White Paper: Our Social Return on Investment
Better Futures Minnesota: Measuring our Social Return on Investment
ADDRESSING THE GROWING PROBLEM OF MASS INCARCERATION
Prisons in Minnesota are becoming increasingly costly for the state—and increasingly costly for our families, schools, and communities. What’s more, mass incarceration in Minnesota is growing at an accelerated rate, and it’s disproportionately affecting people of color.
While whites represent 83 percent of Minnesota’s population, they make up 47 percent of the state’s prison population, according to the most recent data from Prison Policy. By contrast, African Americans represent only 5 percent of the state’s population, but 31 percent of the state’s prison or jail population. These systemic, racial disparities represent a troublesome, growing trend in our state.
Minnesota’s prison population has grown over the past three decades thanks to more drug-related convictions and stiffer sentences. The state has one of the nation’s worst imprisonment disparities between whites and blacks. –Pioneer Press, April 29, 2016: “Minnesota’s worsening racial disparity: Why it matters to everyone”
What’s more, whether intentional or not, our society has turned its back on a group of people, overwhelmingly African American men, who are labeled as chronically homeless, chronically unemployed, frequent offenders, and frequent high users of taxpayer dollars. This is public health crisis that has a deep human and financial toll on the men, their families, taxpayers, and our communities.
Better Futures Minnesota seeks to disrupt this growing public health crisis through effective, efficient, and compassionate practices and services that work to avoid victimization costs and provide men with the opportunities they need to become productive citizens, fathers, employees, and neighbors.
REDUCING RECIDIVISM THROUGH INTEGRATED CARE
At Better Futures, we know the men we serve are not simply in a process of ‘re-entry’ after incarceration. Rather, their experience before, during, and after incarceration is a public health problem that has deep costs to our communities.
For far too long, current systems and practices have produced unacceptable, expensive outcomes and left men wanting to turn their lives around without an opportunity or sufficient support to do so. This crisis is particularly devastating in Minnesota.
Better Futures Minnesota’s integrated-care approach achieves real, quantifiable results and demonstrates creative ways to reduce the reliance on costly systems and place hard-to-employ men on a pathway to independence.
“THE growth in the nation’s prison population has been nothing short of staggering. The United States’ incarceration rate is now more than four times the world average, with about 2.2 million people in prisons and jails. Of those, roughly 200,000 are federal inmates, double the number from 20 years ago. This substantial increase occurred even as violent crime was falling sharply.” –NYT, April 2016
After felons serve their time, they return to society with few opportunities to be successful because of the stigma that comes with their past conviction,” said Jonathan Rose, who examined the state’s racial disparities for the Council on Black Minnesotans in 2013. “It becomes a vicious cycle, and they can’t get out of the trap,” Rose said. “It doesn’t start with prison, but prison is an anchor.”
–Pioneer Press, April 29, 2016
A QUANTIFIABLE SOCIAL RETURN ON INVESTMENT
In Minnesota, the cost of incarceration per prisoner annually greatly exceeds the cost of education per student. According to the most recent report from the Vera Institute, the government/taxpayer cost to educate an elementary/secondary student per year is close to $10,000. Yet the government/taxpayer cost to keep one inmate imprisoned in Minnesota for one year is $40,000.
By contrast, the annual cost for each participant at Better Futures is $17,388—less than half of the incarceration—and it provides the essential wrap-around services, such as housing, job training, health and wellness engagement and services, life coaching, and additional mental and physical health support that men need to transform their lives and begin building their own success stories.
The social return on investment (SROI) at Better Futures Minnesota has been phenomenal. Each dollar investment per participant has resulted in $2.31 return on investment.
What’s more, the $17,388 investment in one participant results in $39,929 in benefits to local municipalities, the state, the federal government, taxpayers, and society at large.
These positive social and financial impacts are seen in wages earned, taxes and child support paid, and victims, prison, and Medicaid costs avoided.
HOW WE MEASURE SOCIAL IMPACT
As a social enterprise, Better Futures Minnesota is accountable to private investors and to the state and local governments who purchase our innovative services that help give men the comprehensive, integrated care and support they need to stay of out the costly prison system and remain productive members of society.
In order to track our social impact, we have utilized the Pew-MacArthur Results First framework, a project of The Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation, which helps states to implement a cost-benefit analysis approach that helps them systematically identify and invest in policies and programs that are proven to work.
Republican and Democratic leaders in Washington State report that this new approach, developed by the Washington State Institute for Public Policy, has helped produce bipartisan policies that improved results while saving more than a billion dollars.
Better Futures Minnesota partnered with independent organization EcoTone analytics, whose model utilizes Sankey diagrams combined with an evidence-based approach to estimating benefits-costs for social impact organizations that is modeled after the Washington State Institute for Public Policy and Pew- MacArthur “Results First” methodology.
