Visit www.redf.org/2011benefit to purchase tickets to our annual Benefit + Social Enterprise Expo in San Francisco on September 30th!

A few takeaways:

1. The most accomplished social entrepreneurs remain frustrated about the slow pace of change, and challenged by the scale required to have a real impact on big problems. While ‘disruptive innovations’ can demonstrate a new way to do business, to affect the majority of people will require us to engage government more directly and significantly increase private investment.
2. We are not remotely assertive enough about making the case for increased individual and corporate philanthropy directed to addressing poverty and conditions related to poverty.
3. When the success of our programs depends on superior execution (e.g. outstanding, uniquely qualified staff; especially strong nonprofit organizations, etc.) those programs will not achieve real impact at scale – because that kind of superior execution cannot be routinely achieved.  Aim for approaches where success can be achieved via ‘average’ implementation.

Perhaps as a counterpoint to our frustration about the slow pace of change — in their book “Switch”, the Heath brothers argued that while big long term goals can be inspiring, it’s the concrete, instrumental steps that make us feel that rush of accomplishment.

Dr. Atul Gawande has also offered an argument for the benefits of incremental change – while also suggesting a blueprint for the kind of ‘average’ replication that may be required.  He describes successful efforts decades ago in the US to transform agricultural production which was driving food prices to unaffordable levels, and putting a damper on economic growth.  Sounds like the health care debate.

Dr. Gawande noted that change happened not prescriptively, but a little bit at a time, as individual farmers in different locales were persuaded and supported to take a chance on new techniques that had positive results, impressing their neighbors to copy those practices.  As the government made selective investments in information and practical analysis, they communicated what they learned widely.  Sounds something like the Social Innovation Fund.

Showdowns over federal and state budgets heat up, and brave citizens protest repression around the world challenging traditional thinking and dogma.  Incremental change can be productive, and demonstrating new ways to do things on a relatively small scale can create momentum and change some peoples’ lives, but until we engage larger systems in government and business we are unlikely to make sweeping, enduring change.  And until and unless as citizens and consumers are willing to challenge orthodoxy, we are not going to get government and business leaders to change direction.

I hear frequent frustration – not just from those who oppose ‘big government’ but from those who are in the social sector — about how the requirements tied to government funds and the incentives they provide make it hard to do the things we know need to be done.  I heard from a member of Congress that when we advocate for funding of specific programs, we must step up to tell them what funding can be reduced.

I noticed a new study from the Harvard School of Education challenging the notion that all we need to do as a country is set young people on a path to a four year college degree in order to engage them in the workforce.  I also saw an article from William Schambraa challenging the value of social sector measurement of results – something we at REDF strongly value.

“The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew”

- Abraham Lincoln

Today we make public the names of six of the organizations that will join our portfolio.  REDF will work with these groups and others selected later this year to expand their businesses so that at least 2,500 more Californians starting working by 2015. REDF’s new portfolio includes two groups in the SF Bay Area, two groups in Los Angeles, and two groups that will operate in multiple California geographies. Together they will employ people who had sky-high rates of unemployment before the current economic downturn – people who need these jobs urgently. We’ll be ramping up businesses that deliver property management services in affordable and supportive housing; enterprises that provide fresh, local produce and recycling; and all kinds of other valued services to our communities.

As we work with the new portfolio to create jobs as pathways into the workforce, we will also pursue our second objective to reach an even larger scale so that every community in the US understands how to accomplish this cost-effectively and with real impact.

With REDF’s portfolio, alumni portfolio, and other social enterprise leaders around the country, we intend to develop even stronger evidence and business models, and promote and expand the road-tested approach that combines sustainable businesses with evidence-based employee supports.

Most employers are reluctant to hire people caught up in the criminal justice system, or those facing homelessness, or struggling with addiction or mental illness.   And many of them are without the work experience to compete; although we know from 15 years of experience that they want to work and are able to.  Once they get some experience, employers are more likely to hire them.  They just need a chance.

With so many out of work, why create jobs for these particular people?

