Job creation is the solution for our economy – which acts like a kind of flywheel.  When it’s cranking slowly with few people working and too little spending, the lack of demand suppresses job creation slowing the wheel further.  As more people go to work, demand increases, accelerating job creation and spending – the flywheel starts spinning.  That’s the virtuous circle One Job for America is trying to reinforce.

This meshes perfectly with the goal of the nonprofits that have just joined REDF’s portfolio.  They were in San Francisco last week sharing ideas and deciding how to work together and with REDF to create not just one job each – but many more jobs – all of them targeted to people with the highest rates of unemployment.

If more nonprofits joined with their for profit colleagues to create jobs around the US, that flywheel would be spinning!

Job creation and economic development was the subject of the grantee meeting I attended in Washington, D.C. last week of the little-known Community Economic Development/Job Opportunities for Low Income Individuals (CED/JOLI) programs administered by the federal Office of Community Services (OCS) .  OCS has made grants to hundreds of community development corporations and nonprofits all over the country to create enterprises and jobs.

My speech focused on results and resilience.

“We have to roll up our sleeves and implement well.  It’s not glamorous but it is necessary”; and despite the trying times, “Just as we support the people we serve to be resilient in the face of setbacks and challenges, we need resilience in our programs.  When we learn what works, or who should be targeted, we should adjust.  If a few grants don’t work or a venture doesn’t work – learn and try again.”  (the full text is here)

In 2011, the President is transforming the CED/JOLI program to focus on bringing fresh, local food to low income communities to fight the growing epidemics of obesity and diabetes.  This  Healthy Food Financing Initiative includes funding from OCS, a loan program through local community development financial institutions and resources from the Department of Agriculture.  Funding announcements are likely to be out this month.

I met people from the Wholesome Wave that are increasing the purchasing power of people with low incomes so they can buy fresh food; while expanding farmers markets, and erasing the stigma of using foodstamps at farmers markets.

While the food initiative is badly needed, the decision to turn the OCS programs that once funded significant business and job creation to only one purpose, while cutting the funding by more than half, reflects some of the misplaced priorities emerging as Washington competes to cut spending.

Meanwhile, those of us living in local communities use what resources we can find to do the most good, while relying on the creativity and entrepreneurial grit at the heart of America to keep on creating jobs and reviving the American Dream.  One Job for America. Sign up now.  One job at a time – we can and will turn that flywheel around.

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 thought about how the economy sputters along, and no one seems to know where the ‘next big thing’ is coming from.  The newspapers today told us that we can’t count on the technology sector for big job growth, and President Obama’s Labor Day suggestion of a new infrastructure ‘bank’ and $50 billion of funding to create jobs repairing roads and bridges hardly registered for most people who are either pedaling as fast as they can to hang on to the jobs they have, or holding their breath as they try to make it through yet another week of unemployment.

Meanwhile, John Tammy of Forbes tells us,

“But while it’s exciting to contemplate the giving nature of Gates and Buffett, if their true desire is to help their fellow man, they should hoard every penny of their significant wealth…

Some will no doubt benefit in the near term, but the removal of limited capital from the productive parts of the economy will ultimately reduce our standard of living, drive up unemployment and make individuals more — as opposed to less — needful of charity”.

Interesting.

Sean Stannard-Stockton’s Tactical Philanthropy blog offered up some choice comments on Tammy’s suggestion, noting that the nonprofit sector is a huge part of our economy, with millions of jobs and active investments in the building blocks of our economy – education, scientific experimentation, etc.

From REDF’s perspective, the irony is perhaps even more pronounced.  We are using a mix of philanthropy and government funding (through the Social Innovation Fund) to invest in the creation of businesses that in turn provide jobs to people who would otherwise be economically unproductive, and would require public subsidies to meet basic needs, while cycling through costly systems such as prisons and homeless shelters.

Quite the reverse of Tammy’s notion, the philanthropy flowing into these ‘social enterprises’ provides capital that drives down unemployment, and makes people less — as opposed to more — needful of charity.

We invite Mr. Tammy to come visit organizations like New Door Ventures, Community Housing Partnership, and Buckelew Programs.  See what philanthropic capital can do when deployed productively.  There’s more than one way to stimulate the economy.  And given the paucity of solutions flowing from for profit private sector businesses, or our nation’s capital for that matter, maybe it’s time to look for ‘the next big thing’ elsewhere.

