January 28, 1999 | Read Time: 1 minute
The financier George Roberts had one requirement when he decided to step up his philanthropy in the late 1980s: “What I was looking for was something that wouldn’t be done if we didn’t do it,” he told Worth magazine (February).
Mr. Roberts, a founder of the leveraged-buyout firm Kohlberg Kravis Roberts, decided that he wanted to find ways to apply free-enterprise principles to combat homelessness and other social problems. His idea was to help non-profit groups start businesses that would employ low-skilled people, who would not only learn jobs skills but would earn enough money to move out of poverty. Through his foundation, he started the Roberts Enterprise Development Fund, which now supports eight non-profit organizations that operate 24 businesses. Mr. Roberts estimates that he puts about $3-million to $4-million a year into the projects.
Mr. Roberts says he is now undertaking a review of how well his approach has worked, but he told the magazine he believes one key to success has been the non-profit groups, which he says understand how to help people deal with personal and psychological problems better than business-run training programs.
While he tells the magazine that he finds similarities between his philanthropy and his venture-capital work, he says he also sees major differences, especially when it comes to measuring the financial return. Mr. Roberts and his top aide, Jed Emerson, emphasize what they call the social return on investment — “the extent to which a non-profit can turn invested human and economic capital into a true ongoing contribution to society,” says the article, which is available at http://www.worth.com/articles/Z9902J01.html.
