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« Raising the Barr: How This Foundation is Going to the Next Level | Main | This Hedge Funder Also Has Billions. But He Doesn't Give Like the One on That TV Show »
Tuesday
Jan262016

Crossing Divides: Why This Workforce Development Pioneer Is Thriving

What if everyone were able to work to the degree that they are truly able?

In some ways, this question defines the quest that George Roberts and his wife, Leanne, embarked on in 1997 when they created the Roberts Enterprise Development Fund (REDF), a pioneering organization developing workforce programs for people facing multiple barriers to employment like homelessness, drug addiction, former incarceration, and a history of trauma.

George and Leanne Roberts wanted to do something to fight the growing tide of homelessness in the Bay Area. They believed that an employment-centered approach would be much more effective than other ways of coming at the problem. As a co-founder of Kohlberg Kravis Roberts & Co., a venture capital firm, Roberts was confident that there was a role for enterprise in addressing homelessness in the region.

Roberts helped develop the basic concept of venture philanthropy, adapting to the social sector lessons of private equity that successfully combined financial assistance and hands-on business advice, while focusing on outcomes achieved. "We helped a number of different companies—Juma VenturesRubiconNew Door," says Carla Javits, who came on as executive director of REDF in 2007 with the goal of expanding the organization's footprint and impacting the lives of more people. Javits brought a wealth of experience in the social sector, primarily with the Corporation for Supportive Housing, where she was CEO and president.

In order for REDF to achieve its goal of getting people on the employment ladder, the terms of work often need to be redefined to allow for a more nuanced spectrum of options for people with different skill levels and experience. The businesses that REDF funds make money and then reinvest their revenue so they can hire and help more people. The standard of success for REDF is not measured in financial return alone, but also in return in terms of improved behavioral or social outcomes.

REDF expanded its reach in 2004 when it converted from a family foundation into an independent nonprofit. Part of the goal of this transition was attracting funding that would allow the group to expand. That happened, thanks to grants from foundations like the Woodcock, Kresge, Weingart, and Kellogg, and this support has continued to grow and branch into new areas. In fact, two of REDF's biggest funders today are corporate foundations, including Bank of America Foundation and the JPMorgan Chase Foundation. Since 2004, REDF has also received significant support from the San Francisco Foundation, the Silicon Valley Community Foundation, the Packard Foundation, the Herringer Family Foundation, the Marie-Josee and Henry R. Kravis Foundation, and the Phalarope Foundation. Other large grants in recent years have also come from the Surdna Foundation and Marin Community Foundation.

With additional help from a $7.5 million grant from the Social Innovation Fund from 2011 to 2015, REDF was able to expand even further. They also received another $7 million from the Social Innovation Fund for 2016 to 2017. Assuming Congress continues to fund the Social Innovation Fund, REDF should receive an additional $10.5 million for 2018 to 2020.

"I do think that universally in the U.S., we value work," says Javits, stressing that Americans put great stock in the ideology of "pull yourself up by your boot straps," and the belief that "anybody can go to work and have a better life."

Indeed, the breadth of support of REDF is striking. A number of its funders are quite progressive, yet—as you might imagine—this outfit is quite popular in the conservative funding world. A recent publication from the Philanthropy Roundtable featured REDF prominently as a program worthy of investment. The report, issued in 2015, is called Clearing Obstacles to Work: a Wise Giver's Guide to Fostering Self Reliance, by David Bass.

But REDF also appeals to fans of impact investing. Workforce development for people face multiple barriers to employment has generally been driven by government and philanthropic dollars, but with REDF's model, business revenue is part of the mix. "It's using business revenue in a very conscious way to create a positive social benefit," says Javits. "It's a win-win that a lot of people really understand and appreciate."

Javits adds that REDF's diversified funding model is especially "important now, because we see that there is an erosion of support for government funded programs."

REDF has the twin benefits of building up the evidence that its businesses are a good public investment—reducing recidivism, reducing use of government benefits—while also offering a model that prepares people for long-term work. But one of the keys to REDF's success is the redefining of work as a value that can be fulfilled at different levels by people of different abilities.

"Helping people to get back to work sounds simple, but is pretty tough to do," says Javits. We talked about a hypothetical example, a 35-year-old childhood trauma survivor with a recent history of drug addiction, prostitution, and violent relationships, who also receives disability payments, but is essentially homeless. The task of an organization like REDF is to help someone like this find work while not compromising what little financial security they may have.

The social enterprises REDF funds and works with use a variety of program models that allow them to effectively support their employees as they move through their program and strengthen their skills. "Some of the social enterprises REDF supports have a shorter window and a higher number of hours they expect people to work, and some may allow a much longer time for people to get acclimated to work."

Javits says this is one of the keys to the success of their programs. "We're trying to create some alternatives that say, let's maximize the amount of work effort people can put in, because they want to work, and because there are so many collateral benefits to working, in terms of having a network and a sense of purpose."

REDF develops social enterprises where the clients "don't feel threatened by maximizing work, and know they can still have a decent quality of life," says Javits. "It makes intuitive sense, but the way programs have been set up over the years, they don't necessarily provide the right incentives, so that's something we're changing."

Some examples of social enterprises profiled by REDF include Greyston Bakeries in Yonkers, New York, which employs 144 people and has a partner foundation that provides support services. The business makes brownies and cookies for major companies like Ben & Jerry's and Whole Foods. Another, Women's Bean Project, produces handcrafted gourmet foods and jewelry in Colorado, and recently secured Walmart as one of its buyers. While studying organizations like these, REDF is now preparing to expand again. It recently had several hundred applicants for funding from 36 states, and will be announcing the new programs shortly.

While part of REDF's strategy involves expanding its reach, it also wants to help different regions of the country do more of this work on their own. "We're eager to spread the word," says Javits. "There are so many great opportunities for investing resources in this program. We could get 100,000 people to work if we could stimulate a wider conversation in business, philanthropy and government." Javits says that part of REDF's strategy is to build up "local ecosystems" so that they can support growth of this model.

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