Every administration has its own distinctive policy fix on the nonprofit sector. With the Bush Administration, it was faith-based organizations. With the Obama Administration, the nonprofit credo centers on nonprofit social entrepreneurs.
The “news” is more than money, as the director of the Social Innovation Fund, Paul Carttar, takes pains to point out.
Last Thursday’s news event was an announcement by First Lady Michelle Obama and the Corporation for National and Community Service CEO, Patrick Corvington,of $50 million in grants from a number of foundations to or for the Social Innovation Fund—above and beyond philanthropic commitments to specific Social Innovation Fund grantees and subgrantees. That’s $50 million from foundations on top of the $50 million appropriated to the Fund, the latter in line for matching fund commitments of perhaps three or four to one.
On one hand, it is a big number compared to the philanthropic capital flows that most nonprofits ever have the opportunity to experience in their organizational lifetimes. On the other hand, for a national program whose mission language is to support “solutions to social problems,” $250 to $300 million, to be spent over a period of a couple of years, isn’t much in the grand scheme of federal budget commitments. The “news” is more than money, as the director of the Social Innovation Fund, Paul Carttar, takes pains to point out.
From this vantage point, there is an alternative narrative discernable in statements by the First Lady and CNCS CEO Patrick Corvington, the latter writing in Government Monitor. The Obama Administration is committed to leveraging the capital and the intelligence of a distinctive swath of foundations dedicated to identifying and promoting social entrepreneurs to bring resources, flexibility, and considerable credibility to the fledgling Social Innovation Fund.
Philanthropic support from social entrepreneurs: Five foundations have committed $45 million to be spent mostly over two years as a resource pool supplementing what the Social Innovation Fund managers have at their disposal. They might use these funds to supplement or add to the moneys in the projects they pick for SIF grants, they might use them for special SIF initiatives, or more. Carttar is clear that these five are not just foundations, they are the philanthropic arms of recognized social entrepreneurs.
As Carttar told the Nonprofit Quarterly, the names behind these foundations are business leaders that “through their own careers have builtsignificant companies based on innovation.” These are people, according to Carttar, “who understand innovation” and are “able to ascertain what is innovative” including utilizing data “to prove what is really working.”
A Social Innovation Fund fact sheetidentifies the five funders as the Eli and Edythe Broad Foundation ($10 million over two years), John and Ann Doerr’s Family Foundation ($5 million over two years), the Omidyar Network ($10 million over two years), the Open Society Foundations’ Special Fund for Poverty Alleviation ($10 million for one year), and the Skoll Foundation ($10 million over two years). Who are the entrepreneurs behind them and what makes them social entrepreneurs?
Eli Broad: From Los Angeles, but born in Detroit, Broad is among the 100 richest people in the world, according to Forbes and worth over $5 billion. As an entrepreneur, he made his money in real estate (KB Homes) and finance (SunAmerica, now a part of American International Group). Although known for having a huge commitment to art and higher education (with big gifts to museums and universities), the Broad Foundation is known in “social innovation” circles for its self-described mission as “a national entrepreneurial philanthropy that seeks to dramatically transform American urban public education.” The Broad statement of “value added” posits that “every person and every dollar in school district central offices and schools must be focused…on students, not adults, and must be held accountable for results,” adding that “competition among American schools is healthy.” Its flagship initiative is the $2 million Broad Prize for Urban Education, with past winners including public school systems ranging from Boston, Massachusetts to Brownsville, Texas, all demonstrating progress in reducing the achievement gap between white and minority students and all utilizing variations of performance-based management systems.
Broad’s philanthropy may be as significant an influence on education policy as any.
While significant seven- and eight-figure grants have flowed from the Foundation to mainstream institutions such as the Los Angeles County Museum of Art, the Museum of Contemporary Art, Harvard University, and the Massachusetts Institute of Technology, Broad’s bent toward funding entrepreneurs in education includes the following (with 2003-2008 grant amounts drawn from the Foundation Directory Online): the Boston Plan for Excellence in Public Schools (over $2.9 million from 2003 to 2007), the California Charter Schools Association ($1.49 million from 2003 to 2008), the Center for Reform of School Systems (based in Texas, $6.233 million 2003-2008), the Children’s Scholarship Fund ($2.99 million for the scholarship program co-founded by John T. Walton and hugely funded by the Walton Family Foundation), the KIPP Foundation (over $6 million for one of the nation’s best known charter school operator), the New Schools Fund (over $10 million for this venture capital fund supporting entrepreneurial investments in education, known for its investment in nonprofit charter school management organizations or CMOs), Pacific Charter School Development (over $12 million for this real estate development organization that finds, acquires, finances, and builds low cost facilities for charter schools), and Teach for America ($15.1 million), plus dollops of funding to think tanks on the left (such as the Center for American Progress) and the right (the Reason Foundation, the Mackinac Center for Public Policy, and the Pion