By Will Corbin, Project Associate.

 

If you are familiar with me or have read my previous blogs, then you know that I am a big proponent of public-private partnerships, especially when it comes to economic and community development. I believe that one of the government’s main responsibilities is to help ensure the social and economic well-being of its citizens. At the same time, however, this task should not fall solely upon the government. In my March 25, 2010 blog post, Governments Need Help Too, I argued that “the harsh economic realities of the present day have forced local government leadership to rely more on private organizations and non-profits in order to spur economic and community development.” This special relationship between public and private organizations represents one of the many ways successful communities sustain positive economic growth.

 

I was thus very excited when Jasmine McGinnis, a good friend of mine and Public Administration doctoral candidate at Georgia State’s Andrew Young School of Policy Studies, informed me about the Obama Administration’s Social Innovation Fund (SIF). Obama has pledged to bolster governmental support of non-profit organizations across America.

 

According to the White House, the SIF is “part of the President’s commitment to invest in results-oriented solutions around the country.” The fund intends to increase government partnership with innovative non-profit organizations, philanthropists, and social entrepreneurs to support grassroots solutions to the many problems that plague American communities, such as poverty and lack of economic opportunity, education, health, and youth development.

 

So how will the SIF work? In short, according to America Forward, the U.S. Federal Government will provide grants to existing grant-making institutions - or partnerships of grant-making institutions, state commissions, and mayors or other local government CEOs.

 

These grantees will, in turn, make sub-grants to non-profit organizations in order to expand or replicate proven initiatives, or, to support promising new initiatives in low-income communities. Congress has authorized $50 million to be appropriated for this program in FY2010. This amount increases incrementally to $100 million by FY2014.

 

It is nice to see that our President is working to give philanthropic and non-profit causes the attention that they so desperately need and deserve. But alas, upon examining the facts more closely, the Obama administration, as well as Congress, is giving the issue little more than lip-service. Much more needs to be done.

 

McGinnis approaches the SIF with extreme caution - her primary concern lies in the question of evaluation, and to what extent the fund will conduct such measurements. Some important questions she brings up are:

 

• What exactly is being measured?

 

• How is it being measured, and with what resources?

 

• Will this fund take metrics that have already been established into account (like the Urban Institute’s Outcome Indicators Projector or the United Way’s outcome metrics, for example)?

 

• Will the SIF consult academic experts in evaluation about how, why, and what to measure within these non-profit organizations?

 

These are all excellent questions that highlight the importance of evaluation when discussing non-profit organizations and their work. In addition to these very relevant questions, I would like to add a few criticisms as well.

 

My main contention is that not enough funding is being offered by Congress! Out of the massive U.S. budget of nearly $4 trillion, a mere $50 million to $100 million will be devoted to the SIF. Given the enormity of problems in our communities, $100 million is a rather paltry amount, and – not to be too pessimistic – unlikely to make a significant, lasting impact. Obama and Congress must do better.

 

Secondly, and perhaps just as importantly, these funds will certainly not go to those organizations that need it most! McGinnis brings up a great point when she mentions that scholars have found one of the reasons non-profit organizations can be so effective is because they are local and community-based. My fear is that because of the highly competitive and structured process, the organizations that do end up winning SIF grants will be the larger, more established ones who “likely have the capacity to not only go through the administrative process of applying for grants, but also the financial and operational capacity to accept a large grant.”

 

In order to make the most impact, the cash needs to be dispersed to more of the lesser-known community-based organizations (many of whom arguably have just as much, if not more, of an impact, and are doing great work). My theory borders on over-simplification, but is easy to grasp: the more local-level organizations that are involved in the non-profit cause, the better off society will be.

 

Of course, the White House wants to cover its back as well, by not foolishly give money out to anyone who asks, unless they undergo a thorough vetting process. Therefore, the stricter standards that accompany SIF grant applications means that much of the funding will end up in the hands of the larger, more well-known organizations, which is unfortunate, in my opinion.

 

Finally, Pablo Eisenberg, in a blog post to onphilanthropy.com offers some pretty interesting ideas on how to increase monetary contributions to non-profits, such as perhaps lobbying congress to increase the five percent minimal payout that foundations are required to distribute annually – and making sure these payouts are all in the form of grants. According to Eisenberg, under current law, foundations can circumvent these mandatory distribution requirements by including all their management costs as part of their minimal payout.

 

The Obama Administration has taken some very positive steps forward concerning the support of public-private partnerships and government investment in non-profit organizations, but more must be done in order to effectively tackle the socio-economic problems that continue to afflict American communities across the nation.