About This Resource

This is a helpful resource for those seeking to better understand the terminology and concepts related to Employment Social Enterprises (ESEs) and the broader field of social entrepreneurship.

We use these terms throughout our content on REDFworkshop and want to make sure you are equipped and have a place to turn to if you have questions about any of the terminology that we use.

Business Planning & Growth Planning 

• Benchmarking – The process of measuring an ESE’s performance against competitors in the market. For example, in developing a pricing strategy, it is helpful to benchmark an ESE’s products/services and prices against those of local competitors.
• Breakeven point – An ESE’s breakeven point is the amount of sales (or quantity of units sold) such that total revenue is exactly equal to total expenses. At the breakeven point, profits equal zero.
  • Breakeven units = total fixed costs / (unit price – unit variable costs)
  • Breakeven sales = total fixed costs / (1 – [total variable costs / total sales])
• Bundling – A pricing tactic to provide greater value to the customer and encourage larger order sizes by bundling complementary products/services together, usually for a lower price than when sold individually (e.g., holiday gift boxes, cell phone plus data plan).
• Business line – A product/service or set of related products/services that serves a particular customer transaction or business need. Some ESEs have multiple business lines; for example, they may run a café as well as a catering business, or offer landscaping services in addition to janitorial services.
• Business model canvas – A one- to two-page framework that helps ESEs define and communicate a business idea by focusing on how different business functions will operate. A good starting point for ESEs looking to begin articulating a business plan.
• Business plan – A document that describes why an ESE exists (i.e., what problem is it solving, what is the market opportunity) and how it will capitalize on the opportunity (i.e., operational plan, key inter-dependencies, differentiation from competition). The document includes an ESE’s overarching objectives and a plan for how it will achieve those objectives. 
• Business-to-business model (B2B) – ESEs that sell products or services to other organizations (e.g., nonprofits, government entities, small businesses, large corporations) have a B2B model. For example, these ESEs might sell property management services or branded swag products to companies.
• Business-to-consumer model (B2C) – ESEs that sell products or services directly to individual consumers or indirectly with intermediaries have a B2C model. For example, these ESEs might sell specialty food products or personal training services to individuals who use these purchases for their own personal use.
• Competition – The most similar businesses currently operating in an ESE’s market.
• Cross-selling – A sales technique to encourage existing customers to purchase related or complementary products/services. 
• Customer acquisition cost (CAC) – How much an ESE needs to spend in sales and marketing to get a new customer. To calculate CAC, add up the ESE’s marketing and sales expenses and divide by the number of new customers acquired during a given period.
• Customer relationship management (CRM) software – A system for managing an ESE’s relationships and interactions – with customers (business/sales management CRM), participant workers (case management CRM), and donors (donor management CRM), for example. 
• Customer segments – The different groups of people or organizations that an ESE aims to reach and serve. Customer segments are often defined by shared demographic (e.g., age, gender, income level, industry, number of employees), geographic (location-based), psychographic (e.g., values, attitudes, interests) and behavioral (knowledge, use and purchase of product/service) characteristics. 
• Direct costs – Costs that are tied to the production of a specific product or service (e.g., direct labor, direct materials). These are typically variable costs.
• Discounting – A pricing tactic to drive sales and move inventory by reducing prices (e.g., for seasonal goods, clearance items, volume discounts, certain customer groups).
• Fixed costs – Expense types that do not vary depending on the amount of business transacted (i.e., number of units sold, or amount of service performed). These are expenses that an ESE will have to cover no matter what (e.g., rent, equipment, management overhead). 
• Growth planning – The process followed by ESEs to determine if and how to pursue a new growth opportunity such as starting a new business line, launching a new product, opening a new sales channel, or expanding geographically to a new location.
• Growth Capital – Enterprise-level funding or investment that builds the capacity for business expansion and strategic planning. Growth Capital provides social enterprises with the space for deep reflection before tackling the next step in their plan to scale.  
• Indirect costs – Overhead costs associated with running an ESE’s day-to-day operations that are not tied to the production of a specific product or services (e.g., rent, utilities).
• Key purchasing criteria – Attributes of a product or service that are most important to a customer when making a purchasing decision (e.g., price, quality, service, speed, scale, breadth of offerings).
• Lead conversion – The process of turning a sales lead (potential customer who may be interested in an ESE’s product/service) into a customer. The lead conversion rate measures an ESE’s effectiveness in converting leads into customers, calculated as the number of new customers during a given period divided by the total number of leads received during that time.
• Market opportunity – A real market with an unmet customer need that the current competition is not addressing.
• Market size – The total number of potential customers for an ESE’s product or service (and the total revenue that would be generated) over a certain period.
• Net profit margin – Net profit (or net income) as a percentage of revenue. Calculated by dividing net profit by revenue.
• Net promoter score (NPS) – A measure of customer satisfaction and loyalty based on a single question (“On a scale of 0 to 10, how likely is it that you would recommend our organization to a friend or colleague?”). One of the most common types of surveys used and particularly useful for understanding whether an ESE is in a position to retain existing customers.
• Pricing strategy – How an ESE determines the ideal price of a product or service, informed by a range of factors such as business costs, competition, and customer value.
  • Cost-plus pricing – Strategy for setting prices to achieve a pre-determined markup on costs.
  • Competition-based pricing – Strategy for setting prices based on competitor prices for similar products/services.
  • Value-based pricing – Strategy for setting prices based on the customer’s perceived value of the product or willingness-to-pay. 

