To understand how we can address the needs of social innovators, we need to first understand the nature of the role they will play in spreading what works. Here at Root Cause, we believe that social innovation is the process of finding, testing, and honing potentially transformative ideas, practices, principles, and models of approaching social issues. Therefore, we need to first train social innovators to correctly assess and analyze social needs in order to enable their development of innovative approaches. Innovators, trained in social needs assessment and analysis, will be able to understand the complex nature of social problem solving, clearly articulate their vision of change and develop expertise on the social issue landscape.

This in turn will allow them to identify new opportunities for impact, define organizational roles, and develop innovative solutions with a focus on target beneficiaries. Finally, this capacity of social needs assessment will assist them in developing and articulating an approach and managing an organization to achieve its goals. But once these leaders have developed innovative approaches, how can we help them spread these models? In other words, how are we equipping them to advance social innovation?

Our work through the Social Innovation Forum shows that spreading proven approaches requires collaboration between nonprofits, philanthropy, government, and business as they move through the social innovation process. Thus, social innovators need to be trained in strategic collaboration, where they can Identify and develop key partnerships within and across social issues and sectors. These partnerships will facilitate the spread of innovative approaches via knowledge sharing about best practices and collaboration with similarly mission-aligned organizations.

However, this collaboration itself requires a platform like a social impact market. Therefore, effective social innovators understand how social impact markets operate. They can develop and implement a system to measure and communicate performance. Consequently, social innovators need to be trained to learn from performance, make data-driven decisions focused on continuous improvement, and effectively allocate resources based on performance.

If sustainable impact is a question of performance, leaders engaged in social impact need to measure their performance to maximize their social impact. This new generation of leaders will need to develop competencies in market assessment and analysis, building and sustaining organizations, engaging in outcomes-driven adaptive learning, and collaborating across sectors. Are our leaders ready for this? If not, how can we prepare them?

According to the RFR, Massachusetts will be exploring Pay for Success contracts in two social issues: chronic homelessness and juvenile justice. This statement represents a welcome shift in the way we approach social impact in two significant ways. First, it orients service providers towards understanding that in a particular social issue, it is a type of program model based on best practices that drives real change, not an individual organization. Second, focusing on common issues will allow the agreement between government and nonprofits working in that social issue area to use common indicators and common terminology related to outcomes. We at Root Cause, call this information alignment because focusing on an approach that works starts to align the terminology of all groups striving towards outcomes in that area. If we do not start calling the social issues by the same name – and realize that not individual organizations, but rather programs based on best practices produce a measureable outcome, how will we ever agree on what high performance is?  We were also pleased to see chronic homelessness selected in the RFR, as it is one of the eight social issue reports we have produced. It is also an area where we believe there is a great deal of evidence of what approach works effectively.

Another aspect of the RFR I really liked was that it does not assume a need for intermediaries to implement Pay for Success contracts. Instead it looks to intermediaries as a potential supplementary to support the initial Pay for Success contracts model if needed.  While I applaud the efforts of Social Finance, and am incredibly impressed by their laser focus on making sure this idea is successful, it is good to see an alternative experiment where government and nonprofit programs try to negotiate the terms of agreements without an intermediary. A huge concern in using the Social Impact Bond model was that it involved large levels of additional resources to even set up the payment structure. Thus, the absence of an intermediary might help the model be more scalable in an already resource-strapped environment.

Thus, with the RFR milestone comes a larger hill that we still have to climb: reallocating current government funds to social programs engaging in the pay for success model, without raising additional money from outside sources in a time of austerity. It will not be easy to renegotiate the terms of the billions of dollars being spent currently and to reallocate this money to programs in chronic homelessness and juvenile justice that engage in new Pay for Success contracts. However, if we are truly going to make progress, we need to head towards a performance-based allocation of resources. The announcement this past week is a step in the right direction. I am hoping we will now see more experiments that don’t just rely on increasing philanthropy, but instead focus on the assessment of how current government funds are being allocated to programs across different social issues.

Illustration: Shannon May

Why am I going? Kevin Jones, a founder of SOCAP as well as Good Capital, has a knack for bringing together great people, interesting content, all while utilizing the latest technology.

