Evaluation of social programs might as well be alchemy or brain surgery for the mystery and complexity surrounding it.  The simple reality though is it’s worth doing when it leads to better results for the people we serve; and when the funders who pay the bills know they are maximizing the ‘social return’ on the dollars they invest. 

On the better results front – there are two outstanding publications worth reading.

Public/Private Ventures (P/PV) Priorities for a New Decade proposes a new way to evaluate nonprofits that engages practitioners as partners, and suggests how to use evaluation to improve program performance.  

And if you missed it, the Kania/Kramer piece in the Stanford Social Innovation Review (SSIR) makes a powerful argument – and offers practical approaches for assessing the collective impact of multiple entities, in dramatic contrast to the idea that one nonprofit by itself changes the world.

Worth reading:  on the human factor

I love everything Mario Marino – founder of Venture Philanthropy Partners — writes.  His two recent posts on how a leader sets organizational culture are stand-outs.  They match up nicely with a post from Dan Palotta on ‘the human factor’.

Worth reading:  on the ‘new hybrids’ – organizational structure

Several recent articles are about a subject near and dear to REDF’s heart – whether to structure an organization as a nonprofit or for profit – and the burgeoning alternatives that offer flexibility. 

REDF’s own paper outlining how to decide to be a nonprofit or for profit, “If the Shoe Fits” has always been one of our most popular publications.  A new piece by Alan Bromberger lays out an alternative ‘hybrid’ model.  And leading social entrepreneur Jim Fruchterman’s “For Love or Luchre” offers practical tips for social enterprise leaders trying to decide whether to be nonprofit or for profit.

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.

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.

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.

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?

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.

The topic is also explored in one of REDF’s most frequently downloaded publications “If the Shoe Fits.”

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.

Sean Stannard-Stockton’s recent blog post suggests government as the ‘take out’ for social innovations pioneered through philanthropic investment. This is a new way of looking at the relationship between philanthropy and government, which has been evolving and changing for decades.

While it is intriguing to consider a rational system of philanthropic investment which tests innovation and is followed by government backing, I would respectfully disagree with the notion that this is likely to occur except in rare cases.

In the 1960’s, many of the largest US foundations worked with government–in fact they often supported programs initiated by government, and pioneered programs that government later adopted in others. For example, anti-poverty programs funded by the Johnson Administration’s “Great Society” in the 1960’s had been initiated by philanthropy and community-based groups. In other cases, such as the early experiments that eventually turned into community development corporations, government initiated the concept and philanthropy experimented with it. Eventually, community development corporations became a backbone of inner city investment — with ongoing support from government, but also from philanthropy, banks and other corporations.

This history is instructive but it is important to note also that times have changed. First, compared to philanthropy, government is more transparent and accountable to a broad public, and would be hard-pressed to be dominated by initiatives developed by less democratic bodies. In the 60’s, government agencies and commissions often came up with the initiatives that philanthropy then came in to support. The seeds of the current foundation reluctance to support government –initiated programs is rooted to some extent in what followed – as the government of the 1970’s began to disinvest in many of these programs, looking to philanthropy to pick up the costs.

Second, there is much more pressure on governments now than in the 1960’s to moderate taxation and spending. At the same time, government is increasingly required to respond to the interests of a polity with a broad array of divergent interests. Thus most innovations that address a particular set of needs – of specific groups of disenfranchised or disadvantaged people for example – are unlikely to obtain all of the support required from government alone.

That said, the opportunities for more collaboration between government, philanthropy, nonprofits and the private sector are greater now than they have been in many years, as symbolized by President Obama’s recent announcement of the appointment of the San Francisco Bay Area’s Sonal Shah to lead the new Office of Social Innovation – charged with forging public-private partnerships to address and solve some of the nation’s most daunting problems. Lessons from history can be informative in building these partnerships effectively. Philanthropy is averse to the unvarnished, rough and tumble advocacy that is central to public process; and government is a blunt instrument for testing out sensitive and subtle differences in practical approaches which can make the difference between success and failure. The interests, stakeholders, incentives, and tools of each sector vary. Some things can be done in concert, some are best done separately. Mutual respect can be cultivated, even in the context of interests that are not always aligned.

The best solutions are likely to require multiple actors participating over long periods of time. Government may indeed be able to act as a ‘take out’ – but only in some cases (the health care example Sean offers is instructive), or for some elements of social innovation. But the likely scenario for long-term success is the difficult dance that engages all of the sectors over time. Sonal Shah has her work cut out.