The federal Social Innovation Fund has shown early signs of progress in its attempt to reward nonprofits that use data to measure results, according to a study released Tuesday.
But a few successes may not be enough to save the fund, which Republican lawmakers have proposed eliminating in the fiscal year that starts October 1.
The fund, an Obama administration brainchild that is part of the Corporation for National and Community Service, was designed to support new approaches to solving social problems like reducing childhood obesity and improving financial literacy. Its grantees are required to undergo intense evaluations to determine their progress and their program’s potential for expansion.
Under the fund’s guidelines, a sponsoring organization, usually a foundation, matches a federal grant, and in turn requires the nonprofit grant recipient to match that combined amount.
With the help of the sponsor, the nonprofit performs the charitable work and collects and reports data on progress to the Social Innovation Fund. As a result of the matching requirements, the fund says it has made $241 million in grants since it began in 2010, and it expects to attract more than $516 million in private investments.
The High Cost of Testing
In current budget negotiations in Congress, House Republicans have pushed for a 42-percent reduction in funding for the Corporation for National and Community Service. The proposal would also end all support for the Social Innovation Fund.
Damian Thorman, who in June became the Social Innovation Fund’s fifth director in five years, did not respond to interview requests.
The matching requirements, along with the need to produce detailed evidence and adhere to federal accounting and employment regulations have proven to be big stumbling blocks for many of the fund’s grant recipients, according to Patrick Lester, director of the Social Innovation Research Center and author of the report. He is optimistic that nonprofits that have benefited from the fund will demonstrate success but said that more evidence is needed. Of the 233 grant recipients during the program’s first three years, only 65 have produced progress reports. Of those, 10 demonstrated both sufficiently rigorous testing and positive results, as judged by the Social Innovation Research Center.
One grant recipient reported mixed results, and the remainder reported only preliminary findings. Many of those programs have at least a five-year life span, Mr. Lester said. He expects a “wave of evaluations” in the months ahead.
“If this progress continues, it may provide real hope for some of the most pressing and intractable problems still facing the nation today,” he wrote in the report.
Six grant recipients have dropped out of the program altogether.
A big part of the problem, said Mr. Lester, is the cost of evaluation. A randomized, controlled trial, for instance, can cost more than $400,000 — a big price tag for most nonprofits.
A lot of the participants didn’t know what they were getting into, he said. “They were not ready for the high level of evidence and the expense that goes along with it. That made a difficult situation worse.”
Still, Mr. Lester is “cautiously optimistic” the fund has a pipeline of grantees that will report success. He’s hopeful largely because many of the grantees that have yet to complete their evaluations were supported by well-funded sponsors that are prepared to give them the help they need.
Signs of Progress
Five of those wealthier sponsors and the efforts they supported demonstrated particularly promising results, Mr. Lester said: the Edna McConnell Clark Foundation, which supported Reading Partners, a program designed to improve reading skills; Jobs for the Future, which supported the National Fund for Workforce Solutions; the Mayor’s Fund to Advance New York City, which supported SaveUSA; REDF, which provided support to eight groups that work to lower barriers to employment among ex-offenders, homeless people, and people with mental-health issues; and the U.S. Soccer Foundation, which supported Soccer for Success, a program that encourages disadvantaged children to play sports and adopt healthy diets.
Nancy Roob, president of the Edna McConnell Clark Foundation, said most small nonprofits are overburdened by the complexities and cost of collecting data on their efforts as required by the fund. To support its grant recipients, the foundation created the True North Fund a pool of $63 million from 14 philanthropies, to provide grants to 12 nonprofits
“We realized our grantees would be challenged to raise the required one-to-one SIF match on a timely basis,” Ms. Roob wrote in an email to The Chronicle. “So we tried to secure as much of our grantees’ match as possible upfront.”
‘Not a Good Fit’
Susan Zepeda, president of the Foundation for a Healthy Kentucky, said her organization’s experience with the fund “was not a good fit.”
The foundation received $1 million to serve as a sponsor and provided support to nine programs. She said many of the foundation’s rural grantees, which specialized in telemedicine, in which health-care providers use phones or the Internet to consult with patients who live in isolated communities, had difficulty coming up with matching dollars.
Some of them, she said, were at very early stages of development, which made it necessary to tinker with their approaches on the fly — a process that made it difficult to complete meaningful evaluations of progress.
Two nonprofits withdrew from the program.
Still, Ms. Zepeda believes that the Social Innovation Fund can be a useful tool to broaden the reach of innovative programs that are at later stages of development.
“These organizations are closer to their communities than anyone in Washington, D.C., and they can spot worthy ideas,” she says. “But it’s fair, with federal funds, to trust in things that are more proven because taxpayer dollars are in play.”