A Genuine Solution to An American Epidemic
By David Koch
The average length of stay until expected release of parole
violators that are recommitted with a new felony conviction is 36.71
upon this figure, the cost to incarcerate is $94,834 per recidivist
in this demographic. The total incarceration cost alone for these
recidivists is between $35.8 and $58.7 billion – just in Ohio.
prisoner recidivism realistically be reduced to a figure below ten
percent? It can’t happen overnight, but yes, it can. With state and
federal budgets for departments of rehabilitation and corrections
reaching incendiary levels, the need to implement new and innovative
programs has become profound.
amounts of capital are spent each year on offender rehabilitation
and community reentry. However, despite these expenditures, the
recidivism rate has escalated to a national average of roughly
seventy-percent. Although there are many excellent rehabilitation
and reentry programs available, very few are genuinely focused on,
or capable of, addressing the core and immediate needs that can
transition an individual from an offender and tax consumer to an
ex-offender and tax contributor.
Ex-offender community reentry is fundamentally a function of
economics. Whether a person is a recent ex-offender or a recent
college graduate, they need income. Sans legitimate gainful
employment, our survival mechanism is nevertheless going to provide
for our basic needs. As a fundamental goal, a genuine solution to a
social problem necessarily incorporates the financial mechanisms for
economically perpetuating the solution and therefore, the problem no
longer requires funding from tax, community, charitable, or
government and foundation grant sources.
the most successful social organizations have practiced the
principle; “The people who are
the problem or have the challenge, developing and becoming their own
solution.” Only a growing constituency of individuals
who have personal experience and skin in the game will
effectively conquer the challenges that contribute to recidivism.
incubation is not a new concept, but it is revolutionary, and with
additional innovative concepts, business incubation can
substantially solve the dilemma of recidivism within a generation.
The most common goals of incubation programs are creating jobs in a
community, enhancing a community’s entrepreneurial climate,
retaining businesses in a community, building or accelerating growth
in a local industry, and diversifying local economies.
of businesses are started every day but very few are organized for
success. The need to address the fundamental business disciplines is
frequently either not adequately considered or not adequately
budgeted. All businesses need competent accounting, payroll,
finance, legal & compliance assistance, sales & marketing,
advertising, customer service, corporate communications,
administration, etc. Each of these departments contributes to the
organizations’ overall health and its ability to grow. However, the
implementation of each discipline requires substantial capital for
an autonomous business.
are hundreds of individuals released from prison who possess the
intellect, business prowess and entrepreneurial spirit to grow a
business. Among the greatest challenges are capitalization and a
supportive network. The formation of a business incubation
origination that is operated by
ex-offenders – for ex-offenders would build successful
corporations that would provide good paying jobs to other
ex-offenders. It is the quintessence of the people with the problem becoming their own solution.
economies of scale increase exponentially as additional incubators
are deployed throughout North America. A single business incubator
developed with twenty-five business enterprises creates substantial
buying power when all purchasing is centralized through the
incubator. These economies of scale are greatly magnified with all
purchasing centralized through the parent incubation organization
for all business incubators and all enterprises within those
incubators. With a conservative deployment strategy, by the tenth
year, the buying power of the parent business incubation
organization is that of over 1,200 businesses. Further, all of the
products and services offered by each entrepreneurial enterprise can
be cataloged in a database. When the parent organization, or any of
the business incubators, or any of the incubator enterprises needs a
product or service, the first purchasing source will be the database
of incubator enterprises. The entire organization becomes
Following initial private placement financing, the parent incubation
organization becomes self-funding by retaining a small equity
position in each of the incubated enterprises, and through an
overhead sharing agenda. A portion of the total overhead to operate
the parent organization and each of the business incubators will be
shared equally among the population of enterprise businesses. This
strategy accomplishes six major objectives:
1. It holds the
parent organization accountable to its entire constituency.
2. It cultivates
team effort and peer accountability among all enterprise businesses
to practice spending discipline and use resources prudently.
3. The cost to
each enterprise decreases as the population of enterprise businesses
4. It creates a
financial incentive to carefully review and approve the sponsorship
of all incubator businesses.
5. It creates the
synergy whereby all CEO’s have a vested interest the success of one
6. The entire
organization is self-policing.
its objectives, the parent incubation organization will build an
endowment from the success of its incubated businesses that will in
turn provide seed and growth capitalization for a continuing and
self-perpetuating business incubation agenda.
According to the National Business Incubation Association (NBIA) the
Client FY 2000 average income was $7,770,341 (the median was
$3,514,978). The average number of client companies served per
incubator was 22 and the median, thirteen. Startup firms served by
NBIA member incubators annually increased sales by $240,000 each and
added an average of 3.7 full- and part-time jobs per firm.
substantially more conservative projections than actual averages
from NBIA, the total income of all ex-offender incubated businesses
generated during the initial nine-year deployment is $367,744,167,
and will have created tens-of-thousands of good jobs for
ex-offenders. Given current recidivism rates that range from 35 – 70
percent, and even taking the low end suggests that recidivism costs
society $350 billion each year.
Homogenizing the principle of the people with the problem becoming their own solution with
proven business incubation agendas can provide a solution to the
recidivism epidemic in our Nation.
David Koch is currently the primary financier at Green Lab Holdings,
Inc, a firm re-inventing the generation and distribution of energy
in the U.S. Koch, accompanied by his yellow lab Buddy, also provides
informative, inspirational and motivational seminars in correctional
facilities for working staff, and both adult and youthful
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