The People that Make Scale Possible

 

Michele Jolin’s report The Vital and Growing Non-Profit Sector, points out one hurdle to the scalability of social innovations/nonprofits, an issue of human capital - finding the right people.  “High-growth organizations report the challenge of finding qualified staff at every level, especially middle managers, has slowed their ability to expand, even when financial capital is available.”  I’ve felt this issue first-hand and am a firm believer that without the right people, all the money in the world is not enough to make an idea/innovation effective.  The people who carry it out are the ones who bring innovative ideas to life. 

Delotte’s Talent Edge 2020: Blueprints for the New Normal identifies that recruiting and retaining top talent is an issue even in the private sector.   Specifically, the report indicates anticipated talent shortages in 12 key areas such as R&D, strategy and planning, operations, finance, and IT among others.  While attracting qualified talent is a challenge in the private sector, imagine how much more of an issue it is in the nonprofit world?   Jolin’s report points to just one organization that is addressing the need (AmeriCorps) but only does so at the entry level. 

I was disappointed to see just one example of an organization that is making strides in this area in the report and was curious to see what else was out there.  While there is no one easy fix, the issue of scaling by attracting private sector employees to the nonprofits could be addressed by some of the following:

1.     Loan forgiveness for students who take on careers in the public sector (e.g.: the Stafford Loan Forgiveness Program, http://www.studentloannetwork.com/repayment/public-service-loan-forgiveness.php).

2.     Aggressive recruitment campaigns on college and graduate school campuses that traditionally prepare students for private sector careers.  Teach For America is an example of an organization that does this very well.   

3.     Adapting recruitment strategies similar those of highly selective private sector companies.  These companies tend to “advertise” their results and impact, sign-on bonuses, opportunities for career advancement, training, and incentives. 

Conditional cash transfers beyond poverty alleviation

I really liked Tina Rosenberg's "To Beat Back Poverty, Pay the Poor" reading for this week. Thinking of a conditional cash transfer program as a "person-centered" approach is key. It is necessary to delve micro-level and understand what could empower a family to pull themselves out of poverty. What makes Oportunidades successful seems to be a realization that moving out of poverty is only the first step and finishing high school is a part of the process.

This also reminds me of my summer experience working with the Global Enviornment Facility's Small Grants Programme (SGP), implemented by the United Nations Development Programme. The SGP funds community based innovative projects towards environmental sustainability. But the grants go a long way as they empower communities to take ownership of their own livelihoods. I was able to connect with Mariamma Djitté, a woman in Senegal who had joined a community initiative to make and utilize solar cookers. I learned that the solar cooker was much more than an object made possible by a grant. It was something that helped her spend less time cooking and spend more time with her family, significantly improved her health as she didn't have to use firewood, and that she actually purchased another solar cooker to make baked goods and sell them in the market. With the additional revenue, she was able to pay for her children to attend school. It amazes me how this limited grant, similar to a conditional cash transfer, had gone such a long way.

The People that Make Scale Possible

what about the little guys?

In The Economist article "Let's Hear Those Ideas," the author discusses how President Obama's Social Innovation Fun gave about $50million to nonprofit organizations. This number is impressive, and the initiative itself is something to be commended, but as the article points out, this money is only going to some of America's most successful nonprofits. This makes me wonder, what about the social innovators who haven't gotten enough traction to prove themselves just yet? The Social Innovation Fund is certainly an inspiring program, and one that is sure to provide the resources for many organizations to do great things. However, it seems that is only already successful organizations will reap the benefits of such a program, then the program itself is rather shortsighted. There are so many social innovators and other worthwhile nonprofits who are just starting out, or are operating on a smaller scale than organizations like Teach for America. TFA is a great organization and it does great things for underserved schools, but most nonprofits aren't luck enough to have tens of thousands of college graduates vying for the chance to work with them. It seems like a program like The Social Innovation Fund would have an even greater impact if some of their funds were spread amongst smaller nonprofits. If some of these organizations were able to get the funds they need to broaden their reach, maybe they could one day become as successful as TFA.

Quality

I was shocked to learn from the reading that in 2004 7.2 percent of the U.S. economy was employed in the non-profit sector. That seems to be a very large percentage, and it seems to be a growing field. While some might be contended that it is growing with more quantity than quality; it is still an interesting number. The actual number of people in 2004 employed in the non-profit sector is about 9.4 million; that same year the city of Pittsburgh was home to about 330,000 people. That means that the city of Pittsburgh would have to be filled 28 times over to house all the people in America working in the non-profit sector. Yet, with all the bright people working in the non-profit sector and all those working outside the non-profit sector trying to tackle our most pressing social issues many if these social issues are worse than ever. To me this highlights the need for true social innovation. It seems that it might be time to start focusing on quality over quantity.

