Dollars and Sentences: Making Cents of Impact Investing in Criminal Justice

By focusing on impact investing, we can help address the systemic issues within our criminal justice system, reduce recidivism rates, and foster a society where everyone has the opportunity to succeed.

Impact investing is a powerful tool that can address systemic issues within our criminal justice system. By directing capital towards programs that support rehabilitation and reentry, investors not only contribute to social good but also benefit economically.

Reducing Recidivism Through Investment:

Investing in rehabilitation programs can significantly reduce recidivism rates.[1] Lower recidivism means fewer individuals returning to prison, which translates to reduced incarceration costs.[2] This not only alleviates the financial burden on taxpayers but also reallocates funds to other critical areas such as education and healthcare.

Economic Benefits for Investors:

Impact investments in criminal justice can yield substantial economic returns. Programs that focus on education, job training, and mental health services for formerly incarcerated individuals enhance their employability and productivity.[3] This, in turn, creates a more robust and inclusive workforce, driving economic growth. Additionally, investments in correctional education have shown to provide a return of $5 for every $1 invested, demonstrating the financial viability of such initiatives.[4]

Impact and Employment Growth

By focusing on impact investing, we can significantly decrease recidivism rates by creating high-quality jobs that provide economic opportunities for formerly incarcerated individuals. When you invest in companies, it not only helps those businesses grow but also generates more jobs, which in turn supports economic development. Investing in companies that offer not just minimum wage, but also benefits like 401(k) plans, ensures a pathway to a better standard of living.[5] Funds targeting equity and diversity are crucial in supporting underserved communities and fostering a more inclusive and sustainable economic growth.[6]

[1] https://nij.ojp.gov/topics/corrections/recidivism

[2] https://www.sentencingproject.org/reports/mass-incarceration-trends/

[3] https://www.brookings.edu/articles/a-better-path-forward-for-criminal-justice-training-and-employment-for-correctional-populations/

[4] https://www.rand.org/well-being/justice-policy/portfolios/correctional-education/policy-impact.html

[5] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8502001/

[6] https://hbr.org/2023/05/the-obstacles-to-creating-good-jobs

- Hanna Rahman, Summer Impact Intern

• Programs like The Last Mile and Defy Ventures are leading the way by providing tech training and entrepreneurial skills to incarcerated individuals, equipping them with the tools needed for successful reentry into society. These programs have shown that when formerly incarcerated individuals are given high-quality jobs that offer not just minimum wage, but also benefits like 401(k) plans, their chances of reoffending decrease significantly. This not only benefits the individuals but also supports economic development by growing businesses and creating more jobs.
• Recent legislative efforts have been instrumental in fostering a more supportive environment for reentry programs. The passage of the First Step Act in 2018 marked a significant milestone in criminal justice reform, aiming to reduce recidivism through various initiatives, including job training and educational programs for inmates. Additionally, states like California have passed laws such as the Fair Chance Act, which encourages employers to consider qualified applicants with criminal histories, further promoting high-quality job creation.

• Support Research and Data Collection: Invest in research to better understand the challenges faced by formerly incarcerated individuals and the effectiveness of various reentry programs. Data-driven approaches can inform policy and investment decisions.
• Corporate Responsibility: Companies can integrate impact investing into their portfolios by supporting bonds and funds dedicated to criminal justice reform and reentry programs.
• Educational Initiatives: Promote and support educational programs in prisons, ensuring inmates have access to GED and college courses to improve their prospects upon release.

• Support Fair Chance Employers: Choose businesses that hire formerly incarcerated individuals. Your support helps these businesses grow and create more job opportunities.
• Invest in Impact Funds: Invest in funds focusing on criminal justice reform. These funds support job training, education, and reentry services, contributing to systemic change.
• Advocate for Fair Hiring Practices: Encourage your employer to adopt fair chance hiring, considering applicants with criminal records based on qualifications.
• Educate Yourself and Others: Learn about the criminal justice system and share this knowledge. Attend events or webinars on criminal justice reform to stay informed.
• Volunteer with Reentry Programs: Offer your time and skills to organizations that support formerly incarcerated individuals through mentoring, job training, and other services.
• Support Policy Changes: Advocate for laws that promote criminal justice reform and reentry programs. Your voice can help shape supportive policies.

This newsletter is intended solely for informational purposes, and should not be construed as investment/trading advice and are not meant to be a solicitation or recommendation to buy, sell, or hold any securities mentioned. Any reproduction or distribution of this document, in whole or in part, or the disclosure of its contents, without the prior written consent of Flat World Partners is prohibited

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