Forest for the Trees: Social Innovation Fund

So have you heard about the Social Innovation Fund?

The Fund, an initiative of President Obama’s, would have (SPOILER ALERT: BIG CATCH HERE: Congress has to appropriate the money!) $50 million to grant to promising nonprofit strategies aimed at addressing elementary or secondary education for low-income students, child and youth development, poverty reduction, health, resource conservation, energy efficiency, civic engagement, or crime reduction. Here are some other bloggers’ posts on the Fund, what it is, how it would work, and what purpose it serves.

I’m not going to rehash those discussions, but you should check them out. Some of the major questions that I do think deserve some consideration include the conflict between ‘innvoation’ and proven legitimacy; the wisdom of funneling the money through grantmakers who will then grant to subgrantees vs. direct granting; and whether the federal government will use the outcomes of the projects funded through the Fund to direct additional appropriations. Under ‘steps in the right direction’, I’d file the requirement that grants be made for at least 3 years, that grantmakers provide technical assistance to grantees, and, most importantly, the requirement that the grants be used as ‘growth capital’ rather than restricted programmatic funds.


As an advocate, what I think is most significant, is the fact that there is this much talk about how the nonprofit world is going to use this grant money once it starts flowing, whether this Fund will really be the transformation in the nonprofit sector that many hope, and the degree to which, so to speak, we should all be cheering for it…WITHOUT ANY DISCUSSION of the fact that Congress has not yet even appropriated the money, that that is, in fact, a necessary step for any money to exist, and, perhaps most importantly, whether or not this is the best use of the government’s $50 million in the budget (so, basically, very little apparent understanding of the finite nature of the federal budget or the process by which it is appropriated). It’s far from a done deal, and, yet, rather than working to ensure that it will be (or entering the highly ‘uncivilized’ but far more urgent debate over health care reform), we’re already tearing it apart on details.

And, let’s talk honestly about that $50 million. Or, as you might prefer to think of it, less than 10% of the direct payment subsidies for upland cotton producers in 2007 (we spent $50 billion on total farm subsidies in 2004–billion, with a b). “Fifty million dollars is better than nothing,” most nonprofit leaders have been arguing. Sure, but, what about instead of nothing, we were really at the table, with the kind of organized power to not only increase our appropriations ($50 million is, after all, almost $31 million less than the earmarks secured by Senator Richard Shelby alone!) but also reform how government tackles social problems in ways that would be deeply and widely felt.

Truthfully, some of the nonprofit voices have been raising these questions. What if the Obama Administration focused its reform energies not on the nonprofit sector but on government itself: changing how departments award contracts, changing rules for reporting, improving transparency, changing tax rules that restrict nonprofit accounting, and, most importantly, revitalizing the eroding social contract so that nonprofits are no longer expected to pick up so much of the slack created by government abdication of responsibility?

I don’t mean to sound like the Grinch that stole the Social Innovation Fund. I do recognize that people are hungry for signs that better days are coming, and I concede that this can be seen as one such sign. I just worry that we’re missing the boat a bit. And if we allow ourselves to lose sight of fundamental questions of justice everytime we get the chance for a little more match money, then we’ll always find ourselves fighting for crumbs to sustain the really excellent, even ground-breaking work that many nonprofits manage to do despite the odds.

The FY2009 budget contained more than $6 billion in earmarks for ANONYMOUS defense projects. Anonymous. As in we have no idea what they are, who requested them, how much goes to each, what they are even supposed to do. Imagine if those who care about social justice in our country directed all of our collective passion and intelligence and thoughtfulness at changing our democracy, so that we no longer debate over ‘national leveraging capital’ and ‘evidence-based, randomized trials’ while the defense industry walks away with $6 billion for their secret wish list?

Now THAT would be innovative.

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