Yesterday I highlight the way that President Obama’s description of the Innovation Fund differed in fundamentally important ways from the policy recommendations of America Forward. The simplest way to understand the distinction is that the way Obama described the Fund would mean that it was making grants to nonprofits, while the American Forward policy recommendation has the Fund making grants to grantmaking organizations.
My sense at this time is that the mismatch is based not on an intentional decision by the President to run the fund in a different way, but by a lack of understanding by the President of the role of the fund (which is understandable since the Innovation Fund can’t be very high on the President’s priority list).
One reason for believing this to be true is that as I understand it, the Edward M. Kennedy Serve America Act that authorizes the Social Innovation Fund requires grants from the Fund to go to grantmaking organizations. The bill clearly states that only “covered entities” may receive funds and it defines “covered entities” as “grantmaking institutions.” So as far as I can tell, the President’s description of how the Fund will be managed that he gave at Tuesday’s press conference runs counter to the bill that authorizes the fund.
Look, just to be clear, I’m not suggesting that any fishy is going on. I’m not saying that the Obama administration is doing anything wrong. I think that we’re operating in a space that few people understand and which even people who understand have a hard time explaining well. I expect that over time administration will figure out how to describe the fund more clearly and accurately.
I think this fund is going to be a big deal. It might end up being a really big deal.