Funder-in-Chief? The Role of Government and Investments in Innovation

        The readings for the week discussed the role of public policy in furthering social innovation in the United States, focusing particularly on the efforts of the Obama Administration to promote social innovation and entrepreneurship through the inauguration of the White House Office of Social Innovation and Civic Participation in 2009 (SICP). Up until this point, I found myself asking where exactly public policy coalesced with social innovation, especially when it seems like public-private partnerships are getting increasingly talked about. I asked myself: What part do governments play when attempting to foster and fund social innovations that deliver vital solutions to pressing problems?

One can say that there are distinctive capabilities that only governments have when it comes to boosting social innovation for the good of citizens. The Carttar article alludes to these capabilities by touting the government as the ‘funder-in-chief’ and suggesting that it positively affect flows of funding and focus on results-oriented solutions when fostering socially innovative projects. Similarly, Michelle Jolin writes in her article that he federal government work to a formulate policy that supports the spread and scale of social entrepreneurship, as well as bridge the critical funding gap that many high-impact nonprofits find themselves in.

 The founding of SICP can be seen as a response to these concerns. In fact, the office was created in response to challenges the government was facing in analyzing the cost-effectiveness and performance of social programs, as well as implicating the private sector in developing programs and supporting nonprofits whose resources are few and far between. Moreover, one of the main instruments that SICP uses to invest in innovative projects is the Social Innovation Fund (SIF), which provides funding to grant making intermediaries, who then distribute the grants to community-based charities, nonprofits, or social ventures that are implementing successful social programs.

Therefore, one can clearly see that there is a role that public policy can play when fostering social innovation, especially when it comes to building cross-sector partnerships in order to harness funding for innovation. However, how can governments make sure that they are using their distinctive capabilities to the fullest?  Is there something more that the White House can do other than provide funding?

In the article, “Social Innovation: What Only the White House Can Do,” author Dan Palotta writes that the White House should use its “unique and extraordinary powers” to move the needle on social change and create significant impact and not exclusively devote all their resources to funding. He suggests that the government change tax regulations towards nonprofits that work to limit innovation, as well as ending restricted giving policies on foundations that donate to non-profits.  Another suggestion that he brings up that I thought was interesting was that the Office should institute a sort of rating system that would allow evaluate organizations’ impact and influence where people choose to donate their money [1].

The bottom line is, as the readings for the week suggest, government has an important role to play in establishing policy that fosters social innovation. However, it is important to recognize that its role is so much more than a ‘funder-in-chief.’ As Palotta suggests, the government has the opportunity to significantly alter the ecosystem that allows social ventures to grow and create a more direct path towards social impact for all.

[1] https://hbr.org/2009/11/pallotta-six-todos-for-the-whi