September 14, 2015

Congress Shouldn't Kill the Social Innovation Fund

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Because the White House and Congress require groups seeking money from the Social Innovation Fund to raise matching gifts, $214 million in federal grants has yielded more than $500 million in private commitments.

In recent weeks, two key Congressional committees have voted to kill all spending on the Social Innovation Fund, a signature Obama administration program that seeks to mobilize government and philanthropic money to expand local programs that get proven results.

These actions on Capitol Hill were a striking contrast to two other developments involving the fund.

An independent analysis was released that offers a positive assessment of the fund’s first five years. What’s more, the Obama administration appointed a high-caliber leader to become head of the agency: Damian Thorman, who worked as a program director at the Knight Foundation before becoming an adviser to donors and foundations.

It’s hard for outsiders to know how to interpret these conflicting signs: the strong doubts of Congress, the cautious optimism of an objective external party, and the resolute affirmation of the administration.

All are significant, but only Congress has the authority to determine the fate of this distinctive program, which it created in a conspicuous act of bipartisanship six years ago.

As the first director of the Social Innovation Fund, I’d encourage Congress to think deeply before making a decision that would be a major setback for the cause of purposeful, evidence-based (dare I say innovative) government.

In short, borrowing a phrase from the nonprofit performance gurus Mario Morino and Lowell Weiss, I urge Congress to learn before it leaps.

That said, I appreciate the difficulty legislators face in getting an accurate read on the Social Innovation Fund’s actual performance. In fact, I agree with a key criticism levied by the independent report — that the fund has been slow (beginning on my watch) to fully capture and broadly communicate its own experiences and accomplishments.

To be sure, there have been other complications as well, including enormous early hype that inflated and distorted expectations. We’ve also witnessed chronic partisan sparring that colored how facts were interpreted and seemingly endless Congressional appropriations cycles that inhibited planning and execution by all participants. Also clouding the picture were ongoing debates among nonprofit leaders about whether the fund’s prime goal should be to foster innovation or build the base of evidence for what we already know is working.

But difficulty is no excuse for irresponsibility. Congress needs to cut through this fog and ensure that it is getting the information it needs to accurately judge the Social Innovation Fund’s value.

So, what is its value?

Patrick Lester, author of the Social Innovation Research Center’s independent report on the fund, found two main benefits: the positive results from five formal program evaluations that have been conducted thus far and the fund’s proven ability to help build the operating and program capacities of the nearly 300 nonprofit organizations across the United States that have received money because of the Social Innovation Fund’s work.

But I believe the fund’s value is far bigger and more profound than that: It lies in the rich trove of cumulative experience and knowledge this bold experiment has generated. If properly harnessed, this knowledge will be an extraordinary asset for federal policy makers and nonprofit leaders alike, touching many critical subjects:

How to change the culture of the federal bureaucracy. The fund was originally touted by President Obama as a "new way of doing business" for the federal government. And there was real skepticism about whether any agency steeped in the government’s deep, inward-focused culture of compliance could effectively build a program that depends on wisdom from outside of the Beltway and that aims to demonstrate respect for and authentic collaboration with grantees. How and why did this work?

How to use private money for greater impact. The White House and Congress’s requirement that coalitions seeking money from the fund raise private matching dollars has been much criticized because this was tough for many groups to do. But because of the matching rules, $241 million in federal grants has yielded more than $500 million in private commitments, tripling the money dedicated to helping improve the lives of people in low-income communities. Who are these donors and what motivated them to voluntarily commit their funds to help advance this kind of partnership with government?

How to weigh evidence-based proposals. Through six annual cycles, the Social Innovation Fund has overseen more than 30 completely open, evidence-based, highly competitive grantee-selection processes, typically working in concert with some of the most experienced results-oriented grant makers in the United States. Are there lessons from this process that other federal agencies or grant makers would benefit from knowing?

How to learn what actually works. When current evaluation plans are approved, the Social Innovation Fund will have started more than 100 rigorous third-party evaluations to determine what programs work, involving nearly 300 nonprofits all across the United States. These evaluations — 20 of which have been completed, including the five profiled by the Social Innovation Research Center — are informing us not only about how specific approaches work but about evaluation processes themselves, such as how much to budget, how to choose evaluators, and how to interpret and use evaluation results to drive ongoing improvement in social programs. Success here cannot be defined simply as whether a given study leads to a positive finding — it must be about what we are learning. What actually makes a program work? How can we apply key lessons to other nonprofit and government efforts to help more people in need?

How to reduce regulatory barriers to progress. The federal government’s clear obligation to wisely steward taxpayer funds should not come at the expense of achieving social impact. The Social Innovation Research Center does a thorough job of describing the difficulties encountered by beneficiaries of the Social Innovation Fund as they did their best to deliver the ambitious results they’d promised. Congress should demand to know which regulations advance a core interest of the government and which ones simply undermine the ability of grantees to succeed on our collective behalf.

Fortunately, the challenge of accurately assessing the Social Innovation Fund is not one that Congress needs to assume alone — and in looking for help there’s no better place to turn than the fund itself. From its launch, the fund has embraced Congress’s mandate that it rigorously evaluate itself, and it is now in the latter stages of a formal assessment being managed by a third-party evaluator. I understand that the early results from this national assessment are positive and that official findings will be announced later this year.

The Social Innovation Research Center got the ball rolling by raising key questions and offering a thorough report with well-reasoned observations and conclusions, and other credible reviewers are likely to weigh in, both favorably and unfavorably. And well beyond the national assessment, the Social Innovation Fund’s leaders are highly motivated to continue to deliver and more effectively communicate the fund’s tangible results.

If Congress must cut spending on the Social Innovation Fund, it should preserve its ability to do two things:

  • Allow current grantees to complete the programs they’re putting in place, including the formal evaluations still in process.
  • Enable the Social Innovation Fund’s managers to accelerate and expand its efforts to distribute the information already learned in the organization’s first five years.

It would be tragic to end this exemplary and productive experiment without capturing the rich value that Congress originally foresaw and that American taxpayers have already paid for.

Paul Carttar is co-founder of the Bridgespan Group and was the first director of the White House’s Social Innovation Fund.

How to reduce regulatory barriers to progress