George Roberts is co-founder of the KKR leveraged buyout firm, and an active philanthropist with a special interest in building “social enterprises”—nonprofit or for-profit firms with lots of entry-level work and a mission to engage with employees who would otherwise have a very hard time getting and holding a job—the homeless, released prisoners, addicts in recovery, persons from collapsed families, and so forth. His California-based foundation, REDF, has been a leader in pulling the persistently jobless into productive work since Roberts created it in 1997. Philanthropy Roundtable author David Bass recently interviewed him for a forthcoming book on assisting work as an anti-poverty charitable strategy. Following is a brief extract.
Q: How did you get involved in philanthropy?
Roberts: When I started out, I started out with nothing. I had $1,000 in the bank when I got married, and that was the bonus I got for the summer I worked at Bear Stearns. Now, by not having nothing, I had a good education. I had two loving parents. I had a lot. I just didn’t have any financial assets. So I promised myself two things: If I were ever in a position to do it, I would never complain about paying taxes and I would try to help other people. I was 23-years-old when I promised myself that, and I’ve tried to hold true to that.
I’ve made investments in the schools that I’ve gone to because I got a wonderful education and I want to give back. But mainly, my focus and my family’s focus is on youth education and jobs. That’s where we spend both our energy and the resources we have to do that.
Q: How do you explain the work of REDF?
Roberts: The thesis that my wife and I had was to find a way to help the people who, if we didn’t do it, wouldn’t get help. That was the overriding philosophy behind it. We came up with the idea to provide some capital, strategic planning, consulting, and help to nonprofit businesses that are helping the very populations that we want to help. That’s really where we worked into what REDF is doing now.
At the present time, we work through existing organizations that have an infrastructure designed to help people who want to work, who are capable of working, but who haven’t been able to do it because of issues in their life. So, we’ll go in and help nonprofit businesses create a new business. Or we’ll provide planning and capital. So it’s really trying to get people into some kind of a job, rather than sitting idly, with the hopes that they can eventually move from the not-for-profit sector to a more mainstream job. Success, quite frankly in my view, is to help someone find a job with health insurance and enough money to have an independent place to live. That is the success that we’re shooting for.
The terms are now used “social venture capital” or “social enterprises.” We help those social enterprises get better and be able to add more people to the employment rolls that they have.
Q: Why is it important for donors to be invested in workforce development?
Roberts: I go back to what I said 17 years ago: Just think for a minute if you didn’t have a job. No one wanted to hire you. You had no hope for a job. You were taken care of because of the public system, but people didn’t want you. Just think what it must be like to somebody: if they don’t have a job, they don’t have hope, really. If you don’t have hope, what do you have?
So think about what that does to the human being in that position. Put yourself in that person’s shoes for a second and ask yourself what it would be like if you didn’t have a job. Then I think it’s a very worthwhile thing to do—to help these people.
Q: Are the consequences of not having a job not only monetary, but psychology and spiritual as well?
Roberts: They are more important than the economic consequences, because people are going to get food stamps. They are going to get taken care of in some way. They can survive. But when you pull out any hope for them, look at what you do to people.
Q: How do you measure success and effectiveness at REDF?
Roberts: It’s hard to do it. We try to track people as best as we can. There are close to 9,000 people who have been through this and gotten employment. That’s really the best we can do at present. We do know what it costs society to keep people in jail and to keep people living off subsidies. In fact, a third party evaluation shows that every dollar invested in a social enterprise produces more than $2 in benefits for society.
Q: Do private nonprofits do a better job of workforce development than the government?
Roberts: Some people would say that this isn’t the job of philanthropy and it should be left to the government. We know how well those things work.
Q: What is different in the marketplace since REDF was first founded compared to today?
Roberts: When we started 17 years ago, people didn’t know what it was about. Others thought it was a dumb idea. But today, social philanthropy is taught in all the business schools. There are more organizations, foundations, and people that are interested in this. So, I think the supply of financial capital and interest in this has grown dramatically. That’s the easy part. The hard part is finding organizations and people to execute the strategy. That’s where a lot of our growth will eventually come from.
Q: Is REDF expandable nationally?
Roberts: Sure. Think about it for a minute: if you take the 25 largest cities in the country, there is no reason that they can’t apply this. We’d be happy to help them anyway we can. Let’s assume those 25 cities have a 1,000 people a year who go through their programs. That’s 25,000 people each year and 250,000 people in 10 years. You can make a meaningful change.