Blog

Every day social innovators and social innovation organizations across the country are measurably impacting communities and individuals. This Practice to Policy blog series lifts up the voices of the more than 70 organizations that make up the America Forward Coalition and our broader social innovation network by highlighting outcomes-based solutions to our country’s most pressing social problems and why these solutions must be reflected in our federal policies. Today, we will hear from Carla Javits, President & CEO of Coalition organization REDF about the history and growth of social enterprise and why it is critical now, more than ever to double down on social innovation.

Ten years ago, the visionary leaders of the nascent America Forward Coalition invited REDF to join them in organizing results-oriented social entrepreneurs across the US as a non-partisan force for change in social policy. I enthusiastically accepted although I was uncertain, given the political climate and constrained resources, if America Forward was going to make the investment to have a real impact on national policy.

As it turned out, America Forward far surpassed my initial expectations, offering a refreshing alternative to the stale, partisan, business-as-usual debates that have stymied progress for so long.

The America Forward team mobilized and listened to the dedicated people who are in the trenches every day, making a difference at the community level. They engaged smart, policy-oriented Washington insiders to make sure the evidence-backed solutions they were uncovering from dedicated people in cities and towns across the US were delivered in a way that would resonate with policymakers.

A signature accomplishment was the establishment of the Social Innovation Fund (SIF) – one of the most visionary and effective programs of the federal government. The program’s design benefited greatly from the input of the America Forward membership, rooted in their daily experience on the ground.

Established by Congress on a bipartisan basis as part of the Edward M. Kennedy Serve America Act, the SIF selected experienced intermediaries who were close to the action at the local level to work in three areas: economic opportunity, youth development and school support, and healthy futures.

It required recipients of the funds to do three things: produce measurable outcomes, evaluate effectiveness, and replicate and expand to serve more individuals and communities. And as icing on the cake, it required a cash match from the intermediaries and the community-based organizations they funded – resulting in almost 4:1 leverage of the federal dollars. This statistic resonated powerfully at a moment when many members of Congress were trying to minimize federal spending and maximize private sector effort.

What was a relatively small investment by the federal government that totaled about $350M over eight years leveraged $700M in additional funding. Hundreds of thousands of people received better educational, workforce, and healthcare services. Ninety-three evaluations were completed documenting the positive changes in people’s lives and shedding light on what worked best and what did not, as well as the “social return” on every dollar invested. Such documentation meant that scarce public resources could be better targeted. And SIF laid the groundwork for a path-breaking way to finance social innovation that is widely used around the world—social impact bonds.

REDF successfully competed for the SIF resources and invested in a promising approach known as social enterprise that was pioneered and developed by local business and social sector leaders. It helps striving men and women develop a work history, gain skills and confidence, get employed, stay employed, and build a better future.

Social enterprises funded by SIF generated both jobs and training that opened the doors of employment to thousands of people overcoming the toughest challenges—histories of homelessness, incarceration, substance abuse, mental health struggles, limited education, and unstable housing. Everything that would pretty much guarantee these men and women are left on the outside looking in, relying on government benefits in order to survive.

Rigorous research conducted by a third-party evaluator as part of the SIF program proves the effectiveness of social enterprise. Every dollar spent by social enterprise businesses generates a social return of $2.23 in benefits to society due to lower public assistance costs, more tax dollars paid by social enterprise employees, and the increased business revenue social enterprises reinvest in hiring and training more people.

The initial five years of funding helped REDF go statewide in California, building on the previous 10 years honing the model in the SF Bay Area. With evidence of results in hand, REDF competed again and won SIF funding to expand across the United States. In total, the federal government provided $14.5M, which leveraged $25M in private resources while helping thousands of people reduce their use of government benefits, increase their earnings, pay taxes, produce valuable products and services, and contribute to their families and communities in ways they had never had the chance to before.

Unfortunately, despite America Forward’s strenuous efforts, and in contradiction to the cost-effective solutions legislators on both sides of the aisle say they want, Congress made a short-sighted decision that defunding the Social Innovation Fund (SIF) was the right course.

REDF was only one of the dozens of intermediaries who lost substantial support for nation-wide initiatives that were improving lives, building an evidence base for what really works, and taking the most promising interventions to scale.

Although the SIF was an effective initiative, it was a tiny part of the federal budget and was not integrated into larger government programs. Now, agencies ranging from the Department of Labor to the Department of Justice to the Treasury should consider how to integrate the private-sector leverage and results-oriented approach of the SIF into mainstream public funding.

While that may be more aspiration than action today, the silver lining is that America Forward continues to organize and advocate for exactly this kind of action on the most pressing issues facing Americans—the problems that demand the most urgent attention. And it does this work based on the practical experience of people at the street level who are getting it done while focusing on how we learn and improve from the hard evidence of results.

America Forward reminds and inspires us that now it is not the time to turn away. With its leadership, we are reminded that now is the time to double down.