First and foremost, these are not strangers, but our uncles, aunts, cousins and neighbors.  They are young people who grew up in the neighborhood. They are veterans who came home traumatized, and became homeless or entered the criminal justice system.  They are among the six percent of our family members and friends with a serious mental illness. We shop at the same stores, attend church or temple together, and have sent our kids to school with them.

And it’s not only that they are part of our community.  If we do not do something now that reduces their incredibly high rates of unemployment, instead of working and contributing to our communities and our democracy, they will burden the economy and taxpayers with the myriad costs that accompany long-term unemployment.  Costs that too many Americans are now learning about first-hand.

The Social Innovation Fund (SIF), a federal program supported by the President and the Congress is fueling this effort with seed funding, fully matched by REDF and our private donors.  The point is to make good on a promise that Americans are rightfully skeptical about – that we can make progress on the critical issues of our time by maximizing private support, using the efficiencies of business methods, and delivering complementary support services that are proven to work.  This is our chance.  We’re at the starting gate.  Check out the competitors on the field, and what you can do to help us reach the finish line!

Fewer obsess about the men and women that REDF meets who have gotten their lives together and started working after hard times and years of unemployment.

With unemployment for everyone so high, people want to be distracted.  We want to hear answers; not how complicated it is to solve problems.

But America’s second wealthiest individual, Warren Buffet, reminds us that in contrast to making money,

“If you’re succeeding all the time in philanthropy, your projects are too easy. Look for the things that are more important and where you may fail.”

This is music to our ears, because trying something hard is the entire purpose of REDF and our partners.   What we’re doing is a good risk, but it’s not a sure bet.

And its not so complex we can’t identify with it. But we know that these are our parents, siblings, and cousins.   Many of us will see them at holiday time and wonder what to do.  Someone close to you has certainly lost a job. But go deeper. Think about your own family – there is probably someone who has gotten in trouble with the law, struggled with addiction or mental illness, or even become homeless.

While so many people are having a hard time getting a job now, it’s even tougher for people who face challenges like these.

The good news is that we are beginning to find solutions.  And those solutions require business not as usual.

The enterprises we work with are part of it — creating jobs that have helped thousands step into the workforce.  These enterprises are a cost effective piece of a larger transitional jobs movement that is generating evidence of results, and gaining momentum nationally.

It’s not, as they say, about giving people a fish, it’s about teaching people to fish for themselves.  It’s about a second chance – something that’s scarce when you are lower down the economic ladder.  But that second chance is essential.

We have met men and women who are transformed completely by that opportunity – going from despair to productivity.  Knowing about that makes all the difference.  It brings hope to us, to them, to their families and children, and to our communities.

In 2011 and beyond, we’ll be working with partners all over California to create more of the right kinds of jobs and supports so thousands more people don’t go back behind bars or to the streets, but go to work and see their wages and spirits rise.

We’ll focus on sustainability — generating earnings from the businesses to cover as much of the costs as possible, and delivering superior results for the price.

Over time we want to impact even more people.  To start, we’ll be pulling together leading practitioners nationally, and consulting people who have made it back into the workforce to define a model that can be implemented all over the country.

Check out this amazing piece from Australia on “social procurement” to see some of what we have in mind!

And if you prefer inspiration, check out Cooked, Jeff Henderson’s story of his transition from cocaine dealer to prison to top chef.

Thank you for sticking with us.  Rest up.  Enjoy friends and family over the holiday.  If you run into Warren Buffet, let him know what we’re up to.

Tune in here early next year to find out about REDF’s new portfolio – in the Bay Area and, for the first time, beyond!!

Join us in this New Year’s resolution: take some risks to create lasting change.

Congratulations, and please get some rest.  We’ll need all the energy you have for the next four years.

When Governor Schwarzenegger was first sworn in as Governor in November 2003, Californians faced an unemployment rate of 6.6% — 5.4% when he was reelected in January 2007.

You take the oath of office with an official unemployment rate hovering above 12% — about 2.5 MILLION people officially unemployed, while the State budget runs a stubbornly huge deficit year after year.  Simple version as you well know: state spending exceeds revenues by a long shot.

