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

Last year’s Fall RFQ resulted in the selection of the six outstanding organizations that are now part of REDF’s portfolio.  We anticipate adding one to three more groups by the end of 2011!

For details on the 2011 RFQ visit www.redf.org/rfq.

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.

Click here to download REDF's 2010 Social Impact Report

REDF’s newly issued 2010 Social Impact Report offers even more evidence about the power of a social enterprise job, and what to do to further strengthen the model in the future.

The Report summarizes data collected by BTW informing change from 1163 individuals employed in social enterprises between 1998 and 2008.  The headlines:

• Social enterprises employ people who face barriers who are willing and able to work; and

• Social enterprise employment helps people who face barriers enter the workforce and increase their income.

Findings revealed the power of a social enterprise job, and teach us what to concentrate on in improving the model in the future.

The following data has fueled REDF’s commitment to our five year strategy to expand social enterprise to multiple California communities, and develop a nationally replicable model:

• People who are employed at any job 6 months after hire in a social enterprise were nearly twice as likely to be employed 18-24 months after hire compared to those not working 6 months after hire, indicating that supporting employees through this early stage was critical to long-term employment.

• Over time, the proportion of REDF social enterprise hires moving on to other employment increased.

• 77% of those interviewed 18-24 months after hire had worked in the past 6 months.

• Both the hourly wage and hours worked per week increased dramatically over time among those working  — wages by 31%.  Among those working at 18-24 months after hire, monthly income from work increased by 90% – an increase of $454 per month.

And a new summary of data from a national survey of social enterprise offers a glimpse into the scope of this growing field.

It’s not only traditional ‘liberals’ that are calling for new ways to address costly problems like recidivism to prison.  The fiscal realities are such that even conservative Grover Norquist is calling for action.

Where we have this much common ground, and social enterprise can play a role in solving the problem – it’s time to make progress.

Everyone says the topic of job creation is hot hot hot – but it probably gets a lot less mind-share from most of us than the topical headline of today’s blog.

I recently spent a week in Los Angeles and San Diego talking with lots of people in business, philanthropy and nonprofits about how the six nonprofits that just joined our portfolio and other groups will create jobs that end the cycle.

And actually, despite the ploy about the blog headline – I found tremendous excitement about making this happen.  Everyone understands what we’re trying to do:  expand the capability of nonprofits to operate businesses at greater scale, creating jobs that help people transition into the workforce, and the employee supports that make sure they succeed in keeping a job.

And we are gaining traction with companies (health care, waste management) and public agencies (schools and universities, utilities) that are intrigued with the idea of purchasing services from these enterprises as part of their supply chain that delivers extra value by also creating jobs for those who would otherwise be chronically unemployed.

I met with the dedicated, focused leaders of the two portfolio organizations we selected for our first foray into Los Angeles – Gregory Scott of the Weingart Center Association, and Mark Loranger of Chrysalis. I’ll focus on one of them here.

Weingart houses thousands of people who would otherwise be homeless and living on Skid Row in Los Angeles.  After five years at the helm, and just completing a state-of-the-art health center in partnership with JWCH, Gregg has set as a top priority creating jobs for the people who live in Weingart’s properties.

Meanwhile he is speaking out to galvanize action about what he sees, and inspire hope about what can be done – noting in a recent Black History Month piece in the Huffington Post the “unfortunate truth” that, “African-Americans are seven times more likely to be homeless than whites, and twenty times more likely than Latinos” – but going on to talk about what must be done to change that picture.

For those of you who have not visited Skid Row in Los Angeles, I have walked through the neighborhood on streets where literally hundreds of people – some just homeless, and others obviously ill with mental health or addiction problems — were sitting or lying on the sidewalks.  It never felt all that menacing or scary, just intensely depressing.  Especially when you’d look up at the towering office buildings of downtown Los Angeles blocks away – like a tragic abdication of responsibility for ‘leveling the playing field’ and treating all people with respect.

Committed, nonprofits, government, and the business community have concentrated on changing the neighborhood.  There is increasing development on some blocks with new offices and high-end apartment buildings.  Still many people who live in the neighborhood are homeless and extremely poor.  There have been major civic fights over gentrification, law enforcement, and the provision of housing and services.

Weingart is one of the neighborhood’s beacons, focused on creating opportunity and hope for the poorest people who live there with decent housing, health care, and now jobs.

This year, they will start at least one new enterprise, creating jobs for people to have a chance to take that all-important first step into the workforce.

One exciting thing about having a portfolio is that REDF has the chance to bring groups like Weingart that are just starting a social enterprise with organizations like Chrysalis that are experienced leaders in social enterprise and job creation, but are eager to expand, create new businesses, and do even more.

And we also have the chance to build on the learning and experience of a whole business network with others in the past and current portfolio that have done this work in the Bay Area, and in other parts of the country.

