Article co-authored by Vanessa Kirsch and Kim Syman of New Profit Inc.
President Obama's new White House Office on Social Innovation and Civic Participation represents more than just another bureaucratic office. If leveraged effectively, this Office could transform how we solve our nation's most pressing domestic problems -- and ultimately move the needle on critical challenges in education, health care, poverty, joblessness, the environment, and more. Here's how.
Just as innovation in the private sector has been the key to our nation's longstanding economic prosperity, so too can innovation in the social sector provide the solutions we need to solve our nation's most challenging social ills. The social sector in its current form, however, fails to foster, support, and scale innovation. Fundamental shifts need to occur in the structure of the social sector in order for systems of innovation to truly take hold.
While many factors contribute to the current dynamics of the social sector, the lack of a clear metric of effectiveness -- such as profit -- makes it difficult for resources to flow to high-performing organizations that are achieving the greatest impact. Adam Smith's invisible hand is, essentially, directionless.
Hence, rather than capital flowing to social initiatives that are most effective, much of it goes to failing non-profits with suboptimal impact or whose footprint is limited and will not scale. Retailer John Wannamaker once famously quipped that "Half the money I spend on advertising is wasted. The trouble is I don't know which half." This is true in spades for philanthropic spending. The effectiveness of America's philanthropic dollars would be incalculably improved if they could be more astutely targeted.
The same principles apply to government funding too: government currently spends billions of dollars per year in education, workforce and economic development, public health, and related areas. But allocation of these resources rarely happens though a process that would enable us to identify and grow the most powerful innovations. For example, most contributions to entities that qualify for not-for-profit status are tax-deductible, but the same level of subsidy occurs regardless of performance, making these subsidies seemingly indiscriminate. We see education nonprofits that aim to help failing public schools receive the same tax subsidy regardless of whether they improve academic achievement. In short, the federal government is already subsidizing social innovation at massive scale, but not in a targeted or performance-based manner.
Enter the White House Office of Social Innovation and Civic Participation.
This Office can use its convening power to help break though some of the toughest barriers that have long prevented marketplaces that can grow social innovations from taking hold, like the lack of metrics that enable us to know what works and the need to invest in "bottom up" versus "top down" solutions. It can help catalyze a shift in the social sector that would better guide funding and support towards social enterprises that have impact.
How might the Social Innovation Office do this? It must have three priorities.
First, it must demonstrate a new way to solve social problems where government serves as an investor in innovations that are developed and identified by citizens outside of government who better understand the problems and can thus identify and support innovative solutions. The Obama Administration and Congress took the first step in this direction with the recently created Innovation Fund, included in the Edward M. Kennedy Serve America Act signed into law in April.
Second, the Office should guide more social innovators towards "bottom-up" initiatives, in preference to "trickle-down" philanthropy - because the societal impact of the former is typically greater. Bottom-up innovations, also known as disruptive innovations, enable a larger population of people who previously had limited access to expensive services to now enjoy them. By illustration, philanthropy has built most major concert halls, and funded most major symphony orchestras. These have enriched our culture, to be sure, but this largesse by the elites largely benefits the elites. Disruptive or bottom-up investments, like RCA's Victorola record players and Sony's transistor radios, brought music to those who couldn't afford the symphony in the concert hall. These disruptive innovations distributed music to a much broader population, even to the consumers who initially lacked concert hall fidelity, and transformed our society's consumption of music. Support for these types of disruptive innovations in the social sector could surface new, more effective, higher-impact solutions to our most stubborn social challenges, too.
Third, the Office should use the convening power of the White House to initiate a focus on impact and metrics. Specifically, the White House should help initiate a process by which categories of social innovations are agreed upon, and metrics can be defined for assessing the impact of innovations in each category on the social problems that they target. Just like independent rating agencies have developed methods for assessing the safety of investments in various securities, methods might emerge that help social investors categorize the type of impact that various social entrepreneurs hope to achieve, and to rate the present and potential effectiveness of their efforts to achieve that impact. Just as investors would never invest in securities whose risks were not balanced by potential returns, few philanthropists intend to dissipate their hard-earned capital propping up non-profits that are unlikely to succeed with their stated missions, and whose impact cannot scale. New methods for measuring risk and impact would help tremendously.
It goes without saying that the Office should also use its convening power to break down an antiquated assumption that all social innovation is the province of the non-profit sector. Our language, accounting conventions, capital markets and tax codes all amplify the binary belief that profit is the opposite of philanthropy and incompatible with social innovation. It isn't. For example, for-profit micro-lending is quickly upstaging non-profit spending by the World Bank as effective mechanisms for helping people escape poverty in nations around the world. All enterprises that hope to sustain their work need capital to survive and grow. We urge the White House to embrace this perspective and use its convening power to lift up social innovation without regard to tax status.
Some people might wonder whether government should even be in the business of fostering and directing social innovation. After all, the government's track record in initiating impactful innovations has been decidedly mixed: On the one hand, federal subsidies spawned America's system of state universities, which extended the availability of higher education to far more people than could be admitted to elite private colleges. And the miraculous potential of molecular medicine has emerged thanks, in no small measure, to funding from the National Institute of Health.
