The Social Innovation Fund

At a time when the economy is creating pressure on service delivery systems to do more with less, the Social Innovation Fund (SIF) has created a new role for government as a catalyst for philanthropic partnerships that invest in proven solutions, releasing the expertise and resources of the private and philanthropic sectors to collaborate in solving the country’s greatest social challenges so that effective nonprofit organizations can grow and replicate. 

The SIF is a pilot for a new model of philanthropy one that provides long-term, capacity-building grants based on impact rather than input, as opposed to the traditional model that has kept effective organizations in a constant chase for funding, diverting essential resources from broader strategic decision making.  Through the SIF, leading philanthropists are investing in results-oriented organizations using a competitive and highly accountable process that will expand the reach of effective solutions.

The SIF will help to grow innovative, results-driven enterprises, allowing us to truly solve problems across the country.  The SIF convenes a host of champions to make this happen: innovative social entrepreneurs, leaders of local community organizations, business leaders, philanthropists, academics, and policymakers are all spearheading provocative, high-profile initiatives to progress these citizen efforts.

Jobs for the Future/National Fund for Workplace Solutions                        Boston, MA

The National Fund for Workforce Solutions (NFWS) and its implementation partner, Jobs for the Future (JFF), is an award-winning national initiative dedicated to providing skills to low wage workers necessary to obtain good careers while at the same time ensuring that employers have the high quality human capital necessary to compete in today’s dynamic global economy. NFWS serves both the workforce needs of workers and employers by organizing close relationships and a deep understanding of a variety of industry sectors in order to ensure that targeted investments are made to create skills that employers truly value and which will lead to career advancement.

Model: NFWS sites are driven by their unique, local implementation of five strategic principles:

1.  A committed, board-based regional funding collaborative that leverages additional support for workforce development investments

2.  The organization, support and development of workforce partnerships that can effectively organize employers into a long term relationship focused on workforce development

3. Sector-specific strategies focused on both employers and workers

4. A strong emphasis on career advancement initiatives and practices

5. Advocacy efforts that result in improved outcomes for low wage workers through improvements in public policies and employer practices

Track Record: The National Fund has raised over $30 million to support 30 communities that contributed an additional $112 million in local resources from more than 300 different funding sources, including community foundations, United Ways, corporate foundations, workforce investment boards, chambers of commerce and state agencies. Each of these communities created a regional funding collaborative that invests in sectoral workforce partnerships. These partnersips organize or broker training/education services that help job seekers find employment and workers get promoted. NFWS has served over 27,000 individuals, providing them with almost 9,000 degrees, skill certificates and/or career readiness credentials and placing more than 5,000 of them in jobs.

Local Initiatives Support Corporation                                                                         New York, NY

The Local Initiatives Support Corporation (LISC) is dedicated to helping community residents transform distressed neighborhoods into healthy and sustainable communities of choice and opportunity—good places to work, do business, and raise children.

Model: The LISC model assembles private and public resources and directs them to locally‐defined priorities.  LISC mobilizes corporate, government, and philanthropic support to provide local community development organizations with: 1) loans, grants, and equity investments; 2) local, statewide, and national policy support; and 3) technical and management assistance.  LISC supports Financial Opportunity Centers (FOC), a workforce development and asset‐building model that boosts earnings, reduces expenses, and coaches low‐income families on how to make better financial decisions.

Track Record: In 2009, FOCs helped more than 1,000 people find employment, 1,500 people obtain public benefits, and 3,000 people establish budgets to help them plan for the future.  The FOC model, which was piloted in Chicago, IL, has demonstrated evidence of effectiveness from one evaluation that showed that 56 percent of participants recorded gains in net income, 42 percent showed increases in credit scores, and 43 percent increased net worth.

Mayor’s Fund to Advance New York City                                                                    New York, NY

The Mayor's Fund is committed to making a meaningful difference in the lives of New Yorkers with the help of private sector partners.  The Center for Economic Opportunity (CEO) seeks to implement innovative ways to reduce poverty in New York City.

Model: The Mayor's Fund is a nonprofit organization that invests private donations in programs that support innovation and emerging needs, while evaluating their effectiveness and feasibility of future public funding.  The CEO works with city agencies to design and implement evidence‐based initiatives aimed at poverty reduction, and manages an Innovation Fund.

Track Record: CEO replications and national impacts include: 1) establishing a local Office of Financial Empowerment, which co-leads a national coalition of cities that advances innovative financial empowerment initiatives for low‐income individuals; 2) developing a new poverty measure recently adopted by the U.S. Census Bureau; and 3) adding work incentives to conditional cash transfer programs—an effort that has been replicated by other countries. 

CEO programs placed more than 6,700 New Yorkers in jobs last year; provided a city-funded child care tax credit to more than 25,000 families; provided education and work experience to more than 2,000 disconnected youth; graduated more than 50 percent of students in community college graduation program; and developed new poverty measure—recently adopted by the Census Bureau. 

