REDF (also known as The Roberts Enterprise Development Fund) is a San Francisco-based venture philanthropy organization that creates jobs and employment opportunities for people facing the greatest barriers to work.

Founded in 1997 by George R. Roberts (KKR), REDF provides equity-like grants and business assistance to a portfolio of nonprofits in California to start and expand social enterprises—nonprofit-operated businesses selling goods and services demanded by the marketplace while intentionally employing young people and adults who would otherwise face bleak prospects of ever getting a job.

REDF is a 501(c)(3) organization and is generously supported by its Board of Directors, individual and institutional donors, and the federal government through the Social Innovation Fund.

 

How REDF Adds Value

The only organization of its kind, REDF adds value to the nonprofits it supports, the donors who invest, and the field of social enterprise broadly by…

• Selecting high-performing nonprofits through rigorous due diligence
• Delivering customized and coordinated business and capacity-building assistance
• Leveraging public and philanthropic support with social enterprise earned income
• Measuring results to focus on the most high-impact and cost-effective activities
• Building the field to catalyze greater social enterprise investment
• Developing future leaders through Farber Program internships and fellowships for MBAs

 

REDF’s Experience and Impact

To date, the 50 social enterprises that REDF has supported have employed 6,500 people and earned revenues of more than $115 million. Three-fourths (77%) of social enterprise employees interviewed two years later were still working. Average employee wages had increased by nearly one-third (31%) and monthly incomes had almost doubled (90%). REDF has also contributed to the growth of the social enterprise field with globally distributed social enterprise tools, publications, and research, including pioneering Social Return on Investment metrics and analysis.

 

Not “Business As Usual”

In 2011, REDF launched a five-year strategy to transform the way young people and adults who have been homelessness, incarcerated, addicted, or have a mental illness move into the workforce. REDF will expand its social enterprise portfolio in California so that thousands more Californians are able to contribute to their families, to their communities and to the economy. Outcomes and impact will be rigorously measured and evaluated and new partnerships will be established leading to the development of a sustainable and replicable social enterprise model that can be scaled across America.

REDF’s 2011-2015 strategy has two goals:

1. Expand in California to employ 2,500 more people in social enterprises

2,500 more people will go to work in social enterprises supported by REDF. Best-in-class employee training, retention, and advancement programs will result in 70% remaining employed at least one year after hire.

2. Develop a social enterprise model that can be scaled nationally to ultimately employ hundreds of thousands more

REDF’s social enterprise model will be refined, its impact measured and effectiveness assessed, and the results shared broadly. Ultimately, public and private sector systems will be transformed, making social enterprise the preeminent strategy to reduce chronic unemployment faced by millions of Americans who can and want to work, but are rarely, if ever, given the opportunity.

With a 15-year track record, a multi-year, $6 million investment by the federal Social Innovation Fund, and visionary leadership, REDF is uniquely positioned to achieve these ambitious objectives. REDF’s 2011-2015 strategy is not “business as usual.”

 

Why Social Enterprise?

Social enterprise jobs are the launching pads to stable employment for the chronically unemployed. Employees receive training and support, earn wages, pay taxes, and often reduce their reliance on costly public programs. The nonprofit operator earns income selling goods and services like landscaping, apparel screen printing, electronic waste recycling, and fresh-cut, local organic produce. With an approach rooted in the best private sector practices, social enterprise can scale sustainably—not relying solely on government solutions, subsidy, or philanthropy.

 

Why Now?

Social enterprise is still limited in its impact and influence. Generating sustained investment in will first require replication in a state like California where more than half of its parolees are unemployed, 10% of its young adults between the age of 18 and 24 are neither working nor attending school and unemployment among the severely mentally ill is estimated at 80% percent. Moreover, the costs of these seemingly intractable problems are immense. Incarceration alone costs Californians $47,000 per inmate annually and nearly 70% of ex-offenders re-offend within three years (California Department of Corrections and Rehabilitation, 2010). Social enterprise has been proven to reduce recidivism by 22% (MDRC, 2010).

 

What Will Be Different?

To achieve even greater impact, REDF is expanding to communities across California by selecting new nonprofit organizations to join its portfolio. In addition to providing larger, multi-year grants for capital and start-up, REDF is enhancing its suite of business assistance to provide more services leading to greater social enterprise success. REDF will also identify and implement the most critical supports that help social enterprise employees keep their jobs and advance in their careers through training and education. REDF is also creating a nationwide network of social enterprises that can successfully compete for larger contracts and take advantage of new market opportunities.

Experiments in this California laboratory will inform the development of a replicable and sustainable social enterprise model that will ultimately be scaled across America. REDF will conduct a rigorous measurement of its impact—developing the evidence base of what does and doesn’t work. To make the case for greater public and private investment, REDF will revisit its pioneering Social Return on Investment (SROI) analysis that calculates the net impact of each dollar contributed, taking into account the model’s up-front costs, the social enterprise’s earned income, and the impact of employment on individuals and communities.