There has been a great deal of chatter since the Social Innovation Fund appeared, first in the Serve America Act, then in the President’s budget, and recently in some high-profile mentions by the First Lady, the Secretary for Health and Human Services and the Director of Domestic Policy Affairs.
Since then, a post by Allison Fine caught my attention when it was featured in a column in the Chronicle of Philanthropy. Ms. Fine presents three critiques of the Fund for which I offer an alternative point of view.
First, she says on her blog that Mrs. Obama’s description sounds an awful lot like the focus of venture philanthropy in the late 1990s on measuring the performance of organizations and trying to grow high-performing groups.
“But the reality is that real social change is too hard to measure in the bite-size pieces that the risk-averse government needs,” Ms. Fine says.
The venture philanthropy movement has had its critics from the start. It has, however, brought to bear three crucial new practices in the nonprofit sector that I believe have accelerated social impact: growth funding, more rigorous measurement systems, and long-term funding. Is one organization going so solve an entire social problem on its own? No; but at the same time, organizations that do grow and are given the opportunity to showcase their results can generate attention on a social issue and, in doing so, increase the potential for talented practitioners and policy makers to address that social issue. Teach for America is one good example: in becoming nationally recognized, they have dramatically increased the dialogue, and thereby moved the dial, on a focus on teacher quality. Permitting these organizations to thrive under practices taken from the venture capital model has accelerated dialogue on a number of social issues as well as recognition for successful organizations and solutions.
Secondly, Ms. Fine is concerned about the White House’s emphasis on market-based solutions to social problems. “This is exactly what hasn’t worked in large part in the social sector in the last 10 years; that’s why for-profit schools are a bust,” she writes.
I’m not sure I really understand this point − it seems like quite an overstatement. Different solutions to social issues working with different constituents offer distinct approaches, and some may be able to use market-based solutions. In a chapter I wrote for the SBA, “Social Entrepreneurship and Government,” I outline no-market, limited market, and low profit market approaches. Market-based solutions, when utilized well, are an incredible opportunity to make better use of tax dollars while also serving a critical societal need, which allows tax dollars to now move on to meet other critical areas of need. Bonnie CLAC is a great example of this.
Finally, Ms. Fine says the administration is taking the wrong approach by supporting the scaling of nonprofit organizations. She suggests that, rather than trying to help charities build new offices and expand nationally, it should be creating “networks of problem solvers.”
“This is a heck of a lot less expensive than bricks and mortar,” she says. “The way you do it is provide intensive leadership development for creative people.”
This last point is, for me, an and, not an or. I am not quite sure why we would want to avoid scaling something that works − it may be more how you do it in terms of ensuring the local community is involved, not whether you do it. What we should also be doing a lot more of is thinking in terms of spread − the spread of the most effective, efficient and sustainable solutions and practices.
While I am not sure exactly what is meant by “networks of problem solvers,” this is a good concept if the idea is to bring synergies to organizations that are working on the same issue by streamlining successful approaches. However, this is very difficult in practice because the nonprofit sector is currently set up in extreme silos with little incentive for organizations to collaborate as a network. This does present a prime opportunity for both the White House and the Social Innovation Fund to ask groups to come together in a more unified approach to an issue.
As we explore what Government’s role might be in a society in which the citizens take primary responsibility for developing innovative solutions to social and economic problems, we are posing a very complicated question. For so long, Government has played the role of service provider, and it will take a massive adjustment on everyone’s part to envision it as anything else. We must all realize that we are standing at the base of Mt. Everest and we have just put on our crampons: there are few answers yet, but we have an amazing opportunity to listen, learn, and adjust.
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