What do you think?  Where is the job growth of the future going to come from?  How can it include more people who have traditionally been excluded from the workforce, while also employing millions of people who were working, but now have been frozen out of an economy that is anemic when it comes to job creation?  What is the ‘next big thing’ to stimulate job growth?

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.

In a stroke of genius, the people preparing us for the Grantmakers for Effective Organizations (GEO) conference in April in Pittsburgh had the amazing Andy Goodman offer some invaluable lessons from his publication Why Bad Presentations Happen to Good Causes (available for download from his web site). Andy’s tips were an elixir based on interviews with more than a thousand of us who have sat hopefully in our seats at the start of dozens of conference sessions, soon snoozing.  Especially useful were some well-known maxims, often forgotten:  engage the audience – we learn by acquiring, interpreting, applying – not passively listening.  Don’t read the slides!  After 15 minutes, attention wanders no matter how good the speaker.  Start strong; end strong!

A hundred people met (for some good presentations) at the San Francisco Federal Reserve which co-hosted “Improving the Outcomes of Place-Based Initiatives” with the Aspen Institute Roundtable on Community Change.  Tracy Gordon, a professor at the University of Maryland, was one of the only people who made it out of the snowy east and suggested we ‘expect the unexpected’, as she provided a primer on California’s wrecked budget, including something I hadn’t heard before – we pay teachers more, and we have more students per capita than other states.  That’s why our tax dollars for education just don’t buy us as much as other states.  Janet Yellen, the widely respected President and CEO of the SF Fed, ended the event with some concise lessons.  History shows that a growing economy and strong labor market are the best weapons we have in ending poverty.  But we can’t rely on economic growth alone to alleviate specific household and neighborhood poverty.  It is critical to create access to opportunity by strengthening the social networks and norms that demonstrate what’s possible to people in the community, and to those who might be convinced to invest.

And, putting two and two together – if we can’t offer a quality education to our kids, it’s going to be hard to keep strengthening our social networks.  My two teenagers and their friends are waiting to hear from colleges, and so far the word is that the University of California and state college systems are so impacted by swarms of applicants and sliced funding that getting a spot anywhere is harder than ever.  It’s up to the adults to demonstrate what’s possible.  The election’s heating up.  Let the gubernatorial candidates know what matters to you.

I recently had the chance to hear Harry Holzer hang the striking price tag of about $500 BILLION annually – almost 4% of GDP – on the real costs we all bear because of decreased earnings and increased social costs that are a result of many people in the US grow up living in poverty. Holzer is a Georgetown University economist affiliated with a score of other policy and research institutes, and investigates the low wage labor market. At a recent San Francisco Federal Reserve forum, he spoke along with Abby Snay who leads the widely respected San Francisco workforce program, Jewish Vocational Services.

These days I know I’m not alone in checking price tags more carefully than ever, and getting that little burst of joy from saving a couple of bucks. It’s hard to grasp what it would be like to save $500 billion. But it does make a compelling economic argument for investing in jobs for people who are otherwise chronically poor.

Meanwhile the California Labor Federation gathered about 400 people in San Jose this month to ‘forge workforce partnerships.’ Focusing on green jobs, Carl Pope, head of the Sierra Club, noted that the much vaunted ‘green economy’ is not actually here yet.  A concrete example – we could have been sitting here a century ago with pretty much the same light bulbs in the hotel chandeliers, the wires bringing in the electricity, and the source of the power. But, he stated, that is likely to change soon. And when it does, Pope suggests, “For 25 years, we’ve tried to build an economy by building the penthouse first, and hoping it will all trickle down. But it’s the workers at the foundation level that really need the training, opportunities, livelihoods and communities that grow our economy. Let’s build the foundation first.”

Despite the drumbeat of devastating economic news in California, we know that we are at the epicenter of innovation where miraculous economic recovery and growth has happened before. As Melody Barnes, President Obama’s Domestic Policy Chief, and California First Lady Maria Shriver hit town the week of June 22 for the mega National Conference on Volunteering and Services there’s one innovation they might attend to. As federal recovery funds for energy efficiency and weatherization, infrastructure, etc. come in to California, as the ‘green economy’ does actually begin to emerge, and as private companies begin to grow again, by purchasing a portion of needed goods and services from employment-focused social enterprises, they can be an engine of job growth for people who otherwise cost us billions of dollars of GDP. That’s a bargain worth shopping for. Stay tuned for the unveiling of REDF’s new marketing kit for Bay Area social enterprise!

