On Saturday, the New York Times’ Stephanie Strom published an article covering the Social Innovation Fund transparency controversy. The article cites unnamed sources confirming the widely held assumption that the applicant which reviewer Paul Light gave the lowest rating to, but which went on to win a grant, was in fact New Profit.
Last night, New Profit posted their non-redacted application.
Two things need to be made very clear as this story progresses.
1) Most of the people, including myself, who have argued in favor of more transparency are now getting the information that they have ask for.
2) To date, there has been only one piece of information that anything unethical might have happened. Reviewer Paul Light says that he gave the lowest possible rating to an applicant (identified as New Profit in the NY Times story), which went on to win a grant. However, all applications were subject to rating by two groups of reviewers. According to a Social Innovation Fund spokesperson, this applicant was one of three which received the highest rating from one set of reviewers and the lowest rating from the other set. In each case, these applications moved to the second round along with the comments and ratings of each set of reviewers.
While I believe that the Social Innovation Fund made poor strategic decisions around the degree of openness in this process, I think it is unlikely that anything unethical has happened in relation to New Profit winning a grant. While it certainly is possibly that the Fund awarded New Profit a grant in spite of a poor application, keep in mind that New Profit is one of the most prominent growth capital funders in the country. Far from it being surprising that New Profit won a grant, it would instead have been shocking if New Profit had failed to win a grant.
As this goes forward, I hope our field can reject the “gotcha culture” that seeks to destroy those that are caught up in the vortex of speculation. Instead, let us seek the truth about what has happened.
What worries me the most is that regardless of whether anything improper happened or not, the simple speculation might be enough to prevent the Social Innovation Fund from continuing in future years. The Fund is one of the most important experiments in building a functioning philanthropic capital market. If it is eliminated simply because they made bad decisions around transparency, it would truly be a tragedy.