Understanding and Confronting
the Prison-Industrial Complex
An Overview for Philanthropists

OCTOBER 2018

UNDERSTANDING AND
CONFRONTING
THE PRISON-INDUSTRIAL
COMPLEX

A BO UT T H E REPORT

As part of its commitment to learning, Robert Wood Johnson Foundation engaged Arabella
Advisors to conduct a study of the intersections between the private US prison system and the
work of foundations. The views expressed in this report do not necessarily reflect the views of
the foundation.
A BO UT A RAB EL L A ADV I SORS

Arabella Advisors helps foundations, philanthropists, and investors who are serious about
impact create meaningful change. We help our clients imagine what’s possible, design the best
strategies, learn what works best, and do the work necessary to turn their visions into reality.
To learn more, visit www.arabellaadvisors.com.

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UNDERSTANDING AND
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CONTENTS
Introduction	

4

Mass Incarceration and the Prison-Industrial Complex	5
Opportunities for Philanthropists to Help Drive Change	

6

An Overview of the Prison-Industrial Complex	7
The Prison-Industrial Complex Spans Multiple Sectors	
Strategic Intervention Points Within the Prison-Industrial Complex	

7
10

Next Steps for Concerned Philanthropists	17
Support Additional Research on the Prison-Industrial Complex	

17

Divest from Egregious Actors	

17

Implement Investor Activism and Capital Market Strategies	

19

Matching Types of Actors with Potential Philanthropic Strategies	20
Conclusion	21
Acknowledgments	21

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Introduction

can help address over-incarceration in America and the serious harm it
does to communities by supporting efforts to better understand and confront what criminal
justice experts call “the prison-industrial complex,” the network of companies that currently
profit from the US prison and detention system. Through their endowments, philanthropists
may be unwittingly invested in corporations within the prison-industrial complex whose
efforts are at odds with funders’ charitable missions and commitments to social, economic,
and racial equity. This report provides a high-level overview of the prison-industrial complex
for philanthropists, identifies several opportunities for potential intervention, and begins to
outline possible strategies that concerned funders and impact investors can use to help curtail
its growth and influence—and thereby work to end the current era of mass incarceration.
We hope that the report will prove helpful to funders that are concerned about the ways in
which their unintentional investments in the prison-industrial complex may undermine their
values and priorities and seek to understand how they can remediate those harms.
PHILANTHROP I STS

W

e recognize that
ending the era of mass
incarceration will
require much more than is
outlined here. It will require
fundamental reforms to our
criminal justice system, including
changes to unjust, unfit, and
overly punitive sentencing policies
and drug laws, as well as reforms
of prosecutorial and policing
practices that correlate with
soaring prison populations. It will
require funding for programs
designed to build communities,
reduce crime, and break down the
pathways and practices that
currently channel far too many
people into prisons, jails, and
other detention centers. It will
require more support of racial
justice and equity, work in which
many funders are increasingly
engaging.

We also recognize, however, that
ending the era of mass
incarceration will require a better
understanding of ways to
effectively confront the prisonindustrial complex: the network
of thousands of companies that
are currently involved, in various
ways, in the detention,
incarceration, and confinement of
human beings across the United
States. As we describe in more
detail below, this network
extends across a wide range of
sectors and includes a variety of
actors, from companies accused
of egregious and exploitive
practices to others that may
simply be supplying services to
prisons to still others that may
not even realize that prison labor
is part of their supply chains. This
network is part of what enables,
perpetuates, and helps to shape

our nation’s prison and detention
system and represents a potential
entry point for disrupting and
beginning to change that system.
Curtailing the influence of the
prison-industrial complex and
holding the worst actors
accountable will require a broad
array of governmental, nonprofit,
and corporate actors.
Philanthropists can play a role in
tackling this part of the mass
incarceration problem by using
their endowments and grantmaking capital to increase
understanding of the prisonindustrial complex, expose and
stigmatize flagrant practices
going on within it, and counter the
political influence of those
seeking to preserve and extend
the current system of mass
incarceration.

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Mass Incarceration and the Prison-Industrial Complex

in the United States harms both individuals and communities, with
particularly devastating effects on communities of color, and it often does so without advancing
the public safety objectives that incarceration purports to serve. With 2.3 million people in
confinement and nearly three percent of the population under some form of correctional
supervision, the United States imprisons far more of its people than any other country.1
Over-incarceration disproportionately impacts economically distressed communities and is a
significant driver of racial inequality. Those convicted of felony offenses—primarily blacks and
Latinxs—suffer profound, long-term collateral consequences, including, but not limited to, lost
voting and civil rights and legalized discrimination in employment, housing, and access to
public benefits.
MASS INCARC ERATI O N

D

espite the significant harm
it does to communities,
mass incarceration is big
business. Skyrocketing
incarceration rates in the United
States have turned the criminal
justice system into a multi-billion
dollar industry, with federal, state,
and local governments spending
$80 billion on incarceration in
2013 alone.2 In an effort to achieve
cost savings, departments of

correction at the local, state, and
federal levels have handed billions
of dollars in contracts to private
firms. This has led to a network of
thousands of companies that
profit from mass incarceration,
ranging from the companies that
operate private prisons to the
subcontractors that provide
prisons with telecommunications,
transportation, food vending, and
many other goods and services.

Activists and others charge
numerous companies within this
complex of engaging in egregious
and exploitive practices. Some
companies have also played a role
in advocating for the public
policies that have driven mass
incarceration and increased
immigrant detention. Others are
companies that profit from
conducting business within and
across the network.

