What Exactly is the Social Innovation Fund?

Having written about the Innovation Fund for the past few days, I thought it would be useful to explain exactly what the Fund actually is.

The Social Innovation Fund (currently being referred to by the Administration as simply the Innovation Fund), was authorized in the Edward M. Kennedy Serve America Act of 2009. The Serve America Act came about from the policy recommendations of America Forward. America Forward is a nonpartisan coalition of more than 70 results-oriented, entrepreneurial nonprofit organizations. The group was organized by New Profit, a venture philanthropy funder.

Among many other things, the Serve America Act calls for the creation of a Social Innovation Funds Pilot Program. Below I’ve bullet pointed out what the program entails:

  • Congress finds that “A network of Social Innovation Funds could leverage Federal investments to increase State, local, business, and philanthropic resources to replicate and expand proven solutions and invest in supporting new innovations to tackle specific identified community challenges.”
  • The Fund is currently waiting on congress to allocate it $50 million. The Act states that the Corporation for National & Community Service will manage the fund. The Fund will make grants to other grantmaking institutions in amounts not less than $1 million and not more than $10 million per year. The Fund may use up to 10% of its funds to award grants directly to nonprofits to enable them to replicate or expand proven initiatives or support new initiatives.
  • To be eligible to receive a grant, grantmaking organizations must propose to focus on improving measurable outcomes relating to: education for economically disadvantaged students, child and youth development, reductions in poverty, health, resource conservation and local environmental quality, energy efficiency, civic engagement, or reductions in crime.
  • In addition, eligible grantmaking institutions must have an evidence-based decision making strategy, which includes use of evidence produced by prior rigorous evaluations of program effectiveness including, where available, well-implemented randomized controlled trials and a well-articulated plan to replicate and expand research-proven initiatives that have been shown to produce sizeable, sustained benefits.
  • Or the grantmaker may propose to support new initiatives with a substantial likelihood of significant impact or partner with a research organization to carry out rigorous evaluations to assess the effectiveness of such initiatives.
  • The grantmakers must match grants from the Fund with their own internal resources and then must use the funds in order to make subgrants to community organizations that will use the funds to replicate or expand proven initiatives, or support new initiatives, in low-income communities. In making decisions about subgrants for communities, grantmakers must consult with a diverse cross section of community representatives in the decisions, including individuals from the public, nonprofit, private, and for-profit private sectors. These subgrants must be of a sufficient size and scope to enable the community organizations to build their capacity to manage initiatives, and sustain replication or expansion of the initiatives.
  • Grantmakers must provide the Fund information on the specific measurable outcomes related to the issue areas involved that the eligible entity will seek to improve.
  • To be eligible for a subgrant, nonprofits must; obtain a 1:1 matching funds from state, local, or private sources, demonstrate they can sustain the initiatives after the subgrant period concludes through reliable public revenues, earned income, or private sector funding, be committed to the use of data collection and evaluation for improvement of the initiatives, be important contributors to knowledge in their fields.
  • Subgrants made to nonprofits must be for at least 3 years and for at least $100,000.
  • The Fund may reserve up to 5% of funds to evaluate eligible grantmakers, community organizations receiving grants, and their programs.
  • The Corporation will post a list of all grantmakers receiving funds and community organizations receiving subgrants on the Corporation’s website.
  • Grantmakers will be selected by the Fund based on the quality of their selection process.
  • Eligible grantmakers must submit their plans for providing technical assistance to their grantees and the Corporation must provide technical assistance to both grantmakers and subgrant receiving community organizations.
  • The Corporation shall maintain a clearinghouse for information on best practices resulting from initiatives supported by the eligible entities and community organizations.

That’s a very condensed version of what the Act actually calls for. I would summarize it further by saying that the Fund will provide grants to grantmakers who will use the funds to support increased capacity and growth of nonprofit initiatives and who will base their funding decisions on rigorous outcome measurement. The Act demands that participants in the program be dedicated collectors of data and that they share their knowledge of what works with the field.

In my next post I’ll explain why I think this is all so important.