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Scaling Social Innovation

May 29, 2013

(Paul L. Carttar is a partner at the Bridgespan Group and former director of the Social Innovation Fund, a federal initiative that enlists private intermediaries to help expand innovative programs proven to promote economic opportunity, healthy lives, and youth development.)

Headshot_paul_cartarrIn much the same way a parent feels extraordinary awe and wonder in watching his or her child grow up and succeed, I recently experienced a powerful sense of pride at a conference in Washington, D.C., devoted to the subject of bringing to scale innovative nonprofit programs, particularly those serving low-income communities.

The conference was sponsored by the Local Initiatives Support Corporation (LISC), the country's largest community development organization, and focused on LISC's successful scaling of Financial Opportunity Centers (FOCs) -- an initiative to help low-income people take control of their family finances. Working off a model developed by the Annie E. Casey Foundation, in just three years LISC has expanded the program from four centers in Chicago to seventy-one locations in thirty cities across the country. Much of the funding for this growth came from an innovative federal program called the Social Innovation Fund when I was the fund's director. As I said, I couldn't be prouder.

The FOC approach is simple but sound. It recognizes that getting a job is just the first step toward achieving long-term financial stability. So FOCs focus on improving the actual net cash a family has each month, taking account of what a family spends as well as what it earns, and helping low-income and unemployed individuals by providing an integrated set of services that are typically siloed. These services include not only job training and help getting and keeping a job, but also hands-on financial coaching related to budgeting and building credit, as well as assistance in identifying and applying for public benefits.

While we still have much to learn about the full impact of FOCs, there are clear indications the approach works. Over the past two years, nearly 75 percent of FOC clients improved their monthly cash flow and net income, while 43 percent raised their credit scores. In addition to improved cash flow and credit scores, clients receiving this integrated set of services showed dramatic gains in employment and net assets compared to those who received such help piecemeal.

At the Bridgespan Group, we often work with funders to determine how they can most effectively invest their resources to advance their missions. And while there are many valid approaches to generating social impact, one of the most compelling is to identify promising programs that are producing strong results in low-income communities and help those programs scale their impact.

But just because an approach is compelling doesn't mean it's easy to implement. So what has enabled LISC to make such dramatic progress in scaling the FOC program? We see three major factors.

First, the FOC model represents an intuitive, evidence-based means of addressing a widespread, persistent challenge facing low-income individuals. Job training and placement are critical, but true financial security comes from the totality of how individuals manage their financial affairs -- and that is what FOCs aim to affect on an individual client basis.

Second, because FOCs are not independent organizations but rather programs based on a model, they can readily be expanded to new communities by aligning with existing service-providing agencies that already have the clients, presence, funding, and governance needed for success. The model offers the potential for the host agency to significantly increase its own impact by providing a more complete and better integrated set of services aimed at achieving clear benchmarks.

Third, FOCs have the benefit of LISC's network of offices in dozens of urban and rural communities nationwide, as well as partners such as the United Way, which co-sponsored the conference. Working through these networks enables LISC to more rapidly and effectively attract funding and support, develop on-the-ground relationships, and engage staff while still preserving the integrity of the FOC model.

Our country needs more stories of successful social innovation and scaling. Simply put, we are not getting the biggest bang out of our investment in the public sector, where marginally effective programs often hang on well past their sell-by date and innovative, potentially high-impact ones face enormous challenges getting off the ground, much less achieving significant scale.

Fortunately, the federal government is beginning to recognize the problem. As Jonathan Greenblatt, director of the White House Office of Social Innovation and Civic Participation, noted at the conference, the government is looking to do more to support promising programs like Financial Opportunity Centers, innovations that have the potential to generate real impact and change lives. Not only will such an approach help government be a more effective funder and partner, it will also greatly increase America's ability to effectively address its most critical problems.

That's something we can all be proud of.

-- Paul Carttar

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