Chicken-Egg conundrum in social innovation funding

Our reading of this week presented us how government support for social innovation. The most notable piece is the proposal for establishing office of social innovation and civil participation by Michele Jolin in 2007 and 2008.

She believed the government could serve in the following areas:

1) Designing tools to direct federal funds to nonprofits that have demonstrated results

2) Serving as a catalyst for cross-sector partnerships between the non-profit sector, corporation, and the government

3) Exploring possible revisions to the tax code

4) Coordinating with the Corporation for National and Community Service to find ways that national service can leverage the work of social entrepreneurs and build the capacity of the nonprofit sector.

Fortunately, the office was established soon in 2009. The one of the most notable piece of their initiative is creating Social Innovation Fund.which will identify promising, innovative solutions that potential to scale to meet the needs of other communities. However, this statement makes me think about the difficulty I witnessed in NGO and social enterprises field of China.

Most case is like that: a social enterprises from particular area seeking a solution to a certain problem, but was stopped out of lacking money and human capital. He can't get money from competitive fundraising with FAMOUS BIG NAME NGOs or social enterprises with strong background, for example, the founder from Mckinsey. Therefore, he can't scale up his business and impact with limited resources.

If government only support those who has already demonstrated results, it will most likely that government always funded big names. It will also leads to the Matthew effect in social innovation field.

I believe the promising reason that social innovation field carries is because it release innovation of every single one. If funding problem could cause more gap between the strong NGOs and small NGOs, it would results in a new unbalance.

My question for this lecture:

1) How could government balance this chicken-egg conundrum and choose the most suitable one to fund?

BTW, I posted a poster of Empowering Chinese Social Enterprises Leaders program initiated by Clinton Global Initiative.