Fuel for the Field

After more than a decade of learning from success, as well as from the school of hard knocks, the time is ripe for dramatic expansion of the social innovation that REDF has been privileged to pioneer with our extraordinary partners. Over the next several years, REDF’s new strategy will accelerate the growth of job-creating social enterprises in the State of California with the twin goals of establishing a replicable and sustainable model that also provides thousands of people the chance to succeed and thrive in the workforce, with higher hopes and brighter futures.

REDF’s first-ever social enterprise exposition and benefit in October celebrated the strength and optimism of a group of men and women who have taken that step into the workforce. The award they received was named for REDF’s founding Board member and a leading Bay Area business leader and philanthropist ─ Stuart Moldaw. Making the journey from lives spent struggling with homelessness, criminal activity, mental illness, and other tremendous challenges, these eight people are now working and thriving. REDF also honored the social enterprises that gave them a chance to work, and the private sector companies that hired them after they took that first step.

We aspire to do much more so that thousands of people have the same chance as the eight.

Why now? We know the need is great. People with complex histories of homelessness, incarceration, mental illness, and related disabilities are unemployed at rates three to five times that of other people. And we know that very few programs of any kind have shown promise in helping these individuals into the workforce. Meanwhile, many of them can and want to work, but because we do not offer them pathways into the workforce, our society loses the value of their contributions, taxpayers bear the costs of their repeated homelessness and incarceration, and people who want to move on with their lives lose hope.

In addition to the promising “social” results – with 74% of those interviewed two years after getting a social enterprise job still working – the social enterprises themselves earn income from their businesses. This income allows for more efficient use of tax dollars by covering costs that otherwise are paid for by government in the form of ‘life skills’ training, work experience programs, or transitional job wage subsidies.

Every community needs social enterprises as part of its workforce preparation system, but few have them, and those that exist do not employ large numbers. Why hasn’t social enterprise grown – or in the vernacular – scaled up? Based on more than a decade of hard experience, REDF believes that with our portfolio we have identified the leverage points that would trigger accelerated expansion.

We have identified the characteristics of businesses that are better bets for social enterprise. And we have found that, because these businesses are at a competitive disadvantage given their ‘double bottom line’ focus on employing those who face significant challenges, they need a competitive edge – better access to the market for their goods and services. The federal “AbilityOne” program, which incentivizes federal agencies to procure from a network of 600 nonprofits that employ 40,000+ people with disabilities, is a good example of this. Access to public and private sector purchasers will help social enterprise grow.

Over the coming years, REDF will adjust our approach to address these obstacles to scale, and accelerate the growth of social enterprises and the numbers of jobs they create. We will be more assertive about defining the types of businesses we will assist according to criteria developed through experience, and we will forge the relationships with government and the private sector that will open the spigot of purchasing so that social enterprise can thrive.

We will work to embed social enterprise in every community, and to connect them much more closely to other workforce development, training, and educational programs so that employees can advance.

We will do all of this in partnership with nonprofits, unions, government officials, corporate executives, philanthropy, education leaders, the MBA students and graduates that participate in our Farber program, and many others.

Of note is The Woodcock Foundation’s recent $300,000 two-year commitment to aid REDF in creating workforce opportunities and delivering on the promise of social enterprise in California and beyond.

We invite you to stay engaged as this tale unfolds. We need your help to ensure we are pursuing the most promising opportunities. As you read our plan for action, what questions come to mind? Which recent innovations seem relevant? Who might you suggest we talk to? With your help and input, REDF will be poised to transform social enterprise from a promising innovation to a sustainable, mainstream approach, offering a pathway to productivity and opportunity.

California is a natural center of innovation. The vast majority of venture capital flows from here, and we spawned the technology industry and Hollywood. We are risk takers and entrepreneurs, unafraid to try new things. The California dream has always been about hope and opportunity. With you, we can engage many more people in that dream so that they can contribute productively, the engine required for the dream to continue for all of us.