• Pricing tactic – Targeted pricing moves to encourage customer buying behavior in specific situations.
• Product/service differentiation – Key aspects of an ESE’s product or service offering that sets it apart from the competition (e.g., price, quality, functionality, availability, design, team, social mission).
• Sales channels – The methods an ESE uses to sell products or services to customers (e.g., web site, physical store, sales reps, partnerships, request for proposal responses, referrals).
• Sales cycle length – The amount of time it takes on average to close a customer from start to finish.
• Scaling: The process of expanding the reach and impact of an ESE, often through opening new locations, increasing production, or serving more individuals.
• Selling process –The series of steps taken to sell a product or service to a customer. A strong sales process is repeatable and scalable, leverages standardized tools and templates, outlines clear roles and responsibilities for sales team members, and is data driven.
• Social costs are any cost incurred by a social enterprise above and beyond ordinary business costs in order to fulfill its mission. In social enterprises with an employment mission, these costs are often related to providing the extra training, supervision, and support that enable individuals with barriers to employment to become successful employees. 
• Social Procurement: The practice of governments and organizations intentionally purchasing goods and services from ESEs to support their social missions.
• Strategic plan – Document used to communicate an organization’s overall intended direction and goals over a specific time period (e.g., over a 5-year timeframe).
• Sustainability: The ability of an ESE to maintain its operations and social impact over the long term.
• Unit economics – How much profit an ESE generates for every unit of product or service sold.
• Unmet customer need – A problem that a customer faces that is unworkable, unavoidable, urgent, and/or underserved.
• Upselling – A sales technique to encourage customers to purchase upgrades, add-ons, or higher-end versions of a product/service.
• Value proposition – A clear statement that conveys how the product/service an ESE sells will meet an important and unmet customer need, and why these customers should buy from the ESE vs. a competitor. 
• Variable costs – Expense types that vary with the amount of business transacted (i.e., number of units sold, or amount of service performed). These costs increase as sales volume increases. For example, the materials needed in the direct production of a good or service are variable costs (for an ESE that makes candles, the material costs for wax, wicks, and containers are variable costs).
• Variable pricing – A pricing tactic that adjusts prices based on known changes in demand for products or services (e.g., hotels charging more on weekends, higher rideshare costs during peak hours).
• Venture criteria – The goals for a new ESE or growth opportunity (e.g., new business line, product/service, sales channel, location) that should ideally be met for it to be “successful”. Venture criteria typically include social / programmatic, operational, and financial conditions that provide leaders with a roadmap to evaluate opportunities in a holistic and evidence-driven way.  

Employment

• Employment social enterprise (ESE) – Mission-driven, revenue-generating businesses that employ, empower, and invest in the potential of people. These are businesses that provide paying jobs and wraparound services that help employees stabilize their lives and break through barriers to work.
• FTE – Full-time equivalent; a unit of measurement to determine the number of full-time employees an ESE has.
• Long-term employment (LTE) – An employment model where there is no defined employment end date for employees. Success is typically defined by the employee staying and/or being promoted at the ESE.
• People employed – The number of individuals facing barriers who are transitionally or permanently employed by the ESE for a given span of time.
• Permanent employment – An employment model where there is no defined employment end date for employees. Success is typically defined by the employee staying and/or being promoted at the ESE.
• Transitional employment – A program or service that temporarily hires employees into positions with duties to help them train for and adjust to longer-term mainstream work opportunities. It often includes a maximum amount of time that the employee can stay in the transitional job. Success is typically defined by the employee transitioning to another employer, transitioning into a permanent role at the ESE, or an educational opportunity.

