By Grantmakers for Effective Organizations
Carla Javits is president and CEO
of REDF, a California-based nonprofit
and venture philanthropy
organization with more than 15
years of experience. As a grantmaking
intermediary with the Social Innovation
Fund (SIF), REDF has been creating
jobs throughout California for people facing
the greatest barriers to work. They do so by
investing capital and business expertise in
social enterprises, businesses with a “double
bottom line,” that make money in order
to employ people.
Why did REDF participate in the SIF?
REDF takes a market-oriented approach
to job creation and workforce development
for people who are willing and able to work,
but who have the hardest time finding and
keeping a job. We applied to be a SIF intermediary
because REDF was eager to join a
national learning community that would allow
us to develop and engage the ecosystem
of government, nonprofits, philanthropy,
and business needed to expand social enterprise,
and to learn from and inform them
about the power of this model.
The SIF builds support and visibility for
what works. It seeks to direct more public
money toward proven and promising solutions
that improve people’s lives and their
communities. It emphasizes evaluation and
assessment of results to drive change.
By working with the SIF, we are demonstrating
the value of establishing and growing
social enterprises to create more jobs. This
approach offers people a chance to work in
a supportive environment—which has been
demonstrated time and again to be the most
critical factor in getting people attached to
the job market. It is also a sustainable approach
that contributes to the economy and
generates revenue. To date, the 50 social enterprises
REDF has supported have generated
more than $140 million in revenue, allowing
them to expand their operations and
hire more people.
What does the government get out of
working with intermediaries like REDF
that it wouldn’t get by making these investments
on its own?
REDF delivers expertise and a deep understanding
of the social enterprise model
on the ground. We are experienced at due
diligence to identify the organizations and
business models that are likely to work best.
We know how to combine grantmaking and
business assistance in order to help these
enterprises grow.
Because of our practical experience
and contact with the communities in which
these enterprises operate, we deliver support
and financial
resources efficiently.
In part we can do this
because we are flexible
and less constrained by
governmental limitations.
One of the greatest
values of the SIF is
to offer a window into
how government can
work more effectively
with private sector intermediaries
to deliver
public services.
The partnership
with government is critical. Not only does
it provide these organizations with the
support to grow and employ more people,
it creates national visibility for the social
enterprise model and offers government a
new way to work with the private sector to
integrate more people into the workforce.
How important is it for the federal government
to invest in growing the impact
of solutions like those that REDF is investing
in?
It would be hard to find an area of government
that’s not affected by the fact that large numbers
of people in our society have no chance
to get into the workforce. This affects tax receipts,
entitlement programs, prisons, homelessness, education, and more. It is in the government’s
interest to provide the incentives
and the capital to help build social enterprises.
For example, that could mean setting
targets for the purchase of goods and services
from these types of businesses, or tax
and other incentives related to “supplier diversity,”
and hiring of people from targeted
populations.
What does it take to build a good working
relationship between a private grantmaker
and government?
It isn’t easy to navigate the rules of the federal
government. It is helpful when there is clarity
and two-way communication about those
rules up front. Also, the government needs
to offer grantmakers some flexibility in what
they fund and how they fund.
As a grantmaker, you need to work with
people in government who understand that
their role is not just to
enforce regulations,
but to be entrepreneurial
about making things
work. This has been the
ethos of the SIF staff.
The SIF has made a
positive contribution by
putting the focus on two
priorities: using grantmaking
intermediaries
to do the work of identifying,
supporting, and
developing evidence
about the effectiveness
of successful activities; and keeping the focus
on community solutions by helping to improve
and scale up promising initiatives at the
local level.
On the other hand, government should
not view intermediaries and private-sector
funders as a way to outsource the costs of
government. I think some people see this
as a way to get others besides government
to be the long-term backbone of support
for these programs. But what it’s really
about—or should be—is ensuring efficient
use of public and private resources aligned
with the objectives and resources of each.
The bottom line is delivery of the greatest
possible value and return on taxpayer and
private investments.