The Social Innovation Fund is back in the headlines over what appears to me another non-issue. Recall that over the summer, the SIF landed in the NY Times over (what turned out to be unfounded) accusations of favoritism in the grant decision process.
Now the Nonprofit Quarterly has run a feature story (see note below) saying that the Office of the Inspector General is “investigating” the SIF and that the Nonprofit Quarterly “hopes [the results of the investigation] will also be published.”
Note: The Nonprofit Quarterly has edited their original post on the topic. Their use of the word “investigation” and their call for the results to be published was part of the original post as I recall it and as it was quoted on Friday by Steve Goldberg in his post on the topic. I spoke with NPQ and they told me that the post Steve and I had seen was an “unfinal version that was not approved for posting”. I normally wouldn’t make a big deal out of this, but leveling accusations that the SIF is being “investigated”, publishing the post and then changing it when it becomes clear they are wrong is serious businesses (NPQ says they stand by the original post and by the word “investigate”. See Steve Goldberg’s take below on why the word “investigate” in inappropriate. I know the original post must have ruffled feathers at the SIF, since they emailed me shortly after NPQ published). Keep in mind that it is possible that the unfounded accusations from the summer about favoritism in the SIF granting process could derail funding for the program in future years and rumors that the SIF is being “investigated” only adds fuel to the fire.
According to an email sent to me by the Social Innovation Fund and confirmed by the Office of the Inspector General, the SIF is not being “investigated”. Instead, the Corporation for National & Community Service requested that the OIG’s “audit division” conduct a review of the SIF’s grantmaking procedure and make recommendations about any suggested changes (which, by law, will be made public).
Steve Goldberg, a reviewer during the SIF’s most recent grantmaking round and “someone who practiced federal and state constitutional and administrative law for more than 20 years” explained the situation this way:
“OIG’s divide their activities between “auditing activities” and “investigative activities.” The distinction is extremely important: an investigation is an adversarial proceeding looking into possible violations of law or contractual obligations, while an audit is a non-adversarial process to improve program management and efficiency…
Federal and state agencies created OIGs because they wanted government agencies to have independent audit and investigation expertise. Government programs like SIF are complex and expensive, and it takes particular skills and dedicated resources to make sure they’re being run with integrity and efficiency. By asking OIG to review the SIF selection process, CNCS is taking advantage of resources provided by federal law for the purpose of helping the Corporation do its job as effectively as possible.”
I’m no expert in the activities of Inspector Generals or matters of government more generally. But I’m continually surprised by how quickly people seem to want to find some sort of smoking gun that reveals that the Social Innovation Fund is corrupt. While I’m a proponent of the SIF, I certainly understand arguments that the Fund will not work, isn’t being run in the best possible way or other critiques of the SIF format. But to date, I’ve seen no evidence that the SIF is corrupt.
Would critics of the SIF rather the Federal government ignore the potential to partner with foundations and nonprofits? Would the social sector be better off if the government did not attempt to find ways to provide growth capital to promising programs?
This newest “news” is a non-event. The most obvious interpretation is that the SIF is taking to heart criticism of their process and soliciting an outside resource to provide them with a review of their approach.
It sounds to me like something the Nonprofit Quarterly should be applauding.
Let’s remember something from the transparency non-scandal over the summer. The SIF had taken heat that they were not transparent enough. This criticism was something that I supported and agreed with. The non-scandal over the summer was due to accusations of unfair grant awards, which turned out to be untrue after the SIF released extensive new documentation of their process. Those of us who wanted more transparency got what we wanted. The OIG review, which will be made public by law, is another step towards transparency at the SIF. Maybe it is time for people who criticized the SIF over transparency to recognize that they won the fight and positively impacted the SIF. When you win an intellectual argument, the next step should be to encourage the steps taken by the other side to move towards your position. Not go looking for another fight.