Eileen Ellsworth on the Social Innovation Fund Process

In mid December, the Corporation for National & Community Service released a Draft Notice of Funds Available (NOFA) for the Social Innovation Fund. They are now accepting public comment on the document until January 15 (simply email your comments to SIFinput@cns.gov). Until that date, I’ve opened the Tactical Philanthropy blog as a public forum for discussion of the Fund and the draft NOFA. For background, please read an explanation of the Fund, why it matters and the highlights from the draft NOFA.

This is a guest post from Eileen Ellsworth, president of the Northern Virginia Community Foundation.

COMMENT #1: Minimum SIF Grant Level Should be $1 Million
Our Community Foundation serves Fairfax, Loudoun, Prince William, Arlington, and Alexandria. We have approximately $30 million in managed assets, 98% of which is donor advised funds and therefore not available for unrestricted grantmaking. We would therefore have to find the dollar for dollar match, from the ground up, for a Social Innovation Fund grant award.

The Corporation for National and Community Service initially advertised grant award levels between $1 million and $10 million. At $1 million, we could have raised the dollar for dollar match. It would not have been a small endeavor, but I am confident that we would have found the $1 million from our existing donor base with a concentrated focus and effort to that end. However, the increase in the minimum grant level from $1 million to $5 million now constitutes an insurmountable barrier for our SIF application.

I appreciate the need to quickly disburse these funds to strong and capable intermediary foundations and to see meaningful results as soon as possible. However, raising the minimum grant level to $5 million will prevent all but a tiny handful of very large foundations from applying.

I believe that the nonprofit programs for which our Community Foundation would seek funding are precisely what the SIF is looking to support. For example, one of our potential subgrantees is a long standing, excellent nonprofit that runs a job training program called “Training Futures” for low income and philanthropically underserved communities across all of Northern Virginia. The program therefore directly falls within the “Economic Opportunity” priority area for SIF grant awards. Training Futures has been in existence for 13 years with a proven track record of transformative results. In addition, that particular nonprofit has forged an utterly unique and innovative relationship with the Northern Virginia Community College that automatically provides college credit to Training Futures program participants, thus encouraging and enabling higher education degrees among graduates of the program. Training Futures has been evaluated and measured with rigorous data and evidence and is utterly poised for scaling to numerous other locations but for the lack of funding.

I therefore believe that our application for an SIF grant would be very strong indeed. Such impressive programs are the reason our Community Foundation would apply for SIF funding and go through the time, trouble and effort of securing matching funds in the first place.

So I ask that you please consider reinstituting the $1 million minimum grant level. One suggestion would be to limit the number of $1 million grants to only 5 (or even a smaller number). In this way you would still be promoting larger grants to very well healed foundations but also leave the door open for smaller, community based foundations to help scale truly impressive programs that are so very worthy of an SIF award.

COMMENT # 2: The Treatment of Low-Income, Rural, and Significantly Philanthropically Underserved Communities

“Low Income Community” Definition # 1
: In our region, governmental and quasi-governmental agencies charged with defining “low-income” populations routinely use 200% of the applicable Federal poverty guideline. We therefore believe that 150% would be too low to capture the low income families and individuals in the pockets of poverty in our region. Applying the 150% standard to our population would exclude a very large number of poor families and individuals, particularly among the elderly. This, of course, is a function of the high cost of living in Northern Virginia, so many more people that have incomes above the FPL are, in fact, poor, primarily because of the cost of housing and transportation.

“Low Income Community Definition” # 2
: Poverty exists in Northern Virginia and looks the same here as it does anywhere. Most of our low-income and poor populations live in “pockets of poverty” that are not neatly circumscribed by city or county borders. Therefore, we highly recommend not using the second definition of “low income community” in the draft NOFA that requires a clearly defined geographic area. For regions like ours where poverty does not neatly fit within a city or county border, it would be unusually difficult to determine, justify, and explain the particular geography we choose to serve with an SIF grant. But if forced to select a cut off “percentage” for the second definition, we suggest 30%, the logic being that the population captured at this threshold level would include all of those with incomes at the FPL in our region, plus approximately about two to three times that number of people with incomes between the FPL and 150% of the FPL.

COMMENT # 3: Assessing the Intermediary Foundations

First, it is important to be clear on the job description of an intermediary foundation before you devise the assessment tool. My personal view of the appropriate parameters of foundation work can be summarized as follows:

In a nutshell, foundations should understand community needs, select the best nonprofits who help meet those needs, support those nonprofits, and communicate our knowledge as broadly as possible in the hope of generating even more support for this important work. Foundations should avoid taking an authoritative role with their grantees. Rather, they should facilitate the work of the best nonprofits meeting the most critical community needs. No one is in a better position to meet community needs than the grass roots, on the ground, service providing nonprofits. Those nonprofits that can also devise successful programs to help meet community needs deserve our support, not our heavy handed second guessing.

The work of the intermediary foundation is therefore 4 fold:

UNDERSTAND: Know what are the most critical community needs by connecting with knowledgeable leaders and assessing needs with data and research.