Employee Success Program 

• 1:1 participant worker engagement – Also called case management or coaching, this is a collaborative process to guide and serve participant workers on their employment journeys. This involves assessing a participant worker’s needs, strengths, and interests; co-developing an individualized plan with personal and professional goals; coordinating employee success wraparound services and training; providing coaching and assistance with job search, matching, placement, and retention; and continuously monitoring, evaluating, and documenting services, participant worker progress and outcomes.
• Barrier / needs assessment – The process of getting to know new participant workers and understanding their goals, histories, barriers and needs upon entering an ESE’s employee success program. This process typically happens during intake and aids employee success program staff in tracking participant workers’ progress over time.
• BIPOC – Acronym that stands for Black, Indigenous, and people of color.
• BIPOC-led ESE – ESE with a CEO or Executive Director who self-identifies as a person of color, or whose leadership team (including CEO or Executive Director) is 50% or more POC.
• Case conferences – Meetings in which multiple ESE professional staff regularly connect to jointly discuss the challenges participant workers are facing and problem solve together. In some cases, the participant worker is also part of these conversations.
• Cohort model – Some ESEs operate with a cohort model, which organizes new participant workers into groups (or cohorts) who start at the same time and progress through the ESEexperience together. These ESEs have scheduled start dates for each cohort throughout the year.
• Cognitive behavioral therapy (CBT) – Approach that supports behavior change by focusing on how thoughts and feelings influence behavior.
• Culture of transition – Refers to the ethos of an ESE that encourages and supports the transitional nature of participant workers’ job experience.
• Dialectical behavior therapy (DBT) – A modified type of cognitive behavioral therapy (CBT) that can help people who have difficulty with emotional regulation or are exhibiting self-destructive behaviors. Strategies include mindfulness, distress tolerance, emotion regulation, and interpersonal effectiveness. (Source: Verywell Mind)
• Employee outcomes – The results of an ESE’s programming; resources and activities are structured to drive toward outcomes. Outcomes are described as changes in relationships, knowledge, awareness, capabilities, attitudes, and/or behaviors and can be short- and long-term. For example, a short-term outcome is the percentage of ESE employees who successfully graduate from the ESE. A long-term outcome could be the percentage of ESE graduates who maintain gainful employment 3 years post-graduation. Some common program outcomes that ESEs track include:
  • Placement rate – The percentage of participant workers receiving wraparound services who graduate and are successfully placed into permanent employment positions (as defined by the program’s mission).
  • Retention rate – Retention refers to how long participant workers stay employed, both within the ESE, as well as in their new jobs after they have graduated from the social enterprise or have been promoted to permanent employment internally. Retention rates are calculated as the percentage of ESE graduates who are still employed after a defined amount of time (e.g., 30 days, 90 days, 180 days, 1 year, 3 years post-graduation).
• Employee success program – An ESE service to support an ESE participant worker’s success while working at an ESE and if or when they move on to the next job. An employee success program is a structured set of activities and services through which employment social enterprises (ESEs) address the barriers to employment faced by their participant workers supporting participant workers reach their goals.
• Employee success wraparound services – Resources that help participant workers secure, succeed and advance in employment (e.g., transportation assistance, earnings supplements, record expungement, retention incentives). Some ESEs call these services “barrier / obstacle removal” since providing participant workers with these resources can help them overcome employment barriers.
• Employment barriers – Life experiences known to increase chances of disconnection from employment, such as homelessness, justice system involvement, substance use, physical and mental health conditions, limited access to transportation, food or childcare, and disconnection from the community.
• ESE participant workers – Individuals breaking through barriers to workplace success with one or more lived experiences. For information on how REDF defines lived experiences, please click here.        
• Focus population – The people an ESE actively recruits and is focused on providing work experience and employee success wraparound services. The ESEs REDF partners with provide jobs and broader preparation for working life to:
  • People with justice system involvement – An individual who has been arrested, charged with a crime, and/or spent time incarcerated (jail or prison). 
  • People with a mental health challenge – An individual who has a mental health condition that affects how they think, behave, and interact with others which impacts their ability to function in daily life, including in the workplace. 
  • People with a substance use issue – An individual whose substance use impacts / impacted their daily functioning, including ability to work, as well as those who have sought treatment to reduce their use or abstain from use. 
  • People with experiences of homelessness/housing instability – An individual who has experienced / is experiencing homelessness or unstable housing. This is viewed on a continuum from lacking a safe and stable place to stay on a consistent basis to being without a fixed residence/address. 
  • Opportunity youth / emerging adult – An individual between the ages of 16 and 24 with life experiences that present barriers to employment. These are experiences that are known to increase chances of disconnection from education and employment including history with foster care, juvenile justice, family violence, familial substance use, homelessness, interrupted schooling, and parental incarceration. 
  • Refugee / asylee – An individual who experienced serious threats to their wellbeing (persecution and/or human rights violations) in their home country and left to seek safety and a better way of life, including asylum seekers. These threats include religious persecution, unlawful detention, and gender-based violence. 
  • People who have experienced domestic violence – An individual who has been in a relationship that included a pattern of behaviors meant to maintain power and control over them by the other person. These behaviors include physical violence, sexual abuse, threats, intimidation, emotional abuse, and financial control. 
  • People who have experienced trafficking – An individual who has been forced, coerced, or deceived into working or providing a service by another individual, this includes commercial sex work (e.g., pornography, illicit massage, and outdoor solicitation) as well as other types of work (including agriculture, domestic work, and cleaning services). 
• Job readiness assessment (JRA) – A tool that assesses how well participant workers are performing on the job and whether they are professionally and personally ready to transition out of the ESE to another employer or into a permanent role at the ESE. The assessment tracks progress in essential soft skills (e.g., attendance, productivity, teamwork), hard skills (enterprise- and industry-specific), and personal readiness areas (e.g., stable housing, childcare, transportation) commonly required for a worker to be considered “job ready”.
• Job search and placement services – Services offered to participant workers to help them find permanent jobs. This also includes the work done to source and develop relationships with employers who will hire ESE participant workers into permanent positions. These two sides meet when participant workers are prepared for and matched with permanent employment opportunities. These activities are most relevant for ESEs that offer transitional employment.
• Job training – Training that supplements work experience to equip participant workers with the skills needed for long-term success in mainstream employment and life (e.g., GED/HSE preparation, financial literacy and empowerment, forklift certification). Includes on-the-job training (firsthand experience and learning from doing a job with real-time guidance from a coworker or supervisor) and instructor or group-led training (classroom or skills training provided before or during ESE employment to upskill workers).
• Logic model – A visual representation that outlines the organization’s impact, activities, and anticipated outcomes. It provides a clear roadmap for achieving social impact by defining the logical connections between inputs, activities, outputs, and outcomes. Logic models also assign metrics to the components to track progress along this continuum. For ESEs, a logic model explains in detail how the ESE job and wraparound services contribute to the short- and long-term outcomes of participant workers.

