[Applause]
thank you I’m over Casper’s I used to
work as a social worker for quite a long
time I graduated in what we call social
economics and now I’m a professor for
Business Administration for social
services and healthcare services in
Germany at the Lutheran University of
Bavaria in number you see a picture of
Niklas Luhmann because lumen was a very
famous sociologist and he’s regarded the
founder of modern system theory in his
lectures he didn’t almost use any charge
charts of pictures at all but in order
to give his students an impression of
what system was about he just drew this
symbol horizontal and one vertical line
so the vertical line marks the border
and the horizontal line on the left with
emptiness on the right shows that
circumstances are different within the
circle to the system on the left
compared to outside the system on the
right so you can easily see the
significance of it when you think about
your skin as the border of your body as
the system so he took that way of
thinking and transferred it to analyzing
society when I was a teenager my picture
of society was very simple I was
thinking in two systems so there was the
system of doing business and in my mind
these people who were doing business
they were bad they were following rules
that were not mine
so I was doing something completely
different me and my friends we were
doing good we were very heavily involved
in youth programs and we were selling
coffee to sponsor the Nicaragua
Revolution back in the early 1980s so
this was my picture and this is how I
grew up
so you may understand that I haven’t got
into business I became
social worker so as a social worker I
really got confused because I saw that
Social Work in practice was some kind of
doing business because I saw that the
behavior of people working in the social
sector was very much driven by the by
the incentives provided by social
legislation so to make it clear I watch
in a home where we were taking care of
prisoners of ex-convicts people released
from prison and most of them didn’t
commit a crime after that some did and I
was thinking that we really provided a
very important service for our society
but when I looked at the way our service
was financed I saw that the money we got
was not related at all to the social
impact we provided the money we got was
related to the costs we created and this
really spoiled our way of thinking so
first of all we were thinking how to
finance our service and just in second
place we were thinking how to provide
really good service for our clients so
doing good to me turned out as something
like doing good if it pays which really
made me sad so in my job and later as a
scientist I tried to reconcile these two
systems the system of economy and the
system of Social Work I was thinking how
can we really measure the social impact
we provide and how can we make sure that
money goes where social impact is
provided and to make sure that those who
provide this impact are really rewarded
in a fair way so if I put it into one
sentence let’s let money follow social
impacts now I want to demonstrate to you
this way of thinking if we look at
incarceration in our countries there are
some amazing figures that may be well
known but if you look at the population
of incarcerated people in the US
compared to Germany we find that out of
a hundred thousand citizens in the u.s.
six hundred and sixty six in prison look
at the figure in Germany the figure is
way lower it is 77 our countries come
closer together when we look at the
expenses for incarceration the annual
costs for someone being incarcerated sum
up to about $32,000 per year in the u.s.
compared to forty five thousand five
hundred dollars in Germany so it seems
the US are better up but we have to take
into consideration the duration of
incarceration an average inmate in the
u.s. is kept in prison for thirty seven
point five months compared to seven
months in Germany so there is a big
difference and there is a big difference
in public expenses so if we look at a
hundred average inmates in the u.s. you
can easily calculate that if you keep a
hundred of them for 37.5 months in
prison the government has to pay almost
ten million dollars so the question is
is that really a good investment it
would be a good investment if committing
a crime was really as
singular event in someone’s life who is
sent to prison but we all know this is
not the case so let’s take a hundred
average prisoners in the US and 100
average prisoners in Germany and talk
about relapse talk about those being
released from prison and committing a
crime again there are 67% so 7 out of 10
committing a crime again in the US and
it’s almost every second committing a
crime again in Germany but committing a
crime again doesn’t mean that those
people are getting incarcerated again so
we have to compare the re-incarceration
rate and these figures really matter so
in the u.s. forty three point three
percent of all prisoners released
getting incarcerated again within the
next three years after their release in
Germany the rate is a bit lower but
significantly lower lower the rate is 33
percent so we can create a business
model from that creating a business
model means making life easier making
life less troublesome saving Natural
Resources saving money or saving time a
business model is about creating
something that has positive effects for
all parties for those who provide the
service for those who get the service
and for the society so the technology I
want to show you is very simple and
heavily tested it is help for
ex-convicts so we got to provide good
probation service
we’ve got to provide regular counseling
and maybe the most important we have to
provide good vocational training and we
can prove that these measures work to
bring down the re incarceration rate so
if we think about a business model we
have to provide a fair profit so I hope
you agree if I compare the business
model that I want to show you to an
investment on the stock market so if we
look at the development of the S&P 500
index over the last thirty years you can
easily easily calculate that the average
rate is about five point six eight
percent per year so this is the profit
an investor would expect and I want to
show you how an investment into Social
Services can provide the same profit so
what is the task what is the challenge
the challenge is let’s bring down the
re-incarceration rate in the u.s. to the
level of Germany so let’s bring down the
reconsideration rate by ten point two
percent percent in other words if we
take a hundred prisoners released from
prison let’s make sure that ten less ten
less will be incarcerated again okay now
let’s talk about these three prisons the
expenses for this three average
prisoners are roughly a million dollars
for incarceration for 37 month or in