Changing more than the tax code when it comes to government involvement

In the readings this week there were many suggestions about how an executive level office of social innovation could help foster and create avenues to encourage innovation. Among the many suggestions was the idea that the tax code should be changed, updating the laws that govern 501(c)3 status and the creation of new laws that would encourage hybrid organizational models that would propel innovation. While this is an idea that comes up a lot in my classes, and is one that I agree with, I think that government should use its influence beyond changing tax law.

One example that came up in a panel discussion, Creative Urbanism, here at Heinz College last week was how New York City changed it's zoning laws to encourage development of a neighborhood. During the 1960's artists illegally populated the dilapidated industrial area of SoHo in New York City. Instead of booting the artists to the curb, the city restructured it's zoning laws to create a certification process for the artists to stay and work, thereby improving the neighborhood overall. While the new zoning ordinances may have worked for a period of time, they were easily abused by non-artists looking for cheap residence and I would consider it an open question as to whether the program was a total success.

While this specific instance is an open question, I think the underlying idea is a good one and one that can be applied to the field of social innovation. How can government alter the way it treats property and zoning to encourage innovation? Working in tandem with changes in tax law, changes to the way property is treated could dramatically reduce start-up costs for many innovators and create long-term value for decrepit areas.

Coaching Social Innovators

At nearly any campus with a business school, there are clubs for marketing, finance, entrepreneurship, and a host of other business related topics. However, clubs for social innovation or entrepreneurship seem to be few and far between. This article explains to importance for social innovators and entrepreneurs to have a support system or a coach in order to create a better product or a bigger impact for their cause. Granted, social innovation and entrepreneurship are newer topics themselves, which contributes to the lack of support for social innovators in school. One video we watched in class mentioned a support ground from a university in England (I believe it was at Oxford) and at CMU we have our own organization dedicated to helping individuals bring about social change. However, it seems as though these organization have been focused towards graduate students rather than undergraduates, and they seemed to be clustered around business schools. This is one pitfall in the creation of these groups already - certainly these innovations can come from engineers and other disciplines at many levels. At graduation on campus last year, Dr. Cohen announced a new fund for budding entrepreneurs at CMU. Although this money can be directed to a larger groups of individuals with innovative ideas, it still seems as though it is focused on the entrepreneurial venture itself, and not the social change it could potentially bring about.

If we want to bring about more social innovation that can be much more effective, these coaching and support techniques discussed in the article should be expanded and more accessible for more students who may otherwise not have the experience or knowledge to make a change with their idea.

So what does 1% of the budget look like?

In the economist article, it mentioned that the Centre for American Progress advocates for every government to be required to put 1% of its budget into innovation funds. That made me wonder: how much is 1%?

This infographic from the New York Times displays the differences between the Obama Administration's 2010 and 2011 budget.

This billion dollar-o-gram from 2009 shows billions of spending in context:
Here's another one for the UK side:

civic entrepreneurship

The reference to “civic entrepreneurs” in this week’s readings caught my eye. While “civic” and “social” are often used interchangeably to characterize social enterprise, the author of the Economist article specifically means innovation in the context of bureaucracy. It’s not clear to what extent that’s even possible, let alone a good idea.

Taxpayer-funded public administration just can’t assume risk or pursue novelty in the same way as private initiatives, which are funded selectively and voluntarily. On the other hand, it seems appropriate for governments to be an engine of economic and social improvement, given their unique means, scope, and equity imperative. This complication cuts to the heart of our discussion topic this week: how the public sector can at once support and thwart innovation.

Two years ago, I heard Michele Jolin speak about the White House Office of Social Innovation. She was addressing a roomful of community and private grant-makers. Everyone seemed to agree that multiyear general operating grants are an unmet need. However, the audience questions betrayed some skepticism about how the White House would actually reach the grassroots – whether matching grants and strict program evaluation were universally feasible, and whether this approach would, in fact, mean another layer of intermediaries and overhead between sources of capital and promising social ventures.

