Social Enterprises February 7, 2025 How to Reduce Prison Recidivism With Inclusive Capitalism Social enterprises are breaking the cycle of incarceration by creating fair-chance employment opportunities, fostering economic independence, and reducing recidivism—discover how these innovative businesses are transforming reentry. A Broken System in Need of Change The United States has the highest incarceration rate in the world, with 1.8 million individuals living in prisons today. Despite spending over $80 billion annually on state and federal prisons, the system has failed to produce lasting solutions to crime and rehabilitation. Recidivism rates remain alarmingly high— 60% of justice-impacted individuals return to prison within three years of release. The consequences of this cycle extend far beyond the justice-impacted individuals themselves. Families are destabilized, entire communities experience generational setbacks, and taxpayers continue to bear the financial burden. Each year, the United States spends approximately $42,000 per incarcerated individual, a figure that does little to account for the long-term economic damage caused by unemployment, disenfranchisement, and systemic barriers that prevent successful reentry. The primary driver behind recidivism rates in this country is the lack of opportunity after incarceration. 75% of justice-impacted individuals struggle to secure full-time employment within a year of release. Without access to stable employment, financial insecurity and social isolation increase the likelihood of reoffending. The traditional approaches—lengthening sentences, increasing surveillance, and expanding prisons—have done little to curb crime or create safer communities. Instead, they have fueled a system where mass incarceration has become a cycle rather than a corrective process. However, a new model is emerging—one that shifts the focus from punishment to economic empowerment and sustainable reintegration. How Did We Get Here? The United States did not arrive at this crisis overnight. The War on Drugs of the 1970’s, mandatory minimums, three-strikes laws, and the 1994 Crime Bill led to an explosion in the U.S. prison population by more than 700%. Despite these aggressive policies, crime rates did not drop in proportion to incarceration rates. Today, we are witnessing the slow dismantling of these failed policies. Reentry programs, prison education initiatives, and criminal justice reform efforts are leading to declining rates of incarceration in the United States. Yet, policy change alone is not enough to reduce unprecedented rates of recidivism. Justice-impacted individuals need real economic opportunities, and that is where social enterprises are stepping in to fill the gap. Emergence of Social Enterprise The U.S. economy has systematically excluded justice-impacted individuals from the workforce for decades. Even though some Fortune 500 companies have publicly committed to Fair-Chance Employment, in practice, many still hesitate to hire individuals with criminal records. This reluctance leaves thousands locked out of the workforce, perpetuating cycles of poverty and reincarceration. A social enterprise is a new kind of business model designed to achieve financial sustainability and social impact simultaneously. Unlike traditional for-profit businesses, which prioritize maximizing revenue, social enterprises reinvest their earnings into community-driven initiatives. These enterprises actively address systemic challenges, such as unemployment, wealth inequality, and barriers to reentry. In the context of criminal justice reform, social enterprises focus on: Fair-chance hiring – Employing justice-impacted individuals who traditional employers often overlook. Training and mentorship – Providing career development opportunities to help employees gain marketable skills. Reducing recidivism – Offering stable employment that helps individuals reintegrate successfully into society. Equity ownership – Creating pathways for financial stability and generational wealth. Social enterprises provide an alternative for people who have been impacted by the justice system–a self-sustaining, scalable solution that does not rely on corporate hiring trends. By directly creating economic opportunities, social enterprises remove the dependency on traditional employers and empower individuals to generate their own success. Turn2U Productions Transforming Reentry Through Ownership Turn2U Productions, a promotional products company developed by the founders of The Last Mile, is an example of a social enterprise dedicated to reducing recidivism by providing justice-impacted individuals with both employment and equity ownership. Turn2U operates as a separate, for-profit business that serves as an onramp for TLM alumni, helping them build skills, financial independence, and career experience. A portion of its profits support TLM, reinforcing a virtuous cycle of opportunity. Turn2U Productions is designed to provide justice-impacted individuals with stable employment while offering a unique opportunity—a path to equity ownership. Equity ownership is a standard part of compensation in industries like technology and finance. Employees receive stock options, providing a direct financial stake in the company’s success. However, these opportunities are almost nonexistent for justice-impacted individuals. Incorporating employee ownership into social enterprises offers a promising solution to economic exclusion by providing justice-impacted individuals with a direct stake in the businesses they help build. For example, Turn2U structures its enterprises as separate LLCs, allowing employees to vest equity ownership in specific companies, and ensuring that those contributing to the organization’s success also share in its financial growth. This model fosters a more inclusive form of capitalism, where wealth is distributed more equitably, empowering workers to achieve long-term financial stability and breaking the cycle of economic disenfranchisement. Despite their potential, social enterprises face significant challenges to widespread adoption in the U.S. A lack of awareness and skepticism from investors, who often view them as riskier or less profitable than traditional businesses, limits funding and scalability. Additionally, insufficient policies and persistent stigma against justice-impacted individuals create barriers to employment and economic reintegration. Managing the balance between social impact and financial sustainability also demands specialized skills, making it difficult for these enterprises to compete and thrive without systemic support. How You Can Support the Social Enterprise Movement If we want a justice system that prioritizes rehabilitation over punishment, we must actively support economic solutions for returning citizens. Here’s how: Advocate for Fair-Chance Hiring within your Organization – Encourage businesses to remove barriers to employment for justice-impacted individuals. Support Social Enterprises – Purchase from Turn2U Productions and other businesses prioritizing employment for returning citizens. Push for Policy Change – Support legislation that removes licensing, education, and employment barriers for justice-impacted individuals. The current system isn’t working—but social enterprises provide a tangible solution. By creating employment pathways that include training, fair wages, and ownership opportunities, we can end the cycle of incarceration and exclusion. This isn’t charity—it’s smart economics and social justice combined. The only question left is, How soon will we support these models to make reentry truly successful? Here are a few other Social enterprises that are worth checking out: Homeboy Industries: Homeboy Industries’ Job Training Program combines on-the-job learning with comprehensive services and unconditional support. Each year Homeboy welcomes thousands of former gang members and previously incarcerated men and women to learn hard and soft skills to transform their lives. Whether joining an 18-month employment and re-entry program or seeking discrete services such as tattoo removal or substance abuse resources, clients are embraced by a community of kinship and offered a variety of free wraparound services to facilitate healing and growth. The social enterprises under the Homeboy brand include Homeboy Bakery, Homegirl Cafe, Homegirl Catering, and Homeboy Electronics Recycling. Greyston Bakery,is a for-profit business that practices open hiring—meaning they hire anyone who applies for a job, no questions asked. This approach has allowed the bakery to employ individuals who might otherwise struggle to find work, including those with criminal records. Greyston’s model has been widely praised for its innovative hiring approach and its positive social impact, proving that businesses can succeed while prioritizing social good. TOMS Shoes has the mission to improve lives by promoting corporate responsibility and conscious consumerism. Founded in 2006, TOMS is considered the Original One for One Company. This means that for every pair of shoes sold, TOMS provides a new pair to a person in need. With the mission to promote corporate responsibility and conscious consumerism, the organization champions a close-knit culture. They have adopted a model where one-third of their profits go toward grassroots organizations. TOMS has given nearly 100 million pairs of shoes to people in need, but their impact expands beyond shoes. According to their 2019 Impact Report, TOMS has provided 780,000 sight restorations, 722,000 weeks of safe water and given $6.5 million in impact grants worldwide. By Robert Roche, Content Marketing Director with The Last Mile. Want articles like this one in your inbox? Subscribe to The Last Mile Marker, a newsletter offering in-depth insights, critical updates, and inspiring stories on criminal justice reform and second chances.