Respectfully, lead with a positive vision.  Nothing motivates like hope for the future.

And one of the most hopeful signs from a brutal election season was the recent poll indicating overwhelming support for compromise from everyone on the political spectrum in order to achieve results.

Set priorities + garner the necessary support to act on the priorities + follow through aggressively + measure results + adjust accordingly = a shot at a decent first two years for your incoming Administration.

As far as priorities go – put job creation at the top of the list.

What can the government do?

Bright spots. Identify what’s working now at the local level to create jobs, and deliver incentives to create more.  Who is creating jobs?  What incentives do they need to do more?  To incorporate better wages and more positive environmental impact?  How can government help connect the dots?  How can we use already appropriated funds more efficiently?  How can government get out of the way?

When things move – help them move.  When things stall, find out why.  When things don’t work, stop funding them.  Shine a spotlight on those creating jobs.  Shine a spotlight on those standing in the way (regardless of party or ideology).   Fight cronyism with facts.

Some examples:

• Initiatives by local government in Los Angeles, from all ends of the political spectrum —  from the community benefits agreements pioneered by LAANE, to emerging leadership appointed by L.A.’s Mayor.

• Creative economic development efforts in Fresno – which has among the nation’s highest unemployment rates – ranging from the new Mayor’s focus on downtown revitalization to neighborhood efforts that support children so parents can work.

• Housing developments creates jobs.  Facilitate the dozens of major development projects now in the pipeline but stalled. Work in partnership with savvy local redevelopment and housing agencies.

Innovate. Everybody is looking for the ‘next big thing’ to get the economy going.  California’s unusual combination of higher education, venture capital, philanthropy, thinking/acting outside of the box, technology, land, and our big, diverse population positions us to lead the country.  Use the tools government has to encourage innovation in the economy and in the social sector.

• Do business with double bottom line companies. Government procurement amounts to billions of dollars.  Channel some of it to fuel ‘double-bottom line social enterprises’ that create jobs for those who otherwise depend on taxpayer support (people with disabilities, people on parole, young people disconnected from school and work –‘graduates’ of the foster care system).  A low cost way to reduce public expenditures.

• Private-public partnership. Engage with California philanthropy.  The center of private wealth and philanthropy has moved rapidly from New York to California.  The most creative social capital investing is happening right here.  Foundations and philanthropists have their own priorities, but are more eager than ever to achieve real impact and scale.  Private-public partnership can add fuel to economic growth.   Mobilize and incentivize to channel resources toward job creation – especially for poor and disadvantaged communities where philanthropic support has lagged over the years (as documented by current Facebook COO Sheryl Sandberg in a piece for the Wall Street Journal authored a few years back when she was at Google).

Signing off, with respect for your willingness to take on the hard work – we offer a hand to help as we can, and hope that you will get the job done.

I’m thinking about them again today as we provide a sneak preview of REDF’s new 2011-2015 Strategy which we’ll announce at our Benefit on September 30, at which we are honoring our committed partners Mitchell Kapor and Freada Kapor Klein and Matthew Cate, Secretary of the California Department of Corrections and Rehabilitation.

With the support of our Board of Directors and our Advisory Council, REDF has created an ambitious five year plan to create jobs for thousands of young people and adults who would otherwise be unlikely to work due to histories of chronic poverty, homelessness, incarceration, addiction, or mental illness.

We also aim to develop a social enterprise business model that will employ many more people in a sustained way across the country for years to come. Enlarging the circle of opportunity so that many more people can work is critical to our families and communities, and also to our economic future. It’s something that should appeal to people on all sides of the political spectrum.

Think about your own work history – that of your family and friends. On a personal level, I know I am motivated by respect I have for the risk-taking and hard work of my grandparents.

Their son – my father — eventually brought my family to the other end of the job market, giving us a wholly different life. He became an attorney, and an elected official (who first honed his oratory next to that pushcart). But one thing never changed – the significance of work as a centerpiece of our lives. It meant we could earn a living, do things, and help those we loved. And it was also about more than that. Work was about relationships, contribution, opportunity and hope.

