A Social Issue-Based Approach to Finding and Funding Social Innovation

The establishment of the Social Innovation Fund last year marked a great milestone for the field of social innovation in the United States. As the Corporation for National and Community Service is receiving applications for its 2011 Notice of Funds Opportunity, I want to share a few insights that I believe are relevant to any effort to make investments that foster social innovation and support what works.

Over the past few years, Root Cause’s Social Impact Research department, with support from the William and Flora Hewlett Foundation, has developed a methodology for identifying high-performing organizations that takes knowledge of what the proven approaches are for a targeted social issue as its starting point. Through the development of Social Issue Reports covering a wide array of issues—from school readiness to childhood obesity prevention to workforce development with opportunities for advancement for adults facing multiple barriers to employment—we have seen increasing evidence of the benefits of starting with an understanding of the social issue, specifically what research tells us are the best approaches to make progress on that issue in order to evaluate an organization’s current and future performance.

For example, we recently completed a social issue report for funders interested in the area of school readiness. Our research for this report revealed that the most successful programs follow an approach that includes three core components: an education-based curriculum, support services for parents, and complementary services (e.g., social services, medical health benefits) designed to prevent negative life outcomes for at-risk children. Furthermore, we found that some of the best indicators for evaluating the performance of organizations pursuing such an approach include use of a certified curriculum, assessment tools related to student development, and level of parental involvement.

With such information in hand, it became possible to determine which programs are most effective in realizing their stated goals. In our own analysis of more than 1,700 childcare centers in New York City using publicly available information, we found that only 17 percent met our minimum criteria of being nonprofit, serving at-risk children, and incorporating the three core components of the proven approach. The vast majority were not employing the methods that current data show to be the most effective. What is even more alarming is that in interviews, we were told that organizations that are not using proven approaches could at times actually be having a negative impact on the children they serve.

Such information about proven approaches also provides a rigorous framework for evaluating the potential of early-stage social innovations to lead to greater progress in addressing a given social issue. It makes it possible to understand how a new approach is positioning itself to fill in current gaps or to outpace current best practices.

The enormous potential of a social issue-based approach to evaluating programs is illustrated by the information revolution that took place in the private sector during the twentieth century. One of the innovations that increased transparency at the time was the development of an independent financial research industry. Reports, conferences, and advice began to be offered by the likes of the Yankee Group, Forrester, and Gartner Research. That information, in turn, provided investors with the insights they needed to make informed investment decisions and greatly increased the amount of growth capital available to technology companies, both young and established.

If we are to significantly improve our nation’s capacity to address social problems, we need to ensure that our resources are going to the approaches that will likely demonstrate the best results – and to the innovations that have the greatest potential to make further advances. Only by starting with an understanding of the social issue and the best approaches to address those issues can we accomplish this.

The Social Innovation Fund could set in motion a similar information revolution within the nonprofit sector by requiring intermediaries this year to use information about proven approaches as a guide for how they make investments. The information about specific social issues could be broadly shared with funders and nonprofits alike to catalyze the revolution.