By focusing on high-impact, results-oriented nonprofits, we will ensure that government dollars are spent in a way that is effective, accountable, and worthy of public trust.
—First Lady Michelle Obama on ?the Social Innovation Fund
In mid-2009, the Obama administration announced the launch of the Social Innovation Fund, which called on the private sector to join forces with government to invest in social problem–solving initiatives. The proposal allocated $50 million to these efforts.
Now, a year later, the Social Innovation Fund’s call for proposals has closed. These “socially innovative” initiatives will receive federal funds to address three priority areas:
- Economic opportunity. Increasing economic opportunities for economically disadvantaged individuals;
- Youth development and school support. Preparing America’s youth for success in school, active citizenship, productive work, and healthy and safe lives; and
- Healthy futures. Promoting healthy lifestyles and reducing the risk factors that can lead to illness.
The Social Innovation Fund faces clear obstacles in terms of scale and sustainability. The prospect of influencing three different fields with $50 million for a population of 300 million could create an expectation gap. But the biggest challenge is not the elusive definition of social innovation (which is itself a problem). The chief challenge is how to prevent these innovations from becoming short-term, novel projects that attract attention and then fade away. While the fund purports to foster innovation, a short-term infusion of dollars may not support lasting results.
Clearly, being innovative is a desirable trait. And the designation—even indirectly by the White House—of innovation could have major fundraising and publicity benefits for grantees.
So what is social innovation? According to the Corporation for National and Community Service’s Notice of Funds, social innovation is defined as the following:
The development of a potentially transformative practice or approach to meeting critical social challenges. An approach is “transformative” if it not only produces strong impact, but also 1) has the potential to affect how the same challenge is addressed in other communities, 2) addresses more than one critical social challenge concurrently, or 3) produces significant cost savings through efficiency gains.
Left out of this official definition is any mention of political conflict, despite our own national experience over the last 100 years, which has shown that implementing substantial social innovations has been very contentious, with changes facing opposition and public protest, frequently requiring legislation and litigation.
The Roots of Social Innovation
There is no question that huge shifts in the United States’ response to society’s changing needs have their roots in social innovation. Consider these examples:
- Institutionalization of those with developmental disabilities. There was a movement from large, impersonal, state-run institutions for people with developmental disabilities to community-based group homes and centers for independent living. This shift was not simple; and the change was supported by family members, the Arc of the United States (formerly the Association of Retarded Citizens of the United States) organizations, and mental-health professionals but resisted by legislatures and public employees as well as through government inertia.
- Domestic violence. A network of domestic violence shelters that gave options to families suffering from abuse was created. The reform struggled against attacks that shelters undermined family relationships and promoted a feminist agenda. In fact the true innovation was not shelters but the elimination of the social acceptability of violence within family structures.
- Charter schools. A new K–12 choice of decentralized chartered schools was developed. It faced deep concern among teachers unions and school boards over the diversion of funds from public schools and the blurring of the public–private school distinction.
- Abortion. Legal alternatives to pregnancy became available, including birth control and safe abortion services, which triggered a religious and political battle.
Each of these social innovations began as pioneering efforts around the country, often supported by individual contributions and foundation grants before public funding became available. Students of social innovation may benefit from considering the role of resources that were committed early on, as in 1916 for Margaret Sanger’s first birth-control clinic in Brooklyn; the start of the National Association of Parents and Friends of Mentally Retarded Children in 1950; the 1964 founding of Haven House in Pasadena, California; and the 1991 support base that passed the first charter school law in Minnesota. These small starts began a process of demonstrating, experimenting, and finally promoting and advocating resources and replication.
The concept of social innovation implies that there are standard ways of doing things and new possibilities: the old and the new. The new language of social innovation adopts positive business terms and perspective energized by an entrepreneurial spirit that captures efficiency through economies of scale and uses smart management that is accountable through rigorous measurement of results.
The current conversation about social innovation presents a positive, hopeful belief in evidence-based change that occurs by common agreement with broad public acceptance of an obvious improvement—not unlike the replacement of floppy disks by flash drives. Happily, flash drives were quickly recognized as more convenient, sturdier, cheaper, and with fewer moving parts (and no one publicly opposed it or got hurt by the change).
The mighty little flash drive demonstrated that innovation could be an immediately recognized clear improvement: simpler, cheaper, and just plain better. But for social innovations such as those described above, each was accompanied by resistance from sectors and institutions that felt threatened, undermined, or destabilized by the innovation.
Reconciling Conflict with Social Progress
Clearly, the landscape of social progress is more complicated than that of flash drives. No doubt the administrators of the Social Innovation Fund want to keep the debate free of the bitterly partisan wrangling in Washington, as the rancor over health care and debates over social and economic issues demonstrate. Perhaps by adopting business terminology, the phrase social innovation seems like a kinder, gentler, less political version of adaptation than is social change.
Lobbying, regulation, public funding, lawsuits, and court orders have been an important factor in establishing 14,000 group homes for people with developmental disabilities, 1,980 domestic-violence programs, more than 3,000 charter schools and 1,787 providers of legal abortion.
These four examples reflect the broad diversity of social innovation. There is no consensus on a single, straight path of social progress, and social innovation cannot be based primarily on financial efficiency.
It is important to concede that social innovation does not always go in the direction its promoters expect. Prohibition created more problems than it solved, and the No Child Left Behind Act has been accused of the same, however well-intentioned these efforts may have been. While de-institutionalization of those with developmental disabilities was a clear improvement, closing mental-health institutions was not followed with adequate support and housing for those with severe mental illness. Today, this lack of support has contributed to homelessness and imprisonment of the mentally ill. When changes are made that affect a larger system, unintended consequences and systemic repositioning always follow, so no single “innovation” can be a panacea.
Is Social Innovation Sustainable?
The public recognition generated by a high-profile competition—such as American Idol—can jump-start a career or expand fundraising for a nonprofit. In the case of the Social Innovation Fund, the intention is that the competition for funds will allow the best innovations to rise to the top so that they can be supported, thoroughly demonstrated, and replicated. As with any new product, the assumption is that the marketplace will beat a path to the door of social innovation, mostly by abandoning less-effective products and re-dedicating the freed-up dollars.
A critical challenge for the Social Innovation Fund is these resource questions: After the Social Innovation grant to pioneer an innovation concludes, what will generate continued and expanded funding? Will Social Innovation Fund grants drive the market to these innovations for postfund support and sustainability?
There are five scenarios in which these innovations could carry on, and each involves risks and varying degrees of probability.
1. Displacement. New social innovation will free new money by displacing older, less-effective programs or low-performing organizations. Or these new efforts will convince other organizations to adopt the innovation using ongoing resources.
This method is based on a common but incorrect assumption: that the dis