Selecting REDF’s Inaugural Growth Portfolio: A Critical Step in Making Our Grantmaking More Inclusive

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One of the best parts of my job as REDF’s Portfolio Director is when we get to notify groups that they are receiving grants. A few weeks ago, we had the pleasure of calling 13 employment social enterprise leaders to let them know that they had been accepted into the first cohort of REDF’s Growth Portfolio.

Today, we are excited to introduce this cohort of enterprises that hail from nine states and DC and operate in a variety of industries. They reflect the diversity, strength, and potential of the employment social enterprise sector.

They also represent REDF’s new strategic focus to invest in growth-stage enterprises, continue to expand the sector nationally, and fully incorporate our DEI commitments throughout our programs.

For the last five years, our Venture Philanthropy Portfolio has included some of the largest employment social enterprises across the country – the stars of the field. We learned so much from their teams and participants, and now we’re ready to take those learnings to invest in and support enterprises that have the potential to become the next stars. Each one of these mission-driven businesses is joining our portfolio at an important point in their lifecycle, where catalytic capital and customized capacity building from REDF will help take them to the next level.

But it’s not just the stage of the organizations that’s changed:

  1. We will now offer unrestricted operating funds, recognizing that our grantees know best how to utilize grant funds.
  2. Our grant period has shortened from five to three years because we learned that the most impactful work with our grantees came in those first three years, and this allows us to scale up our impact and work with more grantees.
  3. REDF’s Accelerator program and its alumni have become the primary pipeline for our portfolio.
  4. And we’ve moved to an annual application. Rather than a static portfolio, we will be continuously bringing in new organizations – expanding our reach and deepening our impact on the sector as a whole.

Most significantly, the selection process for this portfolio marks a critical step in REDF’s journey to fully embed our commitment to racial equity in our investments and programs.

Our team prepared the application for our Growth Portfolio against the backdrop of 2020 – we witnessed hateful acts of violence perpetuated against our Black neighbors, alongside the disproportionate impacts of the pandemic and resulting economic crisis on people of color.

In order to realize our vision for an inclusive economy, we made a goal to increase the amount of REDF capital going to enterprises led by people of color and with expertise grounded in their own lived experience of employment barriers. Like many donors and funders, REDF has been examining our programs and processes to ensure that our grantees reflect the communities that they serve. As part of that work, we made significant changes to our application and selection processes to make it more accessible and inclusive while increasing transparency and building trust:

  1. In setting our eligibility criteria, we reviewed the data we had on the applicant pool to ensure that we did not disproportionately exclude organizations led by people of color.
  2. We provided pre-screening calls so that potential applicants could determine if they were a good fit to apply – before they put time into completing an application.
  3. We shortened the written application to make it less burdensome on our partners and offered office hours to provide insight into what we were looking for in each question.
  4. We offered grant writer support and prioritized enterprises led by people of color or with lived experience in this pilot. In total, nine enterprises received grant writing support, which led to strong applications that gave us a clear picture of their work and impact.
  5. During the application review process, we included previous REDF grantees as reviewers to offer their unique point of view and compensated them for their valuable insights. We did extensive work to ensure that each application was reviewed by a diverse set of staff, across gender and race.
  6. Finally, in the following weeks, we will be offering feedback calls on applications to any applicant who requests one so they can understand our rationale for assessing their fit.

We worked hard to check ourselves for unconscious bias throughout the process, and we implemented changes that seek to address just some of the systemic inequities and challenges that have historically made it harder for entrepreneurs of color to access capital. The result is a cohort in which 54% of enterprises are led by entrepreneurs of color and 31% have leaders with similar experiences as those they employ.

Was the process perfect? No. Did we learn a lot? Most definitely. And we will continue to iterate and improve across all our programs.

In the coming months, we will work with each enterprise to complete a baseline assessment of their business, programs, and organization. This will inform our work together over the next three years, ensuring an impactful partnership that results in stronger businesses, deeper impact, and positive outcomes for participants. We’ll be sharing the results of this collaboration and the impressive work of our partners in the coming months.

This experience has reminded me of just how diverse and large this sector is – the proven power of employment social enterprise is being implemented in communities and industries around the country. I’m excited and energized to work with these 13 businesses who remind me of what’s possible when all people have the jobs and support they need to realize their full potential. Let’s get to work!