“It is said that no one truly knows a nation until one has been inside its jails. A nation should not be judged by how it treats its highest citizens, but its lowest ones.”
– Nelson Mandela

In my writing on this blog, I often proudly carry the flag of the nonprofit sector. I’m sometimes writing in a reactive manner, trying to defend the nonprofit world from those who feel that for-profit models better suit the work our society needs.  Too often this conversation has been framed by the word which – which business model better creates social change? In reality, it seems it might be better framed as a question of when –  when is the for-profit model more effective than the nonprofit model (and when is the opposite true)?

There is no more salient example of our society’s failure to know the difference between these questions than America’s prison industry. As control of prisons has shifted from the government to private corporations, the inmate population has grown and efforts toward rehabilitation have quickly disappeared. In this instance, it has become clear that a for-profit model does not further the interests of the larger society.

In addition to incentivizing a large inmate population, the for-profit model also leaves entire towns depending on a prison (often run by a distant corporation) as the single employer in town. Not only does the corporation running the prison itself have no incentive to rehabilitate prisoners, the communities that rely on prison-centric employment have no desire to decrease the prison population either.

Returning to the question of when: When is the nonprofit structure more appropriate? I’d offer that prison reform is one area where nonprofits are better suited to solve the problem than for-profits.

So, what would our prison system look like if a nonprofit model were adopted? What if the District of Columbia opened the country’s first nonprofit-run prison?

To provide the level of rehabilitation necessary to shrink the inmate population, the new nonprofit prison would need to be run by a collaborative, including organizations that provide education, job training, housing and mental health services. All inmates would receive flexible sentences: While current rules allow for early release due to “good behavior”, our prison would provide early release opportunities for those inmates who furthered their education, earned a certificate in a trade, or participated in counseling. We would incentivize behaviors that would contribute to lower rates of recidivism.

While the above recommendations seem obvious, they would not be the most significant difference between today’s prisons and this new nonprofit model. This new prison would have a stated goal of closing, or, at the least, getting smaller with each passing year, with wings and floors shutting down as they fall out of use. Employees of the prison would have access to free educational opportunities. Through these opportunities, these individuals would be given the opportunity to train for their next job – the one they will need after the prison closes.

How would this be financed? Well, at the onset, the government would continue to provide financial support based on the prison population. To support the expansion of rehabilitation efforts – including education, therapy, and supportive housing – it seems that social impact bonds might be a reasonable tool. Investors would earn returns based on the recidivism rate. This model would benefit investors while also shrinking the inmate population, creating savings for the government.

The current calculus is simple. When for-profit companies run prisons, they are motivated to keep beds full. To a large degree, this creates a perverse incentive: rehabilitating prisoners is bad for business. It also comes at an extraordinary cost to the government and its citizens. A nonprofit prison could focus on rehabilitation with the goal of going out of business – something far from the norm within a for-profit context.

Profit motives can, at times, encourage efficiency. And, at times, as I’ve discussed previously, for-profit models allow for faster growth. This does not mean “business mechanisms” can solve all our problems. We must investigate incentives and ensure that those incentives are aligned with identified social goals.

In our prison system, we’re currently seeing the results of the failure to align incentives and desired outcomes. By developing a nonprofit prison system, perhaps we could see something different – a system that would provide rehabilitation and create savings for the government.

Photo credit: Vectorportal