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• Justmeans.com: How innovative is the Social Innovation Fund? Jeff Trexler argues that the Social Innovation Fund is nothing special. If the Fund is a bust, I think in retrospect Jeff's post will have been the blueprint for why things went wrong. (tags: philanthropy)
• NBC: Touching Hearts TV Show NBC is launching another philanthropy themed TV show in the San Francisco market this fall. Unlike the dramatic rendering of The Philanthropist, Touching Hearts will be a "guide and resource to charitable giving." (tags: philanthropy)
• The Philanthropist: Production Taking Action: Featured Expert Response: Michael Watts It will be interesting to see if the producers of The Philanthropist can capitalize on public interest to teach viewers about the issues in the show. On The Philanthropist blog they are featuring an "expert response" to the first episode that gives an in depth (and opinionated) view of the state of modern Nigeria. (tags: philanthropy)
• Cause Global: Social Media for Social Change: "White Flight" Online? A lot of people who don't "get" social media tend to feel that online interactions are not "personal" enough. But in this fascinating post from Marcia Stepanek, she examines the very real (and in this case worrisome) ways that online communities behave just like "real" communities. (tags: philanthropy)
• Sunlight Labs: Blog – Recovery.gov Bid — a Good Failure Sunlight Labs, a nonprofit, did not get a major new contract and on their blog they're explaining why the missed it and what they learned. As a "lab" they say that experimentation is what they do and that a "failure" doesn't mean they were "wrong". (tags: philanthropy)
• Social Entrepreneurship – Change.org: Stories Truer Than The Truth: The Brand of Social Entrepreneurship Nathaniel Whittemore offers a killer post explaining why stories offer "the truth" and what we can learn from the Grateful Dead. (tags: philanthropy)
• A Historic Day – Are you ‘all in’? at Andrew Wolk Andrew Wolk of Root Cause attended President Obama's event on the Innovation Fund and offers a first person play-by-play of his experience. (tags: philanthropy)

Kelly Ward, the director of America Forward has just submitted this response to my recent posts about the Innovation Fund (see posts here and here):

Thanks Sean for both of your posts and for grounding this discussion in what’s written in the Serve America Act. As you say, the foundation for how the Fund will work is described in the bill. To add to the detail you give above, the Serve America Act requires the Corporation for National and Community Service to administer the Innovation Fund and determine which grantmaking intermediaries will receive money, and with government matching the investments made by the private-sector. (Note that the bill does allow the Corporation to use up to 10% of the money to fund nonprofit organizations directly without going through intermediaries, but that’s a small percentage of the total $50 million.)

It’s truly astounding to have the President give a speech about the work of social entrepreneurs and how we can identify, invest in, and scale social sector solutions. His speech presented a new vision for the role of government in solving our nation’s social problems, including how government can more effectively partner with nonprofits, philanthropy, the private sector, and citizens. It’s exciting to have leadership for the Innovation Fund at the highest levels of our government, and for President Obama to recognize it not just as another program, but as a model for his vision of how government should partner with the nonprofit, philanthropic and private sectors. We certainly hope you’re right that this Fund ends up being a really big deal!

I would be remiss if I didn’t mention that none of this will happen if Congress doesn’t appropriate the funding for the Innovation Fund. We hope that supporters of this idea will call the House and Senate appropriations committees to convey their support.

Kelly Ward, Director of America Forward

Yesterday I highlight the way that President Obama’s description of the Innovation Fund differed in fundamentally important ways from the policy recommendations of America Forward. The simplest way to understand the distinction is that the way Obama described the Fund would mean that it was making grants to nonprofits, while the American Forward policy recommendation has the Fund making grants to grantmaking organizations.

My sense at this time is that the mismatch is based not on an intentional decision by the President to run the fund in a different way, but by a lack of understanding by the President of the role of the fund (which is understandable since the Innovation Fund can’t be very high on the President’s priority list).

