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The White House Office on Social Innovation: A New Paradigm for Solving Social Problems
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.
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Exciting new businesses/organizations are springing up that are enabling better social innovation. One interesting company, BeDo, is engaging corporations and will be holding a social intrapreneurship conference in conjunction with SOCAP09. www.mybedo.com/intrapreneurs/
Let's face it. So far the Obama administration's approach to everything is to throw more money at it.
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.
There is a movement just getting underway worldwide toward local community organizations. Based on the predictions of Climate Change and Peak Oil, we can anticipate that our social arrangements will change drastically in the next few decades. In part that's because all societies are based on their energy sources - in accordance with the 2nd Law of Thermodynamics . So as the age of fossil fuels draws to a close, a surprising number of communities around the world are exploring how they will design their own futures - locally. From the ground up. Some examples of this include Transition Towns, Post-Carbon Institute, and Common Good Finance.
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.
Another foot well placed in the door, White House controling social community issues not good. In remote areas of different states Public Health is a farce, that's a gov. flop. If gov. cant help on essentials, like physical,and mental health, how are they going be of any value in the social. I question the intrusion of gov. in our small home towns. Somethings wrong here. Global is not the contract of the Presidency, its not on our high priority list. Bring back our industries, be American, then the social will straighten out.
That's not the conservavit5e corporatist GOP and DLC agenda.
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.
Social innovation sponsored by the government? God help us.
They need to get busy redesigning capitalism. It isn't working so well.
It is working better than any other system every tried.
Oh I get! Obama is going to solve the unemployment problem by creating jobs in his administration. Wonder how that's workin' for him...
I think the regard of whether or not what has been implemented is working that Christensen highlights is important. This should remain in the objective assessment of Obama's new agency. I have faith, however, with their passion to improve American lives and the clear understanding of public abilities and structural limitations needed to balance that fervor, that they will implement effective measures to bolster social innovation.
If indeed the idea of the Office of Social Innovation is to create means of ensuring the effectiveness of proposed solutions and of ensuring that resources available are used in ways that actually solve some of the most chronic social issues in our communities, it would indeed be a breakthrough to greater security and a better future for this country and the world. Finding ways to measure the effectiveness of every philantropic project we undertake and insisting on demonstrating measurable results so we can design and forecast plans to eradicate a particular problem could put us on the way to really solving the most nagging social problems in our communities. Just like for-profit institutions must demonstrate accountability, insight, and foresight in planning and show measurable results, non-profit organizations must submit to the same discipline and rigor if we want to see progress. I view solving chronic social problems with the same urgency as we view addressing, for example, the issues to improve the economic outlook. It is a matter of survival for society in general. Improving chronic social issues using smart measurable means for practical results will pay huge dividends in restoring optimism and greater security within communities.
This is a great step toward promoting for-profit entrepreneurial solutions to social and environmental problems, however, the private sector needs to look toward this office as an example of the leadership we need, rather than taking the “Obama’s got that covered” approach. To Christensen’s first point, we need the government AND the private sector to invest in new solutions. Venture capitalists, angel investors, and foundations have a much greater quantity of capital to invest and a greater tolerance for risk than the government. The economic, social and environmental problems that face us will require this heft and resilience. The little fish organizations promoting private capital investments in social enterprise, like Investors' Circle, need to be followed by bigger fish with deeper wallets.
Why so many unpatriotic people on this list? "not another government agency" What is wrong with government agencies?
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.
It is shocking that we, as a country, are "ok" with so many of our citizens "falling behind".
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".
Given all the waste in government and not for profit spending, an agency which uses it's White House associated powers to create some level of accountability in social spending can't be all bad. However, I'm far less hopeful than this article suggests. As a society, we politicize our social ills and both left and right freeze us to inaction. The disgraceful performance of the "War on Drugs" over many decades, the accompanying growth of our prison population and the unwillingness of many to admit failure in the face of all evidence and accept the many alternatives that exist for dealing with this problem, are good examples of how politics not common sense frames our social agenda. We are not lacking in metrics. We're lacking in humility to accept our failures and a willingness to use established ideas from many other societies to address a number of our pressing social problems. (See the Vancouver needle exchange program, etc.) Washington is hardly the center of the universe and certainly not a fount of ideas. I'm skeptical that this well meant effort will yield results unless it can be freed from the poltical bonds of control that so often bind us to inaction.
Seems like this is an argument based on not understanding the article. I had not heard about this until now. It is exactly the kind of approach Obama uses in his own work and said he would use at the WH. This is a truly much needed action. The failures of the war on drugs and other government programs can be evaluated by this program as well as social programs.
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.
Once again, you think the solution to a problem is to let the Federal Government create a measure of just how well something works. It is a shame that Federal Government does not create a measure of how well it works. It would self abandon itself in a few years if success was considered in any of its programs.
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!!!!!!!
World War II
The TVA brought hydro-electric power to the southern states in the 1930's and changed for the better the economy and culture of the area and the country.
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.
I can take a piece of paper, put it in an envelope, and for $0.43 they will take it across the country and give it to my cousin for me. I know that's small, but I like giving my cousin pieces of paper, ergo, problem solved.
Europe rehab.
Japan rehab.
Massive universal and higher education.
Medicare - far more efficient than HMO and Medical insurers put together ten times over.
Actually, the list is massive.
The VA. Don't laugh. There's a whole book on how good it is. The title says it all.
Best Care Anywhere: Why VA Health Care is Better Than Yours
by Phillip Longman. There are some real, peer reviewed journal studies too.
Government is not perfect. But sometimes I think it's better than a lot of business.
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