That spirit is also motivating us to create a national network of nonprofits that run businesses to create jobs for people who would otherwise have the hardest time getting into the workforce.  You will hear more about what we learn and what we do together here – stay tuned!

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!

The other week, during the State of the Union speech, the President focused on how to create jobs in the US context, suggesting direct investments in business development, research and infrastructure.  This was followed with a White House event to announce “StartUp America” – an effort led by Steve Case and the Kauffman Foundation to spur innovation and business creation.  Fortune’s business blogger Dan Primack in a January 31 post responded with what he called “cynical optimism”.  But when I heard that the Social Enterprise Alliance (SEA) had been invited to attend, and had a chance to suggest that these investments also be made in social enterprises that create jobs for the most disadvantaged – I tilted from cynic to optimist.

While there’s plenty of debate about how much government can do to stimulate job creation, a  recent paper from the Harvard Business School and Pacific Community Ventures goes so far as to state that, “There is no market from which government is completely absent…”.  Think  government investments that created the worldwide web, and the nation’s web of highways for just two examples.

I heard an earful about these issues myself this last week traveling to Los Angeles and Sacramento where I met with business, government, and nonprofits about REDF’s effort  to create jobs for young people not in school or at work, and people exiting homelessness or incarceration; and a model that can be sustained and scale.   It’s the government’s Social Innovation Fund, along with private philanthropy that support our work – and it’s this kind of combination that does seem to work best.

In the Southland I was greeted warmly by the Board of the Los Angeles Economic Development Corporation – leaders of both business and government  when I had the chance to let them know about REDF’s plans to expand in California.  I met with self-described conservatives who run businesses and advocate for them who fully embraced our ideas about helping nonprofits create jobs for people otherwise shut out of the workforce – and eagerly sought to help.  I met people in government who wanted to connect the dots between community colleges and the people REDF’s enterprises employ; and between procurement and job creation.

My take after working in all 3 sectors over the past 3 decades is that practical people in business and government who care about their communities knows that it takes all sectors to create value for our families, neighbors, and colleagues.

It’s disappointing when public agencies mostly talk about how much they’re spending rather than about results; or offer little analysis of expenditures as compared to benefits.  It’s disappointing when government spends too little time talking to business and philanthropy to find out how to use public investment and regulation to create the most public good.

And it is disappointing that businesses often ignore the social conditions they may exacerbate.  Too often neither their balance sheets nor their lobbying efforts take into account the costs that communities may bear for the decisions they make.  Their private philanthropy may help the community, but they might be able to do more through their core business if motivated to do so.

So when we have huge budget debates, there is little reliable data or information to go on in figuring out what’s worth cutting and what’s not; what tax incentives or regulations should be preserved and which ones eliminated.

Some businesses and some government agencies are starting to show signs of progress.  The whole point of the Social Innovation Fund is to create more evidence about what works, and facilitate replication and scale when warranted..

As the public continues to debate the roles of business and government in job creation, REDF will work with SEA and others to demonstrate that nonprofits also play a vital role in innovation and job creation, while generating data on costs and results that informs, and we hope influences business and government action.

Stay tuned right here – February 15 we’ll announce our new portfolio and the partnerships they have forged between business and government to create jobs!

California unemployment rates since 2005

As 2011 launches with the unemployment rate stuck above 9% (12%+ in California), and the gut-wrenching shootings in Tucson, sunny optimism is on holiday.

In its place, here is resolve for 2011: Create jobs.  Especially for people least likely to have one (REDF’s special niche).  This will create glimmers of hope for the people who get the jobs, the companies that offer the jobs, as well as the businesses and government agencies that buy from these enterprises and hire their workers once they are better prepared.

Also, when we make it clear that all kinds of people can ‘pull themselves up by the bootstraps’ given half a chance, we will contribute in some small way to alleviate the frustration of their fellow citizens whose anger is creating an atmosphere that can lead to violence. Especially among unstable people whose mental health problems are still so stigmatized that they are not only unemployed, but access little in the way of services that might prevent explosions from happening.

So – how do we create more jobs?

While private businesses are the engine of job growth, it is also true that one of the essential economic notions driving US business has been minimizing labor costs.  But in the face of a changing economy, and intense international competition, what if more of a balance between labor and capital is better for all of us.

If more people are employed, more people buy stuff.  If more people buy stuff, more people become employed.  If more people are employed, crime, unemployment insurance, and welfare-dependence drop.  People take better care of their families.  A virtuous circle.

But more people employed might mean that business profits drop.  Witnessing the stock market bubbles, and investor frauds of the past few years might make us wonder how bad that really would be….and capital might start flowing if investors noticed that when more people are employed, the efficiencies achieved can actually increase profits.  Let me illustrate.