While the official program website lists some eminent early-round Social Innovation Fund grantees, including REDF and New Profit Inc., so far there isn’t much outcome assessment. The creation of the new office generated a lot of press in 2009, but the most recent follow-up articles I could find are from January 2010: Obama's $50-Million Fund to Spur Innovation Prompts Much Debate and Social Innovation Fund Sends Important Signal to Grant Makers, both from The Chronicle of Philanthropy.

In combination, those two articles effectively portray the promise and pitfalls of the Social Innovation Fund. Perry writes that, for many, the Fund represents a new kind of cross-sector partnership that stresses measurable results. Dorsey and Schmitz assert that the Fund signals how grant-making should better resemble capital markets. Yet, both articles acknowledge that the program tends to favor established, relatively large-scale organizations, which could be a natural result of public administration constraints.

Is there a place in government for “civic entrepreneurs”? How can they balance complex stakeholder interests and administrative requirements to do something that’s simultaneously unproven and amenable (or at least justifiable) to everyone?

Impact of Microcredit: Morocco

“At the end of 2009, over 128 million people in the world were receiving microcredit” [http://econ-www.mit.edu/files/6659] This figure reflects the efforts put by different institutions in Latin America, India, Bangladesh, Morocco and many other countries. The program has had a lot of impact on its beneficiaries: reducing poverty, encouraging self-employment and micro- projects and most of all empowering people especially woman as they are the main target client of most microcredit projects. Also, areas such as education and health were also positively impacted by the projects.

In Morocco, “the microcredit sector is the commitment of local banks: Commercial banks are important backers of the industry, having created two of the largest MFIs and funding 85 percent of the sector’s assets in 2008” [http://www.cgap.org/gm/document-1.9.41164/BR_Microfinance_Sector_Morocco.pdf] Al Amana program is considered to be the largest institution providing microcredit services. In the last ten years, Al Amana has been targeting urban, peri-urban and rural areas while expanding to 60 branches. One of the main areas affected by microfinance in Morocco is agriculture. Beneficiaries involved directly or indirectly in agricultural activities have been seeing increase in incomes which has a positive impact on their household consumption, education and health situation. Also, Al Amana program supported the creating of new businesses and the expansion of current activities. Women in rural areas used the money to create small businesses to commercialize products such as: Argan and Olive Oil, handmade carpets and traditional clothes, Rose extracts products… Typically, women would create an association or “Coopérative” with ten to fifteen members and design their activities around a local produce or craft. One of the unique characteristics of unique characteristics of Al Amana operations is the joint liability loan concept. Groups of three to four members would basically share the responsibility of making sure the loan is paid and would act as guarantors for each other. This concept has been very successful in Morocco where people value relationships, groups and commitment as core values for the society. This brings up a good point about how microcredit projects should be customized and adapted depending on the region or country in which they are implemented. Joint liability loans, in this case, might not have succeeded in individualistic environments but were a great hit in Morocco.

The Role of the Student in Social Innovation Policy

The progression in the articles of the creation of the White House's Office of Social Innovation and Civic Participation was as inspiring as it was important to the progress of social innovation in the United States. Having "civic entrepreneurs", or even just socially-minded people as part of the policy process is extremely important.

One section of Michele Jolin's article struck a chord with me personally. She has a section that mentions the (then unformed) OSICP would focus on, among other things, "fostering partnerships with the university community to prepare young people for careers in the non-profit sector; ensuring that the student load debt does not prevent qualified, interested young people from entering the nonprofit sector." In a field such as social innovation, where new ideas and a passion for change that has not been dampened the constrictions of bureaucracy are the keys to success. While some people can sustain this energy their whole lives, there are others whose social impact is at its maximum during college and directly after graduation.

While I have heard many important aspects of the OSICP, this is one that I have not seen any actual policy change in as of yet except for the Public Service Loan Forgiveness program. While this program is aimed to help students going into the public sector, it does not quite foster social entrepreneurs to go into the field of innovation soon after graduation. Working in the public sector for 10 years is not the same as having the financial flexibility to start an organization or social venture.

I would like to highlight one innovator who has a unique and inspiring option for social innovators facing loans that are debilitating to their goals. SponsorChange.org, created by Heinz College's own Raymar Hampshire, offers an extremely rewarding partnership opportunity for students, organizations, and loan collectors. Instead of offering a shortened loan terms, it offers $20 per hour of volunteer services at a local organization.  The organizations are offered a solution to The Center for American Progress’s “challenge of finding qualified staff at every level, especially middle managers, [that] has slowed their ability to expand, even when financial capital is available.”  Students give back to the community, organizations get the help they need and the loans get repaid in a timely manner.  Who can say no to a win-win-win?