As the economy continues to stumble, federal spending ramps up, and California government melts down, the buzz in the air is about the respective roles and effectiveness of the public and private sectors in solving social problems. Some are concerned that we might take a step backwards from the current emphasis on private-public partnership – the ‘teach a man (or woman) to fish’ approach – to an emphasis on government programs and entitlements, as in the 1960’s. Most of us view with uncertainty the future of institutions and approaches we have relied on in the past – given the pressure on government budgets, the daunting problems of our credit system, and the downturn in the economic fortunes of for-profit and nonprofit businesses, as well as philanthropy. Many of the groups in our portfolio – which are creating jobs for those with high barriers – face a challenging marketplace for purchase of their goods and services, and decreased funding from strapped California government.

Meanwhile, from REDF’s perspective, we will make progress on social problems by finding new ways to align the interests and the activities of business, government, nonprofits and philanthropy. Not easy, but necessary.

Examples of intriguing public/private opportunities and debates abound.

On green jobs, the Department of Labor just issued guidance on $500 million it plans to allocate for green jobs training. The trick will be to line up the training with real job opportunities, and with the people who need jobs the most who won’t get them without the training. In REDF’s Spring, 2009 eNewsletter I wrote a piece about growing unemployment and how energy innovation – and public investments in it – can lead not only to economic growth but to job opportunities for the people REDF serves. To read the full piece, click here. I welcome your opinions, ideas, etc.

On the topic of whether the private or public sector can best solve social problems – the Tactical Philanthropy post positing government as a ‘take out’ for social investment stirred some good comments; and more recently Tony Wang of Blueprint Research and Design generated a lively debate with a blog entry called “Charity vs. Business” in which he argues that for-profit businesses are better at creating social impact than aid and nonprofits/NGOs. Tony promises another post (sounds like it will be skeptical) about the role and value of nonprofits that earn income — social enterprises. Stay tuned – we’ll probably weigh in when that one comes out.

For the poorest people in the US – those who are literally homeless – government has played a central role in providing aid. And REDF was originally founded by George and Leanne Roberts to bring business approaches to bear in creating job opportunities for those same populations. We are fortunate to work with several groups that focus on creating social enterprise pathways to long-term employment and opportunity for homeless people. Last week, President Obama signed S. 896, the Helping Families Save Their Homes Act. This legislation, a reauthorization of McKinney-Vento Homeless Assistance programs, complements philanthropic and market-based approaches by providing communities new resources and tools to prevent and end homelessness. The new legislation, a result of the advocacy of thousands of people over many years, will strengthen the efforts of our partners, and our nation to end homelessness.

Meanwhile, the America Forward Coalition (REDF is a member) is ramping up its effort to make sure that the Congress authorizes the $50 million proposed in President Obama’s FY 2010 budget for the new Social Innovation Fund established by the Edward M. Kennedy Serve America Act – signed by the President a few weeks ago. This will require matching funds from private donors, and is aimed at scaling creative local efforts to address poverty, education, and other burning social issues.

More to come as we all try to sort out how to align our interests, and make progress in a changing world.

I recently participated in a lunch plenary at the Center for Effective Philanthropy’s (CEP) “Aligning for Impact” conference. My fellow speakers included Matthew Bishop, whose recent book “Philanthrocapitalism” was a largely positive review of business influence on philanthropy, Michael Edwards, who wrote a piece critical of “philanthrocapitalism”, and Gara LaMarche, President of Atlantic Philanthropies.

Sean Stannard-Stockton from Tactical Philanthropy put up a shortened version of my speech from the plenary in his post, Carla Javits on Philanthrocapitalism.

It was months ago when Phil Buchanan, the leader of the CEP invited me to his conference to debate with Michael and Matthew about their opposing views of the value of “philanthrocapitalism” – the phrase Michael coined. While I consulted with colleagues about what to say during the run up to the conference, capitalism of the distinctly non-philanthro kind imploded.

In the aftermath, at this – their first face to face meeting – the putative pugilists were somewhat subdued in battle. Matthew did draw a bright line between his view that business practices could be usefully adapted to philanthropy, and Michael’s opposing and unvarnished critique of that notion. Michael believes it is not only benign, but harmful to the social sector by shifting resources away from creative, long-term advocacy and programs. Gara highlighted the importance of continuing to support social justice movements, while encouraging them to greater effectiveness and achievement. The question was raised – do social capital markets reduce support for the grassroots if they drive investments to the ‘best’ (e.g. proven) organizations.

