Why the Social Innovation Fund Now Matters More than Ever

Last week my organization, the Social Innovation Research Center, released a report on the progress of the Social Innovation Fund (SIF), the Obama administration initiative that funds community-based programs in low-income areas and provides the necessary evaluation resources to determine their impact. The report was balanced, describing both the program’s early accomplishments and some important weaknesses that should be addressed.

For some, the report might seem like a blast from the past — an update on an initiative that some may have largely forgotten. In fact, the early progress we are now seeing from the program may be an important sign of philanthropy’s future.

SIF received tremendous attention in its early years. The program was launched in 2009 with great fanfare, with announcements from both President Obama and the First Lady and considerable press coverage that followed in the ensuing year.

After this early rush of attention, however, SIF seemed to disappear from people’s radars. By 2012, the program had become largely invisible, leaving SIF and its grantees to pursue their work outside the national spotlight. Those wilderness years proved to be important, however, laying the groundwork for what we are beginning to see today.

When it was first launched, SIF was perhaps best viewed as a demonstration program. Drawing upon its roots in venture philanthropy, it was seen as an important test of the idea that greater investments in nonprofit capacity could produce better results.

The program has retained this element over the years, but its importance has shifted from being an end in itself to being the means to a larger end: how to transform much larger public systems and make them more effective. Some of this was due to the work of Grantmakers for Effective Organizations (GEO), which worked closely with SIF’s grantmaking intermediaries in the early days.

Some of this shift was also due to larger trends toward evidence-based policymaking, which are well documented by Ron Haskins and Greg Margolis of the Brookings Institution in their book, Show Me the Evidence. Haskins and Margolis cover the early history of SIF and related evidence-based programs, such as the Investing in Innovation (i3) program at the U.S. Department of Education and the home visiting and teen pregnancy prevention programs at the U.S. Department of Health and Human Services.

These important, but still small, federal programs appear to be the front edge of a larger, bipartisan evidence-based movement. The movement is being led not only by the Obama administration, but by important members of Congress such as Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA), as well as numerous organizations outside government like America Forward, Results for America, the Urban Institute, and the Pew-MacArthur Result First Initiative, among others. The recent spread of social impact bonds is tied to this same movement.

It is this larger effort that makes SIF more important today than it was when it was first created. Not only is SIF part of the movement, it is playing a unique and important role in it by showing how government agencies, foundations, and other grantmakers can build the nonprofit capacity needed for success — a need that has also been amply covered by the Center for Effective Philanthropy (CEP) in its own work.

When my organization released its report last week, it received significant coverage in the philanthropy press, including from The Chronicle of Philanthropy and Nonprofit Quarterly. This coverage accurately portrayed some of the criticisms that were contained in the report, but it largely missed SIF’s importance in this larger evidence-based movement.

For example, the coverage accurately described that SIF’s successes have so far been limited to better-resourced programs, while grantees and subgrantees located in smaller cities and rural communities have often struggled. This description is important, however, not because it proves that SIF has heightened disparities between nonprofit “haves” and “have-nots,” but because it shows the level of capacity needed for success.

The answer is not to dismiss SIF’s experiences, but to learn and build upon them. The lessons learned from SIF are not merely applicable to an elite few who can be counted upon to create an evidence base that everyone else in the sector will follow.

Every nonprofit needs most of the capacities identified in the report, ranging from seemingly mundane compliance and financial management systems to more advanced data and performance management capabilities. These capacities, often derided as “overhead,” are critically important to accomplishing the missions that these nonprofits and their funders are hoping to achieve.

While it is still early, the lessons now emerging from SIF and other evidence-based initiatives may have reached a critical turning point. Far from being a blast from the past, what we are witnessing now may turn out to be a lift-off moment, one that provides real hope for solving some of the most intractable social issues still facing us today.

Patrick Lester is the director of the Social Innovation Research Center.

capacity building, evaluation, nonprofits
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