I remember the powerful stories my father heard at work on the weekends when we’d miss him because he’d be at his office. A woman came to him in tears because her son had become addicted to drugs and stolen everything she had in her home. A man in a wheelchair was devastated because he could not get a job. Creating opportunities to help people solve these practical problems motivated his work as a legislator.

I learned that transformative change — for people and communities — is possible. I learned what opportunity means in a world where the playing field is not always level.

Over the next five years, REDF will work with partners across the state to create social enterprise jobs for thousands of Californians who have been shut out of the workforce. We will learn from our work on the ground how to develop a widely-replicable social enterprise model that creates job opportunities and pathways that bring people into the economic mainstream throughout the country.

To do this, REDF is seeking eligible organizations to become part of our portfolio. We will work with organizations running social enterprises that are selected through our open and competitive process, including an online Request for Qualifications.

With your engagement, help, and support we will succeed. Join us. Spread the word. Learn more about how you can help create jobs, opportunity, and hope.

Meanwhile, front and center on our minds is how we can help to end joblessness among people with major barriers, while being bombarded by articles like those about the self-named “99’ers”. These are the 1 million or so Americans who will have exhausted 99 weeks of unemployment benefits by the end of 2010, and have few ‘barriers to work’ other than not having a job!

Why does REDF believe it’s so critical to create jobs for people with major barriers, when so many other people don’t have work?

An answer we’ve consistently offered over the years is that long-term unemployment clearly costs society, communities, families, and taxpayers as people depend on public benefits or experience cycles of homelessness or even incarceration when they have no way to earn a living.

But in the context of today’s sky high unemployment rates, our commitment to this effort has, perhaps paradoxically, gotten even stronger as we understand in our bones the impact of long-term unemployment. This was brought to life for me at the office last week. A candidate for a REDF job came to interview, and said, “This interview will be short, because I was offered two jobs today.”

She went on to tell us that she had still wanted to come in and meet us because she felt so strongly about our mission, especially after having experienced a significant period of unemployment herself. The painful effects of losing the social network, the feeling of pride and accomplishment and sense of purpose were fresh in her mind. And she told us that what was hardest to hold on to was a sense of hope. She had recently heard someone say that more than any other characteristic, what distinguished those who eventually got a job was maintaining hope.

Click the photo to read about how a job changed Jamall's life

When I first arrived at REDF three and a half years ago, I liked our tag line, “Investing in employment and hope”, but it’s taken on a whole new meaning through this recession. All people need the chance to work. REDF is about making sure some of those with the least opportunity have that chance.

One thing we know for sure is that government is not bailing us out of this mess anytime soon. Private citizens and the private sector have to step up. And with a hole blown in our economic resources, we have to make sure that public and private dollars are invested in initiatives that are not just cost effective, but really impact peoples’ lives.

And while the science of measuring social sector results is imperfect, REDF will do all we can to advance the SIF focus on improving what we do based on what we learn, and scaling the practices that have demonstrated real evidence of impact. Two articles that illuminate the ‘social measurement’ topic in all its thorny glory – worth reading: the New Yorker profile of Esther Duflo of MIT’s Poverty Lab describing the benefits of and controversies surrounding her random assignment studies of social programs ; and the piece by Geoff Mulgan director of the Young Foundation in Stanford Social Innovation Review arguing for sharper common frameworks among funders. There’s an insightful comment on that piece by Sara Olsen posted on that article.

Even if it’s not always what practitioners, policymakers and philanthropists are interested in, we are only going to be able to deliver results on the ground and get the political process and donors to invest in change ‘at scale’ when we are ready to offer hard facts and hard truths about what does and doesn’t work.

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REDF Leverages First Social Innovation Fund Grant

By Carla I. Javits, REDF President
Originally posted on the Stanford Social Innovation Review (SSIR) Opinion Blog

As we prepared our application for the federal Social Innovation Fund (SIF) there were times that I struggled with a hard-earned skepticism about the latest silver bullet solution to domestic social problems. I’ve spent 25 years trying to find ways to counter the destructive effects of chronic poverty. A $50 million federal program—a fraction of the resources needed—did not seem to merit the intense focus it attracted from the social sector.

