REDF: My Dream Job – Melinda Tuan, Co-founder of REDF

Melinda Tuan is an independent consultant who is recognized nationally for her work in high engagement philanthropy, foundation effectiveness, evaluation, and nonprofit capacity building. She serves as a Senior Fellow at the Center for High Impact Philanthropy, on the Board of Managers for Evergreen Lodge and Rush Creek Lodge, and on the REDF Advisory Council. Melinda was also the co-founder and Managing Director of REDF, working alongside Jed Emerson and George Roberts to launch and lead the organization during an exciting and exceptional time in its history. To help mark REDF’s 20th anniversary, we spoke with her about some of the highlights of that seven-year journey, among the most exhilarating and rewarding periods of her career.

You joined REDF in 1997 when it was a newly formed organization. What attracted you to the position?  

My vision had always been to run a multi-service, inner-city, Christian ministry and with that in mind, I majored in urban poverty and homelessness at Harvard, worked in management consulting and nonprofit organizations, helped start-up a nonprofit, and pursued an MBA at Stanford with a focus on nonprofit management and entrepreneurship. Growing up in Honolulu, I volunteered in homeless shelters and worked with nonprofits that helped people who struggled on our beautiful but very expensive island. In my volunteer work, I witnessed the challenges of helping this population. I wanted to be someone who had the passion for the work and also the skills to help nonprofits be more effective in achieving their mission.

In January 1997, I was in my second year of business school at Stanford and was just starting my job search. I was looking for a management position with an organization that served the homeless population – in the Bay Area. One day, the director of my program came running over to me very excited with a job posting that she said described my dream job.

Turns out she was right.

The position was to be the co-founding associate director, working with Jed Emerson and George Roberts, to launch REDF. The job description seemed to have been written just for me. It called for exactly the type of experience I had, and, on top of that, I had already conducted informational interviews with 5 of 10 social enterprises that were in REDF’s portfolio at the time.

The main question I had was how would Jed (and his German Shepherd Ruby) and I get along? We had distinctly different personalities and very different management styles, and I wasn’t a particular fan of large dogs having been bitten by a German Shepherd when I was a newspaper girl in Hawaii.

Jed and I set up some parameters for our working relationship, and by February of 1997, I was helping start-up REDF while finishing my MBA at Stanford. I stayed at REDF for seven years, and those years were among the most exhilarating and rewarding years of my career.

It was such an exceptional time. What were those early years like?

I loved everything that I did at REDF. My work combined all things I like to do—help start-up organizations, work with teams of passionate nonprofit professionals, identify resources for nonprofit organizations, match people with particular skills and passions with the specific needs of social enterprises, teach and present, recruit business leaders to help social enterprises, and the list goes on.

The variety was amazing! On a typical day you could find me hanging out with homeless youth in the Mission; teaching a class on social entrepreneurship at Stanford; coaching a nonprofit executive director; and collaborating with a venture capitalist (Stuart Davidson) to launch the Farber Internship Program. It was such a privilege—I loved going to work every day.

Working at REDF was really life-changing, and so much of that is thanks to George Roberts.

The amazing thing about George is that he gave us full license to experiment, to innovate, to try, and to fail.  My experience running REDF was radically different from that of my foundation colleagues at the time. George provided generous, long-term financial support, and he gave us freedom to share openly about what we were learning. In addition, he fully expected some of our investments not to succeed. After all, these businesses were hiring people no other businesses would hire. We all had a steep learning curve and George gave us the time to learn, improve, and grow. We, along with our social enterprise partners, crashed and failed numerous times, but some of the original social enterprises are still here today and thriving. And amidst all of these social enterprise stories, there are many shining examples of people truly transforming their lives.

One very moving recent example is Kevin McCracken, who spoke at REDF’s 20th anniversary celebration. I first met Kevin at Ashbury Images, our very first social enterprise investment, which had recently hired him as he was recovering from heroin addiction, homelessness, and incarceration. Today Kevin is a husband, a father, and a successful businessman who is giving back. He is the co-founder of Social Imprints, a revenue generating ($10MM last year), profit-sharing, living-wage providing social enterprise that employs people with significant employment barriers.