Sitting at home after taking time off from work to wait for the dryer to be repaired for the second ‘four hour window’ that turned into six hours with no repair person in sight left me wondering about American competitiveness and job growth.

As I simmered, I imagined a two hour appointment window, and an online method for checking the schedule.  After my fifteenth call to the repair company with no accurate information let alone service, my mind began to drift.

It used to be that you could be pretty sure if you lived in the US you were getting the most up-to-date services and products.  We had a huge middle class.  Isn’t that why it was always easy to see why our system was so much better than the Soviets or China during the Cold War?  We had it better.  Now it’s hard to be sure.

Anyhow, when the repair guy showed up, I was interested in what he had to say.  The company he works for had invested $30 million in a new on line system that basically calls him at 4 pm every day to tell him which of the overscheduled appointments he had missed between 9 and 12.  Imagine the number of times those enraged people had already called the company representatives to complain – taking up their time and getting nowhere.

Meanwhile, the guy said he’s working 10 hours days 6 days a week making good money, but he’d just as soon work a few less hours and have a few less irate customers.  Surely there is room there to hire a few well paid dryer repair people and save on at least part of the $30 million technology investment.

So – how do we create more jobs in 2011?

We say social enterprise. But check out what the Silicon Valley Leadership Group (started originally by those record-busting job creators David Packard and William Hewlett) suggested to Governor Brown.  What’s on the top of your list? Stay tuned here for more of REDF’s ideas.

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.

REDF staff at Cowgirl Creamery

Greeting us at the door, Michael, Cowgirl’s cheerful store manager who left a career in high tech for the joys of cheese, turned our attention to the huge vat of curds three skilled workers were stirring and making into compact globes of fresh Red Hawk.

He described the bold business strategies of two of the Bay Area’s shining star entrepreneurs – Sue Conley and Peggy Smith – who had previous stints as founder of Bette’s Oceanview Diner in Berkeley (Sue) and leading chef at Chez Panisse (Peggy).

Smitten by the local dairy farms and farmers of Marin, Sue set out to find a way to market their milk – whose price had remained flat for years.  Partnering with Peggy, they built and helped grow a web of businesses and organizations.  Today they make and market cheeses so good that they routinely receive top awards from the American Cheese Society.

But they didn’t just build a business, they built the complex ecosystems of a market.  They wanted to make a profit and help Marin’s farmland and farmers thrive.  As a result, Marin’s now-successful dairies have gone organic at a far higher rate than anywhere in the US, and the size of the market for artisanal cheese that they pioneered has grown exponentially.

OK I will admit I am especially proud of them because I first met Sue at San Francisco City College’s Hotel and Restaurant Management program where we were students in the late 1970’s.  She hired me as a prep cook when she opened Bette’s Diner, and I roomed with her and Peggy back then.  Now Sue takes time out of her wildly busy schedule to advise REDF on businesses we hope to help our portfolio start up in 2011, and connects us to other people she’s met in the business.

It’s also their story that resonates with REDF.  We have a big dream like Sue and Peggy’s.

Our dream is to contribute to and grow the ecosystem of a marketplace that employs people who would otherwise be shut out, living in the streets, and dealing with violence, crime and incarceration.  This marketplace will offer work and supports so that people advance and thrive with the pride that comes from contributing at work, and to family, and the community.

We have some of the building blocks and partners in place, and now we are assembling the businesses, financing and buyers to make our dream a reality.

We are learning from the strategies of people like Sue and Peggy, taking notes on what’s been done by the Fair Trade movement, local business investors like Inner City Advisors and Pacific Community Ventures, and the AbilityOne/NISH system that employs 45,000 people with severe disabilities around the country.

We are energized by companies like Safeway that have stepped up to purchase services from companies like New Door Ventures – an alumni of REDF’s portfolio, and the investments made by Caltrans and the California Department of Corrections to replicate the Center for Employment Opportunities model for employing parolees that will start in Oakland in 2011.

We celebrate the 2,000 + people who have gone to work since 2008, and the REDF portfolio companies (including REDF alumnae with thriving enterprises) that have employed them.

We are amazed by the dozens of applications from outstanding nonprofit social enterprises around the state for REDF’s new portfolio.  We wish we could take five times as many as the 7-9 we anticipate for 2011.

At the end of our incredible day sampling the fare at Cowgirl, I headed over to San Francisco to join hundreds of people packed into St. Boniface – one of the City’s most beautiful churches – to celebrate the life of Kelly Cullen who tragically died at age 57 after dedicating his life to creating housing and jobs, schools and services for the poor, homeless and immigrant people who live in the Tenderloin.  Urged by San Francisco businessman and philanthropist Lou Giraudo, we roared and applauded for Kelly’s life, and for his suggestion that the way to honor it is to carry on the work.

That’s just what REDF’s plans to do – in partnership with you.  Please check out www.redf.org/takeaction to find out what you can do.