But one remarkable thing about people is that hope springs eternal even in the most dire circumstances. Fanning that resilient and optimistic flame is at the center of the work of the social sector. And it’s at the heart of the success that sometimes comes to those we serve when they are offered half a chance.

Given the stakes, all of us at the Roberts Enterprise Development Fund (REDF) were elated to hear that we would be representing California as a member of the first group of federal Social Innovation Fund (SIF) grantees.

Here’s a brief look at what’s promising and fresh about the SIF—which hopes to accelerate widespread adoption of approaches that demonstrate greater impact than the status quo. To do so, it will test whether funding intermediaries and a focus on measurement of results together deliver better results.

While federal funding for “intermediaries” is controversial, my experience working in two of them over 18 years is that, done right, they can be powerful engines of positive change. These oddly-named entities put the pieces together and connect the dots. We support and aggregate the impact of multiple organizations to make a compelling case for change, and stick with it over time, helping build a healthy nonprofit sector that delivers results (for more on this topic see a great report here).

Funders are often reluctant to sustain intermediaries, viewing them as “overhead”—but the SIF, having the vision to see how intermediaries can expedite and facilitate change, has taken the risk to support us. Our challenge is to prove worthy by adding value.

At REDF, we know what a heavy lift we have ahead with our plans to help nonprofits create businesses to employ people with major barriers across the State of California, and create a model that can be even more widely replicated. But there are few examples of real progress in this area, and the evidence shows that we’re on to something that works. This is the big chance to demonstrate it, and prove it can be done cost effectively.

How will the SIF help? Federal support offers financial resources, greater credibility, and help facilitating policy change. SIF-funded groups will learn from one another.

Some critics also dismiss the SIF’s unprecedented focus on measurement and evaluation as “business as usual” and “not innovation” because subgrantees have to demonstrate a track record. I disagree because the focus on measurement (1) lays down a direct challenge to the kind of patronage that still influences expenditure of public resources; and (2) gives us a lever—objective data—that disruptive innovators can use to get a seat at the table with philanthropy, business, and government. For more on this topic see these blog posts.

With no public resources to spare now, and even less in the future, now is the time to make sure the public knows what results our investments achieve. What is success for REDF and the first “class” of SIF grantees?

• Results! (documented, quantified, well-described, powerful, positive) for people in communities—at a reasonable cost.

• New knowledge and clarity about what works.

• A greater willingness by public and private funders to throw down with those groups that adopt proven practices, measure results, and constantly improve based on what they learn.

Learn how Ramses turned his life around after being hired at a REDF-supported social enterprise.

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Today REDF was elated to receive news of a two year $3 million federal Social Innovation Fund grant from the Corporation for National and Community Service (CNCS). The support is welcome and needed fuel we will use to expand San Francisco Bay Area social enterprises, and to take our work to other parts of California. We are especially motivated to put all we have into accomplishing our goals as we are the only California-based organization among the eleven groups selected.

As readers of this blog know, we believe, and evidence demonstrates that nonprofit-run social enterprises create the jobs that offer a way into the workforce for young people and adults who would otherwise face almost insurmountable barriers due to histories of homelessness, addiction, mental illness or incarceration.

REDF would not have received this federal support without the enthusiasm and hard work of the portfolio of nonprofits we have had the honor to support over the years, as well as our other partners, and our steadfast Board, Advisors, and donors.

Increasing the prospect of successful implementation, several outstanding organizations committed to partnering with REDF in various ways to implement the SIF program including the Mitchell Kapor Foundation, Bank of America, The California Endowment, the United Way of Greater Los Angeles, The Fresno Regional Foundation, The Walter and Elise Haas Fund, NISH Pacific West Regional Office, The California Workforce Association, Association for Corporate Growth – SF Bay Area Chapter, the Center for Employment Opportunities, the SF Workforce Collaborative, and the San Francisco Office of Economic and Workforce Development. And we hope to have the chance to learn from the other ten grantees as part of an initiative that the CNCS and philanthropy are fostering in partnership with Grantmakers for Effective Organizations.