• Lived experience (LE) – Refers to a member of an ESE’s leadership or staff who have one or more of the following lived experiences: justice system involvement, experienced homelessness or housing instability, a mental health challenge, a substance use issue, opportunity youth/emerging adult, refugee/asylee, experienced domestic violence or experienced trafficking. 
• Memorandum of understanding (MOU) – A formal document that lays out the roles and responsibilities of partners to establish an intentional plan for how activities, data, costs, or other resources will be assigned or shared.
• Motivational interviewing – An international evidence-based practice focused on effective and efficient communication skills that promote sustainable behavior change. This practice uses supportive conversations to help individuals identify and leverage their motivations to change.
• Onboarding – A series of events (including orientation) that helps new participant workers understand how to be successful in the ESE and employee success program.
• Orientation – A one-time event welcoming, introducing, and providing initial training to new participant workers joining an ESE.  
• Participant worker data – Information that is input and tracked as part of the 1:1 participant worker engagement process. This data is critical to understanding a participant worker’s progress against goals, the impacts that specific services have, and participant worker outcomes and measures of success.
• Participant worker feedback – Refers to the formal process of gathering and responding to feedback from ESE participant workers, with an emphasis on equity, ease of use for decision-making, review by leadership, and continuous improvement.
• Partners – External organizations that have a formal relationship with an ESE because their work complements and supports that of the enterprise. For example, partners might provide case management services, mental health support, or permanent job opportunities to the individuals an ESE serves.
• Performance management – An ongoing process that helps build and maintain effective participant worker-supervisor relationships. Supervisors evaluate participant workers and provide feedback on areas of strength, opportunities for development, and growth potential. Through performance coaching, participant workers and supervisors work together to set goals and develop a plan for gaining necessary skills through diverse experiences, such as training, new assignments, job enrichment, or self-study.

• Program fidelity – How closely an ESE executes its employee success program relative to planned activities, as well as the consistency in which it delivers program services across all locations and aspects of the ESE.
• Re-entry and re-development processes – Processes that specify how participant workers who exit an ESE program early can re-enter the program later.
• Recruitment channel – Source of participant workers for an ESE (e.g., community-based organizations, re-entry agencies, schools, local health system, current or recently graduated participant workers).
• Recruitment and intake – How an ESE markets its work, attracts new participant workers, gathers information from interested candidates, evaluates candidates for program enrollment and/or referral to partner organizations, and documents the process.
• Restorative justice (RJ) – An approach to addressing conflict and harm by bringing together people who have caused harm and those they have harmed to talk about what happened and collaborate on an appropriate solution and, if possible, repair involved. The process focuses on healing and accountability. (Source: Annie E. Casey Foundation) 
• Retention services – Services provided to participant workers who have graduated from an ESE (“alumni”) and transitioned to another employer or into a permanent role at the ESE. Retention services include a range of intentional supports to help these individuals retain either a specific job or employment generally – by preventing backtracking, incentivizing success, facilitating re-employment, and/or building toward a better future. Services are typically offered for six months to two years after exiting the ESE.
• Retention tracking– seeks to measure whether a former social enterprise employee is employed or not once they exit the enterprise.
• Rolling admissions model – Some ESEs have a rolling admissions model, allowing new participants to start with an ESE as soon as they are ready.

• “Screen in” recruitment approach – Identifying the set of employment barriers that an ESE is well-positioned to address and only selecting individuals who face those barriers (narrow recruitment funnel).
• “Screen out” recruitment approach – Hiring anyone within an ESE’s focus population who is at a specific level of readiness (wide recruitment funnel).

• Theory of change (TOC) – A framework that explains an expected outcome of an assumed activity or set of activities that will impact the change your organization is hoping to achieve with your participant workers and/or in your community. This helps an ESE communicate its long-term vision for participant workers and what it believes it can do to impact this change.
• Trauma-informed care (TIC) – The practice of understanding participant workers’ life experiences and trauma to deliver effective services in a supportive work environment.

