Will the Social Innovation Fund Fund Social Innovation?

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The Corporation for National and Community Service held a conference call on October 15th to describe the emerging Social Innovation Fund and address questions submitted by nonprofits and foundations that might want to participate.  To say that the conference call was well attended would be an understatement.  The SIF has generated lots of attention disproportionate to the relatively small $50 million appropriation recommended in President Obama’s FY2010 budget.  One reason is that the SIF isn’t meant to fund specific nonprofit program topic or themes like youth or education or health or environment.  Created by the SERVE America Act, the SIF will support efforts to strengthen and replicate nonprofit innovation.

According to the conference call, the CNCS will issue a Notice of Funding Availability (NOFA) for the program later this fall with grants to be given to regrantmaking intermediaries in the late spring or summer of 2010.  At this late stage, it’s hard to imagine that the SIF program managers at the Corporation are going to rejigger the program design much beyond what they described in the conference call.  But as observers and analysts of the intersection of nonprofit practice and government policy, we got to raise some questions about what the program will accomplish by delivering a paper at the Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal on October 19th.  Our paper, “Will the Social Innovation Fund Fund Social Innovation,” raised seven points or issues about the Fund:

  1. Seeing the Social Innovation Fund in context as one relatively small piece of the Obama administration’s approaches to “resourcing” the nonprofit sector, necessitating a tempering of expectations of what the fund might achieve;
  2. Staying true to the commitment to find “hidden jewels” in the nonprofit sector as opposed to falling prey to focusing on nonprofits that have the better public relations, substantial research “proving” their innovations, and resources with which to match the SIF and foundation funds they will be receiving;
  3. Avoiding a reflexive tendency to over-focus on organizations that emphasize volunteers (or stipended volunteers) to be supported (because of the SIF’s location in the federal agency whose primary mission is to promote service and volunteerism);
  4. Remembering the limitations of foundations as intermediaries for finding nonprofit innovations;
  5. Thinking about how to support and sustain innovative nonprofit organizations in light of the severe financial constraints that are affecting most nonprofits during this economy and will continue to impact nonprofits for years to come even as the economy shows signs of “recovery”;
  6. Building local systems or networks for supporting and sustaining nonprofit innovation, with the implication that many innovation in the nonprofit sector often depends on networks, not just innovative individual leaders or organizations;
  7. Cautioning fund managers and intermediary regrantors about the downside of “scaling up,” particularly the possibility that scaling up sometimes comes at the cost of losing organizations’ community rootedness.

Because the paper was drafted before the CNCS conference call, we learned additional information on October 15th that supplemented our understandings, particularly the following:

  • The Corporation hopes to focus the first year of SIF grants on “late stage promising innovations,” including organizations that have had experience with replication or are pretty much ready for replication (Note:  Future years of SIF would be dependent on the willingness of Congress to grant the Corporation new SIF appropriations).
  • The Corporation does not intend to make the use of volunteers and volunteerism a required element for successful SIF applicants, but it does see volunteerism as a “powerful strategy to leverage capital.”  Nonetheless, the two “visions” for the SIF as described on the call were “more opportunities for Americans to serve others and be the change they want to see” and then scaling innovations and investing in the nonprofit sector to support its potential to produce “breakthrough results.”
  • Regrantmaking intermediary applicants to the SIF (for 85 percent or more of the SIF dollars) are welcome to have conducted their selections of subgrantees prior to submitting their applications, that is, they can present a “portfolio of organizations ready to go,” though the regrantmaking institutions have to show that they used a “fair and inclusive process” for those selections.  However, the Corporation’s spokespersons did commit to selecting one or more intermediaries that will select their subgrantees through an open process after the SIF intermediary awards.

Tell us what you think of the Social Innovation Fund.  Are you planning to apply as an intermediary regrantors or not?  Are you anticipating getting one of the SIF subgrants (minimum $100,000 a year for three to five years, though subgrantees have to match on a 1-to-1 dollar basis)?  What do you think the SIF will lead to?

This will be the first year of this new program.  If there are future appropriations for the Social Innovation Fund, your comments could guide the Corporation’s staff toward modifications of the program.  Your monitoring and feedback on the SIF will be important.  We hope you’ll share your thinking with us here at the Quarterly.


  • Marshal Wright

    Very interesting article. I would like to throw a counter thought out there to spur thought and discussion. As an attorney and professor teaching courses in the not-for-pofit discipline, it is my understanding that one of the primary reasons not-for-profits are granted special status is because they are providing something valued enough by society that the response will generate the funds necessary to carry on their mission through “voluntary public-support” in conjunction with the tax-exemption they are granted. In that regard, where does a free-market view come into this discussion. Should not-for-profits be looking for greater government support, which will carry with it greater government scrutiny, regulation, and a greater tax-burden on society(forced public support); or, should not-for-profits be looking toward the voluntary funding provided by the general public and design size their activities (including their cost structure – which includes their health care costs) to a size that is sustainable in light of the amount of public support they can generate.

  • RickT

    Wouldn’t a public option at least provide an optionfor nonprofits to save costs?

    And isn’t “free market” just another term for protecting the status quo?

    And what of the lack of regulation in the insurance industry allowing unscrupulous insurance companies to rape the public?

    Anyone who thinks #37 in the world for the U.S. is okay doesn’t hold the U.S. in very high regard, or at least those without wealth.

    Capitalism assumes two things: that resources are unlimited and that greed will never get in the way. We see how that’s going.

    America is about the low end of the scale: setting a bar that no rightful citizen should have to fall below. It’s not about preserving “free market” wealth at the top.

    Most of what’s “free” about America died with habeus corpus anyway.

    Here’s an idea: let’s have a national referendum. A public option would win in a landslide. Politicians like Bauchus, who bathes in insurance industry money, have no right formulating health insurance policy. It doesn’t take a law degree to see that.

  • Eriko A. Kennedy

    Rick’s points are thoughtful. Agreed,$50 million is not much. However, with strategic selection some interesting models could incubate and make significant impact. However, these models are not necessarily going to be universally replicable. We have to plan, coordinate and innovate locally.

    Point 6 on “building local systems or networks for supporting…innovation” particularly resonates.

    With increasing complexity and growth in our nation’s cities, the need for a centralized source for information and planning becomes apparent. Who will step in to do this? This process is quite political and could be a mine-field for the usual sources of leadership.

    1. Government? Local government stepping in to coordinate seems unlikely in larger cities, due to budget constriction, cutbacks in staffing and inherent political difficulties. (However, we should watch and expect some heartening models develop in smaller towns and districts. Fewer players and political layering and barriers to implementation affords opportunity to collaborate–and trust.)
    2.Business? Many are also struggling. However, there could be some interesting local partnerships with local Boards of Trade and business groups.
    3. Nonprofits? In a Darwinian fiscal environment, it is highly unlikely nonprofit agencies are in any position to organize, coordinate and help each other. Larger or more established agencies tend to dominate, and will naturally protect themselves; for smaller nonprofits collaboration with competitors is risky. This holds true within nonprofit membership organizations.

    4.Foundations/philanthropists? As the foundations are not purveyor of services, and a potential funding source