Most of all, we are inspired to do even more by the tenacity and spirit of the people who get jobs in social enterprise, and undaunted by all of the barriers at hand, thrive and succeed beyond anyone’s wildest dreams when given half a chance.

One of our first steps will be replication in California of the New York-based Center for Employment Opportunities (CEO) social enterprise model that has achieved proven results in reducing crime, and recidivism to jail and prison. The resources are now in place for the first replication — a private-public partnership between REDF, CEO, government, foundations, and local nonprofits.

To carry out the SIF, over the next five years REDF commits to:

• Put thousands more Californians to work by investing in social enterprise growth and job creation in the Bay Area and around the State; and

• Develop a replicable, scalable, sustainable model of social enterprise by:
  • A more rigorous demonstration of its impact on job retention and wages;
  • An assessment of the cost-effectiveness and ‘social return on investment’ of social enterprise as compared to other approaches; and
  • Showing how these enterprises can grow in different geographic regions of California

The path ahead will not be easy, but we are heartened by the enthusiasm, talent, and optimism of the people in nonprofits, business, philanthropy, and other sectors that continue to step up in support of REDF, the nonprofits we assist, and most importantly people who need to, want to work, and thrive when given the chance to do so.

With unemployment in California stuck around 12%, prospects for increased employment of individuals with significant barriers might seem dimmer than ever. Putting a fine point on it, “I think the unemployment rate will be permanently higher,” noted Mark Sandi, chief economist at Moody’s Economy.com, “or at least higher for the foreseeable future.” The Congressional Joint Economic Committee just reported that the unemployment rate for youth between age 16 and 24 is—at close to 20%—the highest since it began tracking the data in 1947.

It is hard not to consider whether REDF’s relentless focus on bringing those with significant barriers into the workforce is still relevant in this context. And maybe that’s why I particularly noted the words of actress, performance artist and playwright Anna Deveare Smith who entranced attendees at the “Gathering of Leaders” hosted by New Profit earlier this year.

To paraphrase, she said that those with “optimism” are busy looking for signs of falling unemployment and people heading out to the mall to shop. Those with “hope” have the imagination to look out beyond the evidence of static unemployment to create new possibilities that become contagious against all the odds— innovating despite the present realities, inventing new technologies, and starting businesses that eventually employ hundreds of thousands.

Although we do not know that it will turn out well, people with hope create job opportunities for those with unemployment rates five times as high as others, even when unemployment is sky high. And men and women with hope seek jobs and work hard to retain them when they get them, despite the competition they face from others carrying less baggage.

Few things are as bad for us as being involuntarily out of work, and most people know it.

What is not so clear is why our country has put up with disproportionately high unemployment rates for significant swaths of the US population for decades, especially when the related costs of recidivism to jail and prison, homelessness, youth violence, and family dysfunction have been breaking the bank.

Decades of experience have demonstrated that people with the most daunting challenges are fully capable of moving into the workforce when offered paid work experience and targeted services that connect them to basic education and certified training.

It’s high time to stop talking and start doing. REDF’s 2011-2015 strategy, to be unveiled at our 2nd annual benefit in San Francisco on September 30, is all about making good on our longstanding slogan “investing in employment and hope.” We’ll be taking our job-creation effort statewide in California, with ambitious goals for the numbers employed. We’re going to work with local partners to develop a tier of social enterprises that is a model of jobs plus services. Our aim is that every individual who wants to will have the chance to get on that first rung of the employment ladder and start to move up. Our contribution will be a powerful model that every community can and should be able to develop and rely upon as an on ramp into the workforce.

The reality is that a thriving US economy and society depends on a well-prepared workforce contributing all of their diverse talents and skills.

Accelerating the growth and productivity of the entire economy will require some of us with imagination and hope to fuel business and job growth, so that men and women who have had the most limited opportunities in the past participate in building a better future.