Financial Management

• Accounts receivable (AR) – Money owed to an ESE for products or services purchased by customers but not yet paid for.
• Accounts payable (AP) – Bills that an ESE needs to pay for goods or services purchased from suppliers.
• Balance sheet – Also known as a statement of financial position. Shows an ESE’s net worth at a specific point in time, listing its total assets (what it owns – such as cash, inventory, equipment), total liabilities (what it owes – such as accounts payable, line of credit balance) and resulting net assets (difference between total assets and total liabilities). Common balance sheet terms and financial indicators to monitor include:
• Contributed revenue – Philanthropic income that comes through an ESE’s selected fundraising strategies (e.g., donated by individuals, granted by corporations or foundations).
• Double bottom line (DBL) analysis – An analysis that helps an ESE understand how financially self-sustaining each part of the ESE is (i.e., the business part that sells products / services and the social mission-driven part that provides employee success wraparound services, for example). The analysis involves identifying an ESE’s major costs; determining whether each cost is driven by business activities, social mission-driven activities, or both; estimating the portion of each cost that is business- vs. social mission-driven; and separating out business revenue (earned revenue) and costs from social revenue (contributed revenue) and costs on the income statement to show two bottom lines (business and social).
  • Business cost – Any ordinary business expense that would occur regardless of an ESE’s social mission (e.g., raw materials, rent). 
  • Social cost – An expense that occurs because of an ESE’s social mission (e.g., employee success wraparound services).
• Earned revenue (sales revenue) – Funds generated by an ESE through the sale of goods and services (e.g., revenue from selling coffee or cleaning buildings). This is distinct from other sources of revenue an organization may have, such as donations or grants. Earned revenue is calculated by multiplying the total number of units sold by the unit price.
• Financial reporting – The practice of summarizing the financial performance of an ESE in standardized documents that include information on revenues / expenses (income statement), cash flows (statement of cash flows), and assets / liabilities (balance sheet). In addition, ESEs can report on metrics that are specific to their industry or business operations. 
• Financial planning – The process by which an ESE develops its budget, forecasting anticipated revenues and expenses using historical data and assumptions for future growth. 
• Financial tracking – The process of monitoring an ESE’s income and spending over time, revisiting assumptions, and making adjustments as needed.
• Fiscal year vs. calendar year – A fiscal year is a twelve-month period that an ESE uses for financial reporting and budgeting that can start on any day and ends one year later. For example, many nonprofits use a fiscal year of July 1 through June 30. A calendar year starts on January 1 and ends December 31.
• Gross profit – The amount of revenue an ESE retains after subtracting the cost of goods sold (COGS). For example, if an ESE earns $20,000 from landscaping services (revenue) and it costs $10,000 in labor and materials to provide the landscaping services (COGS), then the ESE’s gross profit is $10,000.
• Income statement – Also known as a profit and loss (P&L) statement or a statement of financial activities. Shows an ESE’s revenue and expenses over a specific period (e.g., monthly, quarterly, annually) and the resulting profit (revenues exceed costs) or loss (costs exceed revenues). Common income statement terms and financial indicators to monitor include:
  • Net profit – Also called the bottom line. The amount of revenue an ESE retains after subtracting all expenses. For example, if an ESE earns $20,000 from landscaping services (revenue), spends $10,000 in labor and materials (cost of goods sold), and spends $5,000 in operating expenses (like rent, marketing, utilities) and taxes, then the ESE’s net profit is $5,000.
  • Year-over-year (YoY) growth – Analyzes whether an ESE’s financial performance (e.g., revenue, expenses, profit) is growing, shrinking, or staying the same compared to the prior year. For example, year-over-year revenue growth is calculated by taking the current year’s total revenue, subtracting the previous year’s total revenue, and then dividing by the previous year’s total revenue.
• Internal financial controls – The accounting systems and processes that enable the management and security of an ESE’s cash, inventory, payments, invoicing, and other money-related business processes.
• Liquidity (months of cash on hand) – Measures how much cash an ESE has on hand to pay bills. To calculate this, first determine how much the ESE typically spends per month (total expenses over the past year divided by twelve months). Then take the cash total from the balance sheet and divide it by the average monthly spend; this is how many months of cash the ESE has on hand.
• Net working capital – Another measure of an ESE’s liquidity, defined as an ESE’s current assets minus current liabilities.
• Return on investment (ROI) – Measures the amount of return on a particular investment relative to the investment’s cost. To calculate ROI, start with the current value of an investment, subtract the cost of the investment, and then divide by the cost of the investment (Source: Investopedia).
• Statement of cash flows – Shows the movement of cash in and out of an ESE over a specific period, giving insight into how much cash the ESE has available to pay expenses.
  • Cash flows from financing activities – Payments (outflow) and/or receipts (inflow) from lines of credit, notes payable, term loans. The amount of cash generated (or used) by an ESE’s financing activities. (Source: Nonprofit Finance Fund)
  • Cash flows from investing activities – Payments for acquisitions (outflow) of real property or investments, or receipts from sales (inflow) of marketable securities or from sales of fixed assets such as property or equipment. The amount of cash generated (or used) by an ESE’s investing activities. (Source: Nonprofit Finance Fund)
  • Cash flows from operating activities – The sum of an ESE’s overall profit or loss plus depreciation and cash changes in working capital items, such as accounts and grants receivable, inventory, accounts payable, accrued liabilities, and deferred revenue. The amount of cash generated (or used) by an ESE’s operations. (Source: Nonprofit Finance Fund)
  • Cash management – The process of collecting, handling, and using cash. Additionally, it involves assessing liquidity, cash flow and investments.
  • Operating reserve – Unrestricted funds that an ESE sets aside and designates as a safety net against any unforeseen fluctuations in revenue or expenses.  
• Total revenue – The sum of an ESE’s earned revenue and contributed revenue.