Racial composition of the incarcerated population in the United States*
RACE/ETHNICITY

% OF US POPULATION

% OF US INCARCERATED
POPULATION

NATIONAL
INCARCERATION RATE

White (non-Hispanic)

64%

39%

450 per 100,000

Hispanic

16%

19%

831 per 100,000

Black

13%

40%

2,306 per 100,000

SOURCE: PRISON POLICY INITIATIVE, USING US CENSUS DATA.

1
2

*Does not add up to 100%

Wagner, Peter. “Mass Incarceration: The Whole Pie 2018.” Prison Policy Initiative. 14 March 2018. [Link]
Executive Office of the President of the United States. “Economic Perspectives on Incarceration and the Criminal Justice System.” April 2016. [Link]

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Over the last
40 years, due to
a surge in tough-oncrime laws such
as three-strikes
laws, mandatory
minimums, and truthin-sentencing laws,
the number of people
incarcerated in
the United States has
quintupled.

State and Federal Prison Population
2MM
1.5MM
1MM
0.5MM
0
1970 	

1980 	

1990 	

2000 	

2010

2020

*DOES NOT INCLUDE US JAIL POPULATION. SOURCE: BUREAU OF JUSTICE STATISTICS 

Opportunities for
Philanthropists to Help
Drive Change

Much work remains to be done,
and we see several areas where
philanthropists can play valuable
roles in beginning to confront the
prison-industrial complex.
Support research to map the
network of companies involved in
the prison-industrial complex in
greater detail. Such mapping can
raise awareness of the prisonindustrial complex, identify and
expose its harmful practices, and
empower advocates to counter
the influence of those seeking
to advance policies tied to profits
rather than to preserve and
protect communities.

Support organizations and
initiatives that are working to
counter the advocacy efforts
of politically active corporations
that profit from mass
incarceration. Various companies
within the prison-industrial
complex provide money to
lobbying groups that strengthen
and perpetuate policies that help
drive mass incarceration. Those
working for better policies need
financial support to overcome
potential opposition from groups
that benefit from the continuation
of “business as usual” in the sector.
Divest from egregious actors
and invest in positive solutions.
As in other sectors, divestment
can help isolate and stigmatize

entities that are engaged in
harmful practices, and can
potentially motivate other
corporations to cease doing
business with them unless and
until they reform how
they operate. Meanwhile,
investment in positive solutions
can begin to help rebuild
damaged communities.
STATE
Consider
investor
activism and
PRISONERS
capital market strategies. Donors
and investors may also want
to use theirFEDERAL
capital and influence
PRISONERS
to take equity positions in
companies that are associated
with the prison industry from
which they can raise awareness
and push companies toward
reform from within.

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An Overview of the
Prison-Industrial Complex
There is no
heavy hitter among
philanthropists
who’s saying,
‘We are not going
to support
the prison-industrial
complex and neither
should you.’
It would have a
huge impact to have
even 10 big foundations
on board.”
N ATION A L JU V E N I L E
J USTI CE E X PE RT

The Prison-Industrial
Complex Spans Multiple
Sectors

The prison-industrial complex is
an extensive network of
thousands of public and private
corporations, many of which have
profited directly from the
dramatic increase in the number
of people detained in the United
States since 1980. The most
well-researched and reported-on
companies profiting from the
prison system are private prison
operators, including the GEO
Group (formerly the Wackenhut
Corrections Corporation) and
CoreCivic (formerly the
Corrections Corporation of

America). These corporations
build, own, and operate private
prisons, immigration detention
centers, halfway houses, and
other forms of detention.
Other actors within the prisonindustrial complex include
companies that supply goods and
services to prisons, jails,
immigration detention centers,
and community corrections
programs; companies within the
for-profit bail industry; and
companies that use or profit from
prison labor.
Not every company necessarily
warrants outcry or action. For
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UNDERSTANDING AND
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example, companies that provide
food or construction services to
publicly run prisons and are not
engaged in any unfavorable
practices may not be good targets
for advocates or funders. More
research—including on how
companies profit, the effects of
their services, and whether or not
they use political influence to
perpetuate mass incarceration—
is needed to understand the
full impact of every company’s
involvement in the prisonindustrial complex.
To facilitate our own research and
analysis, we identified 14 sectors in
which various companies that
make up the prison-industrial
complex operate:
Prison operations and
management companies oversee
private prisons, halfway houses,
or immigration detention facilities.
They may or may not build or own
the detention facility.
Community-based corrections
companies manage tracking and
surveillance systems for people
diverted from prisons or placed
on probation.

Case management technology
firms provide software systems to
track arrest, probation,
incarceration, and medical records
of current and former inmates.
Prison construction and
maintenance companies build
prisons and other detention
centers and provide maintenance,
engineering, and utility services.
Telecommunication companies
provide communication services
to prisoners, such as phones or
video visitation systems.
Health care providers provide
medical services and
pharmaceuticals to prisoners and
medical equipment to prisons.
Food and commissary
companies provide food, cafeteria
supplies, and vending machines
and stock prison commissaries.
Prisoner transportation firms
provide transportation services to
prisoners and visitors.
Products and equipment
suppliers provide furnishings, IT
and communications equipment,

and security equipment and
technology.
Prison personnel agencies
provide prisons with staff
members, including guards, and
with staff training and
management systems.
Bail bond agents provide bail
loans to people who cannot afford
their bail.
Bail bond insurance
companies provide insurance to
bail bondsmen that backs their
bail bonds.
Financial service providers/
banks and corporate investors
provide financing to private
prison operators to construct and
equip prisons, and to facilitate
prisoner money transfers.
Prison labor programs
provide services, raw materials,
and technology for prison
education, rehabilitation, and
vocational programs (does not
include companies purchasing
goods and services created with
prison labor).