Re-Granting Organizations for Innovation

Reading about funding models and innovation from an economic standpoint reminded me of my internship this summer with Theatre Communications Group. TCG, among many other things, is a re-granting organization; they form partnerships with corporations and foundations to award grants of various sizes to theatres who would have difficulty obtaining funds from these entities on their own. TCG is primarily a membership-driven service organization so only member theatres are eligible for grant money. By coordinating the grant panels, TCG ensures that they're made up of panelists who understand the unique needs of theatre companies.

Theatre from an organizational standpoint is often viewed as innovation-less. To combat this, TCG partnered with the MetLife Foundation to create a grant for innovation, financially backing companies with new ideas in sustainable stagecraft, organizational design and engaging with new media - to name a few. Since at least 50% of theatre companies are sustained through donations and grant money, there isn't a lot of budget flexibility to support new ventures or ideas.

TCG/MetLife Aha! Grant

To my knowledge, TCG is one of the only national re-granting organizations. For smaller organizations who don't have the time or resources to establish relationships with large, national foundation or corporate grants, service organizations like TCG are great conduits. They know the foundations and corporations but they know the intimate details of the organizations they serve. If seems like an underutilized model.

Providing Banking Education

Awareness should be the key to creating successful Conditional Cash Transfers in the United States. A 2008 study shows that a person can save up to $40,000 during their employment lifetime. Also, with limited assistance in investment strategy, a person can generate up to $360,000 over a 40 year career (Banking on Wealth). By educating families on the long-term benefits of banking effectively, people can feel empowered to create stability in their financial futures. Since many financial advisors are beginning to generate socially beneficial investments for their clients, these same financial advisors could be solicited to provide advice to lower income families and individuals on simple ways to grow their finances. Providing simple statistics and showing the short term benefits of using a bank account can be a convincing factor. For example, car insurance and utility companies often offer a discount to customers who set up automatic withdraw for monthly bills. Many banks offer free checking and free ATM withdraws. Low balance credit cards are also offered to people with bad or no credit. All of these benefits can create a stable foundation for a low income individual or family to build their credit and learn the benefits of banking with an established institution.

The roadblocks are obvious. Financial institutions must be convinced to make this social investment and also provide educational materials for this part population. Banks must also be convinced of the long term benefits of recreating the America middle class.

How effective will the Social Innovation Fund prove to be in the long-run?

After reading the articles by Michelle Jolin, I was interested in learning more about the Obama Administration’s efforts to support social innovation and began looking into the Social Innovation Fund. I found that, in August, the Corporation for National and Community Service announced the newest set of recipients of the Social Innovation Fund’s competitive grant competition. (See news realease: http://www.nationalservice.gov/about/newsroom/releases_detail.asp?tbl_pr_id=2024) This year, the awards will go to five intermediaries focused on five different areas; supportive housing for people with complex needs, long-term affordable homeownership, obesity prevention and better nutrition among youth, increasing youth literacy rates, and early childhood learning efforts. What each of the proposals have in common is that (1) they are all working to expand, replicate, or scale efforts in these areas and (2) their efforts are not constrained to one location, but will focus on a number of different locations across geographic areas. In addition, the funds awarded to these initiatives have to be matched twice, leveraging $2 in private funding for every dollar of federal funding.

This program seems to be pretty well aligned with the vision presented in Michelle Jolin’s articles. The Social Innovation Fund brings together support from both the public and private sectors to expand efforts that have already proven successful on a smaller scale. This is only the second year of the Social Innovation Fund. I will be interested to see how effective it proves to be in the long run at supporting initiatives that tackle important social problems.

NYC charters: fearing innovation for the few

Knowing that American Progress’s suggestions for the Obama administration to take a close look at investing in social innovation materialized was an exciting read for those who believe there is room for an SI approach in rethinking many traditional government services. We know that the government contracts out many projects. So why not support those who are addressing human service needs? Sometimes non-profits can move faster and with less political limitations and have the freedom to experiment a bit more, and to prove their worth by showing results and scaling up. I believe that with huge systems like health and education, social innovation can offer new ways.

