Serving The Under-Banked And Over-Policed: A Startup Tries To Disrupt The Traditional Bail System

You know how many countries have a cash bail system that is dominated by commercial bail bondsmen? The answer, according to the Poynter Institute, is two—the U.S. and Philippines. And, in the U.S., where the imprisonment rate for people of color is significantly higher than for whites, it’s the former group that bears the brunt of that system.

But there’s more: Those who are jailed pre-trial are three times more likely than others to be convicted, spend three years longer on average in prison and are more likely to take plea deals, according to Judd Grutman, founder of startup Vonzella.

In 2016, Grutman, an attorney, decided to do something about the problem. His company aims to help low-income people who’ve been arrested, but can’t afford to pay bail, through a cost-sharing system, something that’s sort of like, but also is different, from insurance.

He’s also readjusted his business model and relocated quite a number of times.

The Under-Banked and Over-Policed

According to Grutman, most people can’t afford to get out of jail if they’re faced with a cash bail order. The bail system gives bail bond companies, he says, incentives to target larger bonds of above $5,000. As a result, those charged with lower level offenses who can’t scrounge up the money have to sit in jail. “We focus on the under-banked and over-policed,” he says. “There are millions of Americans who face this real threat and have no financial resources to do anything about it.”

Grutman worked for five years as a corporate lawyer when, according to Grutman, he decided he wanted to do something more meaningful. In March, 2016, he ended up moving from LA to New York City, to take a course at General Assembly, a tech skills learning center, in product management. Grutman had spent some time while he was in law school at the University of Michigan working at the Michigan Innocence Clinic, a law clinic helping people wrongly convicted of crimes. His first client, according to Grutman, was exonerated based on non-DNA evidence; Vonzella is named after the man’s mother.

So when Grutman was asked to pitch several ideas to the folks at General Assembly, one of them was a way to disrupt the traditional bail system. Then after spending long stretches of time observing court hearings and researching bail reform, he came to a conclusion: The most immediate way to ameliorate the bail crisis was to provide an economic solution.

Changing Models

With that in mind, he decided to  create an insurance product. “It seemed to be the only way to provide a financial tool for people who desperately needed one,” he says. The reason: An insurance model inherently would help keep people out of jail, because the insurer would lose money every time someone got arrested. “That’s exactly the opposite of what happens now,” he says. In other words, the way the justice system currently works, everyone from bail bond companies to jail transportation providers have a vested interested in seeing that people get arrested and thrown in jail.

What happened next? Grutman moved back to Ann Arbor, where he lived in the basement of a law school dean, went to Detroit every day with her husband, a U.S. district  attorney and collected first-hand bail data.  But when he started networking with insurance experts, they urged him to get statewide numbers. 

Moving Again

That led him to move to Minnesota, which, according to Grutman, is the only state with state-wide bail data. He also applied to The FINNOVATION Lab Fellowship Program, a Minneapolis-based social enterprise accelerator which runs nine-month programs for fledgling companies. During that time, facing relentless red tape and bureaucracy, Grutman decided creating a new insurance product wouldn’t work. So he ended up taking a different approach—a cost-sharing model, based on health cost-sharing ministries that provide ACA-qualifying healthcare coverage.  

Thus, Vonzella would charge a membership fee and provide pre-paid bail coverage. That way, Grutman could offer a product that didn’t require dealing with the regulations and bureaucracy associated with conventional insurance. One tack he’s considering is to create an employer-backed benefit using a subscription or premium model; pre-Covid, Grutman had reached out to Minnesota-based employers to see if they were interested in a bail risk-management program. According to Grutman, he got a positive response from construction companies and meat processing plants. He’s also considering a direct-to-consumer option charging a premium, with an app that could collect premiums and disburse claims payments.

To help with funding, he’s  working with Pillsbury United Communities, a community organizing and workforce development organization that is acting as a fiscal sponsor. Through the relationship, Vonzella can apply for foundation funding. He’s hoping to get a pilot off the ground in the fall in North Minneapolis.

The ultimate goal, says Grutman, is to do away with the commercial bail system altogether and, in fact, eliminate the need for his company. “The moment we don’t have to sell bail coverage—great,” he says. “But right now, people don’t have options.”


Speak Your Mind

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Get in Touch

350FansLike
100FollowersFollow
281FollowersFollow
150FollowersFollow

Recommend for You

Oh hi there 👋
It’s nice to meet you.

Subscribe and receive our weekly newsletter packed with awesome articles that really matters to you!

We don’t spam! Read our privacy policy for more info.

You might also like

The Fate of the Minority Business Development Agency Wobbles...

Minority-owned small businesses risk losing a huge ally.

Consumer Price inflation eases to 6.58% in February

New Delhi: All India Consumer Price Index (CPI) slipped to 6.58% in February...

US FCC issues final orders declaring Huawei, ZTE national...

Washington: The Federal Communications Commission on Tuesday formally designated Chinese`s Huawei Technologies Co and...

Contextualizing The Milwaukee Bucks’ League-Leading Defense

MILWAUKEE, WISCONSIN - FEBRUARY 02: Deandre Ayton #22 of...