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Social Innovation Fund Money Hits the Streets

We are now one step closer to discovering whether the Social Innovation Fund, the new federal grant program designed to help nonprofits expand effective social projects, will fulfill its promise.

Following a controversy last summer over charges that its awards process was too secretive, the fund has fallen out of the headlines. But the 11 organizations that won a total of $50-million in the first round of grants have been quietly going about distributing the money to the nonprofit groups that will actually do the work.

Among the highlights of how the 11 groups decided to give away their money:

• The grant makers—which included groups like Venture Philanthropy Partners, United Way of Greater Cincinnati, and AIDS United—awarded money to 138 groups.

• When all private matching funds are secured, it is expected that they will have raised $130 million in additional money, bringing total social-innovation spending to $180 million. (The program requires both the grant makers and the nonprofits to raise $1 for every $1 they receive.)

• Beneficiaries of the grants spanned 28 states and the District of Columbia.

• The bulk of the awards, 87, went to projects on economic opportunity, followed by health, 21; youth development and school support, 21; and multi-issue projects, nine.

The Edna McConnell Clark Foundation received the largest federal grant, $10-million, or 20 percent of the total amount allotted. The foundation, which is known for its support of proven and innovative programs—including the Nurse-Family Partnership, Youth Villages, and Harlem Children’s Zone—awarded nine grants.

Its process of distributing the money illustrates how this new federal money is being put to work.

The foundation asked committees composed of foundation staff members; Bridgespan, the nonprofit consulting firm; and MDRC, an education and social-policy research organization, to select winners from among 225 proposals. They ranked applicants according to the strength of the proposed programs, ability to evaluate results, organizational leadership, financial and organizational strength, capacity to manage growth, and geography.

As an example of how grant winners showed they could get results, BELL (Building Educated Leaders for Life), was able to point to an evaluation by the Urban Institute–one that used a control group to figure out if participants in its summer-reading program did better than kids from similar neighborhoods and backgrounds who did not get the special help. The evaluation showed that the program did indeed make a difference.

BELL will use its $2-million grant to expand the summer program, strengthen its financial-development strategy, and conduct a broader study that will see if the program is achieving results as it spreads to new locations.

At the national level, the Social Innovation Fund, which is housed in the Corporation for National and Community Service, is setting up an online “learning community” to allow all of the social-innovation grant recipients to share documents. It hopes eventually to open this community to the public.

The fund is also gearing up for a second round of grants. In its recent budget compromise for 2011, Congress allocated $50-million again for 2011, although that will be reduced by a 0.2 percent across-the-board cut that was part of the package.

The federal efforts are being supplemented with management assistance from Grantmakers for Effective Organizations. The organization, which received just over $4-million from 22 foundations to help broaden the impact of the Social Innovation Fund, has released a new report under its “Scaling What Works” project. The report offers advice based on interviews with three of the organizations distributing social-innovation money.

Among the lessons? Their experience with the Social Innovation Fund “opened their eyes to the challenges facing nonprofit organizations that rely on grants from government and philanthropic institutions.”

The report suggests that the grant makers consider reducing administrative requirements for their grantees so they can focus more of their limited resources on their missions.

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