On the people side, representatives from all three sectors will be there, including Sonal Shah from the White House Office of Social Innovation, Kris Prendergast from the Social Enterprise Alliance, Jim Fruchterman from Benetech, Bill Strathmann from Network for Good, many staffers from Acumen Fund, Don Shaffer from RSF Social Finance, George Overholser from Nonprofit Finance Fund, Darell Hammond from KaBOOM!, Jacob Harold from the Hewlett Foundation, and Matthew Bishop from the Economist (click here to see a full list of speakers). I’m really looking forward to seeing old friends and meeting and learning from new ones.

The content also has some interesting spins, including showcasing the capital market spectrum on Day One and creating a new narrative to social impact on Day Two. Of course, I am very much looking forward to hearing Sonal Shah’s keynote to open the conference, as well as participating with her, Carla Javits from REDF, and Vanessa Kirsch from New Profit, Inc. on a panel following the keynote, moderated by Jeff Bradach from Bridgespan, on “Social Innovation and the Administration.”  What are the questions and topics you hope we address?

Lastly, their use of technology is pretty amazing.  You’ll be able to follow the conversation I’m participating in on Twitter at #socap09.DDSIA, as well as other content at #SOCAP09 (see full list of hashtags here), but start following #SOCAP09 now since people are already posting their ideas and thoughts to the conversation. I’m also really impressed with their Connection Concierge for conference attendees, which consists of discussion forums, attendee profiles, and social networking tools.

Just two years in, SOCAP is leading the way on creating a forum for dialogue on some of the most pressing questions in the world of social capital markets. I hope to see you there!

The theme of the event is “Recovery Through Innovation,” and not unlike my first post, there is a strong sense here that we are at an inflection point and that social innovation can play a vital role in moving the world forward on the social issues we struggle with. The critical role of government is quite prevalent here is as well.

Here are a few people I have met so far:

Won Soon Park, from South Korea, is the executive director of Hope Institute. He has been working on engagement of all three sectors for decades. At the Institute, they house the Social Invention Center, which “gathers citizens’ ideas in order to change everyday life and institutions,” and the Center for Alternatives, which “finds new, alternative policy models for our society and the worth in living life for the common good,” among other initiatives. The fascinating thing about their work is the use of technology to find citizen-based ideas, helping to move them forward, combined with very strong connections to both local and national politicians. Won Soon comes from a deep background in advocacy, and brings that experience to driving social innovation in South Korea now.

Louise Savell from the UK is associate director of Social Finance. Social Finance started just a couple of years ago, but they are doing dynamic work to develop financial instruments driven by and for social innovation, a great deal of which involves working directly with the UK’s government. One initiative that particularly intrigues me is the early development of a social impact bond that would be secured by the government based on the savings realized on a particular social issue (e.g., prison recidivism).

Justine Munro from New Zealand is the chief executive officer of the Centre for Social Innovation. The centre just opened this past year, but Justine, along with others from the academic community, are showing me that the momentum being built at universities around the world surrounding social innovation and entrepreneurship is much stronger and more consistent than it was when I first started teaching social entrepreneurship in 1999.

Stay tuned for more from SIX…and follow the conversation on Twitter at #sixlisbon

I left Madrid with two takeaways I thought were worth sharing. The first was a general agreement that we have been too focused on scale by replication, and have not thought enough about scaling ideas. While this is not new for this blog, I heard a new angle on what should be an increased emphasis on collaboration. As one attendee put it, we do not need another water filtration system to solve the world’s clean water access problem; rather, we need to bring everyone working on the issue of clean water together to collaborate and work on a distribution system of the best solutions.

The other takeaway is the critical importance of making the case for why social innovation is different. It occurred to me that as social innovation emerges into the mainstream, and in order for it to realize its full potential, we will have to answer to stakeholders in all three sectors and general public − what’s different?

Watch a video of my presentation at the FTF here.

