Transparency Controversy at the Social Innovation Fund

During the run up to the Social Innovation Fund grantmaking process, I was highly supportive of the Fund. The one area of criticism I had was around the level of transparency. In my interview with Paul Carttar, the head of the Fund, I was disappointed to learn that the Fund had no plans to publish the applications of intermediaries. I felt that these applications offered a tremendous learning opportunity for the field.

In recent weeks, the transparency issue has been thrust onto center stage. First by the Nonprofit Quarterly and yesterday by dramatic accusations from prominent scholar Paul Light, who is an official application reviewer for the Social Innovation Fund.

First the Nonprofit Quarterly outlined some of the transparency issues:

“The fact that there is a pre-existing relationship between the director of the SIF, Paul Carttar, and New Profit, one of the funded intermediaries, that was acknowledged as a potential conflict of interest when he assumed that role, makes it particularly important that SIF and the Corporation act in ways that are more—not less—transparent than other federal agencies.

…Once the SIF proposals were received by the Corporation, they became government records. Other than trade secrets and some aspects of the financial information in them, it is difficult to imagine how the Corporation could reject public disclosure. Under the Freedom of Information Act (FOIA), the proposals of both SIF winners and SIF losers should be considered public records for the purpose of public transparency.”

To their credit, the Fund quickly agreed to release the applications of the winning applicants. According to the Corporations for National and Community Service, which administers the Social Innovation Fund, this is the first time it has done so for any of its grant programs. However, it chose not to release the non-finalist applications, a decision which stands in contrast to the Education Department’s i3 fund, which uses a similar model to the Social Innovation Fund.

Adin Miller offers a useful chart comparing the transparency of the Social Innovation Fund vs. the i3 Fund:


Until yesterday, the debate was more about the relative value of transparency vs. the strategic rationale for maintaining confidentiality for the applicants. Social Innovation Fund director Paul Carttar explained the funds thinking to the Nonprofit Quarterly:

“It was really a strategic decision that was meant to lower the barriers to participation. It was a brand new program without precedent in some ways. We expected that a lot of the applicants would not necessarily have experience as federal grantees and the stakes were perceived to be high. For us to achieve our mission we wanted to get the strongest intermediary applicants with the best track records and providing them with some confidentiality was part of that plan.”

But then yesterday, Paul Light, a reviewer for the Fund wrote a column in the Washington Post leveling accusations of mismanagement of the grantmaking process.

Light wrote:

“The question is why SIF would be so cautious about releasing information. Perhaps the answer lies in the possible disconnection between some of the ratings and the final selections. Simply asked, how many applications were rated as weak and nonresponsive [the lowest rating for an application] in a first-phase review, but won a grant anyway?

I know of at least one. I helped review it in the first round of the process. Despite the applicant’s innovative track record, it provided insufficient information on its program, showed serious weaknesses in its capacity to manage federal dollars, and submitted meager assurances on cost-effectiveness and budget accuracy.

I have no idea how this applicant reached the winner’s circle. My experience has been that a weak and nonresponsive rating is the death knell in a federal grant competition. I can only surmise that this applicant was invited to revise and resubmit. Such invitations are familiar in the federal grant process, but are rarely issued to applicants who receive an initial weak and nonresponsive rating.

Given the applicant’s impressive lobbying effort on behalf of SIF, its success raises inevitable questions about fairness, conflicts of interest, and undue pressure.

…SIF would be well advised to release everything now. With next year’s appropriation pending, SIF’s very existence is at risk. It should not be sacrificed because its leaders insist on needless secrecy.”

But in a comment on the Washington Post website, Steve Goldberg, also a reviewer for the Fund writes:

“You making sweeping assertions that SIF is "becoming a study in what doesn’t work in government transparency," based on "rumors," "controversy" and "surmise," a fancy word for guess. Your sole basis is that you claim to know of "at least one" "weak and nonresponsive" applicant that received a grant, although you state that you "have no idea how this applicant reached the winner’s circle."

Maybe you’re right about that applicant, but you’re inflammatory rhetoric and eager leaps to speculative conclusions can only force everyone involved to run for cover because "questions have been raised." You mention "the applicant’s impressive lobbying effort on behalf of SIF" to imply that the applicant might have done something nefarious, offering wild conjectures about "revised" applications and unexplained "clarifying discussions." Soon, no doubt, we’ll be hearing sage pontifications along the lines of "doesn’t the White House know the cover-up is always worse than the crime."