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THE PRISON-INDUSTRIAL COMPLEX AT A GLANCE

2.3
million

people
are in confinement
in the United States.
SOURCE: PRISON POLICY INITIATIVE

3,100+
corporations
profit from mass
incarceration.

$15

$5.1
million

The combined
total that
private prison
owners
CoreCivic and
the GEO Group
spent to lobby
local, state,
and federal
governments
in 2016

The amount some prisoners
are forced to pay for a 15-minute
phone call

SOURCE: THE INTERCEPT

Number of prisoners held in
private prisons

126,272
SOURCE:
CORRECTIONS
ACCOUNTABILITY
PROJECT

SOURCE: CORRECTIONS
ACCOUNTABILITY PROJECT

68,690
Bail is a

$2
billion

per year industry.
SOURCE: THE ATLANTIC

1999
STATE PRISONERS

2015
FEDERAL PRISONERS

SOURCE: PEW RESEARCH CENTER

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Strategic Intervention
Points Within the PrisonIndustrial Complex

To help philanthropists begin to
approach this intricate network of
corporations strategically, we
have identified four categories of
actors that cut across the
previously mentioned sectors.
The categories represent
meaningful, potential intervention
points to reduce the harm done
by the prison-industrial complex.
The first two categories are of
actors whose priorities need to be
countered, corrected, and
changed most immediately:

detention centers, and other
detention facilities, and for the bail
bond industry.

We know CoreCivic
and the GEO Group
throw a lot of
money around.
We know they have
been working hard
to get in good
graces with this
administration,
and that they are also
very involved at the
hyper-local level.”
ADVOCACY ORGANIZATION
EXECUTIVE

1. Egregious actors: Companies
whose profit-seeking activities
enact undue financial burden or
physical harm on incarcerated
people.

2. Undue influencers: These
actors, including corporations
and correctional trade
associations, use lobbying dollars
and campaign contributions to
protect privatization, oppose
criminal justice reform, and
shape criminal justice policy in
ways that benefit their business
interests.

The next two categories
represent crucial players upon
which the current system
depends. Actors in these
categories may or may not
recognize the roles they play in
the system, and some could
become partners in driving
change within it. They are:

3. Financial sources and
underwriters: These actors are
providing the financial fuel for the
companies that are operating
private prisons, immigration

4. Socially responsible public
companies: Many notable public
companies are doing business
with the prison industry despite
public commitments to corporate
social responsibility (CSR).
Consumer products and services
companies that have built brands
based on their commitment to
social responsibility may be
particularly sensitive to public
recrimination for their involvement
in the prison industry.

Egregious Actors

Some companies within
the prison-industrial
complex financially exploit those
involved in the criminal justice
system or cut corners in ways
that threaten their safety and
wellbeing. These companies
operate within several of the
previously identified sectors and
have come under legal and/or
media scrutiny for various types
of exploitation and/or neglect.
1. Prison Operations and
Management
A 2016 Department of Justice
report determined that private
prisons run by CoreCivic, the GEO
Group, and Management and
Training Corporation were more

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violent, abusive, and dangerous
than publicly operated prisons.3
Inmates in these private prisons
were also more likely to be placed
in solitary confinement or on
lockdown than inmates in public
prisons; and, they were less likely
to receive basic health care.
Measures that private prisons
pursue to meet the demand for
low costs—incentives that
state-run prisons don’t have to the
same degree—may be causing
these harsh conditions.
2. Community-Based Corrections
As more states have allowed
for-profit operators to run
halfway houses, reports of unsafe
conditions, neglect, and abusive
practices have risen across the
country. Cost-cutting has led to
substandard hiring and training
practices that keep houses
staffed with unqualified, poorly
paid workers. In Oklahoma,
private halfway house operator
Avalon Correctional Services
operated a house where
employees sanctioned fights
between residents and recorded
them on cell phones. Despite
these abuses, Avalon was able to
keep its state contracts.4 CEC, an
operator of halfway houses in
New Jersey, experienced an
epidemic of escapes across its

houses, as well as sharp
increases in violence, drug use,
and gang activity.5
3. Bail Bond Agents
Bail is now a $2 billion per year
industry serviced by over 15,000
bail professionals.6 Across the
industry, bail bondsmen charge
high fees—up to 15 percent of the
total bail amount (with a minimum
fee of $100)—to the most
vulnerable and poorest individuals
in the criminal justice system, and
threaten them with incarceration if
they fail to make payments.7 Bail
bondsmen have broad powers to
arrest and jail their debtors that
other creditors do not have. Many
bail bondsmen have been accused
of harassing and even extorting
extra fees out of debtors and their
families under the threat of
incarceration. The bail bondsmen
industry is made up of many
small, local, privately held
companies that receive insurance
backing from nine large national
or multi-national insurance
companies, including Tokio
Marine America, Fairfax,
Bankers, Endeavour, and others.
4. Telecommunications
The vendors that supply
telephone and video visitation
services to prisons (such as

Global Tel Link, CenturyLink, and
Securus) often charge extremely
high rates compared to what
those outside of prison typically
pay, sometimes more than $1 per
minute.8 Many incarcerated
individuals, who have little to no
income, cannot afford to speak to
loved ones for more than a few
minutes at a time. In addition,
some prisons have moved toward
paid video visitation and away
from in-person visitation, meaning
that some prisoners are now
financially unable to communicate
with their families at all.
5. Prisoner Transportation
Private prisoner transportation
companies, including the giant
Prisoner Transportation Services
of America (PTS), have received
enhanced scrutiny in several
states for instances of sexual
harassment, escape, injury, and
even death.6 For example, PTS
and Brevard Extraditions Inc.
are currently being sued in
Virginia by a man who had been
arrested in 2016. The man's
lawsuit alleges that these
companies put people in
unsanitary and unsafe conditions,
in violation of their constitutional
rights, because of a financial
incentive to pick up as many
detainees as possible.10