SaveUSA, a project of the Mayor’s Fund, has helped more than 400 low-income tax filers in New York, NY; Newark, NJ; Tulsa, OK; and San Antonio, TX.  These participants save a portion of their tax refund and receive a match and many open bank accounts for the first time.  One participant in her early 20’s put aside $500 in a SaveUSA account, even though she is pregnant and is the sole provider for her boyfriend and their two children. This participant said that the $250 match is a substantial amount of money for her family.

Jobs-Plus, another Mayor’s Fund project, helps entire families and communities gain employment.  At CEO’s first NYC site, Jose got a job in the stockroom of a local business and referred his son’s mother who was placed in an office job.  The program has been previously evaluated by MDRC and demonstrated sustained employment and earnings gains for participants.  In addition, because the program employs a saturation model to spread messages among neighbors, all residents of the public housing entire communities where the demonstration program was well-implemented experienced an average earnings increase of over $1,000 per year over seven years—even if they had not participated in the program. 

REDF                                                                                                                                   San Francisco, CA

REDF’s mission is to create jobs and pathways into the workforce for people who face significant barriers to work.

Model:REDF has pioneered a model of employing men and women who are overcoming histories of chronic poverty, homelessness, criminal history, substance abuse, or mental illness.

Track Record: Between 1997 and 2010, REDF has provided $17.3 million of financial support and business assistance to 45 social enterprises that in turn have employed 5,757 people and earned revenues of $113.9 million.  Seventy four percent of those interviewed two years after hire were employed, including those working while enrolled in an academic or vocational program.  An additional 12 percent interviewed were enrolled in academic or vocational programs and not working (REDF Social Impact Report 2005).

REDF’s subgrantees have employed thousands of young adults who were disconnected from school or work and people who have experienced homelessness or incarceration, helping them move into the mainstream workforce.  

Foundation for a Healthy Kentucky                                                                                               Louisville, KY

The Foundation for a Healthy Kentucky is a nonprofit, philanthropic organization working to address the unmet health care needs of Kentuckians.  The Foundation’s approach centers on promoting lasting change in the systems by which health care is provided and good health is sustained.  The Foundation works to improve access to care, reduce health risks and disparities, and promote health equity.

Model:The Foundation funds both statewide and community‐based efforts to improve the health and quality of life of all Kentuckians.  Foundation‐sponsored forums bring together the Commonwealth’s policymakers, civic leaders, health professionals, and advocates to share information and build capacity for positive health change.  The Foundation’s grants offer funding for programs to promote healthy living and access to needed health services.

Track Record: Prior Foundation investments have contributed to the development of: 1) a model for in‐home care of the state’s frail elderly population; 2) launch of a pilot e‐prescription program; and 3) expansion of school‐based primary and dental care for low‐income families with limited transportation.

Missouri Foundation for Health                                                                                       St. Louis, MO

The vision of Missouri Foundation for Health (MFH) is to improve the health of the people in the communities that they serve. The Foundation empowers people to achieve equal access to quality health services that promote prevention and encourage healthy behaviors.

Model: MFH programs and grants support activities that aim to achieve objectively measurable improvements in the health of Missouri’s citizens, particularly the health of underserved, uninsured and underinsured populations.  MFH is the largest health care foundation in the state and is among the largest of its kind in the country.  To complement grantmaking reports and address health issues from a systemic perspective, the MFH Health Policy staff provides timely research and information on health‐related issues of significance to Missourians. Recent issues include the availability and cost of health insurance, health care reforms and health disparities.

Track Record: MFH distributes approximately $50 million in grants annually, supporting hundreds of health-focused Missouri nonprofits.  To date, MFH has provided $400 million in grants and awards to community organizations across the state.  MFH’s service area includes about 75 percent of the state (84 Missouri counties and the City of St. Louis).

One of MFH’s subgrantees is located in a county with a population of only 5,000.  Local match dollars committed to date for all subgrantees are $2,115,265 with a total match needed of $2,249,164.  MFH has received letters of match commitment for as little as $250 from community members who are supporting these projects.  This is incredible local participation: people feeling a partnership with the federal government and investing their dollars in local community change.

AIDS United (National AIDS Fund)                                                           Washington, DC

AIDS United exists to leverage resources, develop leadership and advocacy, and foster community innovation to prevent new HIV infections and care for people living with HIV/AIDS.

Model: Through its unique expanding network of Community Partnerships, AIDS United supports more than 400 grassroots organizations annually, which in turn provide HIV prevention, care and support services to underserved individuals and populations most impacted by HIV/AIDS including communities of color, youth, and women.  AIDS United connects national and local funders, scientists, and community based organizations.  Grants provide care and services and work to prevent new infections through education and advocacy.

Track Record: Through its Community Partnerships and Special Initiatives, AIDS United invests more than $8 million annually in HIV/AIDS grant making to agencies nationwide, and has the ability and responsibility to lead discussions on the most effective strategies for preventing HIV.

New Profit Inc.                                                                                                                        Cambridge, MA

New Profit‘s goal is to help visionary social entrepreneurs and their organizations bring about widespread and transformative impact on critical social problems.  New Profit works to ensure that social and economic mobility are available to all by harnessing the potential of social innovation to solve problems.

Model: Provide multi‐year commitment of growth capital, strategy consulting, managerial support, performance management access to a network management, and of entrepreneurial organizations with extraordinary leaders, compelling solutions, and high aspirations for growth.          

