Social Entrepreneurialism at the Public Trough

Organizations such as Teach for America, America's Promise, City Year, Citizen Schools, and others have delivered lots of good for many communities and they have been extremely successful at raising government funds to do it.

Nonetheless, for most nonprofits, it's a little hard to follow the development path of these national players, much less imagine that they too can become the next America's Promise, YouthBuild, or City Year. As national organizations with networks of local or regional affiliates, these more closely resemble national multi-site nonprofits such as Planned Parenthood, Habitat for Humanity, the Nature Conservancy, the Local Initiatives Support Corporation,[1] the Girl Scouts, the YMCA, and much more.  Operating with perhaps less glitz and more marketing modesty than the mostly youth-oriented entrepreneurs, these mostly older and more established organizations are no less entrepreneurial in pursing their programs of environmental protection, community development, or reproductive rights.

The success of the new wave of social entrepreneurs in landing big time government contracts puts them well in the mainstream of large nonprofit practice. Teach for America, America's Promise, City Year, Citizen Schools, and the New Teachers Project, for example, have all been involved in the America Forward coalition organized by Vanessa Kirsch[2] of New Profit, Inc. This coalition has also been very influential with the evolving content of the Obama Administration's thinking about nonprofits.  Most of these nonprofit social entrepreneurs have also been phenomenally successful with federal grants during the 8 years of the Bush Administration.

At USAspending.gov, the federal grant track record of some of these social entrepreneurs is noteworthy:

  • Teach for America pulled down $56.9 million in federal grant assistance from FY2001 through FY2008, including $17.6 million in the Bush Administration's penultimate year in office. According to TFA's IRS Form 990s covering roughly FY2001 through 2007, the organization received $70,990,553 in government contributions, including $17.1 million in fiscal 2007, accounting for more than one-fifth of all of its contributed income.
  • Between FY2001 and 2008, City Year got $25.5 million in federal support. Its 990s covering roughly FY2001 through 2006 reported $74.3 million in government support, almost exactly one-third of its contributed revenues.
  • For America's Promise, the government assistance for calendar years 2001 through 2007 comes to $35.2 million, a little more than 36 percent of its total revenues in direct and indirect contributions. The USAspending.gov numbers indicate that America's Promise has received $63.9 million in federal assistance, including $14.9 million in FY2004 and $14.4 million in FY2005, numbers looking a bit inconsistent with the government income reported in AP's 990s.

Many smaller nonprofits that get the social entrepreneurism message often think that it means earned income from the private sector. But the examples of Teach for America, City Year, Citizen Schools, the Points of Light Foundation, the New Teacher Project, and others are apparent examples that success in government contracting is just as entrepreneurially valid as private sector earned income.

For some of these national entrepreneurs, it hasn't hurt to be associated with major political figures either; consider Laura Bush's active involvement in Teach for America and the New Teacher Project and General Colin Powell's founding of America's Promise.

Due to size, entrepreneurial aggressiveness, and solid political contacts, part of TFA's federal success, for example, is attributable to attracting juicy earmarks, not simply successful competitive grantsmanship:

  • In FY2003, Teach for America got $1 million from the Department of Education's Fund for Improvement of Education, which was followed by DOE earmarks of $2 million in FY2004 and $1.25 million in FY2005.
  • In FY2006, TFA landed a $2.35 million earmark in the NASA budget, "to engage teachers in science, technology, engineering and mathematics" courtesy of Senator Barbara Mikulski (D-MD) (Mikulski put in equivalent earmarks for TFA in FY2008 and 2009).
  • Mikulsi's NASA earmarks pale when compared to the $10 million earmark pushed by President Bush for Teach for America in FY2008, but that was smaller than the $11.79 million recommended by the Senate Appropriations Committee for TFA from the "America COMPETES" program in Department of Education's Office of Innovation and Improvement.
  • President Bush's $10 million request for TFA was attached to recommended earmarks of $8.9 million for the Points of Light Foundation, $4.45 million for America's Promise, and over $20 million for the library program affiliated with First Lady Laura Bush (it appears that POLF did get that earmark from the budget of the Corporation for National and Community Service).
  • America's Promise did get a large earmark in FY2001 for not more than $7.5 million from the CNCS budget, of which it spent, according to an OIG audit, $7.483 million.

As admirable as the program accomplishments of these national social entrepreneurs may be, only a minuscule number of nonprofits have the financial heft and prowess, much less political connections to top Republican and Democrat politicians, to lobby for earmarks like these.

Constituting the leading edge of social entrepreneurship being discussed at the highest levels of the Obama Administration, these national organizations all bear watching. Local nonprofits may admire much of what these organizations accomplish, but the accomplishment should not be imagined as nongovernmental. These social entrepreneurs are accomplished navigators of federal grant programs, their accomplishments depend on activist government-even during the past 8 years of the Bush Administration-willing to invest in nonprofits.

Now that these organizations and the America Forward coalition are on the inside of the Obama Administration's discussions of nonprofit policy, they should remember that 99 percent of the nonprofit sector isn't national, multi-site, and large. Most are small, local, and need as big shares of the upcoming nonprofit largesse of the new occupant in the White House. Their charge is not to double and triple their grantsmanship and earmarking success at the public trough, but to open public funding to the grassroots nonprofits whose daily work defines and implements nonprofit social entrepreneurialism for most of America.


[1] Full disclosure, this author was once a vice president of LISC and earlier a vice president of the Enterprise Foundation, now Enterprise Community Partners, both national multi-site nonprofits.

[2] Kirsch co-founded Public Allies in 1992.  Public Allies is smaller than these other groups, but also frequently mentioned as entrepreneurial and frequently visible in the deliberations of the Obama Administration's nonprofit advisors.