“Review of the Federal Bureau of Prisons’ Monitoring of Contract Prisons.” Office of the Inspector General, US Department of Justice. August 2016. [Link]
Jones, Corey. “12 Ex-Avalon Tulsa Inmates Sue Facility, ODOC with Allegations of ‘Gladiator-Style’ Fights, Drug Ring.” The Tulsa World. 10 April 2015. [Link]
5
Dolnick, Sam. “At Halfway House, Bedlam Reigns.” The New York Times. 17 June 2012. [Link]
6
White, Gillian. “Who Really Makes Money off of Bail Bonds?” The Atlantic. 12 May 2017. [Link]
7
“How Much Does Bail Cost?” AboutBail.com. Accessed: 25 September 2018. [Link]
8
Law, Victoria. “$15 for 15 minutes.” The Intercept. 16 June 2017 [Link]
9
Jan, Tracy. “Privately Run Prisoner Transport Company Kept Detainee Shackled for 18 Days in Human Waste, Lawsuit Alleges.” The Washington Post. 24 April
2018. [Link]
10
Ibid.
3

4

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In recent years,
smart, strategic
[private prison]
corporations are
following the market.
That means they
are now in the
probation space,
which had been
almost exclusively
nonprofit. These
corporations have
bought the better
nonprofit treatment
providers.”
ADVO CACY
ORG A N I Z ATI O N
EX ECU TI V E

6. Health Care Providers
Advocates have accused two of
the largest providers of prison
health care in the country,
Wexford Health Sources and
Corizon Health, of delivering
poor-quality care. In a report to a
federal judge in Idaho, advocates
charged that Corizon Health
provided poor care and neglected
the health needs of prisoners

in several Idaho prisons.11
Additionally, several class-action
lawsuits have accused Corizon
of withholding care to some
prisoners and providing
inadequate care to others,
including those with cancer and
diabetes, causing suffering and
death.12 A current class-action
lawsuit in Illinois accuses the
state’s corrections department of
significant lapses in care that put
patients at “risk of pain, injury,
and death.”13 The suit implicates
Wexford Health Sources, which
has been the state’s prison care
contractor since 2011.14
7. Prison Labor Programs
Many companies contract with
prison labor outfits to produce
products or services at low cost.
In some states, prisoners earn
minimum wage, but in others,
they earn only 16 cents per hour
or nothing at all.15 Some
corporations contract directly
with local, state, and federal
prisons for prison labor, while
others have prison labor in their
supply chains and may not even
know it. Prison labor in the United
States, especially within state
prisons, where the bulk of the
nation’s prisoners are held, is an
opaque industry. Generally, state
prisons are not required to
disclose the corporations they
work with, and corporations are

not required to disclose their
supply chains.

Undue Influencers

Our research also identified
how some players within
the prison-industrial complex
have used significant political
muscle to convince state and
federal officials to adopt policies
that promote mass incarceration.
More recently, these players
lobbied to defend privatization
and shape criminal justice reform
policies in ways that benefit
their business models. Political
activity in this industry manifests
in four main ways:
1. Lobbying
Many of the largest corporations in
the prison-industrial complex hire
lobbyists at the federal and state
levels to advance their interests. To
get a sense of how politically
active the industry is, Arabella
identified the 22 largest publicly
traded or private equity-owned
corporations that are either fully
dependent on the prison-industrial
complex for their revenue or own
subsidiary businesses that are fully
dependent. According to their
lobbying disclosures, the members
of this group spent a total of $33.2
million lobbying the federal
government between 2015 and

Dutton, Audrey. “Saint Al’s Sues Idaho Prison Contractor Over $14M in Medical Bills.” The Idaho Statesman. 27 April 2018. [Link]
Clarke, Matt. “Numerous Lawsuits Filed Against Corizon.” Prison Legal News. 3 August 2017 [Link]
Walsh, Dylan. “Does Bad Health Care Constitute Cruel and Unusual Punishment?” The Atlantic. 17 June 2017. [Link]
14
Ibid.
15
Goodrich, Julie and Mari Schwartzer, et al. “Prison Labor in the United States: An Investor Perspective.” NorthStar Asset Management. May 2018. [Link]
11

12
13

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In total, the Corrections
Accountability Project identified
3,100 corporations with business
interests in the criminal justice
system (ranging from complete to
minor involvement) that gave a
combined total of $175 million in
state and federal political
contributions in the 2016 election
cycle alone.19

2017.16 According to their own
reports, in 2016 alone, the GEO
Group spent $3.3 million and
CoreCivic spent $1.8 million to
lobby states and the federal
government (including members
of the Senate and the US House of
Representatives, the Department
of Justice, the Department of
Homeland Security, and other
agencies).17 The GEO Group and
CoreCivic publicly stated that they
do not lobby for or against policies
or legislation that would determine
the length or reason for an
individual’s incarceration or
detention. However, they do lobby
legislators to pass laws that will
keep people detained longer and
push for government investment in

new forms of private detention
from which they can profit.
2. Campaign Contributions
Corporations connected to the
prison-industrial complex also
make contributions to state and
federal policymakers to build
political influence. Drawing on
data from the Corrections
Accountability Project, we
estimate that the 500 companies
that are completely dependent on
the prison-industrial complex gave
at least $2.5 million to political
candidates in 2016.18 These totals
do not include contributions to
independent political action
committees (PACs) or 501(c)(4)s
supporting political candidates.