The problem will be ensuring that these new approaches to public services are truly public and the benefits shared. For those who believe that a government is responsible for delivering economic and health security to its citizens, the idea of essentially contracting out these services is walking a dangerous line. Working an internship in New York city, I was in contact with a group called New York Collective of Radical Educators. I don’t share many of their opinions of the education system but I can understand some of their concerns over the onslaught of “innovative” new schools in New York City. The Obama administration paid a great tribute to the Harlem Children’s Zone and wants to support its growth. HCZ revitalized an entire neighborhood in some ways. The fact that many HCZ students who are on par with state standards considering most NYC public schools’ standardized test scores, HCZ has done an incredible job changing the lives of the children and families within their community.

But turning neighborhood schools into charter schools, or adding charter schools that essentially “compete” with neighborhood schools for students, often means exclusion. In New York City, most students “apply” for acceptance into middle school and high school, both public and private. What schools are looking for varies—some are honors high schools while others have a focus on public service or want students from diverse backgrounds. Most charters choose through lottery. The system of public and private schools in NYC is complex and getting more so as large schools are broken up into multiple schools in the same building with very different approaches to teaching. Charter schools receive public money but have more flexibility in their methods and approaches. Some charters are actually begun by groups of teachers and parents in a community and continue to be neighborhood based.

But for others like the radical educators, seeing a neighborhood school turn charter, and seeing children turned away based on luck of the draw is extremely difficult to stomach. The radical educators believe that children’s educational outcomes have been proven to improve with smaller class room sizes and that a focus on standardized testing is no true measure of education. They feel that charter schools, which are exclusive by necessity, rob the rest of the system of opportunity to change and distract from the problem that there aren’t enough teacher per student in NYC traditional public school classrooms. In the end, many charter leaders like Canada of HCZ focus on classroom size and individual attention as well. Whether problems like this should be dealt with through the government supporting innovative not for profits or whether it’s the governments responsibility to overhaul a system from the top will be fiercely debated as the governments’ investment in socially innovative answers to traditional public services grow. Charters in New York are proving that changing the educational system can transform students lives; unfortunately, because not for profits are not the NYC, NY state or federal government, they can only show this incrementally. This small scale means that people are being left behind. I think, given the problems in NYC’s schools, that trying to create change for some disadvantaged students is better than nothing. But I can imagine being on the wrong side of a lottery or being a teacher in a public school who feels that traditional schools are being abandoned in the wake of charter school creation, you may be left wondering when the sort of change on a scale that only a government can create is coming. What other resistors to government investment in social innovation may exist?

The Community, the Investment, the Possibility

There was a lot of talk this week in the readings regarding government investments into social innovations and enterprises in order to encourage social change in communities and the greater society. The idea of tax incentives, partnerships with public and private philanthropies, and federal departments were discussed as means to spur much needed change-inducing cash flow.

However, many of these strategies, while absolutely deserving of merit, are still fairly reliant on entities with large piles of money that have the flexibility and incentive to share with others. Yet, the generations that are about to come into power in the world are not typical of these entities. They do not act like the generations before. There was no glory of growing up in during the birth of the Ford era of philanthropy, and their behavior is indicative of that. Even more of note, is that for the first time, they are not expected to be better off than their parents. However, they still are eager to help out friend's and acquaintance's causes. More of this discussion can be found in an interesting article on the Chronicle of Philanthropy.

This fact could be reason in itself to be supportive of government-backed social innovation agencies or strategies. If young people will not have the same donor tendencies as the baby boomers, we should take that into consideration when deciding on policies that affect charitable giving and investment incentives. The younger generation tends to give in smaller amounts and at a more engaged level. While initiatives such as SIF and OSICP are very fruitful and have incredible potential for the future, will they truly create the change in people’s behavior that is sustainable for generations to come? Do they plant the bug within citizens that will create the bond of investing in their communities, or will they still see the money that is creating change, as coming from an outside entity, and thus are disconnected to it?

Is there another focus that also deserves the spotlight? Take for instance the idea of community foundations. These entities allow everyone, individuals, businesses, families, nonprofits, etc. to invest specifically in a geographically defined area, typically one that they reside in, and take actions to improve the community. It encompasses the public and private partnerships that are present in the government programs, but allows a more personalized incentive to what a donor or investor’s money can do. Interestingly enough, the Foundation Center reports that community foundations typically are larger than corporate and private foundations in both assets and grants. So what would happen if these entities that are comprised of geographically focused funds were able to pursue program-related investments (PRIs) for L3Cs, an increasingly popular track for social innovations?