Fundraising

• Annual giving – Activating contributed revenue from base-level donors through compelling content. The goal is to acquire and retain a broad, large donor base at smaller gift amounts (any amount below the ESE’s major gift threshold). The most common strategy in fundraising.
• Annual giving calendar – Twelve-month calendar to coordinate channels, segmentation, and messaging at all stages of the cycle so that an ESE is constantly activating and stewarding donors toward greater and greater generosity.
• Acquisition – Communication efforts designed to acquire a first-time donor.
• Capacity – An individual’s ability to make a major gift.
• Channels – The medium through which a message is delivered to a particular audience.
• Collateral – Material to share with donors that activates their giving.
• Corporate sponsorships – Activating corporate responsibility through meaningful value propositions. The goal is to obtain a philanthropic gift from a corporate or business partner in addition to other ways an ESE may already be partnering (e.g., ESE customer, supply chain partner).
• Cultivation – Communication efforts designed to engage existing donors to deepen their commitment to the ESE (e.g., give additional gifts or convert from one-time givers to monthly givers).
• Development operations (or development infrastructure) – The systems and processes that function behind the scenes to create a well-oiled machine for fundraising (e.g., clarifying a team’s division of labor, prospect research, gift processing, gift acknowledgment, data administration). Fundraising infrastructure exists for the sake of front-line efficiency and performance visibility.
• Donor segmentation – Organizing lists of donors into categories for the purpose of customizing communication. Common segments are related to recency of giving, frequency of giving, and giving level.
• Events – Activating contributed revenue through curated experiences. Events are opportunities for connecting people’s stories to impact beyond themselves.
• Foundations – Organizations that offer grants through a competitive application process. Foundations are divided into several categories:
  • Private foundations are operated by a nonprofit and offer funds derived from a single source (an individual, family, or corporation). 
  • Family foundations are specifically tied to the philanthropy of a single family. 
  • Corporate foundations offer philanthropy offered from the profits of a business. 
  • Community foundations serve the philanthropic goals of donors within a given geographic area, for the benefit of that area. 
• Fundraising messaging – Creating messages that communicate the transformational work occurring within an ESE’s workforce programming (distilling the core impact of its programs) to convert audiences and customers into lifelong donors.
  • Problem – The challenge that an ESE was built to address.
  • Solution – The ESE’s intervention, its disruption of status quo.
  • Missional goal – The bite sized pieces an ESE is taking out of the impact statement within a short-term period (3-5 years). This describes the quality of the impact the ESE is planning to achieve within its programs at large.
  • Impact statement – A summary of what it looks like if an ESE knocks it out of the park on its mission within its lifetime.
  • Output – Outputs measure the churn of an ESE’s activities, the quantity of its work. 
  • Outcome – Outcomes measure the quality of those activities. The way people’s lives were changed.
• Fundraising return on investment (ROI) – How well a fundraising strategy pays in relationship to time and money spent.
• Grants – Activating institutional generosity through structured processes and technical writing.
• Government funders – Public institutions that offer grants through a competitive application process. Government grants are offered at the federal, state, and municipal level.
• Impact reporting – Reports generated for donors that demonstrate progress on program goals.
• Individual giving strategies – Fundraising from individual donors. Includes major gifts, annual giving, and events.
• Institutional giving strategies – Fundraising from institutions, such as foundations or corporations. Includes grants and corporate sponsorships.
• Lapsed – Communication efforts designed to reactivate donors who used to give, but no longer give.
• Letter of Intent (LOI) – A letter or short grant application that is sent prior to a formal grant application. It indicates to the grantmaker that an ESE is interested in applying for the opportunity. It can also be used to introduce the ESE to a grantmaker who has an invitation-only grantmaking process.
• Major gifts – Activating generosity through personal, high-touch donor relationships. Generally classified as gifts of $10,000 and above (though the definition of a major gift varies based on the organization) and capable of moving forward projects, initiatives, and campaigns in transformational ways.
• Major gift threshold – The minimum gift amount an ESE assigns to its “major gift” category. This threshold should be set considering how many donors the ESE has at different gift amount levels and whether it allows the ESE to have personal relationships and execute moves management with each person giving at that level. 
• Major Gift Officer – Donor-facing fundraiser focused on the work of a major gift portfolio.
• Major gift prospect – An individual with the wealth capacity and the demonstrated propensity to make a gift of $10,000+, or whatever amount is uniquely determined by the ESE.
• Messages – The plan for the targeted communication for each segment.

• Moves management – The activity related to moving donors forward through the stages of the giving cycle.
• Needed infrastructure – How complex the operation of a fundraising strategy is.
• Operating support – Unrestricted funding that invests in a grantee’s mission rather than a specific project or program. Grantees can use operating support funds as they see fit to achieve their goals.
• Portfolio management – The process through which a fundraiser moves an individual from prospect to donor. The process includes four primary stages of progression: qualification, cultivation, invitation, and stewardship. Each stage represents a series of actions with a specific and unique purpose. 
• Propensity – An individual’s previously demonstrated giving. Look for evidence that this individual has given a major gift in the past to some other organization if not to the ESE itself.
• Prospect research – The work of identifying new donors.
• Return horizon – How quickly fundraised money comes in.
• Request for Proposals (RFP) – A grantmaker’s outline of the grant opportunity. The RFP is created by the grantmaker and outlines the purpose of the funding opportunity and the requirements for the application.
• Scalability – How easy it is to build exponential revenue growth over time.
• Segments – The portions of an ESE’s audience to which it communicates separately.
• Social Return on Investment (SROI) – Measures ESEs’ social benefits to society through outcomes.
• Sponsorable asset – The item or program that is assigned to a corporate sponsor’s brand (e.g., tables at a gala, computer labs, workforce development instructors, cohorts of employees, machines).  
• Stewardship – Communication efforts designed to demonstrate impact to donors.
• Sustainability – How well a fundraising strategy can withstand volatility.
• Transformational experience – Any experience designed to change the way we think and act over the course of our lives. 
• Upstream metrics – The goals an ESE sets related to daily activities that are designed to result in revenue growth (e.g., number of prospects managed, number of donor touchpoints, number of proposals submitted).
• Value-add content – Content (video, copywriting, social media posts) that uses the ESE’s expertise to elevate, liberate, or inspire the audience. 