3. Revolving Doors
In addition to lobbying state and
federal officials and funneling
contributions to candidates,
many corporations that do
business with the prison industry
are keen to hire former legislators
and agency officials to extend
their influence in government, or
conversely, to have the officials
hire their staff members. These
connections accelerate the
growth of private prisons by
allowing corporations to build the
case for privatization, navigate
the contracting process more
easily, and, in some cases, avoid
strict oversight. Many top
corrections officals at the federal
level and in several states,
including Ohio, Maine, and New
Mexico, worked for CoreCivic or
the GEO Group before entering
public service or moved to the
prison industry after leaving
government.20, 21

Arabella identified the 22 companies (including parent companies) that are dependent on the prison industry for revenue using the Corrections
Accountability Project’s “The Prison Industrial Complex: Mapping Private Sector Players.” Lobbying expenditures data come from www.OpenSecrets.org.
17
Corrections Accountability Project. “Immigration Detention: An American Business.” June 2018. [Link]
18
Data on direct contributions to candidates pulled from FollowtheMoney.org and aggregated by Arabella Advisors. Data courtesy of the Corrections
Accountability Project. (Accessed June 29, 2018)
19
Ibid.
20
Katz, Eric. “Federal Official Boosted Use of Private Prisons; Now He Has a Top Job at One.” Government Executive. 29 August 2018. [Link]
21
Clarke, Matt. “Private Prison Companies Use Political Influence to Increase Incarceration.” Prison Legal News. 15 November 2012. [Link]
16

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One-third of
prisoners in some
states are housed
in county jails,
and sheriffs’
associations and
individual sheriffs
are shameless
about lobbying to
their own benefit.
They want
more prisoners in
their jails.”
ADVOCACY O RG A N I Z ATI O N
EX ECU TI V E

22
23

4. Support for Advocacy and
Trade Associations
While some companies in the
prison-industrial complex may
not directly lobby on criminal
justice issues, they consistently
sponsor powerful advocacy
groups and industry trade
associations that have been vocal
proponents of policies that foster
mass incarceration policies. The
conservative American Legislative
Exchange Council (ALEC) has
worked with corporate sponsors
to pass numerous policies that
have helped drive incarceration to
historical levels and that have
increased the detention of
immigrants. Throughout the
1990s, CoreCivic (then
Corrections Corporation of
America) was a corporate
sponsor of ALEC and held a place
on ALEC’s Criminal Justice Task
Force. During this time, ALEC
successfully pushed model
legislation creating tougher
sentencing laws in dozens of
states, driving steep increases in
incarceration rates throughout the
1990s and 2000s. Additionally,
the American Bail Coalition, a
longtime partner of ALEC, helped
to draft model legislation to
expand the bail industry, resulting
in three states legalizing “postconviction” bail. Under this new
practice, which exposes
thousands of new people to the
bail industry, bail bond companies
can pay court-imposed fines on

behalf of the individuals, who then
must repay the bail bondsman
and pay additional surcharges.
Additionally, many corporations in
the prison-industrial complex
sponsor corrections industry trade
associations, which have a history
of advancing policies that drive
mass incarceration. According to a
2015 report by the advocacy
group In the Public Interest, in
2014, corporate vendors to the
prison industry contributed at
least $3 million to five of the
largest professional corrections
associations: the American
Correctional Association, the
American Jail Association, the
Association of State Correctional
Administrators, the Corrections
Technology Association, and the
National Sheriffs’ Association.22
These groups typically support
platforms designed to maintain
and expand the prison-industrial
complex—policies that serve the
interests of the associations’
corporate members. For example,
the National Sheriffs’ Association's
policy platform advocates for
stronger immigration enforcement
policies, which would result in
higher levels of immigrant
detention, and has received
corporate sponsorship from many
companies in the prison-industrial
complex, such as Aramark, Global
Tel Link, Wexford Health Sources,
TriTech Software Systems,
Pay Tel, and Accredited Surety
and Casualty Company Inc.23

In The Public Interest. “Buying Access: How Corporations Influence Decision Makers at Correction Conferences, Trainings, and Meetings.” August 2015. [Link]
“Corporate Partners.” National Sheriffs’ Association. Accessed: 25 September 2018. [Link]

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Financial Sources and
Underwriters

Another set of actors is
crucial to the system’s
functioning: its financial sources
and underwriters. An expansive
network of banks, private equity
firms, and insurance companies
finance the prison-industrial
complex and enable it to operate.
These financial backers offer a
potential entry point to apply
financial pressure on other actors
in the industry, including private
prison operators, bail bondsmen,
and additional companies
engaged in malicious practices.

Wall Street banks have an
outsized role in the system
because they extend revolving
lines of credit to private prison
operators and underwrite the
companies’ bonds.24 Because the
GEO Group and CoreCivic are
technically classified as real
estate investment trusts (REITs),
the lion’s share of their profits
must be returned to shareholders,
leaving little cash on hand for
everyday expenditures. They need
continuous, massive lines of
credit—and could be vulnerable
to any credible effort to push
banks to withhold their financing.

