I have some text on a working surface. I've already converted the text to a sketch. Now I want to make a larger outline around each letter where the outline is a fixed distance from the nearest point along the perimeter of the original text sketch. I hope that makes sense. Any ideas how I would go about that?

Define you boundary and then add dimension from the points to the boundary OR better create construction lines from the boundary to nearest point, set them all equal (the construction lines) and dimension just one.