My basic points? There’s not one ‘silver bullet’ – business or philanthropic methods; capitalists or civil society. Progress requires contributions of business, government, philanthropy, nonprofits, labor, academics, advocates, citizens. No sector is immune to dysfunction. The benefits of working together across sectors include transparency, accountability, challenges to orthodoxy; and the value of the social sector’s insistent focus on the common good and the public interest.

I suggested fewer gatherings of philanthropy or nonprofits only, more with business and government. It really struck me that at this gathering of philanthropic leaders we had so little discussion of philanthropy’s role in leveraging the billions of dollars in the stimulus package, and the new Office of Social Innovation in the White House. I suggested we become ‘multilingual’, tolerate and understand sometimes clashing motives, and be prepared to walk away without burning bridges. I ended with a story from a colleague. As one of the people who had created a local marketplace in Africa said – after the market was destroyed in the wake of local rioting and the people had requested loans and aid to rebuild but were instead receiving a trickle of traditional emergency and food aid – “Just don’t let me be a beggar.” We need to do better.

On day 2, my colleague Jason Trimiew and I had early morning coffee with some of our peers who wanted to talk about leveraging the stimulus package. A lively discussion about the opportunities for scale, and the day to day challenges of working with government ensued with participants from Craigslist Foundation, the James Irvine Foundation, the Case Foundation, and REDF’s board member Julia Lopez who also runs the College Access Foundation.

Then Jim Collins spoke, and reminded us of the premises of his monograph “Good to Great and the Social Sectors.” He restated his view that the social sector should not be more like business, but that it should aspire to greatness. The key ingredients – focus and discipline. He suggested that we make not only a ‘to do’ list, but also a ‘not to do’ list. He told a story about a military officer who had been imprisoned and tortured in Vietnam, and survived by having faith that he would eventually return home – knowing that that moment of peril would be the seminal time of growth and strength in his life, while also acknowledging the bitter truth and reality that he would not escape quickly. A sobering but inspiring lesson for today. Jim ended by urging us, as he had been admonished by his mentor Peter Drucker, to go out and do something useful. And out the door we went to follow this good advice.

On my first day back from the new year’s holiday, with the barrage of bad news about unemployment over the holidays running through my head, I tuned in to an Urban Institute audio webcast called: “Help Unwanted: Mitigating the Recession’s Toll on the Workers Most at Risk.”

Harry Holzer – one of the top national researchers on at-risk workers – told us that since November 2007 overall unemployment rates had risen by 3 million people from 4.7% (4% for whites, 8% for African Americans) to 6.7%. Teenage unemployment went up twice as fast, and the picture for high school drop outs and people who had been incarcerated was especially bleak. Of course in California we’re looking at overall unemployment of 10% – so all these figures are even higher for us!

Last week’s tragic shootings in Oakland reminded me of this broadcast. While there is no easy answer to preventing this in the future, one thing that the parolee who shot the police officers definitely did not have immediately upon exit from prison was a job. And all the data is definitive that crime and recidivism decrease dramatically when former prisoners have jobs.

Holzer also noted that not only are unemployment rates higher for people who are most at risk (such as people who have been incarcerated or homeless or young people who dropped out of high school), but they are much more vulnerable in the downturn, and they have less access to the safety net than ever. They even get less unemployment insurance.

Holzer’s prescription: improving and expanding the safety net; making sure that some of these most disadvantaged workers are able to access the jobs created by the new stimulus act by creating targeted community service, transitional and youth employment jobs and more linkages to education.

While Holzer’s ideas make sense, he did not mention social enterprises — a market-oriented, income-earning solution with the added benefit of sustainability after the stimulus funds run out.

The President, California’s Governor, and local San Francisco officials should make sure that social enterprises which employ the most disadvantaged workers have a chance to be part of the supply chain as contractors and subcontractors for the goods and services that will be purchased as the stimulus package rolls out – green jobs, infrastructure and all.

There’s precedent for this. The federal government now makes it possible through the Javits-Wagner-O’Day/AbilityOne program for more than 600 nonprofits around the country to employ 40,000 severely disabled people a year by delivering more than $1.6 billion of goods and services under contract to the federal government – things like military uniforms and landscaping services.

A whole lot of more of this can be done through state and local government, and private sector contracts with social enterprises – like the ones in REDF’s portfolio — that create jobs not only for people with disabilities – but also for other people who have absolutely nothing to fall back on. If we do this right, more people will be working and paying taxes instead of out in the streets, back in prison, or searching for what little safety net is still stitched together.