REDF (Roberts Enterprise Development Fund)

Jobs for People With Impediments

  • Prosperity
  • 1997

George Roberts was co-founder of the pioneering private-equity firm Kohlberg Kravis Roberts & Co., and when he entered philanthropy he brought the mindset of an investor expecting returns, only this time measured in lives changed rather than dollars accumulated. His most inventive work has been in battling poverty, and his focus there has been consistent from the beginning: work (rather than social work) is the best anti-poverty strategy.

Today it is not unusual for successful business people to orient their philanthropy toward market-based solutions to social problems, but Roberts was a pioneer of such efforts. When he gave a million dollars to a nonprofit so it could set up a cabinetmaking shop where minorities could be trained, he insisted the organization take out a bank loan to cover the other half of the project’s costs—because their commitment to the bank would keep them focused on running the operation like a business rather than a giveaway.

In 1997, after several years of supporting nonprofits that tried to help homeless people get jobs, Roberts created REDF (the Roberts Enterprise Development Fund), a so-called venture philanthropy that supports groups with “equity-like grants and business assistance” so they can start sheltered businesses where “people facing the greatest barriers to work”—convicts, school dropouts, the mentally ill, alcoholics, etc. who would otherwise be living on government assistance or charity—can get a foot on the employment ladder. The groups REDF funds are expected to be business-like in their work, and to find revenue streams that can be reinvested into training and services for their employees.

Here are examples of some social enterprises that have recently been in REDF’s portfolio:

  • Chrysalis runs a maintenance and property-management service for buildings in the Skid Row section of Los Angeles, as well as street-cleaning crews who contract with merchants in the Fashion District.
  • Community Housing Partnership has a growing business providing lobby services to landlords in San Francisco.
  • The social enterprise 360 Solutions provides pest-control in southern California towns.
  • The Center for Employment Opportunities has maintenance contracts that keep its workers busy in several cities.

In 2004, REDF converted itself from a family foundation into an independent nonprofit so other donors could participate and expand its footprint and methods. The Roberts Foundation continues to be its biggest contributor with millions in annual contributions, but donors like the Kellogg and Weingart foundations now also fund the group.

From 1997 to 2015, REDF has supported 50 social enterprises that have employed more than 8,700 people with little previous success in the workforce. These individuals earned more than $140 million, and three quarters still held their jobs two years after starting. REDF’s goal is to expand enough to help create an additional 2,500 jobs in the near future.