Leadership & Talent Development

• Allyship: Proactively supporting and advocating for individuals from marginalized or underrepresented groups, using one’s privilege to amplify their voices and advance their rights and opportunities.  
• Benefits: Benefits are non-wage compensation such as healthcare, retirement benefits, paid time off, and other benefits that support employee well-being. 
• Candidate Sourcing: The process of identifying and attracting potential candidates for a given position through various methods such as job boards, social media, and employee referrals.
• Career Advancement: Career advancement refers to opportunities and pathways provided to support employee growth and development.
• Compensation philosophy: A compensation philosophy is a set of principles that guide an organization’s approach to compensation. It should be aligned with the organization’s mission and values.
• Culture: The shared values, beliefs, behavior, and attitude that characterize an organization, which influence its employees’ behavior and decision-making.
• Diversity: The range of differences among people, including but not limited to race, ethnicity, gender, sexual orientation, age, and ability.
• Employer Branding: The process of developing and promoting an organization’s reputation and image as an employer to attract desired talent. 
• Equity: The practice and outcome of considering the unique needs and barriers of employees to support access to the resources and opportunities they need to succeed, regardless of their identity or lived experience.
  •  In the context of performance management, equity means evaluating and addressing any indications of bias or lack of inclusion in the performance management process. For example, this could involve ensuring that performance expectations are clear and consistently applied across all employees, regardless of position, identity, and tenure.
• Feedback: Feedback is the process of providing specific, objective, and supportive observations to employees on their strengths and areas for growth. 
• Hiring Process Equity: Ensuring that the hiring process is fair and impartial for all candidates.
• Inclusion: The practice of proactively creating conditions to support a work environment where all employees feel welcome, valued, and supported.
• Intersectionality: Recognizing that individuals have multiple aspects of their identity, such as gender, race, sexuality, disability, and socioeconomic status, which can intersect to create unique experiences and challenges.
• Job Analysis: The process of identifying the key responsibilities, tasks, and skills required for a given position.
• Job Description: A written document that outlines the key responsibilities, qualifications, and skills required for a specific role.
• Job Posting: A public announcement of an open position within the organization that includes all relevant details about the role.
• Onboarding: The process of introducing new employees to the organization and providing them with the necessary resources and support to succeed in their new role, including orientation sessions, training programs, and ongoing support and feedback.
• Pay ranges: Pay ranges are the minimum and maximum amount of pay that an organization provides for a given position. They are typically based on market data and internal equity considerations.
• Psychological Safety: The practice of creating a work environment in which all employees feel comfortable sharing their ideas, concerns, and feedback without fear of negative consequences.
• Screening and Selection: The process of evaluating candidates and selecting the best fit for the position through reviewing resumes, conducting interviews, and evaluating candidates based on skills, experience, and fit.
• Total rewards: Total rewards refer to the comprehensive set of benefits and incentives offered by an organization to attract, retain, and motivate employees. This includes not just salary and traditional benefits, but also non-monetary rewards such as recognition programs, work-life balance initiatives, and opportunities for career advancement. 
• Unconscious bias: Implicit biases that affect our perceptions, decisions, and behaviors, often without our awareness. It’s crucial to address and mitigate unconscious bias to foster inclusivity.
• Values: The shared beliefs and principles that guide an organization’s decisions and actions.

Marketing

• Asset framing – An approach that defines people by their aspirations and assets before mentioning their challenges (e.g., “We help young people overcome systemic barriers to employment and achieve their dreams” instead of “Our organization employs at-risk youth living in high-crime neighborhoods.”) 
• Brand – How an ESE shows up in the world and is perceived by those who interact with it (e.g., from how product packaging and uniforms look, to the voice and tone of communications). A strong brand creates credibility, distinguishes an ESE from competitors, builds trust, and helps customers remember it.
• Earned media – Free publicity from content shared about an ESE by a third party (e.g., print, digital, radio, and TV coverage).
• Ethical storytelling – Sharing the stories of an ESE’s participant workers, employees, and leadership in a way that involves them and their wishes, centers their perspectives, and treats them as the hero of their own story.
• External communications refers to any time that you are speaking to your target audiences about your work—encompassing everything from public relations and event appearances to social media and email marketing.
• Marketing assets – The print and digital pieces that an ESE shares with target audiences to educate them about its products and services, organization, and mission (e.g., brochure, business cards, deck/presentation, annual report, short video)
• Mission statement – One sentence that establishes what you do and why you exist.
• Owned media – Content channels that an ESE has full control over and can post on for free (e.g., ESE’s website, email newsletter, social media posts).
• Paid media – Content promoted through channels that an ESE pays to access (e.g., sponsored social media posts, Google ads, newspaper/radio/TV advertising).
• Search engine optimization (SEO) – The process of improving an ESE website’s visibility in search results (on sites like Google) without paying for ad placements.
• Social media refers to a variety of technologies that facilitate the sharing of ideas and information among their users (Investopedia).
• Values – A list of words that capture how you conduct yourself as an ESE and the type of environment you seek to create within your organization and/or physical space.
• Vision statement – One sentence that describes your long-term goals – what you hope to see in the world.