While foundation investments currently can be tricky due to government tax regulations and specifications, it poses an interesting idea, and one that is sparking a lot of buzz in the sector. To encourage a foundation that is supported by the community, for the community, to make targeted investments into social innovations for their towns, cities, and regions, could be a powerful mechanism to influence the behavior of people in philanthropy from the bottom up. This is in no way intended to take away from the work that the SIF or the OSICP do, but simply to provide a partnership with people on a smaller, more engaged level. Would tax regulation changes that make these types of investments create more innovation locally? People give to people, and to play a direct role in the betterment of your immediate society with whatever financial means you are able to contribute, provides an incentive many could find attractive...

Holton Farms

Today I wanted to highlight a social venture called the Farm Truck of Holton Farms. It happens to be making a profit off targeting its goods to high-income people and then turning those profits around into supplying low-income communities with fresh produce. Originally, the truck focused on wealthy neighborhoods where fresh produce is conveniently found but has recently started setting up in New York City's food deserts. New York is no stranger to the food truck scene, and hopefully this social enterprise venture will show other cities how trucks can be beneficial to serving the unmet needs of residents.

LIVELIHOOD EMPOWERMENT AGAINST POVERTY: GHANA’S CASE OF DIRECT CASH TRANSFER

When Dr. Martin Luther King Jr criticised Lyndon Johnson’s for doing little to fund the War On Poverty, a brilliant social initiative most people did not understand why the Civil Right leader would wade in the economic waters in the country. To Dr King he believed that empowering the poor through effective social interventions that would transform beggars into purchasers would not only lift the poor from the “stinking darts of poverty”, but it also has the knock down effect of stimulating the economy for massive take off.

“Rising tides does not lift all boats especially those stuck at the buttom”, says Jesse Jackson. Society must reach up to millions of people whom the forces of demand and supply cannot help. There are millions of people who have limited entry into the “highway of economic prosperity.” These are the people in the society who need to be helped. They are the ones who cannot owe an equity at the New York Stock Exchange or London FTSE.

A center-right party in Ghana led by John Agyekum Kuffour in 2008 commenced an economic transfer program called the Livelihood Empowerment Against Poverty (LEAP).[1] Few were those expected a property-owning government to come out with this unprecedented and massive social intervention. The policy was to transfer cash directly to those who were classified as poor according Ghana Living Survey. It is difficult to measure people’s income in the country since the economy is largely informal and more than 50% of people are not captured by the banking services or any other financial services. These were not reason for the government to put on hold the program. The money transfer varied with regards to the location of the recipient and the number of household and among others. The opposition viewed the cash transfers as a ploy by the government to appease voters in the forthcoming elections.

It has now been proved that directly handing out cash to economically vulnerable group does not only improve their purchasing powers but also enhances their health, nutrition and the education of their dependents. This innovation though has some draw back as some beneficiaries find it reward to be receiving the handouts than working for dollars. Yet the coloration between direct transfer to the poor and reducing poverty is statistically significance.

---

[1] http://allafrica.com/stories/200802010131.html

Conditional Cash Transfers in Pittsburgh?

Michele Jolin referenced "civic entrepreneurs" in her article, "Innovating the White House." In an effort to learn more about how a civic entrepreneur is defined, I came across the blog "Civic Entrepreneurship - Social Edge" which largely draws from the book, The Power of Social Innovation, written by Stephen Goldsmith. Jolin references Mr. Goldsmith repeatedly throughout her article. This blog, linked to the title of this post, is a program of the Skoll Foundation.

While reading through some of the blog entries, a few salient points jumped out at me: 1) One of the entries profiles the Family Independence Initiative in San Francisco. An interesting aspect of this initiative is that it serves the working poor - people who may be living 30% above the poverty line but still living paycheck to paycheck. Another interesting aspect is that the initiative embodies the conditional cash transfer idea discussed in Tina Rosenberg's NY Times article, "To Beat Back Poverty, Pay the Poor." The blog post states "individual households report on behaviors - each of which earns them $25... In two years among the San Francisco cohort, households increased their income by an average of 20 percent; half the school-age children improved their school performance; three out of five households reduced their debt; and three out of four increased their savings." In addition, this system relies on word-of-mouth and peer influence. The blog states that when members of the community see these families succeed, they are inspired to do the same. Within six months of contacting the initial families, two hundred new families contacted the initiative's leader to become part of the program. The initiative inspires participants to shift the power dynamic, to take control of their situation, and begin to ask themselves instead of the program leader what they need to do to take the next step.

