Lawmakers weigh $17 million proposal to continue CA RISE support for employment social enterprises

The Office of the Small Business Advocate (CalOSBA), housed within GO-Biz, asked the Assembly Budget Subcommittee No. 5 for $17 million in additional funding to continue CA RISE, a statewide program that provides capital and technical assistance to employment social enterprises (ESEs) that hire people facing employment barriers.

"CA RISE is the nation's first statewide capital and capacity building investment of this kind," Terrilyn Gray, director of CalOSBA, told the committee. Gray said the first iteration of CA RISE supports 61 ESE grantees with a reported headcount of more than 13,000 employees across participating organizations.

The LAO urged caution, saying evidence from LA RISE, a Los Angeles County program, did not show long-term employment gains for participants after subsidy periods ended. "LA RISE... did not lead to long-term higher employment among participants," Alexander Bentz of the LAO said, and recommended the Legislature consider rejecting the proposal or requiring a rigorous third-party evaluation if funding proceeds.

CalOSBA and program supporters said CA RISE differs from LA RISE because CA RISE emphasizes capacity building for organizations rather than short-term subsidized employment. CalOSBA described a midterm evaluation in progress (midterm survey analysis expected by mid-April) and a final program evaluation due in September 2025.

Speakers from REDF and multiple ESEs testified in support of continued funding. Darby Kernan of REDF said outside evaluations show positive results for ESE models and cited findings reported from Mathematica and other evaluations, including sustained income gains and housing stability for participants. Downtown Streets Team and multiple Goodwill organizations provided local placement and payroll figures to support continued investment.

Why it matters: CA RISE targets populations with high barriers to employment (including individuals experiencing homelessness, returning from incarceration and those with behavioral health needs). Supporters argued the program builds organizational capacity that leads to sustainable employment and reduced reliance on public benefits; the LAO said the evidence base is mixed and emphasized rigorous program evaluation.

What's next: Committee members expressed concern about voting before the final evaluation is complete; CalOSBA said a midterm report would be available before the final vote in the budget process but that the full evaluation is due September 2025.