1. Banks
Banks make loans to all
creditworthy applicants, often
without bias or moral judgment.
As such, any effort to curtail bank
financing of companies in the
prison-industrial complex cannot
rely on moral arguments; instead,
it must make a credible case that
those companies’ business
practices expose them to
litigation and regulatory risks,
undermine their prospects for
delivering strong financial returns,
and make them less creditworthy.
This is a difficult path but one that
could be worth exploring further,
as the two largest private prison
operators, the GEO Group and
CoreCivic, rely extensively on
debt to finance their operations.
According to a 2016 report by In
the Public Interest, six prominent

2. Private Equity
Private equity firms play a strong
role in backing hundreds of
companies that do business with
the prison system. According to
Corrections Accountability
Project data, 76 private equity
firms own 141 companies within
the prison-industrial complex, 52
of which are completely
dependent on the prison industry
for their business.25 The list at
right shows the private equity
firms that invest in businesses
that are entirely dependent on
revenue from the prison-industrial
complex, such as private prison
operations, telecommunications
firms, and security services
companies. While private equity
firms may be less susceptible to
public pressure than publicly held
financial institutions, there are

24
25

Private equity firms
that invest in
businesses that are
entirely dependent
on revenue from the
prison-industrial
complex:
American Securities
Apax Partners
Audax Group
Beecken Petty O’Keefe &
Company
BlueMountain Capital
Management
Falfurrias Capital Partners
Frazier Healthcare Partners
GTCR
H.I.G. Capital
Kanders & Company
Peninsula Capital Partners
Platinum Equity
Prophet Equity
Riverside Ventures
Spotlight Equity Partners
Sverica Capital Management

SOURCE: CORRECTIONS
ACCOUNTABILITY PROJECT

potential pathways to engaging
them through investor activism
that involves large institutional
investors. Some of these
strategies are described in more
detail below.

In The Public Interest. “Report: The Banks That Finance Private Prison Companies.” 17 November 2016. [Link]
Tylek, Bianca. “The Prison Industrial Complex: Mapping Private Sector Players.” Corrections Accountability Project. April 2018. [Link]

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The largest insurers
backing the
bail industry, with
subsidiaries:
AIA
IFIC Allegheny Casualty Co.
American Surety Company
Bankers Financial Corporation
Bankers Surety
Bail USA
Endeavor Insurance Services
Aladdin Bail Bonds/Two Jinn
Seaview Insurance Company
Fairfax Financial Holdings
Limited
The North River Insurance
Company
United States Fire Insurance
Company

3. Insurance Companies
A small cohort of large insurance
companies underwrites the bail
industry, allowing tens of
thousands of bail bondsmen who
charge high fees to vulnerable and
economically distressed
populations to operate across the
country. According to a 2015
ACLU report, many of the largest
bail insurers are multi-national
corporations for whom bail
insurance is a tiny part of their
business. For others, especially
those companies actively involved
in the American Bail Coalition,
bail insurance represents a large
portion of their business, which
insurance companies have
worked aggressively to expand.

FCS
Lexington National
R&Q
Accredited Surety and
Casualty Company
Seneca Insurance Company
Tokio Marine America
HCC Surety Group
United States Surety
Company
US Specialty Insurance
Company

SOURCE: COLOR OF CHANGE/ACLU

Socially Responsible Public
Companies
Many companies maintain
public commitments to CSR
related to promoting public
health, community development,
or similar issues, even as they
profit from a system that targets
economically distressed
communities and perpetuates
poverty and incarceration. Using
data from the Corrections
Accountability Project, Arabella
identified large, publicly traded
companies with over $5 billion in
annual revenue doing business

with the prison-industrial system.
While over 100 companies that
do business with prisons maintain
public CSR commitments that
outline their dedication to
improving communities, it is not
clear to what degree they profit
from mass incarceration or for
how long they have been doing
so. More research is needed on
companies that identify
themselves as socially responsible
to understand the extent of their
investments in the prison industry.
Additionally, advocates and
researchers have identified several
high-profile, brand-name
companies with strong corporate
social responsibility policies that
sell products created by or provide
services performed by prison labor
programs. Because prison labor
systems lack transparency, it is
hard to know if these companies
use prison labor on a regular basis,
in what amounts, and for what
products or services.
By setting up supply chainmonitoring systems, socially
responsible companies could root
out prison labor from their
suppliers or continue to source
from prisons while demanding
higher standards for working
conditions and better wages for
prisoners—in other words, an end
to exploitive practices.

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Next Steps for Concerned Philanthropists
Given the scale of the system of
mass incarceration and the
extensive network of actors
profiting from it, philanthropists
will ultimately need a multipronged, multi-year, multi-actor
approach to effectively confront
the prison-industrial complex—
one that uses both their
endowment capital and grant
making to mobilize public,
political, and financial pressure for
reform. Developing such a
multi-pronged, multi-year
intervention strategy is beyond
the scope of this report. However,
in surveying the landscape, we
have identified several steps that
concerned funders and investors
can begin to take even today.

money flows between companies
that benefit from prisons and
elected officials, the extent of
these companies’ access to
politicians, and the specific
policies for which they lobby.
Gaining a stronger understanding
of corporate influence and the
ability to identify the elected
officials that accept corporate
money from the prison-industrial
complex is the first step in
reducing that influence over time.

Philanthropists can bolster efforts
to challenge the prison industry
by funding research in several
areas. Filling these research gaps
is important for developing
comprehensive corporate
accountability strategies,
divestment campaigns, or
approaches to investor activism.

Prison labor supply chains.
Prison labor supply chains are
complicated and opaque, and the
field does not have accurate
information on which companies
profit from prison labor. These
data are somewhat simpler to find
at the federal level; finding the
data at the state level will require
investments in comprehensive
supply chain research. This
information will help advocates
identify high-profile brands that
use prison labor and allow them
to apply public pressure and
demand the brands stop the
practice, or insist that prisoners
receive a fair wage and safe
working conditions.

Political activity. According to
many advocates, those working
for reform generally do not have
much political muscle to support
their work, while corporate actors
give millions in political
contributions to lawmakers who
support tougher criminalization
and immigration laws. Advocates
still do not know exactly how

Reports of harm. Our
understanding of the physical and
financial harms caused by
corporations within the prison
industry is incomplete, with
information drawn piecemeal
from lawsuits, one-off
investigations, and reports to
advocacy groups. Philanthropists
can support advocates’ efforts to

Support Additional
Research on the PrisonIndustrial Complex

document trends in abuse across
the prison-industrial complex and
monitor the most egregious
corporate actors and sectors.
Financing networks. Advocates
have begun to explore the
complex networks of financial
support and underwriting within
the prison-industrial complex,
but they need more information
on how to disrupt financing for
the industry’s most glaring,
influential actors.
Policy research. Philanthropists
can support advocates who are
researching the most effective
oversight and regulatory policies
at the state and federal levels that
can counter the influence of the
prison-industrial complex. Better
oversight of contractors and
increased disclosure requirements
for corporations taking
government funds could help
identify and eliminate harms
within in the prison system.