In another blog post, civic entrepreneurship is defined as producing "exhilarating change in a person, family, or community by expecting them to succeed and by viewing their own jobs as clearing away the obstacles. Executive leadership, whether from the president, governor, mayor, foundation president, or student activist can create the conditions for change." So, what can we do to clear away obstacles in the Pittsburgh community? Could the conditional cash transfer idea work in conjunction with programs in the Pittsburgh community? I think it can; in fact, our project group will present an idea tonight that I think would be a prime candidate for the conditional cash transfer idea.

-Whitney Coble

How can social programs reach the poorest, highest need populations?

Reading about the amazing success of the Conditional Cash Transfer programs in Mexico and Brazil motivated me to learn more about Opportunities NYC: Family Rewards, the New York City experimental CCT program, and the reasons behind its mixed results changing lives. The findings show that Family Rewards only had a small impact on children’s education and no significant impact on family preventative health care. Surprisingly, Opportunities NYC found that there was little room to improve in these areas. Elementary school students already attended school more than 90% of the time and families already maintained consistent health insurance. Interestingly, the educational area where the program did make a big difference was with incoming ninth graders who scored “proficient” on the eighth grade state exam. These students, who were better positioned to take advantage of the program’s performance incentives, increased their attendance rates and performance.(http://www.npc.umich.edu/publications/policy_briefs/brief22/policybrief22.pdf)

On one hand this is good news. Low-income families are advocating for themselves and for their children. On the other hand, these findings raise two important questions. What is the target population of Family Rewards? How can social programs trying to capture the poorest, highest need populations ensure that they will be able to reach these groups? I believe this is a common obstacle for organizations and all too often the questions above don't get addressed until after the program has been implemented.

In my own experience in the education system I often saw well-intentioned programs fail to reach the most at-risk students. For example, the Chicago Public School program After School Matters (ASM). After School Matters is a nonprofit organization that provides out-of-school opportunities to high school students in the arts, science, sports, etc. In exchange for participation, students get paid for their involvement. This has been a very innovative approach to helping kids stay off the streets and results show that students who participate in the program have higher attendance, fewer course failures and higher graduation rates compared to their peers. Not surprisingly though, the study also found that students who participate were already attending school more and failing fewer courses before starting the program. (http://www.chapinhall.org/sites/default/files/publications/ChapinHallDocument(2)_0.pdf)

I can attest to these findings. The school where I taught had a strong gang presence and the students participating in After School Matters at were not the students running around in gangs. They were the students who were already performing well and on-track to graduate high school. The program definitely succeeded in boosting the opportunities for these students, helping develop their skill sets, and creating further incentives to stay away from gangs. Did After School Matters intentionally target this group? If so, what is being done to grasp the bottom line, the most difficult to reach student population? The answer to these questions is the difference between the results of Bolsa Familia and Family Rewards. Bolsa Familia reaches the poorest populations in Brazil whereas Family Rewards clearly involves families who are already advocating for themselves. Only once programs can effectively reach the neediest populations will we see strikingly positive results.

Paying the Poor

It seems somewhat impossible to write a blog about innovation and not acknowledge the passing of Steve Jobs. As the owner of an iPod, iPhone and iPad, I can truly attest to the life changing nature of his products. In fact, I am typing this blog on my iPad right now. This man was truly a visionary; making us unable to live without devices we never knew we needed. Whle I can't say his products were necessarily geared towards the bottom of the pyramid, his work should undoubtedly be considered social innovation. He really did change the world for the better. As he so famously said, "We're here to put a dent in the universe. Otherwise, why even be here?" In the readings for this week, I was most struck by the notion of paying the poor out if poverty. While the amount of money these families were receiving was pretty small, for them, it was extremely significant; in many cases doubling their family income. I cant say I like the idea of paying the poor to not be poor. People don't want handouts; they want jobs and opportunity. Being focused on education, I couldn't help but connect this to a trend a few years ago to pay students to learn. Even after being supported by Harvard, the initiative was seen as being a failure. Why? Because I don't think you can pay people to change behavior. The social innovation here would be to find a new method of teaching and learning that engages students and their teachers in their work. Likewise, in the case of paying folks out of poverty, the social innovation would be to develop long term solutions out of poverty, or to actually address the health issues folks have or to no longer make students pay for their school books. I don't see this work as innovative, but I can't ignore that it seems to be working. While possibly not the most empowering or long-term strategy, in the short-term, it does seem to be moving families out of poverty and that is definitely worth celebrating. So would it work in the US? Could this be a potential solution for welfare reform? Could this be a solution for the poorest amongst us who even still struggle meeting monthly bills with assistance? I don't think it'll work and I'm not even sure it's worth trying. Let's think of permanent strategies out of poverty and not those that continue to have people coming back for handouts.