I believe that in order for us to advance a social innovation agenda, we will need to link federal initiatives to state-level activities. While I don’t yet have a specific perspective on how details of such an arrangement should be executed, I think we can learn from how the SBA and the Corporation for National and Community Service (CNCS) link the two. As you know, in addition to the White House Office of Social Innovation, two states have already established similar offices: the Louisiana Office of Social Entrepreneurship was established within the Lt. Governor’s office, while in Texas, the Center for Social Impact is a nonprofit organization with a direct connection to state government – the governor even appoints the executive director. These organizational structures are similar to the way state-based Service Commissions have been set up, and these commissions are connected to AmeriCorps and the CNCS at the federal-level.

Please take a moment to read the op-ed, and then let me know: do you think a state presence is important? If so, what might be good ways to link this presence to federal activities? Comments encouraged below.

Here’s an excerpt from the op-ed:

“The public spiritedness and creative energy of Massachusetts citizens have often led to breakthroughs in the way we live. From being the first state to abolish slavery, to providing the first shelter for homeless women, to creating the program that became the model for AmeriCorps, the commonwealth¹s citizens have been pioneers in social innovation.

“Today - as the economic meltdown sends our social service providers scrambling to provide increased services with vanishing resources - Massachusetts should demonstrate civic leadership again, by establishing a state Office of Social Innovation.”

Click here to read the full article.

Besides the fact that it was my first time teaching using simultaneous translation − which was itself interesting − I was amazed at how engaged the participants were. As I reflected on the time I spent with these participants, it occurred to me that China, because of its recent adoption of capitalism, has a particularly interesting opportunity to advance social innovation. It was only 30 years ago that China began to explore free markets, and yet the country is already seeing market failures along with the vast opportunities to advance social innovation that come with those failures.

The leadership of the All-China Youth Federation got it, recognizing that it would take all three sectors to tackle issues of poverty, the environment and other society-wide challenges that will become even more pronounced as their economy continues to grow. The delegation was led by Dong Xia, the deputy secretary general of the All-China Youth Federation, who spoke with grace about exploring a program in China similar to the Peace Corps. In addition, I was able to spend some time with Jeffrey Q.G. Woo, the deputy director general of the Beijing Municipal Social Development Office, which, although it just launched, sounded a lot like our own White House Office of Social Innovation.

As I left to fly home, it struck me: the world truly is at an inflection point.

• Michelle Obama announced the Obama Administration’s request to Congress for the allocation of a $50 million Social Innovation Fund
• Melody Barnes, Director of the President’s Domestic Policy Council, discussed the White House Office of Social Innovation at the Council on Foundations, “including creating a positive policy environment for social innovation, finding and scaling what works, catalyzing partnerships with other sectors, leveraging new media tools, and supporting national service”
• Kathleen Sebelius, Secretary of Health and Human Services, reaffirmed the Administration’s perspective that investing in what works and encouraging communication across sectors is key

These strong statements from key players at the top levels of federal government communicate a commitment to applying the principles of social innovation to society’s toughest challenges. This is what we have been waiting for: a breaking with the old, worn ways of doing business in silos and perpetuating behemoth bureaucratic systems for the sake of perpetuity, and a new emphasis on digging down and asking the hard questions about where solutions exist and how to ensure that we are investing in the right ones. Let’s hope the massive challenges we face with the economy, among other things, don’t detract from this parade of effective movement. We need to communicate to our public representatives at all levels that we believe social innovation must be prioritized, because it is a strong and necessary investment in the future.

Photo: http://www.flickr.com/photos/mountaineerpics/ / CC BY 2.0

Nathaniel Whittemore, whom I had the pleasure of meeting at ASE09, and the Social Entrepreneurship blogger at Change.org, wrote a great piece on our session yesterday. Please check it out and leave your thoughts here and on his post as well.

In the paper I wrote with the Aspen Institute, I proposed one possible approach: to draw from among the best practices of two existing models. The first is one that the federal Small Business Administration has used. It’s the Small Business Investment Company, which matches privately raised funds two to one with public funds to spur private-sector innovation. The other is venture philanthropy and social venture capital, which use the principles of venture capital to invest in and support nonprofit and for-profit social-entrepreneurial organizations, respectively.

What are your ideas? If you comment here by Monday I will bring them to the discussion…