Social Innovation Fund

Comments submitted to White House staff responsible for the new Social Innovation Fund.

[Because nonprofit groups often cannot expand ideas that work because the nonprofit marketplace is 180 degrees from how the private-investment marketplace works because they don’t have early access to capital for experimentation and expansion, testing innovation is tough.]

Yes, and this gets at the challenge of how problematic it can be for successful and nationally expanding groups to focus on developing donated funding streams. Donated money from individuals, in a range of amounts, provides tangible evidence of relevance and civic engagement. It shows whether the work being done–and the key people involved–can build and excite a genuine fan base.

Evidence of investment in individual fundraising really should be a marker of the potential for a social innovation. For potential of the program concept and delivery. For potential of the innovation’s leadership to create a movement. Perhaps better yet would be ensuring that medium-sized groups, with proven program and capacity that are poised for innovation can get the practical, concrete, tailored, __creative and innovative__ assistance they need to grow their fundraising capacity. Leaders need support from __funders__ to spark the innovation in __resource development__ needed for so many organizations.

The problem with big, government agency-size investments early in the process of innovation is that it can eclipse–and, frankly, distract the leadership from attending to this responsibility. It’s too natural instead for these (typically young) leaders to focus on developing the program itself and doing whatever it takes to big government funding.

Instead of saying “it’s hard” to raise individual money, social entrepreneurs need to say “it’s essential and let’s figure it out and do it.”

One other thing to note is that the social networking fundraising ($10 by mobile phone and Facebook causes, etc.) has been an innovation in reach. Expanding a donor base is really important. However, the important thing nonprofit leaders must __still__ learn to do is to figure out which of these many, many new fleeting donors can be engaged to stick around–which ones can continue to invest and be involvedin the innovative program work into the future.

Very instructive for board members–and, dare I say, social entrepreneurs–are the Nonprofit Finance Fund papers on capital structure and the “strange” world of nonprofit finance, where in addition to a charity’s core business it has–and must attend seriously to–“subsidy” businesses, such as fundraising and volunteer labor. Also, the theories and practice of grassroots fundraising–really connecting to and engaging donors and community members.sets the framework.