta Nwanltea. 16.nseniorat?oo- legs. - Greaney. a spokesman to advertise their goods nausea, Greanep said. Inthewogram.cachoflhe115, students takes a 50-minute en- da 1iliach pupil gets a BIZBAG, or!r business startup Itit. that contains a: sales receipt hook.areoord-keeping . bank. a business-card holder, an . =address book. a calculator. a watch I and a tlictionarjlr,r said Kevin for the . - teaching foundation. who have taken the onmne in other . Students are given $10 to open' cities havestarted areal] Ell-13m aavingaaccounta. that havelastedatleastsixnsonths They are given an additional .350 and generated more than $55100 a to buy wholesale merchandise. then- are told to make posters and mm. andsell . them at ?ea markets. tiresome}.Ir said: lit the end of the torso. the stu-* dents with the best plans compete for $5131 grants to'start real bush - tablished in rear by Mat-intti a for- York'sSoutla Bronxneighmhood and. - "raised $3.5roillioninprivatednnae students nationwide'_will take the ?153 ?an Hamil Fa?- . =7 - doth? fullvinndeli the classes for the .mg p599]; from 11001" neighborhoods opportunities ECEDDLB. From Pain 1 to do:- said PUG 5514:3001 Stiller-inter: ?dmtliinnkitnL th. I fere'd a programthat he did not needto?mdandthathadthestlp- portofschoolprincipals. 5 'l'heteaching foundation wanes- mer businessman turned school- tescher. He began wilhonestudent entrepreneur program in New now supervises programs in '10: Fifteen percentofthestndenta" .The teaching.foundation has tin-us and educated anon students invthe last segen rears?hout anon :llerovernuer 23:199.] Biz kids Star Edltorlal Koch gift puts at?risk kids in business They could have been getting into mis- . chief that recent Saturday. instead, 115 teenagers, many of whom would ?t some" expert's de?nition of ?at risk," were at the Mall of America. They weren't shopping or loitering. They were selling legitimate wares, and pock- eting their pro?ts. - Patricia Dawa, 13, of Minneapolis sold an'lassortment of handcrafted goods from her native Kenya. Robbie Alvara- do; 12, and his buddy David Cohen, 13, of St: Louis Park, hawked ?oppy hats bearing Sports team logos. Angelique Hayes, 12, of Minneapolis, pushed shirts.? Other teens offered beaded key chains, coin holders, clocks, jewelry and more, experiencing the thrill and disap~ pointrnent business ventures can bring. Thcyare participants in the Young En- trepreneurs of Minnesota Program, the local project of the NationalFoundm tion for Teaching Entrepreneurship, a - New York-based program that teaches business skills to disadvantaged youth. The project demonstrates how young lives' can change for the better when corporate America puts its money as well as its mouth behind educational in hovation. Young'Entrepreneurs of Minnesota is solely sponsored by Koch Re?ning Co. of Rosemount. Its gift this year of $330,000 allows the program to invest an average of $1,500 in each student. That'investment buys appealing hands- on. experiential learning, unlike the tra? ditional' pedagogy often offered in school classrooms. Each student? is re- quired to go into business for himself or herself; and keeps any pro?ts. Each re- ceives a canvas attache case stocked with business supplies. Students also get ?venture capital" $50 to invest in a business, 515 to start _a bank account, $35 to purchase a share or more of stock. They devise a business plan and compete for a $1,000 prize for the? plan judged best each semester. No young entrepreneuri has struck it rich in Minnesota yet But in New York, where the program got an earlier start, several ?ourishing retail stores, one recording studio-and a dressmaking company have been founded by pro- graduates. A better measure of the program's success may be that, in Min- nesota, 45 of the program's 7,00 grade-t ates are still engaged in the businesses they founded, and seyeral others are pursuing college degrees or careers they might have considered unattainable be- fore. As educators are beginning to under- stand, many children considered disad- vantaged possess resilience and survival skills that, if properly channeled, can make them successful adults. The les- sons of the School of Hard Knocks may be eSpecially applicable to entrepreneur- ship and the risk-taking it requires. Thanks to Koch's vision and generosity, the Young Entrepreneurs program is testing that notion. It may serve as a model for larger-scale efforts to redeem troubled young lives and inner-city America.