The role of public policy for social enterprise

In "Innovating the White House", she discussed the importance of government role to accelerate social entrepreneurship. I totally agree with the idea. Among all, I believe government controls and tries to accelerate social business by relaxing the regulations related to "finance" area such as tax deductible donation, social responsibility investment and new type of corporate (L3C, which allows to gather funding by issuing stocks). However, funding is only one aspect of the business. I think "education" is another very important factor which government can do something. The social entrepreneurs tend to lack some aspects of business perspective like finance, law, and globalization. So to support them, government can provide workshops / seminars for them, they can be the hub to share the best practice/know-how/tips/success stories, they can provide good data and provide tools to support their operation such as financial tools.Also, they can encourage people (universities?) to increase social business incubation centers, which can advice the early stage social ventures to plan their strategies effectively, and reduce the financial and legal risks. Supporting them means using tax, so government has accountability for their support. However, one of the problems government has is that they can't estimate return on investment effectively and consistently for social business. So developing a method to measure the success might also accelerate social business indirectly.

Breaking Down Tax Barriers and Rewarding Partnerships

As mentioned in "Innovating the White House" by Michele Jolin, non-profit organizations have grown to tackle some of our biggest challenges such as education. In addition several of the articles this week discussed the importance of removing outdated tax and regulatory barriers to innovations. However, while the tax system for a non-profit organization can cause a struggle, it can also provide partnering opportunities with for profit institutions. Pennsylvania's Education Improvement Tax Credit creates a chance for non-profit and for-profit entities to mutually benefit.

In this program, a for-profit entity must pay one of six kinds of taxes to be eligible and then submit an application for approval. The credits are distributed on a first come, first serve basis. The tax credits can equal up to 75% of a $300,000 gift in one fiscal year, but it can be increased to 90% if the business pledges to give the same donation a second consecutive year. Applications for 2011-2012 Fiscal Year accepted on July 1, 2011 and all tax credits had been allocated by July 8, 2011 (http://www.newpa.com/find-and-apply-for-funding/funding-and-program-finder/educational-improvement-tax-credit-program-eitc).

This program drives companies to support non-profit organizations for the credits, but they also have the added public relations benefit of being seen as socially responsible. If this program, or a similar one were implemented on a larger scale and even outside the realm of education, the partnerships between for-profit and non-profit entities could maximize the effectiveness of programs for any audience and connect that same audience to a company that may seem completely out of reach.

We need wide awareness and feasible tactics---(For the sixth class meeting)

-- The conditions needed to conduct a successful and sustainable social innovation

It’s rather promising to read about Brazil Family Grant (Bolsa Família), not only because it has clear philosophy to assist the poor to overcome the poverty in a long run, but also it has feasible operational system to implement its plan.  It raises the awareness of the society to tackle the vexing problem the majority is facing and it overcomes some traditional obstacles, such as bureaucracy, corruption, governmental non-effectiveness, which eventually makes the social welfare project a big success and even a model for many other countries, like Mexico.

This indicates a strong message—as long as we have a widely accepted consensus and a practical implementation mechanism system, some tough issues can be dealt with efforts and orders contributed from household level up to the top. This  message is especially valuable when it comes to addressing and solving some worldwide issues, such as population increasing, water usage, food shortage, energy utilizing, environmental protection, labor transferring, regional equality, and so on. These international common issues especially need general awareness from global residences and workable operation system across national boundaries.  

What’s more, rethinking the role of government in the social innovation arena is necessary. Because regardless of many genetic shortcomings of governmental management, it still has variety of resources and abilities to allocate these resources to foster social innovation. Otherwise the potential of social innovators may suffer from lacking of seed capital, proper climate, and so on.

http://en.wikipedia.org/wiki/Bolsa_Fam%C3%ADlia

http://www.youtube.com/watch?v=OmsmoUGNhSs

http://www.youtube.com/watch?v=S4_LEo2yqyg&feature=fvsr

http://www.ted.com/talks/lang/eng/katherine_fulton_you_are_the_future_of_philanthropy.html