We want people to pay the price for crime.  We want to feel safe.  We also enjoy stories of redemption and transformation.  But for very practical reasons businesses offer few opportunities for people who have been in prison to get jobs, which we know from evidence is the greatest way to firmly break the cycle of crime and incarceration.

Two recent articles showcase the two sides of the coin. – “Imprisoned, Rehabilitated and Unemployed”, a distressing tale of a man imprisoned years ago who has worked for decades since then to prepare to be a firefighter with no luck due to that mark on his record.  Meanwhile, “Why I Hire Convicts and Former Gang Members” spotlights Electronic Recyclers International (ERI) founder and CEO John Shegarian who affirms the benefits of giving people a second chance.   Knowing about ERI’s overall commitment to employment of people with barriers, a few months back REDF helped broker a new business relationship between St. Vincent de Paul of Alameda County and ERI.

Ultimately, REDF’s work will have its most powerful impact when private sector businesses begin to incorporate the lessons of the social enterprises we work with into the management and hiring of their front line workforce.  Namely: people with tough histories are fully able to turn their lives around and become excellent employees given the chance to work, and management practices that foster their success.  Hiring these individuals and successfully managing them will reduce the high costs businesses pay now for all the churning at the front lines of their workforce.

That’s why we were heartened to note that REDF was featured in the San Francisco Business Times Annual Bay Area Giving Guide read by business leaders throughout the SF Bay Area.  We hope that many of them consider new partnerships with REDF and with job-creating social enterprise — incorporating them into their supply chain, while also supporting and investing in social enterprise growth.

Last note – a provocative piece in Friday’s Wall Street Journal, about Carlos Slim and his assertion that private sector job creation is the best anti-poverty strategy, asks if wealthy individuals accomplish more by investing in new businesses rather than funding philanthropy.

I would say philanthropy has leveraged powerful change where the market has failed.  As an example, REDF and others have demonstrated definitively that young people and adults who have been homeless, or in prison, or have a mental illness can work and want to work.  However millions of them are unemployed even in the best of times because the private sector does not provide them a way to enter the workforce.  This results in taxpayer, family, and personal costs that are avoidable.

Private philanthropy is the fuel that creates the nonprofit-run social enterprises that in turn create jobs and are willing to take the initial risk to hire these individuals and get them ready for private sector employment.  Thousands of people are in the workforce as a result – more every day.  What do you think?  Where and how is philanthropy most effective in solving problems?

This year felt more tangible – less about people with fairly limited funds searching for investments that didn’t quite exist yet.  More about those with significant resources considering how to invest in a different way at a larger scale.  More participation from real and growing businesses.

Especially impressive….. The food track highlighted an emerging industry devoted to growing and distributing food so as to improve rather than degrade the environment and peoples’ health.  An emblematic session featured Jose Corona of Inner City Advisors who talked about the investments ICA is making in new food businesses that are creating jobs, Cheryl Dahle of the Future of Fish who showed some spectacularly simple slides she had drawn that told the story of ‘greener’ fish – as it turns out ‘fresh’ is not necessarily best, and Debra Tropp of the US Department of Agriculture illuminating useful information on major new federal investments in healthier food.

Tactical Philanthropy’s Sean Stannard Stockton also organized a provocative series on the philanthropy of the future.  Which reminds me – SOCAP came up with the good idea to ask knowledgeable people to ‘curate’ tracks on specific topics – which led to solid, informative panels.

With full bias in play, I especially liked hearing Lee Zimmerman talk about how he started the thriving Evergreen Lodge in Yosemite.  This beautiful resort also trains young people from tough backgrounds for jobs in hospitality.  Melinda Tuan (my predecessor at REDF who helped fund Evergreen) hosted.  She probed Lee and Stuart Davidson (who is on the REDF board) about the project financing, and why and how Stuart invested.  Fielding multiple questions from the audience, Lee informed us that investments did not come from venture capital or angel sources, because his venture structure was too novel, and not in a sector well-known by those investors.  Critical infusions came from foundations, traditional financing (including the initial infusion from friends/family, and later a small business administration loan), and individuals, like Stuart, willing to take risks.  The result –  Evergreen, and its social mission, are thriving now.

Final notes.  Several sessions spotlighted the Cleveland Foundation’s projects leveraging the buying power of anchor institutions to fuel the development of local, cooperatively-owned businesses.  The session I participated in on ‘green’ investing featured Robin Hacke of Living Cities and Margot Brandenburg of The Rockefeller Foundation.  Both are continuing to invest in green jobs, and modifying strategy to reflect what they’ve learned from places like the City of Portland which is creating local jobs through its energy efficiency initiative.

While high tech moves into the ‘cloud’, SOCAP is moving out of the clouds and onto the ground.  I left energized, anticipating the applications for REDF’s RFQ (which closes October 15), eager to get started helping those enterprises create jobs!

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.