I’m thrilled with the Social Innovation Fund’s newly announced list of grantees. In many ways, the results read like my personal wish list for how I thought they should approach their decision.
The Fund has announced 11 intermediary grantees, who will select subgrantees to receive the final funding. The full list is here.
In the official comment that I submitted to the Fund back in January, I offered a number of recommendations including:
- The Fund was overestimating the availability of conclusive evidence in the nonprofit sector and should not restrict funding to organizations that already have such evidence.
- The goal of the fund should be to fund and build the evidence base of the next Nurse Family Partnership (a nonprofit widely seen as being a model of an organization that has conclusive evidence of effectiveness).
- That the debate over whether the Fund should support “innovation” or “effectiveness” was a false dichotomy because an approach to philanthropy which focuses on providing growth capital and funds for building a nonprofit’s evidence base is itself a little used and innovative approach.
So I was thrilled to see that in the press release announcing the grants that while most of the subgrantees have yet to be selected by the intermediaries, the Fund says that the eight pre-selected grantees “have evidence of effectiveness along a continuum of preliminary, to moderate, to strong.”
In addition, the largest grant, fully 20% of the total funding, went to the Edna McConnell Clark Foundation, the funder which is most closely associated with providing the support to help grow Nurse Family Partnership. If any funder is going to focus on funding and building the evidence base of the next Nurse Family Partnership, it is Edna McConnell Clark.
Finally, the Fund seems to have rejected calls for them to fund truly early stage “innovation” and recognized that effective organizations that are building their evidence base are themselves innovative. The Fund’s grants also do not seem to reflect a traditional, government bureaucracy driven effort to “earmark” funds for preferred contractors, as some pessimists have worried. And the grants did not go to “business as usual” grantmakers and nonprofits.
While the list of intermediaries may be familiar to philanthropy insiders, grantees like Edna McConnell Clark, New Profit and Venture Philanthropy Partners (who collectively were awarded almost 40% of the total funds!) each appeared on a very short list of of organizations I wrote about early last year who “invest in nonprofits” and see their role as funder as identifying great and potentially great organizations and providing them the funds they need to grow and thrive. So I was thrilled once again to see the Fund describe their grantees as funders who, “share a track record of success at identifying and growing high-performing nonprofit organizations.”
Since the grants are only going to intermediaries (funders) at this point and the final grantees will only be announced later, we can only use the eight pre-selected grantees to get a glimpse at the sort of organizations who will eventually get the money and represent what the Fund must see as their “model subgrantee”.
Those pre-selected grantees include College Summit, Year Up, Latin American Youth Center and KIPP. While these subgrantees will be familiar to philanthropy insiders, they are in fact disruptive innovators who are seeking to apply innovative solutions to solve social problems while focusing heavily on building their evidence base around what works and what does not.
In my comment to the Fund, I wrote that while the nonprofit field today lacks a large number of organizations who have conclusive evidence of impact, the Fund could help set an example of evidence-base building that other funders may replicate. I argued that this process could help create a nonprofit sector teaming with organizations deploying proven effective solutions.
While philanthropy insiders may debate the relative conclusiveness of the evidence base of the subgrantees I list above, they represent the vanguard of organizations who believe that measuring their effectiveness and deploying their resources into the programs that they know work is the best approach to achieving impact. If the social sector was teaming with organizations like these subgrantees, we would live in a significantly different and better world.
No single project, least of all the Social Innovation Fund, will single handedly change the world. But if the Fund’s approach leads to more funders following the approaches of groups like Edna McConnell Clark, New Profit and Venture Philanthropy Partners, I do believe that philanthropy will change for the better. Their tactical approach to investing in nonprofits is by no means the only way that philanthropy should approach social change. But it is currently a deeply underappreciated key to the development of a far more robust and effective nonprofit field.
(On a more personal note, I’d also like to congratulate the group REDF, led by my friend Carla Javits, for receiving one of the 11 grants. Like all of the intermediaries, REDF clearly believes that their role is to identify and invest in effective nonprofits.)
Congratulations indeed to all the awardees of the SIF funds and thanks Sean for the nod to REDF. As one of the co-founders of REDF, I am clearly biased in favor of REDF’s recognition as an effective intermediary. However, REDF also has a long track record of providing high quality, substantive output and outcome data demonstrating the efficacy of their approach to working with nonprofit-run social enterprises. For those unfamiliar with REDF’s approach to measuring results, check out: http://www.redf.org/about-redf/measuring-results.
Since 1997, through its high engagement approach to philanthropy, REDF has been providing employment and hope for thousands of disadvantaged individuals in the San Francisco Bay Area. I look forward to seeing how the SIF funds help REDF reach thousands of additional disadvantaged individuals throughout California in the months and years to come.
Perhaps the most exciting aspect is the paradigm shift that SIF represents in how the government thinks about investing in social change. During the press conference to announce the SIF’s grantees, the Corporation’s CEO, Patrick Corvington, stated that, “Feeling good is not enough. Impact is what matters. Results are what matter.”
In our experience at Commongood Careers, SIF grantees can have the greatest impact by targeting their limited resources on “human capital.” And by human capital, we mean that to fully leverage growth capital, nonprofits must be able to recruit sufficient numbers of talented staff and volunteers, utilize proven management systems, and shape their cultures in order to position talent for success, development, and retention.
Having worked for years with several of the SIF grantees, as well as the organizations that they support, we have witnessed first-hand the results that these foundations achieve when they bring financial capital together with human capital.
Although many traditional foundations have either overlooked human capital issues or focused only occasionally on piecemeal support, pioneering groups like New Profit Inc., Venture Philanthropy Partners, and the Edna McConnell Clark Foundation have excelled in supporting a more complete range of human capital needs across their grantees.
Commongood Careers strongly encourages all SIF grantees to consider the impact that human capital will have on their efforts, as well as the many ways that they can help to control those outcomes. As a fundamental determinant of social return on investment, human capital can either be an unanticipated barrier to success or an effective catalyst for achieving it. The difference comes down to intent and strategy.
Thanks Dana, I definitely agree on the value of human capital. Since a fair bit of human capital costs can be termed “overhead”, it is one of the reasons I’ve always rejected the importance of overhead expense ratios in nonprofit evaluation.