What were some of REDF’s major contributions to the nascent field of social enterprise?

Among the many contributions REDF has made to the field, our early work on Social Return on Investment (SROI) is one that has had far-reaching effects both nationally and internationally.

In 1999, after a couple years of research and development in collaboration with several professors at the Stanford Graduate School of Business and a Farber Fellow who was a former JP Morgan analyst, we published a set of “SROI stock reports” on our portfolio of social enterprises and an open source document detailing the SROI methodology. In that first iteration of SROI, the intention was to demonstrate the blended value of the enterprise from a financial valuation and a social savings valuation perspective. Our methodology was based on actual social outcome data from the thousand plus social enterprise employees we had been tracking over a two-year period. We knew from the social outcome data that the lives of social enterprise employees were improving across areas such as job retention, income, and housing stability; and through SROI we could also demonstrate that the social enterprises were saving society money.

We knew our SROI methodology wasn’t perfect—and that’s why we made it open source—so people could replicate it and improve upon it. It’s remarkable to think that the work REDF, a relatively tiny organization, did in the late 1990’s has influenced so many other efforts to measure social impact. SROI really took off in Europe where there are a lot of public payers, and it was a precursor to all the Pay for Success work today. And to think that SROI was not even the core of our work at REDF, it was sort of a side project!

Yes, SROI was definitively a significant achievement, especially from a small, new organization. Any other REDF innovations that came from that time?

When I think about the major innovations REDF engaged in I count SROI, high-engagement philanthropy, and social enterprise as the three areas where we made significant contributions to the field. When we started REDF, there weren’t many social enterprises in existence across the country. We created a geographic portfolio, supported them with a suite of services and large, multi-year grants, and demonstrated that it is possible to achieve positive outcomes over time as measured by an objective third party evaluator. That was huge! No other organization had done that before. We were in essence experimenting with social enterprise, high-engagement philanthropy (also called “venture philanthropy” before it became a popular term), and SROI, and all of these practices have since been proven to be effective and endured over the last twenty years.

I realize I might be making it sound like REDF invented social enterprise, high-engagement philanthropy, and SROI, but I don’t think any single organization can take credit for any of these accomplishments. In the late 1990s, there were a number of organizations that were working on each of these areas and in that way it was really a remarkable time period. George (Roberts) always encouraged us to learn from our failures and wait until we had really accomplished something before we started talking about it. That humility, I think, is still part of REDF’s DNA, and it’s also why at the time; more high-profile organizations received more credit for some of our ideas. For example, I still have to remind my other high-engagement philanthropy colleagues to include REDF in their list of those original “venture philanthropy” innovators as we pre-dated many of their efforts!

How do you feel about the future of REDF and the social enterprise field?

When we first started REDF there were only a handful of social enterprises serving people with employment barriers in the U.S. It is so gratifying to know REDF helped seed this field, and today, there are hundreds of social enterprises around the country that are serving people desperately in need supportive employment and training. These organizations are making such a difference in the lives of people who have so much to contribute; people who really want to turn their lives around and need the support of a social enterprise to take that next step.

Just the other day, I was talking with a friend who shared about her sister who is recovering from drug addiction. Her sister is desperate for a chance to work again, and get back on her feet towards independence, but she is afraid that no one will hire her because of her checkered history and employment record. I was so grateful to be able to tell them about these unique organizations called social enterprises and point them to REDF and the portfolio of social enterprises. As my friend said, “Just knowing that these kinds of social enterprise organizations exist gives me hope for my sister and her future.”

It has been an honor to be a small part of REDF’s early history. And it is truly a privilege and a blessing to be a part of REDF’s future as it grows and expands to support greater numbers of social enterprises around the country and provide employment and hope to tens of thousands of people.