IN THIS POST
Ever since I joined REDF in 2014, I’ve witnessed a shift firsthand in how we have defined success.
We used to define success as “helping an individual get and keep a good job.” But over the last decade, we’ve learned that lasting impact and transformational change at scale will not be achieved by counting one more person employed, or even one fewer person returning to prison.
Now, we’ve set our line of sight further and adopted an aspiration that can track what we’re ultimately trying to achieve: helping an individual build economic power.
How We Define Economic Power
In 2024, I had the privilege of supporting REDF in reflecting on our organizational goals and how we can best serve our employment social enterprise partners. We spent the year defining what we hope to achieve, specifically around our goal of economic power.
We referenced many existing frameworks on economic mobility, including Urban Institute’s Upward Mobility Framework, Aspen Institute’s Economic Mobility Program, Camber Collective’s research on economic mobility, and Jobs for the Future’s Quality Jobs Framework. After extensive external research, engaging in internal dialogue, and conducting a practitioner focus group, we developed a definition of economic power that reflected REDF’s unique perspective and experience supporting employment social enterprises within the wider field of economic mobility.
Definition: Economic power is the access, knowledge, resources, and capabilities to build wealth and exercise control over one’s life and well-being.
The Economic Power Spectrum
We heard from our ESE partners that having economic power is not binary. Rather, it exists on a spectrum. This spectrum of economic mobility begins with economic exclusion. As someone builds wealth and gains control over their life and well-being, they build economic power, and progress from:
Economic Exclusion → Economic Inclusion → Economic Stability → Economic Autonomy
At the highest level, Economic Autonomy, an individual has:
- Stable employment, which provides family-sustaining wages and benefits
- Predictable hours and paid time off
- Advancement opportunities
- Voice and dignity in the workplace
- Financial security and savings
- Disposable income for spontaneous spending
- Affordable, high-quality options for housing, childcare, and other critical components of well-being
REDF’s Journey to Advocate for Economic Power (& Some Hard Truths)
Over 25 years ago, REDF pioneered the concept of Social Return on Investment (SROI) that’s become a foundation of social impact study. Essentially, SROI quantifies the socioeconomic benefits of investing in ESEs by calculating cost savings for society at large. And in 2015, REDF facilitated third-party studies of our portfolio through Mathematica and RTI. These studies confirmed the societal benefit that is generated when an individual in tough circumstances manages to enter (or reenter) the workforce.
That said, the findings were complicated. While these studies showed that though ESEs returned more than $2 for every dollar invested and ESE participant employees retained employment at a higher rate than the control group, they also showed that ESE participant employees’ financial well-being didn’t always grow after their ESE employment.
Reckoning with this hard truth — and the others that followed — was the beginning of an organizational learning path for REDF that led us to our focus on economic power. The three hard truths in our work are:
1. Sometimes work doesn’t pay adequately — and the benefits cliff is real
We first needed to grapple with one core reason why some ESE experiences did not lead to improvements in participants’ financial well-being: the existence of what’s often called “the benefits cliff.” Even a small increase in earnings for an individual can lead to a sudden cutoff from access to public benefits or community resources — meaning they are gainfully employed but under more significant financial strain.
This didn’t sit right with us at REDF. We do not want to graduate people (primarily people of color) from ESEs into the working poor. Therefore, REDF focused on improving and economic advancement for ESE employees, who are disproportionately people of color.
Furthermore, we recognized the need to improve participant employee earnings. To do this, we looked to the expertise of ESEs in our portfolio, seeking to replicate the programming and best practices of ESEs with the best outcomes.
2. A good job is more than just a living wage
We started looking beyond wage and earnings to understand what qualities make a job “good.” We heard directly from ESE employees that the benefit of having a job is more than just a paycheck that covers the bills; it’s about living the “the good life,” which includes freedom, dignity, and control over one’s life and well-being.
3. A good job isn’t enough to result in economic advancement
To see improvements, we focused heavily on data collection: How many individuals overcoming barriers did our grantee ESEs employ each month? What was their average wage for a participant? How long did participants maintain employment after leaving the employment social enterprise (ESE) experience?
These metrics on employment retention and wages told a story, but still, there was something missing in explaining how economic advancement happens, and, alternatively, why a good job is not enough to get ahead.