One reason for believing this to be true is that as I understand it, the Edward M. Kennedy Serve America Act that authorizes the Social Innovation Fund requires grants from the Fund to go to grantmaking organizations. The bill clearly states that only “covered entities” may receive funds and it defines “covered entities” as “grantmaking institutions.” So as far as I can tell, the President’s description of how the Fund will be managed that he gave at Tuesday’s press conference runs counter to the bill that authorizes the fund.

Look, just to be clear, I’m not suggesting that any fishy is going on. I’m not saying that the Obama administration is doing anything wrong. I think that we’re operating in a space that few people understand and which even people who understand have a hard time explaining well. I expect that over time administration will figure out how to describe the fund more clearly and accurately.

I think this fund is going to be a big deal. It might end up being a really big deal.

California charities that depend on state money to survive are facing a mixture of confusion and fear after Gov. Arnold Schwarzenegger declared a fiscal emergency and the state said it would start paying many of its bills with IOU’s.

While charities are used to California’s regular budget impasses, the magnitude of the state’s deficit — more than $26-billion — and the drawn-out battle between Democrats and Republicans on how to plug it have created an especially tense environment.

No matter what the outcome, steep cuts in spending on health and human services are expected.

“Everyone has resigned themselves to that fact,” says Cynthia Carmona, policy specialist at the Community Clinic Association of Los Angeles County. “This year is the worst we’ve ever seen it.”

Governor Schwarzenegger declared the emergency after the legislature failed to agree on a budget before the fiscal year started on July 1, ordering state offices to close for three days a month to save money.

Mariana Moore, director of the Human Services Alliance of Contra Costa, says alliance members at a recent meeting were unusually distressed about the potential impact of the current budget crisis on their organizations.

“These are very seasoned executive directors,” she says. “Many have been executive directors for 20 years and they don’t panic about anything. And they were panicking.”

Banking on IOU’s

The most immediate concern is how the IOU’s — or officially, registered warrants — will work. Despite California’s many fiscal crises, this is the first time since 1992 the state has resorted to paying its contractors this way.

State Controller John Chiang announced that in the absence of a budget deal between the governor and legislature, the state would start issuing the IOU’s today and honor them, with interest, on October 1 (assuming the budget has been adopted by then).

But it’s up to banks to decide whether to accept them, a prospect that unsettles some nonprofit leaders.

Nancy Berlin, director of the California Partnership, a coalition of antipoverty groups, remembers when the state issued the IOU’s in 1992 and says they “created a lot of hardship and panic.” She says some banks were reluctant to honor the warrants, forcing charities to seek lines of credit.

“That works if you’re a large agency with a relationships with a bank,” she says, but not necessarily for a small day-care provider, for example, without such a relationship.

Furthermore, she says, many charities had to seek credit lines during last year’s state budget crisis, when payments were delayed, and some banks may not be as sympathetic this time around, especially those that have been hit by the economic downturn.

“To go back to your bank every year — it gets to be old news,” she says.

Beyond Delays

Gloria Standoval, executive director of Stand Against Domestic Violence, a charity in Contra Costa County, says her group will likely dip into its $250,000 credit line once the state starts issuing IOU’s for domestic-violence services. But she’s more concerned about what will happen once the state actually adopts its budget.

Governor Schwarzenegger has proposed ending state grants for a domestic-violence shelter program that provides her group with about $200,000 in annual revenue. While the legislature’s budget conference committee proposed a smaller cut, of 20 percent, Ms. Standoval is worried her group might not get paid for the services it offers while no budget is in effect.

“It may not be a problem of delayed payment,” she says. “It may be a problem of getting any payment at all.”

Other nonprofit leaders said they had similar concerns. The governor has proposed steep cuts to social services, including eliminating both the Healthy Families Program, which provides health coverage to children from low-income families, and the CalWorks program, which provides cash assistance and job help to low-income families.

While the budget conference committee rejected many of the governor’s proposals last month, it still proposed $11-billion in cuts to state programs.

Debbi Lerman, administrator of the San Francisco Human Services Network, an association of charities, says her group’s members have “a zillion questions” about how the potential cuts might affect county budgets, which pay for many social services.

“It’s sit here, hold your breath, and hope it turns out okay,” she says.

