Social Enterprises: No One is Unemployable

Social enterprises can make real reductions in the unemployment rate among job seekers who may have previously been homeless, incarcerated, or struggling with addiction or mental health issues.

That was the case made recently by Carla Javits, president and CEO of The Roberts Enterprise Development Fund (REDF), in an appearance at the American Enterprise Institute moderated by AEI Resident Fellow and Morgridge Fellow in Poverty Studies Robert Doar.

Javits said REDF strives to push back against the view that some members of society are simply unemployable. “I think that we have accepted that there are millions of people in our society who can’t work and won’t work. And that’s just not true. There’s no farm team or training ground where people can get their act together,” she said.

In its 10-year history, the venture philanthropy has grown to fund more than 97 social enterprises that employ 18,000 people in 18 states. Javits said the organization has set a goal of employing 50,000 through its grantees by 2020, with businesses that range from ballpark concessions to janitorial services to electronic waste recycling.

REDF’s governing concept is to provide equity capital and advisory services to start-ups that agree to invest their profits in supporting employees with difficult work histories — employees most businesses are unwilling to hire. REDF seeks buy-in across the political spectrum. Javits’ late father, former New York Sen. Jacob Javits, was known for his bipartisan efforts in the Senate, and the Javits Family Foundation last year endowed an annual Prize for Bipartisan Leadership.

Social enterprises provide “a supportive setting, where management is really about the success of those individuals . . . and where they can connect to the kind of supports they need,” Javits said. “The mainstream workforce system . . . generally has not served the people that we’re talking about.”

She further explained that job training programs often don’t work for individuals who may have minimal work experience and who aren’t “familiar with the norms of the workplace.” Many of the businesses provide their own housing and addiction/mental health services.

She noted that a recent survey of REDF projects in California showed that incomes for people employed by social enterprises went up by 268 percent—and one out of four had never had a legitimate job before. She said employees’ reliance on government assistance also diminished dramatically, from 75 percent of their income to 25 percent. For every $1 invested by REDF, there was a $2.23 return.

Javits cited several specific success stories, including:

• Seattle’s Farestart, which provides food services and food products and recently received funding from Amazon to open five new eateries and start an apprentice program; and
• Roca, a Massachusetts social enterprise that focuses on employing gang-involved youth who were in jail.

While REDF is geared toward private sector funding, it has benefited from a $7 million grant from the federal Social Innovation Fund, which is part of the Corporation for National Community Service. REDF expected to receive $10 million more from the Fund, but it was eliminated in the recent budget deal passed by Congress.

“At a time when the nation is particularly troubled that ‘forgotten Americans’ are not in the workforce or earning enough to support a reasonable standard of living, we need exponential growth of these practices that have demonstrated results,” Javits wrote recently.