This is sad and unfortunate. Even with its tiny size, SIF represents an important and courageous experiment by a forward-thinking administration to promote social progress by combining what the government does well (funding programs at scale) with what the social sector does well (fostering innovative solutions to difficult and incapacitating problems). It has attracted private funding from some of our best foundations that exceeds the taxpayer money committed.

You have raised questions about just 1 of 69 applications, which can be investigated by the responsible oversight agency, the Office of Grants Policy and Operations. There is no basis to cast SIF’s response as "weak and non-responsive," yet you seem willing to throw SIF to the wolves and let a promising cross-sector innovation become engulfed in a feeding frenzy of speculation and second-guessing. Are you really prepared to deny the beneficiaries of the final grantees the unprecedented financial and management leverage that SIF is on the verge of producing?”

When I read Paul Light’s article yesterday I was in the middle of writing my next Chronicle of Philanthropy column on the topic of the Social Innovation Fund’s approach to transparency. Since the next issue of the Chronicle does not got to press for over two weeks, the editors will publish my column as a special web feature early next week.

I’m still thinking through this issue. I’m talking with finalist grantees, an unsuccessful applicant, Paul Light, a spokesperson for the Fund and other players who are in the think of all of this. But I want to know what you think. I’m most interested in where you think things should go from here. What should the Fund do now? How might applicants, who the Fund has twice told me own their applications and are free to do anything they want with them, help or hinder the situation? What role should the application reviewers, who are free to speak publicly, have in all of this?

In my opinion the Social Innovation Fund is too important for all of us as a field to screw this up.


  1. Ruth Jones says:

    Social Venture Partners is the “unsuccessful applicant” that Sean refers to in his blog. We’ve given Sean our application to share in the hope that we can all learn from one another . We’d encourage other unsuccessful applicants to share their applications.

    SIF was a great opportunity in that it really encouraged SVPs to work together in common cause. Ultimately we were not selected, but we are very proud of the nonprofits with which we planned to work. I’m sure other applicants feel the same way and sharing information will shine a light on a lot of great nonprofits. We’re excited to apply again in 2011.

  2. Adin Miller says:

    Sean, good post. I think one of the main concerns I have is that the Corporation has failed to take control of the public communication on the SIF and is unintentionally fostering a high level of scrutiny. The lack of transparency is leading to perception issues, which – if left unaddressed – could lead to the screw up we want to avoid.


  3. Rachel Fagen says:

    Adin Miller, exactly. Not exactly editorial time well spent. Had Mr. Goldberg or any of the SIF reviewers spent a few minutes either laying out the reasons for SIF’s current level of transparency, or acknowledging concerns around less-transparent info areas and promising to keep those concerns in mind as they proceed, we would be in quite a different conversation.

  4. Geri Stengel says:

    Sean —

    Really nice overview of the SIF controversy. I’m delighted to hear that winning applications will be shared. As a teacher, coach, and consultant, I know future applicants will learn a lot from analyzing winning applications.

    Adin’s Miller’s chart comparing I3 to SIF status shows the direction SIF should be moving. I want to add a couple of points, which have to do with the ongoing quality of the expert reviewers.

    SIF required 50 hours over a 3-week period with grueling deadlines. In the debriefing with reviewers, SIF spoke about stretching the evaluation period next year. I just want to reinforce the importance of doing this. Having high-quality reviewers is critical to the process. Most reviewers work. Therefore, having realistic deadlines that allow reviewers to balance this volunteer assignment with their full-time jobs is essential.

    Have easy-to-use tools for reviewers so they can do their jobs effectively. I can’t tell you how much time reviewers wasted sorting through three different documents to find insights related to the evaluation criteria.

    One last point. First-time initiatives are messy and imperfect. I’m okay with that as long as, in each of the following years, the process improves. It sounds like SIF is headed in that direction.

    • Thanks for sharing in inside perspective Geri. I think your point “First-time initiatives are messy and imperfect. I’m okay with that as long as, in each of the following years, the process improves.” is exactly right. I do think we’re getting there!