Fall 2003 eNewsletter - Growth and Change
A Message from Kristen Ace Burns, Managing DirectorWhat a year! In the last eight months, REDF has undergone much change — including a leadership transition and a fundamental shift in our financial structure. And yet, the most important elements of our work remain the same: a portfolio of strong and healthy nonprofits running social enterprises, a highly-engaged approach to philanthropy, and an overarching dedication to helping to move individuals out of poverty.
George Roberts remains a dedicated supporter of REDF’s work, with a commitment of $5 million over the next three years. In addition, for the first time in our organization’s history, we are able to offer individuals and foundations the opportunity to join us in our work by investing directly in REDF. As George suggested last spring, it’s time to “take REDF to market” — and so far the market is responding with enthusiasm. The William and Flora Hewlett Foundation, The David and Lucile Packard Foundation, and the Phalarope Foundation have each made six-figure, multi-year commitments to REDF. We are also in conversation with a number of other foundations who have expressed a desire to partner with REDF in the years ahead.
The advice we provide to our portfolio of enterprises applies to ourselves too, and diversification over the long run is key. In 2004 we will begin developing an individual donor base to complement the funds invested by George Roberts and by the foundation community. (We’re adding a Development Director to our team to guide this effort; check out our job posting.) Our goal is to create a balanced, sustainable mix of funding sources to ensure a strong base of support for REDF and our portfolio.
The nonprofits with whom we work are no strangers to these issues, and CVE in particular has changed and grown dramatically since we started working together in 1996.
CVE — A Diversification Success StoryImage of mopIn 1996, CVE (Community Vocational Enterprises, Inc.) was a $1.4 million San Francisco-based agency providing training and employment opportunities for individuals with psychiatric disabilities. While its enterprises generated approximately $300,000 in annual revenues, CVE had not yet obtained 501(c)(3) status and was highly reliant upon government support. CVE’s management team identified a need to diversify their funding sources and move toward a more self-sufficient financial strategy. They took steps to build and strengthen their enterprises: Industrial Maintenance Engineers (IME), a janitorial service; two cafes; a clerical placement business; and Stamp of Approval, a mailing and assembly business.
As these enterprises grew, CVE continued to keep diversification in mind, ensuring whenever possible that each business’s corporate customer base was spread broadly across industry sectors. This served CVE well, particularly during the dot-com bust when many internet-related businesses in San Francisco disappeared. According to Michele Tatos, CVE’s CEO and a staff member since 1992, “These have been challenging times for us, and we are proud that our businesses have not only weathered the economic downturn, but have grown by more than 7% over the past two years. We feel that having a diversification strategy in place has been a key factor in our success.”
Today, CVE is a vibrant and robust $3M organization with a highly diversified funding base, using business revenues of nearly $1 million to supplement funding from foundation grants, individual contributions and government support. They continue to provide training and employment opportunities to individuals with psychiatric disabilities, and their enterprises employed more than 140 people with barriers to employment in 2002. They have successfully grown and strengthened their organization significantly as a result of the management team’s thoughtful planning.
In many ways, we now have more in common with our portfolio groups than ever before. We now share not only a commitment to creating opportunities for homeless and low-income individuals to move out of poverty, but also a focus on identifying new investors to support this work. While 2004 holds many new opportunities, our commitment to strong, engaged relationships with each of our portfolio members remains at the heart of all we do.
Best wishes for the holidays and the year ahead!
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