other words this money can be saved if
we can avoid the re-incarceration well
if you look at a bit closer it is not
this $1,000,000 it’s a bit less because
we have to take into consideration
that if you put someone in prison this
may save social subsidies like food
stamps or subsidies for affordable
housing so I reduce that amount of money
which should be around a hundred
thousand euros so the net savings nine
hundred thousand dollars so what would
someone who might consider investing
money into the stock market give for
such a program he might be willing to
give eight hundred and twenty eight
thousand dollars and demand 72 thousand
dollars as his profit I calculated this
profit of a period for one and a half
years so this program might want three
years but the investor doesn’t need to
pay the money in advance so he pays it
every month so so I calculated the
profit for one and a half years there is
no business model without a fair risk
assessment so the prisoners who will not
be sent to prison again
will pay back because the government
saves a lot of money you see there is a
risk and the risk that the investor has
to take is related to the effects the
Social Service provides so if we just
achieve two prisoners less or three or
four up to eight the money is safe for
the government doesn’t come up to the
investments so there is a break-even
point at about nine and there is the
range of profit beyond nine so imagine
an investor and the social worker follow
the same objectives so what could we do
with that money so let’s take eight
hundred and twenty eight thousand
dollars what could a social service
provider
do if we take into consideration that
one hour of good social work might cost
$50 so it might be reasonable combining
sessions with individuals and group
sessions so let’s take one hour of
social work with individual counseling
and two hours of group counseling so if
we take group counseling in a group of
three this might cost a hundred and
fifty dollars and I calculated that this
might cost for an individual about $30 a
week so we would have $80 a week for
every ex-prisoner so how long can this
money last this money can last for about
a hundred and four weeks of service so
in other words we could provide provide
two hours of social service taking that
money that is invested into social
impact so if we think about combining
the two systems of economics and the
welfare system we have to answer two
basic questions does it help and does it
pay back so if you look at the lower
left corner the decision is clear things
don’t help and things don’t pay back so
we better leave it but in my mind too
often we take decisions in the upper
right corner we get profit out of it but
it doesn’t have so things may work in
this corner but for a society things
don’t make sense it is good that we find
lots of people especially in the US that
are located in the lower left corner
this is the corner of philanthropists
they invest
because it helps knowing that the money
doesn’t come back in their lifetime the
upper left corner is about social impact
investing social impact investing means
that individuals or corporations invest
into social services and they get their
money back if the social service proves
that it creates social impact so next
time you think about investments
keep in mind 10x inmates who now lead a
decent life and compare it to the value
someone else proposes to you thank you
[Applause]
you
thank you I’m over Casper’s I used to
work as a social worker for quite a long
time I graduated in what we call social
economics and now I’m a professor for
Business Administration for social
services and healthcare services in
Germany at the Lutheran University of
Bavaria in number you see a picture of
Niklas Luhmann because lumen was a very
famous sociologist and he’s regarded the
founder of modern system theory in his
lectures he didn’t almost use any charge
charts of pictures at all but in order
to give his students an impression of
what system was about he just drew this
symbol horizontal and one vertical line
so the vertical line marks the border
and the horizontal line on the left with
emptiness on the right shows that
circumstances are different within the
circle to the system on the left
compared to outside the system on the
right so you can easily see the
significance of it when you think about
your skin as the border of your body as
the system so he took that way of
thinking and transferred it to analyzing
society when I was a teenager my picture
of society was very simple I was
thinking in two systems so there was the
system of doing business and in my mind
these people who were doing business
they were bad they were following rules
that were not mine
so I was doing something completely
different me and my friends we were
doing good we were very heavily involved
in youth programs and we were selling
coffee to sponsor the Nicaragua
Revolution back in the early 1980s so
this was my picture and this is how I
grew up
so you may understand that I haven’t got
into business I became
social worker so as a social worker I
really got confused because I saw that
Social Work in practice was some kind of
doing business because I saw that the
behavior of people working in the social
sector was very much driven by the by
the incentives provided by social
legislation so to make it clear I watch
in a home where we were taking care of
prisoners of ex-convicts people released
from prison and most of them didn’t
commit a crime after that some did and I
was thinking that we really provided a
very important service for our society
but when I looked at the way our service
was financed I saw that the money we got
was not related at all to the social
impact we provided the money we got was
related to the costs we created and this
really spoiled our way of thinking so
first of all we were thinking how to
finance our service and just in second
place we were thinking how to provide
really good service for our clients so
doing good to me turned out as something
like doing good if it pays which really
made me sad so in my job and later as a
scientist I tried to reconcile these two
systems the system of economy and the
system of Social Work I was thinking how
can we really measure the social impact
we provide and how can we make sure that
money goes where social impact is
provided and to make sure that those who
provide this impact are really rewarded
in a fair way so if I put it into one
sentence let’s let money follow social
impacts now I want to demonstrate to you
this way of thinking if we look at
incarceration in our countries there are
some amazing figures that may be well
known but if you look at the population
of incarcerated people in the US
compared to Germany we find that out of
a hundred thousand citizens in the u.s.
