REDF: Finalist's Statement

Social Capitalists

REDF

REDF creates opportunities for homeless and low-income individuals to move out of poverty. We partner with a portfolio of San Francisco Bay Area nonprofit organizations to create jobs and training opportunities in social purpose enterprises. In these partnerships, we offer financial support, business assistance, human and intellectual capital, and other customized support to strengthen our partner nonprofits.

Our highly engaged approach to philanthropy places an emphasis on helping the nonprofit organizations we work with become more sustainable over time, using best business practices and building their capacity to help others. We have developed measurement techniques that enable us to determine whether our approach is helping those people those who need it most.

Poverty can have numerous contributing factors, including homelessness, mental illness, substance abuse, previous incarceration, and developmental disabilities. Individuals with such barriers to employment are often deemed "unemployable" by traditional companies. REDF works with a group of five nonprofits to create social enterprises -- businesses owned and operated by nonprofits that aspire to employ the people who need jobs to move out of poverty. At the time of hire by one of the REDF Portfolio social enterprises, 26% of these individuals had a history of incarceration, 44% were homeless or at risk of homelessness and 43% self-identified as being mentally ill. REDF believes that by creating supportive opportunities for these individuals to work, we can help them take steps towards self-sufficiency, dignity, and hope.

Overall, the REDF Portfolio runs 15 social enterprises, including cafes, a janitorial business, landscaping services, and a screenprinting operation. For example, one of the nonprofits in our portfolio is Rubicon Programs, which runs a bakery and a landscaping business, and won last year's Fast Company Social Capitalist award. The REDF Portfolio social enterprises employ more than 600 individuals each year and produce more than $10 million in combined revenues annually.

We determine the effectiveness of our portfolio's social enterprises on the basis of their financial and social outcomes. We have developed a Social Return on Investment (SROI) model that has influenced many others to examine ways to gauge their effectiveness and create their own measurement tools.

As we implemented SROI, we realized that most nonprofits lack the funding and infrastructure required to track important social outcome indicators. As a result, we developed OASIS, a customized social management information system housed within the nonprofits we serve. We continue to measure our results and refine our standards as REDF and our portfolio's social enterprises mature.

Providing systems like OASIS for the nonprofits we support is one example of how REDF works: we facilitate positive change in individuals' lives by strengthening the capacity of the nonprofits that serve them. It is widely known that nonprofits typically lack the resources they need to operate at maximal effectiveness. We address this shortfall by responding to agency-wide needs for assistance with strategic planning, board development, leadership development, fundraising, and measurement.

We know the REDF model works based on the results of our social outcomes tracking. REDF has followed the progress of every REDF Portfolio employee who has worked in one of our social enterprises since 1998. As a result, we know that 78% of those served by our portfolio remain employed two years later, and their average monthly incomes increased by 300%. We continue to review and refine our measurement tools to help us best serve the enterprise employees as well as the REDF Portfolio organizations.

On a national scale, we recognize that many foundation, corporate and individual funders struggle with similar questions of the best ways to work with their grantees, how to measure results, and strengthening the nonprofits they fund. By sharing our lessons and collaborating with others, we have been able to increase our impact far beyond the boundaries of our San Francisco Bay Area portfolio. Through publishing and speaking, we will continue to address questions and develop concepts that are central to effective funding and nonprofit management and that will enable other funders nationally to extrapolate from our experiences.

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The above information was provided by the profiled organization.