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How Philanthropy Can Catalyze Social Impact

November 25, 2012

Robert Egger is a textbook example of how a pioneering entrepreneur can effect sustainable social change and impact. In the late eighties, Egger identified an innovation (food recovery) and launched a high-performing, results-driven organization (DC Central Kitchen) to execute on it.

A few years later, he coupled food recovery with job and wealth creation and built what is now a $10-million social enterprise that employs marginalized peoples at living wages (starting pay, $13 per hour) with full benefits. Now, he’s leaving DC to do the same thing for L.A. What Egger and his team built works better than what existed before, and is scalable and replicable; in short, it’s innovative.

I’m convinced Baltimore is full of men and women exhibiting Robert Egger-type potential; it’s up to the rest of us to help them succeed. One way to help Baltimore’s pioneering social entrepreneurs succeed is organizing institutional philanthropy in such a way that it can be more responsive, transparent and helpful to them.

This is neither a criticism nor an indictment of Baltimore’s funding community; it’s an acknowledgement that there is room–and need–for growth and innovation within it.

So what’s missing from Baltimore’s philanthropic landscape? We can look to our friends in San Francisco at the Roberts Enterprise Development Fund (more commonly referred to as REDF). Founded in 1997 by George R. Roberts of the famed private equity firm KKR, REDF makes long-term philanthropic investment and provides business assistance to California-based social enterprises that employ marginalized employees. According to REDF, their portfolio of 50 social enterprises has employed 6,500 people and earned revenues of over $115-million.

But those numbers only tell part of the story. Consider the contributions made to California’s economy, with 6,500 fewer people on government assistance, increased employee taxes and consumer spending. REDF also invests in future leaders through its Farber Program, ensuring a pipeline of dynamic social change leaders.

Baltimore is a social services city with an 11 percent official unemployment rate, with some communities devastated by unemployment rates creeping toward 40 percent. We have no dearth of people looking for work. As a former workforce development professional, I’ve observed that Baltimore spends a lot of time and money training ex-offenders, long-term poor and lowly skilled for jobs too many employers are unwilling to hire them for; and when they are hired, too few jobs offer living wages or an atmosphere conducive to individuals facing severe barriers to work.

Social enterprise certainly isn’t a panacea, but considering the bleak job prospects for disadvantaged Baltimoreans and nonprofit’s difficulty with fundraising, it’s an area for local funders to seriously explore. And if social enterprise isn’t your cup of tea, we can take a lesson from our neighbors to the south, Venture Philanthropy Partners, who place an emphasis on identifying what works, and bringing to bear the resources required to ensure long-term impact for the National Capital Region. VPP really prioritizes getting behind the leaders and ideas that can have great impact.

While VPP co-founder Mario Morino is concerned that there’s a lack of courageous and competent talent to lead, I see a different problem in Baltimore; I see innovative ideas and courageous leaders going without the necessary resources. Our funding community can fix that, by prioritizing grant-making strategies dedicated to identifying successful, scalable and replicable models, and nurturing the leaders who will execute them. It requires a bit of risk, but isn’t philanthropy inherently risky?

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