by Nicolas Takamine

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The Social Innovation Fund Debate

Last week, Fast Company published a blog post about the federal government's new Social Innovation Fund (the "Fund"), and I think the post deserves some discussion. Fast Company contributor Brian Reich wrote that he's worried that the Fund won't truly drive innovation if it funds proven (though still young) ideas, as is currently the plan. Instead, he writes, it should decide which social issues should be allocated funding and "force social innovation to happen."

I was directed to Mr. Reich's post via Twitter and I think the author of the tweet had the right response: "Force social innovation?...Really?" Seems to me that we can force effective social innovation just about as easily as we can force the discovery of an inexhaustible source of clean, affordable energy.

If only we could.

Still, Mr. Reich gave some guidelines on how we might force social innovation. Trimmed down, his recommendations are these:

  • Guide the efforts of the social innovation community to a few prescribed areas, otherwise it will never stay focused. Direct all funding and support to these areas (presumably he means all Social Innovation Fund funding and Office of Social Innovation support).
  • Identify the high-potential people who are not currently applying their efforts to social innovation and recruit them. Truly new ideas and approaches will come from the people who aren't currently involved.
  • Keep pushing for continuous innovation and new solutions from projects, ideas, and people, not organizations. Organizations may "get lazy" and focus on maintaining their work rather than innovating. "Use the money to make things happen, not support things that are already happening."

I must say, I disagree. In what follows, I don't specifically intend to pick apart Mr. Reich's argument, but each of his points prompts some useful thought and, in a strange way, illuminates some of the ways in which the Social Innovation Fund and the Office of Social Innovation (the "Office") will have positive impact.

The Social Innovation Community Needs Guidance?

The notion that the social innovation community needs direction lest it get distracted seems misguided itself. One of the exciting aspects of the field is the very fact that it does represent such a rich ecosystem that solutions to social problems are bound to sprout. In contrast, the idea that the government can best determine where people should focus their efforts brings to mind a parallel in command economics, along with all of its failings. Indeed, the Chairman of Venture Philanthropy Partners, Mario Morino, in a great piece on how innovation is like a coral reef, describes innovation as:

A natural, chaotic, unpredictable process that is hard, perhaps even impossible, for well-meaning outsiders to foster. If we try to control or micromanage innovation, we risk squeezing out the very life forces that give rise to successful new ideas. Instead we must focus on finding ways to nurture and accelerate the natural processes of innovation once they've begun organically.
(The Stanford Social Innovation Review also published an opinion piece that appears to be an earlier version of his thinking on this topic.)


Image by Sam and Ian.

Of course, the Fund and Office will be guided by the Administration's policy priorities and will focus its support in the areas of education, health care, and economic opportunity. But there is a difference between the artificial channeling of people's energy that Mr. Reich describes and the targeted support of people's efforts in certain areas, which the Fund will do.

Can the Fund and the Office support social innovation, then, even with the social innovation community trailblazing a million new paths? I think so. And, apparently, so does the President: creating a policy environment in which (all) innovations can thrive is one of the tenets of his new governing approach in this area, according to a White House blog post. The Fund will not—and should not—tell people where to focus their energy. In the words of Mr. Morino:
We have an enormous amount of innovation taking place all through our nation—in physical and virtual worlds, in well-financed laboratories and converted garages, in corporations and small businesses, universities and charter schools, nonprofits and social ventures, and even government agencies…The challenge before us is to inspire all innovators and those who may not even know yet that they are innovators.
Look to New People for the "True" Innovation?

Mr. Reich's second recommendation corresponds, to a degree, with this last idea—that we need to harness the potential of those who don't yet consider themselves to be innovators. He recommends that the Fund and the Office find and draft the people who do not currently apply their passions and expertise to activities with social goals, and to look to them for the "truly new ideas and approaches."

I agree that increased diversity in perspective and expertise should be beneficial to innovation. But I much prefer Mr. Morino's phrasing. We should inspire people from all backgrounds—not draft and direct them—to apply their perspective to socially beneficial activities.

And we must be careful not to devalue the potential of the people who have been and are currently generating the innovations that have social benefit, as Mr. Reich's phrasing comes dangerously close to doing.

Nor must a social innovation necessarily arise from an effort to generate a social innovation. Ashni Mohnot's blog post on social entrepreneurship (not to equate the term with "social innovation") draws from commentary by a Colombian entrepreneur to explain that, for many, social entrepreneurship is not a hobby, it's a necessity. This insightful comment by John Alexis Guerra Gómez in a socialedge discussion (search for his name) illustrates that many people generate innovations with social benefit not because they go looking for problems to solve, but because the problems come looking for them. The idea that the revolutionary innovations of the future will come from the people who actually face the challenges is rapidly gaining credence.

Suffice it to say that true social innovation will come from many more areas than a corps of bright minds that the government recruits. Fortunately, by strengthening the infrastructure of the social innovation field, the Fund will encourage more activity across the board.

Don't Fund Organizations? Really?

Mr. Reich is not alone in his third area of concern. Social Velocity, in another post about the Social Innovation Fund debate, points to discussions here and here, which concern the fear that only organizations with established and proven concepts will end up getting funding. "It has become all too easy, too common," Mr. Reich says, "for successful organizations to fall into a pattern, to get lazy, to focus on maintaining their work instead of innovating continuously and looking for new solutions." Don't fund organizations, he advises, fund projects, ideas, and people. The IssueLab blog (linked above) poses a related question: "How [do we] ensure that the government doesn't just reward the largest and most tested programs in lieu of smaller, sometimes newer, and even untested efforts at innovation[?]"

Well, I challenge the assumption that this vehicle must fund nascent innovations.

On the contrary, funding proven innovations is its explicit mandate. The press release says it without a hint of disguise: "The Social Innovation Fund will identify what is working in communities across the country [and] provide growth capital for these programs." The idea was never for the Fund to identify the garage project that will become the next HP. The idea is to help winning innovations (yes, they are still innovations even if they are no longer on the fringe) to scale up and spread their impact.

And, contrary to what Mr. Reich says, this is an appropriate goal. When an organization is implementing an innovation that makes a difference, we should be concerned precisely with helping it to continue its work and to increase its impact.

It seems an appropriate role for a government fund, too. What reason do we have to think that a government agency can "root out new innovations" from each nook and cranny in which they are hiding? That's a job for angel investors and social venture capital groups (although it's true that this sector needs development). The Social Innovation Fund, in contrast, will support the next stage of funding to help the organization scale nationally. The Fund is filling a gap here, where no Series B and C financing is available to take an idea to the next level, as might be available from a traditional venture capital firm in other sectors. What's more, the Fund will leverage its role to mobilize "foundations, philanthropists, and corporations which will commit matching resources, funding, and technical assistance" (press release).

In the end, it should be no surprise that the government will insist on funding models that can demonstrate their impact; after all, it does not want to be too speculative with public money.

Don't Force It

"Do not train a child to learn by force or harshness; but direct them to it by what amuses their minds, so that you may be better able to discover with accuracy the peculiar bent of the genius of each."
– Plato

Social innovation can't be engineered. The best we can do is to support that "natural, chaotic, unpredictable process" of Mr. Morino's coral reef and nurture the innovations that take hold.

This experiment is not the full solution to that challenge, but it's a great start in strengthening the social innovation field in the U.S. And, as I mentioned in a previous post, for the federal government to espouse the need for an explicit focus on social innovation is a huge step in the right direction. Social Velocity got it right when they wrote, "If we are truly going to scale social solutions then the largest funder of those solutions [i.e., the federal government] has to be on board" (emphasis added). We as the social innovation community (if we can even call it that) should be excited for this support.