In 2017, REDF conducted a census of employment-focused social enterprises around the country. Social enterprise, businesses that make money and reinvest it to serve their mission, is an evidence-backed approach that transforms lives, empowering people who otherwise would have a tough time getting a job and keeping it. All over the country, there are hundreds, maybe thousands of social enterprise businesses doing this vital work. Trouble is, REDF, and the policy-makers, funders, and supporters who can help grow the field didn’t know exactly how many.
So we decided to find out.
We knew it would not be easy, so we tapped our networks, cajoled our friends, offered incentives for people to respond, and in the end, we got a small but representative sample of the sector to tell us a few things about themselves. We are very grateful to the groups that responded, sent it to their networks, and supported REDF in this effort to amplify the voice of our social enterprise sector.
Here’s what we learned.
A Vibrant Sector
There is a vibrant network of social enterprises in 33 states and 93 cities nationwide (and Canada too). They are primarily non-profits (86%), but a growing number of the more recently-incorporated social enterprises are for-profit, B Corp, or hybrid structures which suggests that more founders understand that you don’t have to be a non-profit in order to do good.
The industries represented track closely with traditional social enterprise – food service, maintenance, retail, and production were most represented in the census. An emerging area gaining traction in the sector is the crossover from traditional construction and maintenance into green and sustainable jobs in deconstruction, recycling everything from mattresses to e-waste, and urban agriculture. Tech continues to be a challenging sector for social enterprise employees to get a foothold in, but we are starting to see some bright spots –in digital media and web design. Employees with lived experience are demonstrating valuable insight in home health worker and other related healthcare jobs which is a growth area for the economy that can also drive social enterprise revenue.
Speaking of revenue, there is a wide range of size and revenue in this sector – from hundreds of millions of dollars in annual revenue to several thousand, and 57% reported that the social enterprise is able to break even while many others reported that as a major challenge. These results speak to the capacity of social enterprise to scale and serve the millions who are unemployed but want to work.
With the Potential for Even Great Impact
And what about the people employed by social enterprise? The census respondents collectively reported employing around 20,000 people in 2017. Large social enterprises employ several thousand people per year, but the median is around 100 employees. Social enterprises are offering critical employee supports from uniforms and tools needed on the job to transportation assistance, financial education and mental health services to help employees navigate and successfully transition into competitive employment when they’re ready. Because not every social enterprise can provide a full range of supports, there is room for better linkages and partnerships to leverage service providers that are specialized in these areas.
We also learned that the leadership of social enterprises mirror that of the larger non-profit sector, slightly more female-led (53%), and very underrepresented by people of color (29% of social enterprise directors). We know that social enterprise leaders with lived experience will only strengthen the effectiveness of the employment experience, so REDF is making efforts to expand our own networks.
We Know You’re Out There
What we didn’t learn much of was where to find social enterprises that are not connected into REDF or other existing networks, or businesses employing people with significant employment barriers that don’t call themselves social enterprises.
In REDF’s travels around the country, we hear of these businesses everywhere but connections are very ad-hoc. We’d like to make it easy for practitioners, regardless of what they call themselves, to join our network and connect with REDF and other social enterprise leaders on our platform REDFWorkshop.org.
REDF will continue to use innovative channels to seek out and support more social enterprises that are committed to serving people with significant employment barriers. As our estimate of the current social enterprise capacity is refined, we will use this information to inform policymakers and funders about the value of this solution and why it needs to be scaled up to reach the millions of Americans who deserve a chance to work.
Thank you to all of those who took the time to be part of the census, and help strengthen the social enterprise movement. For those we missed, it’s not too late to join the movement. Visit REDFWorkshop.org to register!