Nonprofit World Debates New Social-Innovation Fund

July 01, 2009

Nonprofit World Debates New Social-Innovation Fund

The nonprofit world is applauding President Obama’s Social-Innovation Fund, which he officially announced the creation of yesterday.

But even proponents of the $50-million effort are raising questions about how it should operate.

Matthew Bishop and Michael Green, the authors of Philanthrocapitalism, write on their blog that “implementation is going to be challenging, to say the least. There is not much of a track record of scaling up nonprofits to draw on for guidance. And $50-million is a drop in the ocean compared to the scale of the problems.”

Betsy Fuchs, a philanthropy consultant, agrees. On her new blog, Modern Giving, she also wonders how the fund will pick the “best” charitable programs to support.

“With countless private foundations around the country squabbling to define the ideal due-diligence process, how does Washington know exactly how to build one? How will we be certain that those deemed the ‘best’ programs really are the best programs?” she asks.

On the issue of evaluation, in The Huffington Post, Clayton M. Christensen, a business professor at Harvard University, writes that the administration should create a national discussion among government agencies, grant makers, and others about how to measure social innovation. He also urged the president to look at businesses, and not only nonprofit organizations, when looking for innovative projects.

In all, Mr. Christensen hailed the Obama fund as a “new paradigm for solving social problems.”

Not everyone is convinced of this.

“Clay Christensen piece has left me speechless,” IssueLab, a nonprofit research group, says on its Twitter feed. Neither the argument nor the “paradigm” is new, it says.

What do you think of the social-innovation fund? What questions do you have about how it will operate? How would you run it? Click on the comment button below to share your views.

— Ian Wilhelm

Comments

It seems that there should be at the heart of our best social innovations two key concepts. First, does the innovation systemically treat a root cause of a social problem or just its symptoms. The former is far more valuable than the latter. Second, does the innovation employ leverage, so that it scales with cost economies? If it does not treat the root causes and efficiently scale, then we will be forever paying and making little progress for the society that underwrites these social enterprises.

— David Hoo Jul 1, 03:33 PM #
How do we identify the most promising nonprofits, those most likely to produce positive outcomes for the people served? I believe David Hunter and Steve Butz are onto something, described in the following publications:

Guide to Effective Social Investing
http://www.alleffective.org/docs/Guide%20to%20Effective%20Social%20Investing%20102108.pdf

Social Value Assessment Tool
http://www.alleffective.org/docs/Nonprofit-Social-Value-Assessment-Questions-Version7.pdf

The propose assessing six dimensions for any program/organization:

1. Outcomes focus: It has a good theory of change, which includes clear, measurable outcomes and indicators
2. Data integrity: It collects data diligently, ensures good data quality (complete and accurate data)
3. Relating staff efforts to outcomes: It is able to relate efforts to outcomes: collects data about services and the quality of those services so that the organization can look at the reasons why outcomes are positive or negative (e.g., are outcomes better when services are more frequent, or when staff have built better relationships with clients?)
4. Making essential adjustments: It adjusts its approach in response to findings; the organization makes changes to its services if it finds that the program is not implemented as intended or that outcomes are not achieved
5. Capacity to deliver programs with fidelity: It has capacity to deliver programs with fidelity to a defined model
6. Program impact data: This is about the degree to which it can demonstrate impact (from anecdotes to rigorous external evaluation)

Using an approach like this would open the door to innovative nonprofits that are not yet “evidence-based” because they haven’t been through rigorous evaluations, since proven impact is only one indicator. At the same time, it would save people from all the nonprofits that simply do not measure or manage performance in meaningful ways and are therefore likely to be ineffective or – unknowingly – cause harm.

— Ingvild Bjornvold, Social Solutions Jul 2, 02:38 PM #
Though I agree with Ingvild on the basics, these are the basics.

I can think of one organization I know that doesn’t have these levels of administration in place yet has very successful outcomes, incredibly competent leadership and a strong balance sheet.

There needs to be some way that also allows for an organization in early stages of growth that could rise to this level of functioning through receiving a grant here.

— Stu Jul 6, 02:54 PM #

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