On the other hand, vast sums of taxpayer dollars have been wasted on innovations that proved foolish. Over $60 billion has been spent equipping schools with computers, for example, but with no measurable impact. And the billions wasted on oil shale as a solution to America's dependence on foreign oil in the 1970s parallel the billions being dissipated on biofuels in the present decade.
But with record unemployment, rising job loss, a high school dropout crisis, strained communities, and unprecedented economic restructuring, we don't have a choice but to innovate.
If the White House Office of Social Innovation can improve the context for social innovation, its impact will extend far beyond a new government bureaucracy -- it will transform the way we solve problems; create a powerful new alignment around impact; and foster an environment where government, the vast reservoirs of American philanthropy, and socially innovative entrepreneurs will spend less on things that don't work, and more on things that do.
Otherwise, it's business as usual, just different lobbyists.
As for sociual "innovation", that's just the Axelrod re-branding term for social engineering. The government should not be in that business.
If the new White House Office on Social Innovation and Civic Participation is interested in exploring these creative approaches to living on the downward supply slope of the oil curve, it could contribute significantly to our future health, to survival of many, and to the preservation of civic order. If they can't, the movements will go on by themselves.
One alternative pattern would predict breakdowns in economics, transportation, food, education, housing, and civic order as oil prices rise and climate patterns change our ability to produce food, Suburbs could be threatened.
Reading about this new office, I am hopeful that they will seek out the people who are designing these grass roots movements and bring them together to help us all design a resilient future for ourselves - maybe with government help? Doesn't sound bad to me.
Plutocracy is the .1% of the filthy rich banksters and CEOs
totally dominating the 99.9% serfs.
Democracy is the social invention we need.
We let the corporate media buy the DLC dems and use the corprate media to sucker punch Dean, Kucinich and any other true people;s candidate.
Till People learn to totally reject the media fabricate popular consensus, the Plutocrats rule.
Obama, Clinton, Rahm and the entire Dem leadership is conservative, corpratists.
"The DLC states that it “seeks to define and galvanize popular support for a new public philosophy built on progressive ideals, mainstream values, and innovative, non-bureaucratic, market-based solutions." [3]"
http://en.wikipedia.org/wiki/Democratic_Leadership_Council
Note that only one phrase in their mission statement has any actual meaning:
Market Based Solutions.
And they get huge funding from corporate lobbyists.
Government agencies do not operate much differently than any large business. Would you say, "oh god, not ANOTHER corporation...dont we already have TOO many"?!?!?!? OF COURSE YOU WOULD NOT.
You have been fooled to believe that somehow your government is dysfunctional. Well I hate to break it to you, but if our government were really as dysfunctional as you claim, America would not be the super power it is today. Strong countries have strong governments.
Surprisingly, our government is not out to get you. It is (and should have always been) out to HELP you. For god sakes, this whole "government is the problem" mindset is so silly it is laughable. Get over it. Help make your country stronger by realizing the public sector has just as much as a place in this country as the private. Look around and start to appreciate your roads, parks, beaches, lakes, post offices, monuments, and all the other countless great things that not only make this country great but are a testimony to the great work our government does.
History judges societies based on how well they care for "the least of these". For those who read the Bible, it states that nations will be judged likewise. As individuals, we will too.
We need to do a lot of things differently. If a new government agency can possibly help, then we should give it a chance. We've had eight years to allow the "market", "philanthropists" and "non-profits" to fix major issues like poverty, lack of medical care, failing schools and so on. They have not succeeded. We cannot afford to give those groups four or eight more years to "figure it out" on their own. We NEED the government to step in and take innovative steps NOW.
If we won't take responsibility for our fellow citizens, then the government should. It's a shame that so many of us lack compassion and fail to acknowledge how much "help" most of us have had. Those who usually don't support "government programs" feel this way because they come from families who will support THEM when they stumble. Unfortunately, not every person in our country has "family welfare". It's a shame that we aren't more willing to help those whose relatives cannot afford to support them after they stumble or "fall". Perhaps a new government agency will begin to help our citizens who are "falling behind".
It is designed to get input from outside the beltway so that the best ideas have a chance of getting picked. I really want to see it used to promote newer teaching methods and other changes to our public education system. Like the Naperville (IL) High School PE program, now in it's 18th year. The program could be designed to allow private donors to contribute to funding. The Wannamakers and other wealthy might just try it to get a better ROI on there philanthropic donations.
I think this made my week.
The fallacy of this approach is that you think governmental officials want to solve problems or direct money where it is needed. They want to perpetuate problems so they can continue to control and to direct money where it best benefits them.
Please name me one problem, just even a small one, which the Federal Government has solved!!!!!!!
The social security system was, and still is, a success. I can see this new program being the incubator of ideas to keep social security funded for future generations.
You only asked for 1 problem, I've given you 2 at no extra cost.