The establishment of President Obama’s Office of Social Innovation and Civic Participation (SICP) seemed to answer the call for federal involvement in social innovation proposed in this week’s readings from McKinsey&Company, Center for American Progress, and the Stanford Social Innovation Review. By investing directly into nascent ventures as well as existing ventures, the Office of SICP supplying much needed capital in the social sector where impact is likely valued higher than profit (if profit is valued at all). Additionally, the Office of SICP pursues various public-private partnerships to as another means of building capital and encouraging innovation. So far, it has acquired “Innovation Funds” with hundreds of millions of dollars and created multiple public-private partnerships (1).
With this apparent success at the federal level, development of administrative capacity focused on social impact ventures at the state level would be a logical next step. Given that over 20 states are considered financial insolvent due to budgetary concerns (2), state governments could benefit greatly from reducing costs related to social. Since many social initiatives strive to impact lives of constituencies in need, raising capital for successful initiatives to innovate and become more successful would ultimately lower the cost of social problems to the primary spender, the government.
However, support to develop the administrative capacity for developing social impact ventures seemed to have stalled the federal level. While it is true that some states have explored implementing various initiatives aimed at developing social impact ventures such as Utah, North Carolina, Washington, and Colorado, these states all subsequently failed to move passed the consideration stage of the process (3).
More recently, New Jersey's Department of State, a department in a government that owes over $40 billion in debts (2), is accepting applications for faith-based and community organizations to receive funding to help develop social ventures. Notably, the outreach for development of social ventures comes not from a centralized office with sole purpose of doing so, but instead the executive branch of the state's government. While this program may work well and reduce costs for the state, the potential for developing social ventures may be stifled in lieu of a more central administrative capacity. Thus, it may prove important for state governments to take the example of the federal government and create such an authority to achieve the highest level of development for social impact ventures.
With this apparent success at the federal level, development of administrative capacity focused on social impact ventures at the state level would be a logical next step. Given that over 20 states are considered financial insolvent due to budgetary concerns (2), state governments could benefit greatly from reducing costs related to social. Since many social initiatives strive to impact lives of constituencies in need, raising capital for successful initiatives to innovate and become more successful would ultimately lower the cost of social problems to the primary spender, the government.
However, support to develop the administrative capacity for developing social impact ventures seemed to have stalled the federal level. While it is true that some states have explored implementing various initiatives aimed at developing social impact ventures such as Utah, North Carolina, Washington, and Colorado, these states all subsequently failed to move passed the consideration stage of the process (3).
More recently, New Jersey's Department of State, a department in a government that owes over $40 billion in debts (2), is accepting applications for faith-based and community organizations to receive funding to help develop social ventures. Notably, the outreach for development of social ventures comes not from a centralized office with sole purpose of doing so, but instead the executive branch of the state's government. While this program may work well and reduce costs for the state, the potential for developing social ventures may be stifled in lieu of a more central administrative capacity. Thus, it may prove important for state governments to take the example of the federal government and create such an authority to achieve the highest level of development for social impact ventures.
(3) Cohen, R. (2014, July 25). Social Impact Bonds: Phantom of the Nonprofit Sector| Nonprofit Quarterly. Retrieved September 27, 2016, from https://nonprofitquarterly.org/2014/07/25/social-impact-bonds-phantom-of-the-nonprofit-sector/
New Jersey Department of State. (2016). Social Entrepreneur and Enterprise Development Project (SE2D) Project and Social Innovation (SI) Grants. Retrieved October 4, 2016, from http://www.nj.gov/state/programs/dos_program_faith_based_funding.html
(2) Norcross, E., & Gonzalez, O. (2016, May 23). Ranking the States by Fiscal Condition 2016 Edition. Retrieved October 4, 2016, from https://www.mercatus.org/statefiscalrankings
(1) The White House. (n.d.). Office of Social Innovation and Civic Participation. Retrieved October 4, 2016, from https://www.whitehouse.gov/node/11163
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