Divest from Egregious
Actors

Divestment movements that
have targeted South African
apartheid and the fossil fuel
industry have demonstrated that
these types of campaigns can be
an effective strategy for
stigmatizing offending industries
and reducing their influence,
building broader social
movements, and making the
political environment more
amenable to positive policy
changes. Philanthropists should
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view divestment primarily as a
movement-building and political
strategy, rather than a means to
exert substantial financial
pressure on its targets, as most
experts believe divestment is
unlikely to meaningfully impact
corporate bottom lines. The
biggest actors in prison
divestment to date are
universities, municipalities, and
faith-based institutions.
Philanthropists are still relatively
rare in this landscape and can
help develop the movement not
only by removing prison
investments from their own
endowments and retirement
funds but also by leading a call for
divestment pledges from fellow
philanthropic institutions.

How Philanthropists Can
Advance a Prison Divestment
Movement

INVEST FOR IMPACT
As a complement to divestment strategies, philanthropic funders can
pursue impact investing strategies that channel divested (or other) funds
into companies that are working to counter the deleterious impacts of
mass incarceration and reduce recidivism, such as businesses that provide
employment and economic opportunity for citizens returning from prison.

1

Make mission-related investments in companies that are committed to
employing individuals with criminal records. Philanthropists can work
with a socially responsible financial services company to customize a
portfolio that sets up a positive screen for such businesses.

2

Make program-related investments in innovative companies and
organizations working to counter the impacts of mass incarceration.
For example, the New Orleans-based Rising Foundations runs a small
business incubator for previously incarcerated individuals and provides
them with microgrants and zero-interest loans. Similarly, Boston-based
New Profit operates the Unlocked Futures accelerator, which invests in
businesses created by previously incarcerated people.

3

Make use of pay-for-success financing, also called social impact bonds,
to make impact investments in initiatives that aim to reduce
incarceration rates. Philanthropists can use these bonds to provide loans to
organizations that are working to reduce recidivism by providing behavioral
health, job training, and education programs to those who are exiting
prisons or the juvenile justice system. Several prominent foundations have
recently invested in the Massachusetts Juvenile Justice Pay for Success
Initiative, which aims to reduce incarceration rates by supporting hundreds
of at-risk young men in the probation system.

1. Divest your endowment assets
of any holdings in CoreCivic or
the GEO Group, two of the most
egregious, politically active, and
vulnerable companies in the
prison-industrial complex.
Philanthropists can act quickly to
remove these high-profile private
prison companies even while they
consider a more comprehensive
divestment strategy that includes
multiple screens and other
corporations.

want an investment partner to
help establish investment screens
and root out companies profiting
from incarceration can work with
socially responsible investment
groups like OpenInvest to
establish investment accounts
that align with their values.

2. Use social, governance, and
environmental screens to
exclude companies profiting
from the prison-industrial
complex from endowment
holdings. Philanthropists who

3. Provide grants to advocacy
groups that are building a prison
divestment movement. To be
successful, divestment efforts
must be situated within a larger
movement that has

communications, research, and
grassroots organizing capabilities.
Philanthropic funding can help
put such infrastructure in place.
While several advocacy groups—
including Enlace, the Corrections
Accountability Project, and the
American Friends Service
Committee—and student
activists at a handful of Ivy
League universities have started
prison divestment efforts,
investments that better broadcast
their work could help the
movement gather momentum.
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Implement Investor
Activism and Capital
Market Strategies

Investors who are eager to exert
financial pressure on companies
may be able to achieve greater
impact by taking equity stakes in
companies connected to the
prison-industrial complex and
using their standing and creative
strategies to push companies to
reform. Investor activism
proponents who seek to engage
and disrupt companies in this way
could pursue a variety of
objectives: demanding that
private prison operators increase
pay in prison work programs;
forcing companies connected to
the prison-industrial complex to
disclose full details of their
lobbying and political activities
and to cease supporting politically
active trade associations and
industry front groups; pressuring
telecommunications companies
to stop charging incarcerated
individuals excessive fees
for video visitation and phone
services; pushing for the
replacement of corporate board
members with directors who
are more sympathetic to the
interests of the communities
impacted by mass incarceration;
and demanding that companies
reduce their business with and
reliance on the prison-industrial

complex. Investor activism can be
a powerful tool when it activates
large, institutional investors and
influences financial analysts and
Wall Street opinion makers by
demonstrating how a company’s
practices—due to reputational
risks, regulatory pressures,
litigation risks, etc.—are reducing
shareholder value.

