REDF is one of 11 organizations selected in 2010 as a recipient of the Social Innovation Fund Federal grant. Through an open and competitive process, including an online Request for Qualifications (RFQ) during fall 2010, REDF selected six organizations for our portfolio, announced February 2011.

For the second round RFQ, we are looking for strong organizations committed to building social enterprise to employ low-income California residents facing barriers to employment. For additional information such as eligibility requirements, evaluation criteria, selection process, and documents required to complete the application, please visit our website.

Please help REDF spread the word by forwarding this email to your networks, sharing the news about REDF’s RFQ on Facebook and Twitter, and telling any interested organizations to visit:

www.redf.org/rfq

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.

Spirits at REDF were high as we marked the arrival of Spring with two ‘firsts’ that are described in this newsletter.

Several dozen representatives of REDF’s new portfolio came to San Francisco for their inaugural gathering, where they heard from Paul Carttar, Director of the federal Social Innovation Fund.  He was in town to talk about how REDF’s portfolio is part of a national effort to build evidence of what works when communities deal with tough social problems like chronic unemployment, and how to widely replicate the most promising solutions.

REDF is already starting that replication effort, click here to read more about Samra Haider who is leading our expansion to Los Angeles.

Click here to read the full newsletter

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.

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!

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.

Icing the cake were the lunchtime remarks of Bay Area philanthropic and business leader William H. Draper III whose new book, The Startup Game, will illuminate lessons from a lifetime of work in the financial and social sectors.

Take-aways from the day:

• While there is plenty of talk about a new social capital market (SOCAP 2010; Social Investment Exchange; the Office of Social Innovation; Nonprofit Finance Fund), market realities lag behind. VisionSpring, Fair Trade, and Kiva (and of course I was also thinking about REDF’s ambitious 5 year strategy) could accomplish transformative work at significant scale with multi-year capital infusions of $10-$50 million.  The track record is there.  Growth opportunities are tantalizing but unrealized.  All agreed that loans and PRI investments are useful, but grants (equity) are needed to generate outsized social returns.  The market estimated the value of Facebook long before it made any money; but Kiva? Fair Trade? VisionSpring?  Not yet.

• Broader “ecosystems” are required to impact social problems at scale.  Professor Dees’ 2008 SSIR article detailed this idea.  But curiously, though all participants actively engage multiple actors including the private sector, their stories clearly showed that in the absence of their prodding and intermediation, mainstream business is not highly motivated to do business or address basic needs in the huge marketplace that represents low income and poor communities.  It seems counterintuitive – e.g. if there’s a dollar to made someone will be there making it.  But it’s still not the case.

All of this left me thinking differently about the cover story on mental illness in last Thursday’s San Francisco Chronicle.  The article itself was a rare bird.  A substantive piece that reinforced another surprise; a compelling television commercial I recently saw dispelling stereotypes about mental illness created by bring change 2 mind, an initiative of Glenn Close and Fountain House.  Media attention to this subject — still surrounded by stigma — generally only comes from pharmaceutical companies advertising new medicines.

We don’t like to think about it or talk about it, although it touches almost every family.  Despite the fact that an estimated 6% of the population struggles with severe mental illness; and that people with mental illness still face high rates of unemployment — with less than 40% having worked last year, less than half the rate of all other workers.

REDF and its portfolio know that many want to and are fully capable of working.  The financial value to society and taxpayers of putting more people to work is obvious.  Other, more personal elements of the value proposition are hidden but perhaps even more significant.

Last week Marin County’s Buckelew Programs held a community forum showcasing social enterprise and supportive housing, and new service approaches that bring people with mental illness into the workforce and into the mainstream.

Bringing it full circle, for society to value social innovation sufficiently — galvanizing the investment required to scale the most promising solutions; we are going to have to paint bright lines that connect the ‘ecosystem’ dots between local efforts like those Buckelew and REDF promote, the welcome media attention of bringchange2mind, and broader public and private sector economic recovery efforts.  Not easy – but the path is getting clearer.  What do you think?  Possible?

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’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.