Track Record:  To date, New Profit has raised over $92.7 million.  Their portfolio average annual growth of lives touched is greater than 35 percent and the portfolio average annual revenue growth is over 30 percent.  New Profit’s portfolio of more than 20 organizations exceeded growth targets, realizing a 40 percent compound return for lives touched since 1999.  The number of lives that New Profit’s portfolio organizations have touched is more than 1.5 million as of 2009.

Subgrantee Track Records:

College Summit will help 2,500 incremental low-income high school students graduate high school and enroll in college.

iMentor will support over 1,225 low-income high school students graduate from high school and enroll in college.

Year Up will help 1,290 incremental urban young adults find living wage employment.

Single Stop will support 4,400 incremental students persist through community college.

YouthBuild will support 500 incrementallow-income young people to work towards their GED and enroll in post-secondary education.

Advising Corps will reach over 15,000 incremental low-income, first-generation high school students enroll and persist in college.

Year Up (YU) founder and CEO Gerald Chertavian’s commitment to working with urban youth spans more than 20 years.  Chertavian brings inspirational vision and invaluable business perspective to YU’s operations, including his exceptional skill at building public and private sector relationships integral to YU’s success.  These include partnerships with local and national corporations that provide internships and jobs, community colleges that offer college credits, and community organizations that assist with student outreach and enrollment in YU programs.  Under Chertavian’s leadership, in 2007, YU successfully completed a $20 million growth capital campaign, enabling expansion to four new cities, bolstering local site fundraising capabilities, and establishing a sizable cash reserve. 

YU uses a comprehensive management dashboard that tracks all operational metrics, financial indicators, and program outcomes.  Data is available to management for real-time review and to YU’s senior leadership team and board of directors quarterly.  Recent evaluations show that more than 85 percent of YU graduates secured full-time employment earning an average wage of $15/hour (equivalent to $30,000 annual salary) within four months of graduation.  YU has augmented its alumni programs and is implementing and alumni tracking system to aid measurement of long-term impact.

The Edna McConnell Clark Foundation                                                                       New York, NY

The Edna McConnell Clark Foundation (EMFC) seeks to make a difference in the lives of those less fortunate. Currently it fulfills this mission by making significant and long‐term investments in the development and growth of nonprofits with proven programs that help low‐income youth successfuly transition to productive adulthood.

Model: EMCF makes long term investments in nonprofit organizations whose programs have been proven to produce positive outcomes and that have the potential for growth.  Its funding consists largely of support for business planning, capacity building and program evaluation, so that grantees can expand while maintaining the quality of their programs.  EMFC also helps to make an impact on the life trajectories of more young people, so that they can eventually become organizationally, programmatically and financially sustainable.

Track Record: EMCF has invested over $220 million in 33 nonprofits that operate nationwide. The average grant has increased from $90,000 in 2000 to $2 million today.  EMCF has worked with 19 investors to create a $120 million Growth Capital Aggregation Pilot designed to help three effective nonprofit organizations grow to serve 55,000 youth.

Venture Philanthropy Partners                                                                                  Washington, DC

Venture Philanthropy Partners (VPP) is a philanthropic investment organization that helps great nonprofit leaders grow effective programs to improve the lives of more children and youth of low-income families in the National Capital Region.

Model:VPP invests large amounts of scarce growth capital and hands-on, strategic management assistance from its team and network in high-performing nonprofit organizations to help them increase their impact. It leverages its investments through funds from foundations, public agencies and business and drives performance through a rigorous and disciplines investment management process.

Track Record:VPP raised over $31 million in its first fund and over $44 million in its second fund.  First fund dollars were leverages more than $1 for $1, resulting in an additional $34 million going directly to the nonprofits in its first portfolio. Those 12 nonprofit grew to directly serve over 16,000 additional children and youth in the National Capital Region, opened 29 new sites and reach 48 new neighborhoods through co-located services.

United Way of Greater Cincinnati                                                                        Cincinnati, OH

The Cincinnati/Northern Kentucky Social Innovation Fund is a collaboration of more than a dozen local grant makers who together are supporting innovative and effective community solutions along a cradle-to-career continuum.

Model:  United Way of Greater Cincinnati and The Strive Partnership are leading a funder's collaborative that includes the community foundation, private foundations, corporations, and family foundations to support social innovations working towards five key community outcomes: kindergarten readiness, fourth grade reading, high school graduation and college preparedness, post-secondary enrollment and completion, and sustained employment.

Track Record:  Through the Strive Partnership, a cross-sector partnership of more than 300 organizations, the community has developed several key documents which help guide funder investments: 1) the Cradle to Career Roadmap, which identifies what children and youth in the area need to succeed; and 2) the Striving Together Report Card, an annual report card documenting key education measures of success and how the urban core of Greater Cincinnati is progressing towards identified outcomes.  United Way and the funding partners have strong history of using data and evaluation results to expand or replicate effective programs, including early childhood and career pathways programming. Of the 54 community indicators tracked in the Striving Together Report Card, 40 of them were demonstrating progress in 2010.

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