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.

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!

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!

What is? Clarity about objectives and expected results in the context of basic values like integrity.  Excellent implementation on the ground.  Accountability – internally and externally – for achieving results.

This is just as true of nonprofits and government as it is in private sector businesses.  The economy blew up because many private sector companies forgot this, and their funders, overseers and regulators neglected to hold them accountable.   I would argue that one of the factors undermining support for government and the programs it funds is a perception and too often a reality – of similar issues.

An important clue to improvement can be found in the results of a recent  national survey, whose initial results were released this week by Public/Private Ventures (P/PV).  The Huffington Post spotlights it,

The United States spends billions of dollars every year on workforce training programs funded by 12 federal agencies, 50 states and at least 240 large foundations. One of the challenges to understanding what works best is that most of the programs use different data and different benchmarks for success.

Many don’t even agree on what constitutes a job. …Job retention is even trickier to define. … Then there’s the question of who gets chosen for the program in the first place. Some select job seekers with relatively high skills levels, while others concentrate on harder-to-place applicants, including former inmates or high-school dropouts. Guess which programs have the highest placement rates?  We are left with no clear picture, however, of what approaches are most likely to help people secure and keep jobs with the wages and benefits that would support a family.

P/PV’s report takes a run at how to make the metrics more coherent.  The Alliance for Effective Social Investing – a big tent alliance of others in the social sector concerned about the same issue – continues to push for the same end.  The Social Innovation Fund (which REDF is part of) and the groups that are part of the social entrepreneurship movement that America Forward represents are all focused on this objective too.  More clarity about results, financial support to help community groups achieve those results, and accountability for reaching them.

These are bipartisan efforts – results-oriented, and interested in adapting useful business principles that can help the social sector deliver.  Not the whole answer to our problems, but a critical part of implementation, and building public trust.

With 25 million people in the US unemployed or underemployed, and five workers available for every job, the urgency of delivering results and building confidence that we can solve problems could not be greater.  A recent NPR report reinforces a lesson that REDF and the chronically jobless people we help have known for a long time – many employers are reluctant to hire people who don’t have a job.  While we spend billions on “workforce” programs, we need to course correct and absorb this simple lesson about objectives – if people have a job it is easier to get a job.  Simply put, job creation has to be a central strategy to reduce joblessness.

From my point of view that means the time is ripe right now for innovation.  Maybe I’ve been breathing the Bay Area’s air for too long, but living in a business climate whose investments in innovation have resulted in some of most far-reaching and positive impacts on job creation and economic growth of the past several decades, I have witnessed first-hand the value that can be generated by old-fashioned risk-taking and investment combined with innovative ideas and entrepreneurial people.

For decades I’ve had the privilege of working with hundreds of people at the community level who have invented and expanded win-win approaches that maximize independence and self-reliance, use public resources efficiently, have proven results, and adapt private sector operating principles and financial tools to achieve beneficial social outcomes.

Innovation in both the social and business sectors happens at the local level – motivated, engaged people who are not daunted by current circumstances or constraints, and see the possibilities over the horizon.

The most optimistic and realistic (I hope) piece I’ve seen on the economy was Gretchen Morgenson’s in Sunday’s New York Times noting that the economist Ian Shepherdson (who accurately forecast the mortgage meltdown)  sees significant job growth at the end of 2011 because there are positive signs of increased lending to small business – the engine of job growth.

On the ‘social’ side of the small business equation, the local nonprofit-run innovative social enterprise run by Community Housing Partnership (CHP) just received a $439,000 investment to grow.  The funds came from a very small and virtually unknown federal program (as seems to be the case with many of the more impactful things the government does) administered by the Office of Community Services.  The funds will leverage private sector support to expand CHP’s businesses and create jobs for many formerly homeless people in San Francisco.  CHP has been part of REDF’s portfolio, and we were fortunate to be able to provide assistance to them in securing this welcome job-creating investment.  Los Angeles-based Coalition for Responsible Community Development and five other California nonprofits also were funded, hopefully fueling job creation around the state for chronically unemployed populations.

For the US to thrive, clearly the next few years must be all about job creation.  Finding the most efficient ways to use increasingly scarce public resources and private financing to grow businesses and expand jobs for everyone in our community is the key.  There is one thing people should be able to agree on across the political spectrum despite the obvious risks during a time of uncertainty characterized by volatile politics and an anemic economy.

Smart investments in entrepreneurial people, ideas, and businesses (for profit and non profit) will create the basis for a better future.

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.

Today we also publicly initiate the first phase of our federal Social Innovation Fund (SIF) grant.  The posting of our inaugural Request for Qualifications (RFQ) starts an open, competitive process for nonprofits and their partners to apply to become part of REDF’s portfolio and a SIF subgrantee.

It is with great pleasure that REDF announces the launch of our RFQ.  Completed applications must be submitted by 5:00 PM Pacific Standard Time (PST) on October 15, 2010, although submissions prior to the deadline are encouraged and accepted.

The administering federal agency for the SIF notes that the SIF is “a new way of doing business for the federal government that stands to yield greater impact on urgent national challenges” and that the SIF, “sets a higher standard for evidence, empowers communities to identify and drive solutions, and creates an incentive for grant making organizations to more effectively target funding to solutions that generate real impact.”

In this spirit, REDF developed the RFQ.  For more details about eligibility requirements, evaluation criteria, selection process, and documents required to complete the application, please download and review this PDF document.

It is unacceptable that so many Californians have had little or no access to the workforce,  especially when we understand the high price they, their families, and the members of our whole community pay when people who can and want to work cannot find a way to do so.  It is even more unacceptable when we know how to create pathways for them to succeed.  It’s time to change that picture.

Please join us by helping REDF spread the word by forwarding this post to your networks, sharing about REDF’s RFQ on Facebook and Twitter, and telling any interested organizations to visit: www.redf.org/rfq.

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?