Social innovators have long operated with little or no government funding, mostly by choice. Government was generally considered either a faithless partner, driven by political expediency, or just plain hostile to anything that might challenge its own view of the world. It was more a target for innovators than a supporter.
Government has been changing of late with its heavy focus on improving program performance. Democrats and Republicans alike have embraced social innovation as a way to solve problems such as poverty, disease, government sclerosis, discrimination, education gaps, global climate change and energy dependence.
Even though the Obama administration is not the first to endorse social innovation, it has put the most money at risk, whether through monster competitions for improving public schools such as the Department of Education’s $4 billion “Race to the Top,” or tiny programs such as the $50 million Social Innovation Fund for scaling up programs such as the Local Initiative Support Corporation’s Financial Opportunity Centers.
Yet despite the federal government’s growing interest in social innovation, it is at risk of becoming an unreliable, even dangerous partner. State and local governments are part of the problem too.
To start, governments at all levels impose enormous paperwork burdens on their partners. Touch a government dollar, and you magically enter the land of red-tape, byzantine accounting systems, endless reporting requirements and constant second-guessing from legislators and executives alike. Touch a government dollar, and you can also count on delayed payments, especially as states struggle with declining revenues and escalating liabilities, as well as opposition from interest groups that protect the status quo.
And then there’s the danger of guilt by association. Social innovators have to meet payroll like any other business or nonprofit. They can’t print money like the federal government, after all. The more money they take from government, the more they look like mere agents of the status quo. Much as they say to themselves that they can change the world even in golden handcuffs, they must often compromise their values to stay alive financially.
Do some social innovators take government money to stay in business? Of course. But those who are really trying to change the status quo have to decide how much of the narcotic to take. They can be easily co-opted, even pacified, by the convenience of government grants, and always run the risk of their own shutdowns as government changes direction after each election.
Moreover, at least some social innovators have decided that the best path to success involves arm-twisting and tin-cupping in the legislature. Pity the poor social innovator who hires a lobbying firm to grind out a few unreliable dollars, only to be featured in a national story about the dirty little business of squeezing dollars out of government. Although the national media has not picked up on the story, there are plenty of social innovators who have retained lobbyists to prowl the government for generating earmarks--and an earmark is an earmark, whatever the vehicle.
It is not entirely clear how to solve these problems, but one possible solution is also innovative in character. Instead of funding social innovation through existing federal and state programs, Congress and the president could convert the Corporation for National and Community Service into an independent, quasi-governmental agency. Funded by a permanent endowment created by government, the Corporation would be released from most bureaucratic rules in exchange for maximum transparency.
Operating with financial surety, the Corporation would also be liberated from needless haggling over the federal budget and political gamesmanship. Guided by a national board with full authority to monitor the agency, held to strict standards of transparency and public purpose, and subject to audit and investigation by a truly independent inspector general and external reviewers, the Corporation could also mount its own competitions for new ideas.
In short, the Corporation could become the faithful partner that social innovators need as they launch their new combinations of ideas. However, creating workable programs with government support requires--surprise--workable government. Sadly, the federal government and its state counterparts are anything but workable these days. Congress and the president should cut the Corporation for National and Community Service free to do this job.
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