six hundred and sixty six in prison look
at the figure in Germany the figure is
way lower it is 77 our countries come
closer together when we look at the
expenses for incarceration the annual
costs for someone being incarcerated sum
up to about $32,000 per year in the u.s.
compared to forty five thousand five
hundred dollars in Germany so it seems
the US are better up but we have to take
into consideration the duration of
incarceration an average inmate in the
u.s. is kept in prison for thirty seven
point five months compared to seven
months in Germany so there is a big
difference and there is a big difference
in public expenses so if we look at a
hundred average inmates in the u.s. you
can easily calculate that if you keep a
hundred of them for 37.5 months in
prison the government has to pay almost
ten million dollars so the question is
is that really a good investment it
would be a good investment if committing
a crime was really as
singular event in someone’s life who is
sent to prison but we all know this is
not the case so let’s take a hundred
average prisoners in the US and 100
average prisoners in Germany and talk
about relapse talk about those being
released from prison and committing a
crime again there are 67% so 7 out of 10
committing a crime again in the US and
it’s almost every second committing a
crime again in Germany but committing a
crime again doesn’t mean that those
people are getting incarcerated again so
we have to compare the re-incarceration
rate and these figures really matter so
in the u.s. forty three point three
percent of all prisoners released
getting incarcerated again within the
next three years after their release in
Germany the rate is a bit lower but
significantly lower lower the rate is 33
percent so we can create a business
model from that creating a business
model means making life easier making
life less troublesome saving Natural
Resources saving money or saving time a
business model is about creating
something that has positive effects for
all parties for those who provide the
service for those who get the service
and for the society so the technology I
want to show you is very simple and
heavily tested it is help for
ex-convicts so we got to provide good
probation service
we’ve got to provide regular counseling
and maybe the most important we have to
provide good vocational training and we
can prove that these measures work to
bring down the re incarceration rate so
if we think about a business model we
have to provide a fair profit so I hope
you agree if I compare the business
model that I want to show you to an
investment on the stock market so if we
look at the development of the S&P 500
index over the last thirty years you can
easily easily calculate that the average
rate is about five point six eight
percent per year so this is the profit
an investor would expect and I want to
show you how an investment into Social
Services can provide the same profit so
what is the task what is the challenge
the challenge is let’s bring down the
re-incarceration rate in the u.s. to the
level of Germany so let’s bring down the
reconsideration rate by ten point two
percent percent in other words if we
take a hundred prisoners released from
prison let’s make sure that ten less ten
less will be incarcerated again okay now
let’s talk about these three prisons the
expenses for this three average
prisoners are roughly a million dollars
for incarceration for 37 month or in
other words this money can be saved if
we can avoid the re-incarceration well
if you look at a bit closer it is not
this $1,000,000 it’s a bit less because
we have to take into consideration
that if you put someone in prison this
may save social subsidies like food
stamps or subsidies for affordable
housing so I reduce that amount of money
which should be around a hundred
thousand euros so the net savings nine
hundred thousand dollars so what would
someone who might consider investing
money into the stock market give for
such a program he might be willing to
give eight hundred and twenty eight
thousand dollars and demand 72 thousand
dollars as his profit I calculated this
profit of a period for one and a half
years so this program might want three
years but the investor doesn’t need to
pay the money in advance so he pays it
every month so so I calculated the
profit for one and a half years there is
no business model without a fair risk
assessment so the prisoners who will not
be sent to prison again
will pay back because the government
saves a lot of money you see there is a
risk and the risk that the investor has
to take is related to the effects the
Social Service provides so if we just
achieve two prisoners less or three or
four up to eight the money is safe for
the government doesn’t come up to the
investments so there is a break-even
point at about nine and there is the
range of profit beyond nine so imagine
an investor and the social worker follow
the same objectives so what could we do
with that money so let’s take eight
hundred and twenty eight thousand
dollars what could a social service
provider
do if we take into consideration that
one hour of good social work might cost
$50 so it might be reasonable combining
sessions with individuals and group
sessions so let’s take one hour of
social work with individual counseling
and two hours of group counseling so if
we take group counseling in a group of
three this might cost a hundred and
fifty dollars and I calculated that this
might cost for an individual about $30 a
week so we would have $80 a week for
every ex-prisoner so how long can this
money last this money can last for about
a hundred and four weeks of service so
in other words we could provide provide
two hours of social service taking that
money that is invested into social
impact so if we think about combining
the two systems of economics and the
welfare system we have to answer two
basic questions does it help and does it
pay back so if you look at the lower
left corner the decision is clear things
don’t help and things don’t pay back so
we better leave it but in my mind too
often we take decisions in the upper
right corner we get profit out of it but
it doesn’t have so things may work in
this corner but for a society things
don’t make sense it is good that we find
lots of people especially in the US that
are located in the lower left corner
this is the corner of philanthropists
they invest
because it helps knowing that the money
doesn’t come back in their lifetime the
upper left corner is about social impact
investing social impact investing means
that individuals or corporations invest
into social services and they get their
money back if the social service proves
that it creates social impact so next
time you think about investments
keep in mind 10x inmates who now lead a
decent life and compare it to the value
someone else proposes to you thank you
[Applause]
you
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