New report exposes how “Inmate Welfare Funds” in at least 49 prison systems use families’ money to pad prison budgets

New report details how prisons and jails have misused money in "Inmate Welfare Funds" to pay for bounce houses, ham gift cards, and even shooting range memberships.

May 6, 2024

Easthampton, Mass. — In virtually every state, incarcerated people and their families subsidize the operation of prisons and jails when they pay for phone calls and commissary items, or make deposits into their loved ones’ accounts. While prison profiteers like Securus and Keefe Group are now well known, less widely known is that the money families pay to these companies is shared with prisons and jails themselves — and kicked back into so-called “Inmate Welfare Funds” with little accountability or transparency.

This morning, the Prison Policy Initiative released a new report called Shadow Budgets: How mass incarceration steals from the poor to give to the prison. Our report finds that at least 48 state prison systems and the federal Bureau of Prisons have “Inmate Welfare Funds,” and lays out how these accounts — which often receive millions of dollars a year — are used. We found that all too often, this money:

• Is used to pay for capital projects, such as prison construction, or for basic essentials for incarcerated people — items that prisons and jails should be paying for
• Is governed by loose regulations, under which virtually any spending is “justified”
• Sits unused despite an urgent need for in-prison programming

While the focus of Shadow Budgets is on prisons, the report also collects anecdotes from welfare funds in local jails. This evidence suggests jails are prone to using incarcerated people’s money in even more egregious ways than prisons, with expenditures like:

• $40,000 on gift cards to The Honey Baked Ham Company for jail staff (Fulton County, Georgia)
• $300,000 on gun range memberships for staff (Dauphin County, Pennsylvania)
• $217,000 on guns, bullets, and vests for law enforcement (Pinal County, Arizona)

“Welfare funds are yet another example of how our failed system of mass incarceration burdens the poorest members of society the most,” said report author Brian Nam-Sonenstein. “Prisons and jails need to be held accountable for how they use welfare funds to fill budgetary gaps — and when their budgets fall short, they should be incentivized to decarcerate facilities rather than exploit poor families.”

Our report lays out policy recommendations for state and local governments to end the worst misuses of welfare funds while protecting the basic needs they all too often pay for. In particular, it urges states to ban the use of welfare fund money for construction or staff costs, to meet incarcerated people’s needs through the general appropriations process, and to guarantee that incarcerated people and their families have a say in how welfare fund money is spent. Above all, though, the report emphasizes that prisons and jails should focus on reducing the number of people behind bars to address budgetary shortfalls rather than sapping money from incarcerated people and their families to fill the gap.

In our report and companion guide for press, we encourage journalists to investigate the welfare funds in state prisons and particularly in local jails. We make details about every state prison system’s welfare fund available in Appendix A, explaining how these funds are accrued, spent, and overseen. Meanwhile, Appendix B lists some specific examples of expenditures, prohibited expenses, and regulatory language across the various welfare funds we investigated. For those interested in investigating welfare funds in local jails, Appendix C contains a list of state statutes, some of which apply to sheriffs and county facilities.

See the full report and appendices at https://www.prisonpolicy.org/reports/shadowbudgets.html, and our companion guide for journalists at https://www.prisonpolicy.org/blog/2024/05/06/welfare-funds/.