The Role of Foundations in Taking Social Innovations to Scale With Government Support

The Role of Foundations in Taking Social Innovations to Scale With Government Support

Not so long ago, when a foundation wanted to solve a pressing social problem it would fund an innovative nonprofit organization doing cutting-edge work and hope that the idea would catch the government's interest and that the government would expand the program to serve even more people. From there, the foundation would move on to the next good idea and the cycle would start over again.

During 2010, the Obama administration turned that scenario on its head or, perhaps, made that scenario more likely to succeed than ever before. Through its Social Innovation Fund (managed by the Corporation for National and Community Service), the government has taken a very intentional role, investing $50 million to expand effective solutions that can be replicated in communities nationwide and, beyond the one fund, building innovation funds into many federal agencies. Indeed, the government is taking a proactive and direct approach to social problems by helping to expand the impact of high-performing nonprofit organizations and seeking the innovations that private philanthropy has already brought into existence.

As the work of the Social Innovation Fund grantees continues into 2011, private philanthropies remain key players in the equation, not simply because of the matching funds they have provided but because they continue to work closely with their government and nonprofit partners. To that end, it's important not to forget hard-earned lessons that are still relevant for private philanthropies today.

For starters, flexibility is a key ingredient for any highly successful nonprofit. Creative nonprofits must have a certain degree of freedom to move flexibly according to their best judgment. They need to be able to make decisions that don't require government approval. Private foundations can offer ballast against the increased and sometimes arbitrary control that comes with government involvement.

A second lesson is that private foundations can react nimbly and offset weaknesses or challenges created by government slowness or bureaucracy. Sometimes, government takes months to make a decision; sometimes, it makes the wrong decision. In either case, private support can and should be available to fill the gap.

A third lesson may be especially relevant in light of the recent changes in congressional leadership: While government priorities often shift with different political winds, private foundations are able to maintain a long-term commitment to an organization's agenda and vision. What happens, for example, when an Appropriations staffer says, "There's been a change. We don't support that initiative any more because it is associated with the chairman's predecessor from the other party." Thankfully, private foundations backing the endeavor are able to step in temporarily until the political problem is solved.

A great example of a successful public-private partnership is how the Charles Stewart Mott Foundation and the Ford Foundation supported YouthBuild USA for more than twenty years during the process of taking YouthBuild to partial scale with public funds. At every critical juncture, Mott and Ford stepped in with wise and flexible investments that kept our train on the tracks and moving toward increased scale and impact. They funded evaluations, communications, capacity initiatives, an endowment, and filled the inevitable gaps in government funding. It was amazing long-term support that helped YouthBuild defy the odds and succeed at going to partial scale with quality.

I started YouthBuild in the late 1970s after asking teenagers what they would do if they had adult support. They answered that they would take back abandoned buildings from drug dealers and build affordable housing for poor families and the homeless. From an initial tenement building in East Harlem that was visited by trustees of both the Mott and Ford foundations in the 1980s, YouthBuild has expanded to 273 local programs nationwide that have collectively engaged more than 100,000 young people in building 20,000 units of affordable housing while working toward their GEDs or diplomas in an environment that emphasizes community service and leadership development. None of this would have occurred without the steady support of the Mott and Ford foundations over the decades. And that is another lesson for philanthropists: long-term support is critical.

Local YouthBuild programs now get money from the federal and state governments. They apply for competitive grants from the U.S. Department of Labor's YouthBuild program, which is authorized under the Workforce Investment Act. They are not assured steady funding, however, and must re-apply every two years. More than twice as many apply as can be funded. Without private and local support, some of these wonderful programs are forced to shut down thus leaving young people without the YouthBuild option for a second chance at a positive path.

Even now that a national network of federally funded programs has been established, YouthBuild USA continues to be supported by private and corporate foundations such as Mott, Gates, Open Society, Skoll, Walmart, Bank of America, Saint Gobain, and others so that it can provide cutting-edge innovations within our network, keeping the federally funded program dynamic and responsive to new challenges and opportunities.

Nobody should ever think that the private philanthropic role is less important just because government is providing core support. On the contrary, it means private support can play a catalytic cutting-edge role with greater assurance that the program will be taken to scale through government's greater resources.

The relationship between philanthropy and government undoubtedly will shift over the coming years. But in that changing dynamic, philanthropy's role will continue to be critical.

Dorothy Stoneman, a MacArthur and Ashoka Fellow, is president and founder of YouthBuild USA, a national nonprofit that received the international Skoll Award for Social Entrepreneurship and was named one of America's twelve best nonprofits in the book Forces for Good.