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Year in Review: Two Steps Forward, One Back for Social Innovation Fund

December 30, 2010

Sif_billions_cover As the year opened, the $50 million Social Innovation Fund, a White House initiative designed to support innovation in social change work, was viewed as a promising new venture by nonprofit leaders hopeful the Obama administration, having passed healthcare reform and bailed out Wall Street, would turn its attention to the nation's struggling nonprofits. At the same time, many experts were critical of the White House for not adequately funding the effort.

In May, the Corporation for National and Community Service, which houses SIF, announced commitments totaling $45 million over two years from the Open Society Foundations ($10 million), Omidyar Network ($10 million), Eli and Edythe Broad Foundation ($10 million),  Skoll Foundation ($10 million), and Doerr Family Foundation ($5 million) to match SIF grants and/or invest in other innovative community solutions. (Over the summer, it was announced that additional private commitments had been secured, bringing the matching total to $74 million.)

In July, CNCS announced the eleven winners of the inaugural round of SIF grants: Boston-based Jobs for the Future ($7.7 million over two years); the Local Initiatives Support Corporation (LISC) ($4.2 million over one year); the Mayor's Fund to Advance New York City ($5.7 million over one year); San Francisco-based REDF ($3 million over two years); the Foundation for a Healthy Kentucky ($2 million over two years); the Missouri Foundation for Health ($2 million over two years); the National AIDS Fund ($3.6 million over one year); New Profit, Inc. ($5 million over one year); the New York City-based Edna McConnell Clark Foundation ($10 million over one year); D.C.-based Venture Philanthropy Partners ($4 million over two years); and the United Way of Greater Cincinnati ($2 million over two years). Under the rules of the competition, eight of the SIF grantees were to select sub-grantees through a competitive process within six months of receiving their SIF funds.

Although initial concerns about the adequacy of funding for SIF may have been addressed by the willingness of private funders to participate in the effort, the initiative faced scrutiny of a different sort when, following the July grant announcement, the nonprofit press raised questions about the award to New Profit, Inc., a Massachusetts-based venture philanthropy fund that previously had employed SIF's executive director, Paul Carttar, in an executive position. As nonprofit bloggers rushed to attack or defend the fund and the process used to select its inaugural grantees, it was revealed that Carttar had recused himself from the process at the outset.

Nevertheless, questions about transparency and conflicts of interest lingered into the fall, when the New York Times reported that the inspector general charged with oversight of the Corporation for National and Community Service would audit the fund's selection process. According to the Times, the audit, which CNCS had requested, could lead to recommendations for changes in how SIF distributes funds it receives from Congress.

By year's end, it seemed as if the fund's critics and supporters had agreed to a temporary truce. And as Billions of Drops in Millions of Buckets author Steve Goldberg argued, when all is said and done it may come down to the investigation being "yet another case where a responsible government agency is trying to do the right thing in the way that it manages taxpayer money."

Update (1/10/11): An earlier version of this post stated that, in May, CNCS announced  matching commitments to SIF totaling $50 million, including $5 million from "a consortium of twenty national and regional funders led by Grantmakers for Effective Organizations." That was inaccurate. What CNCS in fact announced in May was a total commitment of $45 million over two years from five private foudations to match SIF grants and/or invest in other innovative community solutions.

The May 27 CNCS press release also noted that an independent consortium of more than twenty national and regional funders led by Grantmakers for Effective Organizations had "come together to invest almost $5 million in the 'Scaling What Works' initiative, to provide complementary funding for key initiatives to build the infrastructure needed for the long-term success of the SIF [sic]."

That language wasn't as clear as it could have been. As our colleagues at GEO pointed out in an e-mail earlier today, Scaling What Works was launched last year with the support of an independent coalition of twenty-two funders who contributed a total of $4.65 million "to expand the number of grantmakers and public sector funders across the country that are prepared to partner with each other and promising nonprofits as they grow their impact." More importantly, while the initiative's goals complement those of the Social Innovation Fund, it is an autonomous project of GEO -- albeit one "eager to support collaborative learning and action among the organizations that directly participate in the Social Innovation Fund, and between these organizations and the broader field of grantmakers."

We regret the error.


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Posted by Geri Stengel  |   January 04, 2011 at 09:43 AM

As long as it was two steps forward and one step back, and not the other way 'round. Yes, SIF had some glitches along the way but they worked them out. The process of doing that makes the program that much better and shows us yet again the power of social media. Maybe it was even three steps forward and one step back.

Posted by Mitch Nauffts  |   January 05, 2011 at 10:40 AM

Hi Geri. I think you may be right about the three steps forward. The questions raised about the selection process were legitimate, and CNCS's action in response to critics were appropriate and a model of transparency. I love your post on the controversy (linked in Geri's comment above) and suggest that everyone interested in SIF and social innovation read it.

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