Operations

• Asset audit – The process of verifying the existence, location, value, and state of an ESE’s most critical and/or highest value pieces of equipment. 
• Capacity building – Capacity is the maximum output of an ESE given available resources, where ‘output’ is essentially the social and business impact of the ESE. Capacity building is the process of developing and strengthening an ESE’s knowledge, skills, processes, and other resources to scale its impact.
• Continuous improvement – A part of organizational culture that is achieved by recognizing that there is always an opportunity to incrementally improve how an ESE operates.
• Cost-benefit analysis – The process of estimating all costs and benefits of a project or decision (e.g., whether to purchase new equipment) to see whether the benefits outweigh the costs before moving forward.
• Data access, usability, and behavior refers to how different types of data (e.g., financial and program data) is collected and stored in technology or paper-based systems across an ESE and the process of cleaning, transforming, and modeling data to discover useful information for decision-making.
• Equipment acquisition and management – The approaches to renting, purchasing, and maintaining the tools and machinery that are used to develop a product or deliver a service. “Equipment” can also be extended to include technology equipment for program and business operations (e.g., laptops, smartphones, etc.).
• Facilities – The physical spaces where an ESE operates its business and program. The facility could be customer facing (like a retail store) or meant only for participant workers (for job coaching and placement services, for example). In all cases, an ESE’s facilities should be selected, designed, maintained, and renovated with intention and purpose.
• Health and safety policies – A documented set of rules and procedures intended to protect employees from illness or injury caused by their work. These policies also help to protect the ESE from liability and serve to support business continuity. 
• Impact Measurement: The process of assessing and quantifying the social benefits created by an ESE, often using key metrics and key performance indicators.
• Key metrics – Quantitative or qualitative measures commonly used for assessing, comparing, and tracking performance or production in an ESE. Also referred to as Key Performance Indicators (KPIs).
• Operations improvement – Improving the administration of business practices within an ESE to get more done and make more impact with available resources.
• Performance dashboard – A visual display of an ESE’s most important metrics that offers a real-time snapshot of performance, typically fitting on one page. For example, a business dashboard might include graphs or charts of year-to-date revenues, costs and net income against budget, revenue and costs by product line, and sales by region.
• Process – A series of steps and decisions taken to complete work in an ESE. A process defines how several procedures fit together to take an input (what is needed to start the process) and produce an output (what the process is expected to deliver when it is complete). For example, an invoicing process involves a number of steps, starting with a customer’s service request and resulting in an invoice to the customer.
• Procedure – A set of instructions for completing a task (e.g., how to schedule a service for a customer so that it can be invoiced correctly).
• Root cause analysis – An approach for discovering the root cause(s) of a problem to determine an effective solution that will address underlying issues (vs. put out fires). It can be helpful to use the “5 why’s” method of asking “why” five times to discover the root cause of a problem.
• SMART framework for metrics – Metrics and KPIs should be SMART (specific, measurable, attainable, relevant, time-bound) to be useful for an ESE’s performance and growth.
• Software – A set of instructions, data or programs used to operate computers and execute specific tasks. Microsoft Excel, QuickBooks, Shopify, Slack, ADP, and Salesforce CRM (Customer Relationship Management) are examples of different types of software that some ESEs use. (Source: TechTarget)
• Staffing management – The practice of aligning participant workers with work shifts and service contracts to ensure that the ESE can reliably deliver work it has committed to.

Terms Related to REDF’s Model

• Baseline assessment – An analysis conducted by REDF (with data supplied by the ESE) that helps generate an initial understanding of the ESE and how it scores across factors REDF believes are critical for long-term success. This assessment is used to determine what support can be provided by REDF to reach an ESE’s goals. 
• Capacity building support – REDF’s advisory services that support an ESE’s mission and growth. This includes customized technical assistance projects, leadership support, and access to REDF workshops and other resources to help an ESE scale its impact.
• Farber Fellow – Graduate students with business and management experience who spend the summer with REDF learning about the employment social enterprise field. The focus of their summer is 10 weeks of full-time work with a REDF ESE working on critical strategic projects.
• Public / private partnership – A collaboration between government and the private sector. REDF’s LA:RISE initiative is an example public / private partnership that connects the City and County of Los Angeles workforce agencies with ESEs and employers.
• Relationship manager – A member of REDF staff who serves as the key point of contact for an organization within REDF’s network.
• Technical assistance (TA) – REDF’s specialized business and capacity-building advisory services to ESEs that help amplify impact. TA projects can span across functions, including: growth strategy, market analysis, employee support strategy, program design, recruitment and placement strategy, data capture and analysis, talent management, and systems implementation support.
• Venture philanthropy – An approach that applies principles of venture capital funding (high-engagement partnership, tailored capital and capacity building, focus on impact measurement) to investing in social enterprises.