“There are so many things on the table, so many things to discuss, so many threats,” says Tom Kinoshita, public policy director at the Silicon Valley Council of Nonprofits. “There’s total confusion everywhere.”

• New Philanthropy Capital Blog – Could grant-makers borrow their way through the recession? John Copps wonders if foundations should consider borrowing to maintain their grantmaking levels. (tags: philanthropy)
• Seth's Blog: The risk/reward confusion Seth Godin, urges readers to put aside (for the moment) taking big risks, and looks at the large returns that come from taking just a little risk. Clearly a lesson for philanthropy. (tags: philanthropy)
• New Models for (Philanthropy) Research & Dialogue « Philosopher 2.0 Tony Wang, remixes a recent Working Wikily paper and my recent Chronicle of Philanthropy column and draws out the implications for the way philanthropy creates and shares research. (tags: philanthropy)

Yesterday, President Obama officially launched the Office of Social Innovation and Civic Participation and the Innovation Fund (whether it is now call the Social Innovation Fund or just the Innovation Fund is unclear). He also named Melody Barnes to run the Innovation Fund. You can see video of the event here.

Interestingly, President Obama described how the fund would work in a way that I think would be a huge mistake and is not in line with indications we’ve had to date of the structure.

President Obama said:

“We’re going to use this fund to find the most promising non-profits in America.  We’ll examine their data and rigorously evaluate their outcomes.  We’ll invest in those with the best results that are most likely to provide a good return on our taxpayer dollars.  And we’ll require that they get matching investments from the private sector — from businesses and foundations and philanthropists — to make those taxpayer dollars go even further.”

The implication in this statement is that the Innovation Fund, with just $50 million, is going to set out on their own to find promising nonprofits, evaluate them and then make restricted grants to these nonprofits that will only be given if the nonprofits can find matching grants from the private sector. In other words the government run fund would identify the innovative organizations and then demand that private philanthropic dollars are matched against the Innovation Fund decisions.

This would be crazy.

If this is what the Innovation Fund is, then it is just a small foundation that isn’t really doing anything special. But I think President Obama doesn’t really fully understand the Innovation Fund.

Let’s instead look at what America Forward said about the announcement. America Forward is important because they are the group that made the policy recommendations that led to the Serve America Act, The Office of Social Innovation and the Innovation Fund. They have been the intellectual force behind these policy decisions.

Note how America Forward presents the structure of the Innovation Fund differently than President Obama:

“Administered by the Corporation for National and Community Service, the Fund will provide grants to existing grantmaking institutions that will in turn invest in growing innovative, results-driven nonprofits. Both grantmaking institutions and the nonprofit grantees will match the Fund’s investment, generally resulting in a 2:1 match.”

Whew! That’s much better. Under this model, the Innovation Fund is simply identifying smart private sector funders, making grants to the funders, who would then pick which nonprofits were innovative, effective and ready to scale. The government gets to put money to work via smart funders focused on effective solutions. They also get to watch the development of the grantees as they scale and will be in a great position to make significant funding decisions once some of the effective organizations have gone national. The case study for this is the successful scaling of Nurse Family Partnerships (by private sector funders) and the $8.5 billion that the 2010 federal budget calls for to fund these types of activities.

I think this is all really exciting. I think that the Innovation Fund is on the right track. It is great to see Melody Barnes assigned to run it. I believe that structurally the Innovation Fund will represent something new and serve as a conduit that helps start to streamline the capitalization of of effective organizations as they grow. I highlight President Obama’s (hopefully) incorrect description of the Fund to highlight 1) that the structure of the Fund is what makes it important, not the $50 million which frankly is not much money to start something like this and 2) to point out that as much as there are a lot of forces moving in the right direction to create more effective social capital markets, we’re still in the confusing market creation period. We’re going to get some things wrong. I hope we get the Innovation Fund right.

Documents newly released to Congress shed additional light on the difficult working relationship between employees at the Corporation for National and Community Service and its ousted inspector general, Gerald Walpin, The Washington Post reports.