Data and effect sizes were primarily gathered from the MN Department of Employment and Economic Development (DEED), Net Impact Evaluation, the University of Minnesota Health Care Homes Evaluation, the MN Supportive Housing and Managed Care Pilot, and Better Futures’ Participant and Financial Data. The Results First framework was endorsed by the Minnesota Office of Management and Budget.
In addition to the higher-than-average cost-benefit Social Return on Investment, in 2016, through Better Futures Minnesota’s model:
- 146 men received outreach services
- 89 men received coaching, housing, and job placement
- 80 men were employed through Better Futures enterprises
- 25 men obtained permanent housing that had never been obtainable to them before
- 92 percent of men Better Futures’ model remained in the community and paying taxes, compared with the average of the same population in Hennepin County where nearly 40 percent return back to prison within two years.
Better Futures Minnesota is buoyed that our community-based, comprehensive, integrated-care model has shown real results.
For the men at Better Futures, less than 10 percent are returning to prison for a new crime within a year of release, a rate that is about three times lower than other documented results. What’s more, 86 percent of the men living in housing financed by Better Futures are employed or in school. Since our inception, Better Futures has employed more than 550 men in our lines of business.
UNIQUE SOCIAL ENTERPRISE: CLOSING THE GAP
The Mathematica Jobs Study, released by REDF in 2015, revealed that social-enterprise businesses provide a cost-effective way to improve the lives of people who face barriers to work while also generating savings for communities and taxpayers.
In addition to the average 268 percent monthly wage increase for those employed by social enterprises, the report also revealed that social enterprises generate a significant return on investment for society.
According to the report: “For each dollar spent by social enterprise, taxpayers save $1.31. When you add in the social enterprise’s revenue, and worker’s income, the return on investment rises to $2.23. This means a $100,000 investment would have a return of $223,000 for society.”
Better Futures current model exceeds that national average, with a return on investment of $2.31, and it does so with a unique wrap-around model that provides men with services that are integrated and comprehensive, and often at a cost less than individual services.
In Minnesota, transitional housing alone, for example, costs an average of $20,000 per year, while all of Better Futures’ wrap-around services—mental and physical health care, supportive housing, workforce development, and life coaching and compassionate care—cost $17,388 per year.
In addition, the effect on earnings for men in Better Futures during 2016 was $11,738 higher than the earnings for the same population average, resulting in more child support paid, individual income earned, and immediate financial benefits to taxpayers and the local economy.
[U]nemployment for Minnesotans of color is as much as four times higher than that of white residents. In February of 2016, 2.9 percent of white workers were unemployed, compared with 13.6 percent of black workers.
Addressing racial inequity is important, not just for moral reasons but because Minnesota’s economic future depends on it. Workers of color are the only part of the workforce that’s growing.
Minnesota has some of the worst racial disparities in the nation — gaps that have widened over the past five decades and that soon may create a statewide economic crisis.
U.S. Census data show most Minnesota families of color now have median incomes about half those of their white neighbors. It wasn’t always that way. In 1960, family earnings for the state’s small nonwhite population were about 74 percent of what white families made. –Pioneer Press, April 29, 2016
WHY OUR MODEL WORKS
Better Futures Minnesota works through an evidence-based, integrated-care model that connects the men of Better Futures with the Four Fundamentals (health, housings, jobs, and coaching) and focuses on healing, personal accountability, and hard work—all of the parts working together to achieve personal transformation and positive outcomes.
Operating since 2007, Better Futures Minnesota’s unique model has helped men throughout Minnesota realize their potential for success and become responsible members of the community who earn wages, pay taxes and child support, and are self-sufficient and engaged in building their own success stories.
We are a social enterprise bigger and more ambitious than a program. We are building a movement that supports personal transformation and the building of a healthy, vibrant community of men.
At Better Futures Minnesota, we aspire to:
- Re- imagine effective, efficient, and compassionate practices and services that work to transform lives, instead of costly, ineffective government polices that cripple government and keep men out of opportunities to become productive citizens, fathers, employees, and neighbors.
- Re-define the problem. The men served by Better Futures are not in a process of re-entry; rather their experience before, during, and after incarceration is a public health problem. We seek to address the trauma and mental health issues, racial and economic disparities, and poverty and homelessness that are chronic public health issues that disproportionately affect the men we serve.
- Re-address public perceptions, biases, and policies that marginalize people and keep men locked out of opportunities.
- Re-engineer the way essential, core services are organized, delivered, and financed.
- Re-direct public dollars to focus on trauma-informed, evidence-based care and services instead of in costly institutions and ineffective practices that don’t produce long-term, positive results.
- Re-build a strong, vibrant community of hard-working men who are dedicated to success and transformation, and to Better Futures’ commitment to making a positive impact in our communities.
Through our unique public-health intervention model, we can address the root causes of chronic poverty and homelessness, dependency on public assistance programs, racial disparities in physical and mental health outcomes, and the high rates of untreated trauma and illnesses that often lead to incarceration and increased recidivism.