Despite some progress toward ending mass incarceration in recent years, the U.S. still has the highest incarceration rate in the world. Racial and gender disparities and inequitable policies within the criminal justice system – from policing to courts to prison – continue to harm individuals and their loved ones. Forty-five percent of the U.S. population has a family member in prison.

But solutions to these problems abound. The De-Carceration Fund invests in tech-enabled enterprises that reduce recidivism and help those impacted by incarceration. The Fund is included in ImpactPHL’s index of impact investments, which lists investments that create positive social outcomes in Greater Philadelphia.

Giving Compass spoke with Christopher Bentley, founder and managing principal of the De-Carceration Fund, to learn more about the organization’s approach, successful models, and how impact investors and donors can be effective partners. The interview has been edited for length and clarity.

Q. Tell me why the De-Carceration Fund was founded and why your approach is unique?

I've been doing seed-stage impact investing for about 15 years as a generalist, working on everything from environment to education and access to health care. I started to focus on why the private sector is so unsuccessful in creating positive outcomes in this space. It has a well-earned bad reputation for a lot of things, particularly around misaligned business models (when a successful outcome from a business and finance standpoint is the inverse of what we want to happen from an impact standpoint). A high level example of this is private prisons. Their financial model is not based on rehabilitation, but on how many beds are filled per day. Other companies have taken advantage of their ability to become a sole supplier to charge whatever they want because they are the only choice. 

I began to focus on a theory of impact in this space, and look for business models designed to create disruption and either scale good policy or disrupt bad policy. That was the basis for the launch of this fund. A lot of it is looking at policy trends and the efficacy of nonprofit work in this space and using that knowledge to design private sector business models that create alignment there. 

Q. Can you share an example of an investment that has had a positive impact on incarcerated individuals or that addresses the injustices of mass incarceration?

Our first investment is a company called Uptrust. They started off working with public defenders and developed a tool for them to better communicate with their clients. The goal was to reduce pre-trial violations that can cause re-incarceration prior to an individual’s trial after they've been released. Pre-trial violations can happen for a number of technical violations which aren't necessarily crimes – missing appointments, meetings, check-in dates. This tool helps public defenders with a high workload easily communicate – send reminders to and get feedback from their clients. They have now expanded into the probation and parole market doing the very same thing. About 70% of individuals that are re-incarcerated after they've been given a parole or probation sentence haven't committed a crime, they’ve just missed a meeting or committed technical violations. 

When I was doing diligence on Uptrust, the probation chief said that most people entering this line of work genuinely want to work with people on rehabilitation. But she said everything about the job looks like enforcement. It's about looking for things that people do wrong and calling them out. So you have a bunch of people that are signed up because they want to be coaches, and instead, their job looks much more like a referee. This tool allows them to coach their clients.

Q. What are the major disparities in the criminal justice system and how is technology specifically poised to offer solutions?

There was a drastic reduction in budgets for educational programs in prisons. It has been historically very expensive to do educational programming in prison because you have such a broad spectrum of population needs. However, if you can curate the right kind of content and use technology, specifically, tablet-based, self-directed educational programming, then you can help meet those various needs. Technology can provide everybody in a facility (at an extremely low cost) with the ability to do vocational training, work on a GED, take college courses, or court-mandated classes.  

Health care is also an area of huge disparity. There is a massive impact on life expectancy for every year of incarceration. Research suggests that the incarceration rate in the United States has led to a two-year reduction in life expectancy across the total population. Telehealth could provide a much more even playing field and access to medical care that isn't available there. The same is true for financial literacy, communication, and job access as well. 

Q. How has private investment affected the criminal justice system? What are your criteria when selecting investments to fund to avoid perpetuating disparities? 

First, is there some verifiable, measurable impact change that we can look at? Generally, that boils down to: Are they reducing the number of people getting into the system in the first place? Second, are they reducing the impact to individuals that are currently in the system or their families? Then, are they really helping to make a more successful transition out of the system? 

The second thing we look at is the potential for unintended consequences. We ask questions like, “Where is the risk?” and “How could this go wrong and create an outcome that we didn't want?” We have a fair number of nonprofit partners that offer valuable insights about company approaches to help us decide if it makes sense.

The last component we look at is if the company were to scale and grow, could it really create a significant disruption? Using the Uptrust example: If the company is successful and makes meaningful changes in the number of technical violations and people that are incarcerated after receiving probation and parole sentences, this means they could actually reduce the number of people inside and could meaningfully change the way parole officers do their work.

Q. What would you like to see from impact investors looking to invest in criminal justice reform? What advice would you give them?

The big thing is looking for potential for unintended consequences and ensuring that the mission alignment and the business model are not in opposition to one another. Another really important area is making sure that individuals with lived experience have agency in the decision-making process. We have maybe 50 companies in the pipeline that we're looking at right now. Almost half of that pipeline includes founders that are returning citizens. I think that lived experience goes a long way into understanding what strategies might work.