Kelly Ward, the director of America Forward has just submitted this response to my recent posts about the Innovation Fund (see posts here and here):
Thanks Sean for both of your posts and for grounding this discussion in what’s written in the Serve America Act. As you say, the foundation for how the Fund will work is described in the bill. To add to the detail you give above, the Serve America Act requires the Corporation for National and Community Service to administer the Innovation Fund and determine which grantmaking intermediaries will receive money, and with government matching the investments made by the private-sector. (Note that the bill does allow the Corporation to use up to 10% of the money to fund nonprofit organizations directly without going through intermediaries, but that’s a small percentage of the total $50 million.)
It’s truly astounding to have the President give a speech about the work of social entrepreneurs and how we can identify, invest in, and scale social sector solutions. His speech presented a new vision for the role of government in solving our nation’s social problems, including how government can more effectively partner with nonprofits, philanthropy, the private sector, and citizens. It’s exciting to have leadership for the Innovation Fund at the highest levels of our government, and for President Obama to recognize it not just as another program, but as a model for his vision of how government should partner with the nonprofit, philanthropic and private sectors. We certainly hope you’re right that this Fund ends up being a really big deal!
I would be remiss if I didn’t mention that none of this will happen if Congress doesn’t appropriate the funding for the Innovation Fund. We hope that supporters of this idea will call the House and Senate appropriations committees to convey their support.
Kelly Ward, Director of America Forward
Sean, this is an importance conversation and one I was alluding to earlier this week. There seem to be several issues that need further clarification as the Social Innovation Fund and the Corporation for National and Community Service move ahead with this effort (assuming the funding comes through as Kelly Ward rightfully points out).
1. Will the reporting burdens Jeff Trexler alluded to (http://twitter.com/JeffTrexler; http://bit.ly/btxhr) present barriers to participation for grantmaking institutions that have never received federal funds before? Moving from simply providing audited statements to providing financial statements that comply with OMB Circular A-133 is big step. And as the Circular states, this responsibility will part be shared by subgrantees as well.
The philanthropic field is trying to move toward less toward less reporting burdens (see http://www.projectstreamline.org). The additional reporting demands that the Corporation for National and Community Service would most likely require in order to track metrics and program outcomes might also be a shock to the system for some grantmakers. That burden would have to be shared with subgrantees as well, which may add a chilling factor to outreach efforts to potential grantees. I can also foresee instances where foundations would have to hire staff to specifically handle these responsibilities.
2. Will potential partner grantmakers shy away from participating in the effort due to an increase level of government scrutiny or issues around power dynamics? I’ll be provocative on this point: power dynamics are an ongoing issue within the philanthropic community. Many foundations are used to having the power based on their position of distributing funds. Receiving funds from the government would shift those dynamics and may be a reason for some to shy away from participating in the program.
3. How will the Social Innovation Fund and the Corporation for National and Community Service identify and fund an innovative idea that has not demonstrated results yet but has an innovative approach that might generate a better return than an existing proven approach?
Great points Adin. I’ll be addressing some of them in a post tomorrow. The power dynamic issue is a dramatic one. When you say that reporting will be a “shock to the system” I agree and it will be interesting how foundations respond since most of them are requiring the same sort of reporting from their own grantees.