Evidence sent to the Senate Homeland Security and Government Affairs Committee includes e-mails, memos, and a parody newsletter printed for a retiring staff member that contains racial and sexual jokes about the federal procurement process.

The Obama administration said it lacked confidence in Mr. Walpin, but he has said the agency’s claims about his performance lack merit. Congressional critics have raised concerns that he was fired for whistle-blowing.

(Free registration is required to view this article.)

Broadcasters and other media companies donated commercial time, ad space, and other support for public-service campaigns worth more than $1.83-billion last year, The New York Times reports.

The total was slightly higher than in 2007 and includes spending on television and radio commercials, outdoor ads, print ads, ads online, public relations, and other types of advertising, the newspaper says.

Public-service ads are continuing to get more time and space in 2009 as the recession makes it harder for media companies to sell all their ad space, said Peggy Conlon, head of the Advertising Council, which calculated the figures. In the first quarter, the total number of placements rose 21 percent compared with the same period a year ago, she said.

(Free registration is required to view this article.)

The Seattle Times profiles two Microsoft veterans who are starting nonprofit groups that aim to connect a new generation of philanthropists with people in need via mobile and online technology.

Scott Oki, a retired Microsoft executive, co-founded SeeYourImpact, a micro-charity site that uses mobile-phone photos and videos to show donors the impact of their funds in the field. Microsoft Research program manager Adnan Mahmud and his wife, Nadia Khawaja, have created Jolkona, a nonprofit group that allows donors to give small, targeted gifts and use online tools to monitor their impact.

“If [donors] can actually see the impact of a $17 gift on a human life somewhere around the world, I believe that will open up the floodgates of hundreds of millions of micro-donors impacting the hundreds of millions of needy people around the world,” Mr. Oki said.

The John F. Kennedy Center for the Performing Arts announced plans Tuesday to expand its crisis consulting for arts organizations that are struggling to survive the recession, the Associated Press reports.

Michael Kaiser, president of the center, will meet with arts leaders in all 50 states and Puerto Rico over the next year, he said, beginning with visits to New York, Kalamazoo, Mich., Indianapolis, and six other cities in the next two months.

Since February, the center’s “Arts in Crisis” effort has offered advice on fund raising, budgeting, marketing, and other areas in which arts organizations need help as their money woes increase.

Read an excerpt from Mr. Kaiser’s book on how arts groups can turn themselves around in a financial crisis.

After “selling out” the 35,000 available free tickets for the Virgin Mobile’s FreeFest music festival next month, promoters set aside an additional 3,000 passes for fans willing to volunteer to help the homeless, USA Today reports.

Volunteers who work 13 hours for selected homeless organizations will be rewarded with a VIP pass to the all-day Aug. 30 show at Merriweather Post Pavilion, in Columbia, Md., which will feature Franz Ferdinand, Weezer, Public Enemy, and Blink-182. Eight hours of service will earn a general admission ticket. Current ticket holders are being asked to donate $5 on-site.

“There are 2 million young people out there ages 12 to 24 who are homeless,” said Ron Faris of Virgin Mobile USA. “So we’re willing to eat the cost of a $100 ticket, if people can just donate $5 to help homeless youth organizations that have been decimated by this economy.”

Details on the “Free.I.P.” program are available at the festival Web site.

The Financial Times reports on the growth of events such as the Global Philanthropy Forum that are focused on providing education and networking options for givers.

The increasing popularity of philanthropic conferences featuring speakers, analysts, workshops, and networking sessions reflects the emergence “of a hands-on generation of philanthropists” who want to professionalize their giving and work to maximize its impact rather than just signing a check, the newspaper writes.

“It’s like doing exercise,” said Jane Wales, chief executive of the Global Philanthropy Forum. “You are much more likely to stay with something if you have a community of colleagues with which to pursue that work.”

(Free registration is required to view this article.)

President Obama announced today that White House officials will travel across the country to find “the most promising nonprofits in America” as the administration decides how to spend a new $50-million fund to help charities expand innovative social projects, The Chronicle of Philanthropy reports.