Teresa Hodge has been a tireless entrepreneur throughout her life.
After finishing her seven-year prison sentence, Teresa has founded three nonprofits or startups to help people returning home from prison or jail in the United States. Her latest venture, R3 Score Technologies, was inspired by her experience getting turned down from a job because of her criminal record. The R3 score uses a sophisticated algorithm, the kind that’s often used by fintech startups, to create a real-time risk assessment for formerly incarcerated people when they apply for a job, a car loan or a house. The score offers a nuanced report instead of simply labeling someone’s background history as "good" or "bad."
Teresa knew she had something powerful on her hands for disrupting the cycle of recidivism, and she wanted to scale the idea. She could have created a nonprofit and raised funding from foundations to iterate and market the R3 Score. But she knew that there was an opportunity to sell this technology to HR departments and loan officers. She chose to create a tech startup and seek funding from venture capitalists. In just a few years, she was able to raise $750,000 in funding, and has since launched several paid pilots and contracts with community financial institutions and gig-economy platforms.
Teresa is one of several entrepreneurs that joined us earlier this month for a summit on justice tech organized by Village Capital and the American Family Insurance Institute for Corporate and Social Impact. We sought to understand what justice tech means, and how to navigate the ethical challenges in building a business around criminal and civil justice change.
Tech and Justice
The backbone of our justice system is supposed to be that every person is treated equally and given due process, equal respect and an equal chance. But a history of systemic racism and biased policy around and within the criminal and civil justice system has too often stacked the odds against Black, Indigenous, people of color (BIPOC) and low income communities.
From over-policing and surveillance, to prohibitively expensive cash bail and legal services, disproportionate citations and sentencing, and lack of reentry and family support, systemic biases have contributed to racial bias in the system, crowded prisons and high rates of recidivism.
As an unwelcome side effect, our bloated criminal justice system has created a lucrative industry worth at least $182B, as private companies have become suppliers of healthcare, entertainment, communications, and financial services (among others) to a group of captive consumers with few alternatives.
What happens when technology interacts with the industry of incarceration? Over the past decade tech startups have disrupted virtually every aspect of our lives, often encroaching on the public sector: from Uber and public transportation to Facebook and public elections. The criminal justice system has not escaped this tech disruption. The past eight years in particular has seen a new wave of technology such as Flikshop (launched in 2012) or Paladin (launched in 2016), among others aimed at disrupting the criminal and civil justice system.
However, it’s no secret that this space is fraught with many gray areas and ethical concerns as companies seek to reduce harm while co-existing with industry, policy and regulatory mandates. One famous example is Rekognition, a facial recognition tool developed by Amazon and sold to police departments among other customers. The ACLU found that the software was more likely to misidentify BIPOC, causing Amazon to stop selling the product to police. Walmart also discontinued a “restorative justice” technology for shoplifters meant to provide an alternative to police intervention and a criminal charge, after a court ruling that the company was extorting customers by forcing them to pay for the program. “This company has set up a private, pseudo-justice system that is based on profit,” the prosecuting city attorney said.
These stories pose a series of ethical questions and challenges: how can we build scalable technology to disrupt the criminal and civil justice system without exacerbating disparities in the system – or tying a startup's growth and success to the system’s continued existence?
We believe that tech can help reduce disparities in the criminal justice system, but only if it follows one important principle: it is designed by, with, and for people with direct experience in the criminal and civil justice system or those who have dedicated their lives to criminal and civil justice change.
Innovative solutions for life’s simplest problems, like looking for an affordable way to share a ride or the desire to see who’s at your front door while you’re in your garage, have come from individuals who have personally experienced these situations. Why wouldn't we expect the same level of transformative problem solving when it comes to disparities like the ones that exist within the justice system? At the Institute, we believe it is essential that solutions to today's social issues be born from those who have lived experience.
In early September, we virtually convened 29 leaders for a candid dialogue around our Redefining Criminal and Civil Justice Tech project. The 29 leaders hold roles as policy advocates, nonprofit executives, foundation leaders, grassroots activists, writers, lawyers, venture capitalists, impact investors, and tech entrepreneurs. We brought together leaders not just in criminal justice, but also in civil justice; people who have been directly impacted by the justice system as well as advocates who have been working for years and decades to support people and families impacted by the system.
Our purpose was to discuss how to move forward in redefining criminal and civil justice tech from an ethical, human-centered perspective. Here’s what we heard:
Systemic and structural racism is at the heart of challenges within the criminal and civil justice system, justice tech must center solutions led by people with direct experience. We heard that systemic racism and structural racism are the central barrier to challenges related to financial security and health, health outcomes in and out of incarceration, and access to work outside of incarceration for people and families impacted by the criminal and civil justice system.
Justice tech presents an opportunity to focus on holistic approaches that center people and their experiences across their lifecycle of prevention, inside, and post-release from the system. We heard that historically, a lot of the framing on support for people impacted by the justice system has been around “giving them jobs”. Yet, there is no one-size fit all solution for people and families impacted by the system. Justice tech has an opportunity to focus on holistic solutions that meet people and families where they are at, and bridge all aspects of life they are trying to work through, including but not limited to:
Justice tech also has an opportunity to examine the interconnectedness between civil and criminal justice. We heard that civil rights education and services that democratize access to the civil justice system are an important foundation to build upon. As the economic fallout from COVID-19 leaves many unemployed, unable to make rent, and facing eviction, the risk of losing it all in a country that criminalizes poverty is high. Now more than ever people need to feel that they can get a fair shot at support from the legal system when their rights are infringed upon.
Justice tech will need to collaborate with nonprofits, advocates, policy, and philanthropy. We heard that currently, there is no community/ecosystem map of which justice-oriented solutions exist and are viable for venture capitalists. There is also no clear division of labor nor explanation on the role of tech startups and investors and their interconnectedness to the efforts of nonprofits, philanthropy, advocacy, policy.
At the same time, nonprofit leaders with direct experience in the system are creating programs, yet face challenges raising philanthropic capital and misalignment with funder missions. Tech founders with direct experience are creating companies, yet also face challenges raising capital from venture capitalists. Founders are not receiving the capital they need and oftentimes, do not have the “friends and family round” support that other tech founders have.
Justice tech has an opportunity to catalyse collaboration and to redistribute capital and labor across spaces to ensure that information is being shared, duplicative efforts are not being made, and to collectively challenge, support and fund aligned outcomes.
The big picture takeaway from our summit was that justice tech will need to be conscious and honest about technologies that operate in a “gray” zone. Without firm guardrails, well-intentioned ideas can be derailed by the complexities of government policy, industry regulations, and corporate politics in this space.
That said, we heard over and over again that technology has an opportunity to reduce disparities in the justice system – and that thoughtful impact investors have a critical role to play in supporting ethical justice tech startups. Teresa Hodge has raised $750,000 in convertible notes from Techstars Impact, Conscious Venture Lab and Kapor Capital, three venture capital firms that are interested in the intersection of justice, tech and impact. There is a growing number of such firms.
Moving ahead, the Redefining Criminal and Civil Justice Tech Project will investigate answers to some of the areas and questions raised by leaders in criminal and civil justice. Over the next few months, we will seek to define “Criminal and Civil Justice Tech” and share findings with the goal to collectively work together to center people and families impacted by the system. We will by no means have all the answers, but seek to embark us on a starting point towards change.
Marcia Chong Rosado is Future of Finance Practice Lead at Village Capital.
Nyra Jordan is Social Impact Investment Director at American Family Insurance.