How Philanthropists
Can Reform the PrisonIndustrial Complex Through
Investor Activism

1. Provide grant support to
organizations engaged in investor
activism targeting the prison
industry. Several organizations,
including the Human Rights
Defense Center and the Interfaith
Center on Corporate
Responsibility, have engaged in
low levels of shareholder
advocacy on this issue.
Philanthropic capital could
catalyze their efforts. Additionally,
partnering with big pension funds
such as the California Public
Employees’ Retirement System
(CalPERS) and large fund
managers such as BlackRock can
bring real power to investor
activism. These institutional
investors own large equity stakes
in most public companies, are
often the largest investors in

private equity firms, and have a
history of shareholder activism on
CSR issues.
2. Use your standing as investors
to provide proxies and access for
advocates seeking to advance
shareholder resolutions. While
individual philanthropists may not
be well positioned to execute a
shareholder advocacy campaign,
investors can provide nonprofit
organizations or other activist
investors with their proxy votes to
strengthen a shareholder
campaign’s position.
3. Join with other philanthropists
to set up an investment fund
that has stakes in the most
egregious and politically active
companies in the industry.
Philanthropists could staff a fund
with experienced researchers and
advocates who can use the fund’s
standing as an investor to
advance industry reforms from
the inside. This could include
shareholder resolutions as well
as more aggressive shareholder
strategies, such as delaying
mergers and acquisitions,
withholding votes in board of
director elections, or pushing for
proxy access that allows for
direct shareholder nominations to
the board to gain concessions
from company management.

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Matching Types of Actors with Potential Philanthropic Strategies

Each of the categories of companies we identified earlier represents an intervention point to reduce the prisonindustrial complex's harm. As such, there is a different set of goals that philanthropists and their advocacy
partners can pursue for each category. This chart summarizes those goals and their ultimate impact.
EGREGIOUS ACTORS

UNDUE INFLUENCERS

FINANCIAL SOURCES AND
UNDERWRITERS

SOCIALLY RESPONSIBLE
PUBLIC COMPANIES

GOALS
- Understand where the most
egregious practices within the
system are occurring

- Secure full disclosure of
lobbying and political
activities

- End egregious and harmful
practices

- Pressure companies to
cease supporting politically
active trade associations and
front groups

- Convince financial backers
to stop supporting bad
actors within the prisonindustrial complex

- Gain a better
understanding of which
brand-name, socially
responsible companies
benefit from prison labor
- Encourage socially
responsible companies to
end contracts with
privately operated prisons,
immigrant detention centers,
and other facilities

STRATEGIES
- Research on corporate
activity to identify egregious
practices

- Opposition research to
expose companies’ undue
influence

- Divestment campaigns that
stigmatize these companies
and create public pressure
for regulatory reform

- Divestment campaigns that
help stigmatize these
companies

- Investor activism to push
for reforms from the inside of
companies

- Investor activism that
pushes financial backers to
condition their financing on
reforming egregious
practices that pose litigation
and other financial risks

- Support organizations
pushing for comprehensive
research into corporate
supply chains to identify
prison labor

- Pressure from financial
backers to reform the most
egregious practices in the
industry

- Isolation and
stigmatization of companies
engaged in egregious
practices in the industry

- Investor activism to push
for disclosure and
curtailment of political and
lobbying activities

- Investor activism and
corporate accountability
campaigns that push
high-profile companies to
cut ties with the most
harmful elements of the
prison-industrial complex

POTENTIAL IMPACT
- Curtailment of the most
exploitive and harmful
practices in the prison
industry

- Decline in the political
influence of companies in the
prison-industrial complex
and in their ability to advance
policies related to prisons
and the criminal justice
system that adversely impact
communities

- Increased public visibility
of and attention to harmful
practices in the prison
industry
- Improvement in the
standards, working
conditions, and wages for
prison labor

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Conclusion

will require advocating for fundamental reforms to our
criminal justice system, including rolling back tough-on-crime sentencing policies and drug
laws and reforming prosecutorial and policing practices that have caused prison populations to
soar. It will also require confronting the power and influence of the prison-industrial complex:
the thousands of companies that profit from the detention, incarceration, and confinement of
human beings in the United States. Philanthropists can continue to invest in and profit from
these companies themselves, or they can use their endowments and grant-making capital in
creative and strategic ways to expose, stigmatize, and disrupt the industry, neutralizing its
harms and its undue political influence in our politics. Taming the prison-industrial complex can
help restore the public’s ability to shape just and equitable criminal justice and immigration
policies. Better policies and more accountable corporations can help reverse the mass
incarceration and mass criminalization that undermine freedom and opportunity for millions.
ENDING THE ERA O F M ASS I N CARC ERATI O N

Acknowledgments

would like to acknowledge the contributions of the experts and field leaders
who contributed their time, knowledge, insight, and research to the development of this report.
They include Jim Baker (Private Equity Stakeholder Project); Andrew Behar (As You Sow);
James Bell (W. Haywood Burns Institute); Noah Bookbinder (Citizens for Responsibility and
Ethics in Washington); Kevin Connor (LittleSis.org); Bill Dempsey; Margaret Dooley-Sammuli
(ACLU of California); Rachel Fagiano (Nathan Cummings Foundation); Alex Friedmann (Human
Rights Defense Center); Shar Habibi (In The Public Interest); Kyle Herrig (Daylight Project);
Kevin Keenan (Vera Institute of Justice); Cyrus Kharas (Arabella Advisors); Marc Mauer (The
Sentencing Project); Tulaine Montgomery (New Profit); Zachary Norris (Ella Baker Center); Udi
Ofer (ACLU Campaign for Smart Justice); Angela Peoples (ACRE); Rashad Robinson (Color of
Change); Lorraine Ramirez (Funders for Justice); Liz Ryan (Youth First); Marc Schindler (Justice
Policy Institute); Susan Shah (Vera Institute of Justice); David Shapiro (ACLU National Prison
Project); Carrie Sloan (ACRE); Ryan Strode (Arabella Advisors); Rob Thomas (Social(k));
Jamie Trinkle (Enlace); and Andrew Wright (Marathon Strategies).
ARABELLA ADV I SO R S

We extend a special thanks to Bianca Tylek of the Corrections Accountability Project at the Urban
Justice Center for sharing the organization's in-depth research on the corporations profiting from
the prison-industrial complex.

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