Evaluating Outcomes and Impacts of Social Enterprises Run by REDF's Portfolio Organizations

Prepared for

Social enterprises are mission-driven businesses that hire and assist people who are willing and able to work, but face great challenges in getting a job. These challenges can include youth and inexperience, homelessness, mental health disorders, or previous incarceration. Using a grant from the Social Innovation Fund (SIF), a program of the Corporation for National and Community Service, REDF helped expand and support social enterprises in California. In addition to employment opportunities, social enterprises provide on-the-job soft and hard skills development, counseling, and life-stability supports such as food, clothing, transportation, or housing assistance.

Mathematica's evaluation—the Mathematica Jobs Study or MJS—included five evaluations: (1) an implementation study, (2) an outcomes study, (3) a quasi-experimental impact study, (4) a monitoring study, and (5) a cost benefit analysis (CBA). The implementation study examined all organizations receiving REDF SIF funding, to document implementation of each of the social enterprises, assess the quality of implementation, and document how variation in implementation may be associated with program outcomes. The outcomes study tracked and analyzed outcomes about one year after being referred to social enterprise employment for the population of about 500 individuals newly employed in social enterprises between April 1, 2012 and March 30, 2013. The impact study examined about 275 social enterprise workers in one organization and 80 individuals that entered the labor pool for social enterprise employment but were not hired. The monitoring study conducted monthly tracking and reporting on employment in the social enterprises, which extends until June 2015. The CBA linked the cost of operating a social enterprise with the benefits from it as captured in the MJS.

Mathematica's evaluation found that social enterprises may help people find jobs, move toward economic self-sufficiency, and improve life stability. In the year after workers began their social enterprise jobs, employment increased from 18 to 51 percent; average monthly wage and salary income increased by 268 percent, while the total income from government benefits decreased from 71 to 24 percent; and the share of workers living in stable housing increased from 15 to 53 percent.

The study also found that social enterprises add value to society. For every dollar spent by the social enterprise, there was a $2.23 return on investment for society. This includes benefits for taxpayers from reductions in government transfer payments and increases in revenues for social enterprise businesses. Results from the Mathematica Jobs Study suggest that investing in the growth of social enterprises, as well as their additional support services for workers, can have a positive impact on people's lives, while lessening the burden on government resources.