SELECT: Select the most capable subgrantees with the most promising programs that truly help meet community needs.

SUPPORT: Support the selected subgrantees and programs to the greatest extent possible. Communicate what we know and what we learn in the process to our entire constituent base in the hope of focusing even more philanthropic dollars on this critical work.

COMMUNICATE: Foster open and unthreatening dialogue about program results with the subgrantees. Come to some consensus with them on what worked, what didn’t work, and how to improve things going forward.

Through this lens, the intermediary foundation does not run the program and should therefore not be assessed on how the program is run. Rather, we should be assessed on the behavior over which we do have control:

(UNDERSTAND) The process used to understand community needs. What has the intermediary foundation done, and what does it continue to do, to understand critical community needs? Has the foundation commissioned any needs assessments, and if so, what was the impact on their strategic plan and grant making behavior? Does the foundation meet with local leaders? Do they collaborate on local initiatives with other community partners to address pressing issues?

(SELECT) The process used in selecting the best, most capable subgrantees with the most promising programs for SIF awards. This is probably the most critical aspect of assessing the intermediary foundation. Ask: What was the subgrantee and program selection process? Was it fair and open? Was it informed by the foundation’s understanding of critical community needs? Why did the winners win?

(SUPPORT) The extent of the work that has been and will be done to find SIF matching funds. This is a direct reflection of the intermediary foundation’s commitment to community improvement and is a huge piece of the assessment puzzle. If a foundation does not need to look outside its own asset base for the SIF match, then good for them. But if a foundation must essentially run a mini fundraising campaign to find the SIF match, that is a direct reflection of the foundation’s commitment to improving community and the quality of life for its residents. Ask: Describe in detail the effort you needed to expend in order to find the SIF match.

(SUPPORT) The communication efforts used by the intermediary foundation to get the word out about the programs they fund with SIF dollars. The world should know, and the foundations should do the telling. This optimizes the chances of building a funding collaborative around the issues addressed, further focusing even more philanthropic dollars on the programs. Ask: How have you communicated with other potential donors in your community about the SIF grantee programs and your support of them? What has been the outcome of such communication? Have you attempted to forge partnerships and funding collaboratives around the issues addressed?

(COMMUNICATE) The schedule, extent and outcomes of the communications between the intermediary foundation and the subgrantees. The foundation should foster and nurture an open and unthreatening dialogue with the subgrantees about the results and impact of the SIF funding. The parties should schedule regular meetings to review the data and evidence and to discuss what worked, what didn’t work, and what could be modified going forward to optimize results. This creates a feed back loop based on data and hard evidence that sustains what works and fixes what is broken. The Corporation should therefore assess its intermediary foundations on the regularity and content of communications with their subgrantees. Ask: How often do you meet? What is the agenda for the meetings? What is discussed? What is the outcome of those meetings? What does the data show about the program’s impact, and what modifications to the program, if any, have resulted from this feedback and communication loop.

(REACT) The reaction of the foundation to subgrantee failure. If a selected subgrantee is not performing over the course of SIF funding, then some mechanism must be in place to pull the subgrantee funding going forward and redirect it to another promising subgrantee or program. No human organization gets everything right, all of the time. Sometimes nonprofits simply go out of business or stop running programs because of unforeseen events. If a subgrantee merely stumbles, then the foundation can still chose to fund it. But if the subgrantee fails, then the foundation, in the exercise of its best judgment, must have the latitude under the SIF grant program to stop funding the failing initiative and redirect the SIF funds. And we should be assessed on our reaction to a perceived failure.

One Comment

  1. Adin Miller says:

    Great comments Eileen! Your points were also reinforced by the Council on Foundations in a short commentary published today. I was struck by your conclusion that “raising the minimum grant level to $5 million will prevent all but a tiny handful of very large foundations from applying.” I ran a quick search on the Foundation Center database for community foundations with assets of $150M or greater (i.e., five times the size of Community Foundation of Northern Virginia and representative of the increase in the SIF match requirement) and came up with 69 foundations – mostly based in urban centers – that might have the resources to apply for a SIF grant. And that assumes that those foundations either have unrestricted resources available to them or can raise at least 50% of the match requirement within a short period of time. This might be a small pool of eligible applicants

    I also liked your argument to modify the draft NOFA’s definition of low income communities. Your point that ““pockets of poverty”…are not neatly circumscribed by city or county borders” applies to Northern Virginia as well as other communities across the nation. I agree with your suggestion to set a percentage cut off for this definition (she recommends 30%) that would encompass the populations at the Federal Poverty Line as well others at the 150% of the Federal Poverty Line. I’m curious to know how that would work with other communities.

    I also appreciated your push to focus the evaluation efforts at the local community organization level instead of focusing on how an intermediary might run its SIF grant. However, not all foundations provide their grantees with the freedom to operate as they know best in their communities. There is a broad spectrum of how foundations interact with their grantees and I expect the Corporation will be very keen to assess the active (perhaps authoritative role) of foundations in developing, fostering, and nurturing local social innovation.