Elderly Care and the Future of Social Innovation

Social innovation tends to care disproportionately about the young. Take a look at the Social Innovation Fund’s initial investments, for example, and you’ll find that more than a third are explicitly targeted at youth, with the rest heavily concentrated on relatively young families and those early to the labor pool. There is not a single initiative on that list that is targeted at the elderly.

This absence is striking on purely demographic grounds. The elderly currently comprise 13 percent of the total population, and in less than 20 years, it is projected that one in five Americans will be over the age of 65.

However, social innovators must address the issues facing this population for reasons beyond demographic coverage. The state of the elderly will actually determine the fate of our entire social innovation field.

Social innovation in the era of fiscal scarcity

We are entering a new era where the dominating reality is intense fiscal scarcity in government at all levels. Historically, it is public sector funding—which dwarfs private philanthropy by about four to one—that ultimately determines which innovative ideas go to scale. But government appetite for new ventures—especially local government in large states like California—is shrinking dramatically as governments fight for fiscal survival.

This shrinkage will continue until new solutions are devised to answer a fundamental question that every society in history has asked: How will we care for the elderly? Almost every city and state faces severe budget shortfalls because of two runaway cost items related to the elderly: pension obligations and health care. Both costs reflect our society’s broken model for senior care: The first reveals that we can’t afford previous expectations of how the elderly will live and the second is hugely correlated to how our health care system can’t afford the way the elderly get sick—and die.

Until successful new models for senior care are developed, all other forms of social innovation will be constricted. There simply isn’t enough money or government attention to go around.

A case study in innovation: Jewish Family and Children Services

I recently spent some time with one of the most well-regarded agencies in the Bay Area: Jewish Family and Children Services (JFCS). JFCS is the oldest public charity west of the Mississippi and serves the elderly from the entire community, not just the Jewish one. In the 1980s, it began to struggle financially. Amid this fiscal crisis, Anita Friedman took over as the executive director and vowed to reinvent the agency’s business model or go out of business trying. Over the next twenty years, she radically reshaped JFCS into a thriving $30 million organization that enters the new era of fiscal scarcity far stronger than typical social services agencies.

Her reinvention included several components, but I found one particular idea especially worthy of contemplation: the adoption of universal versus targeted services.

Universal versus targeted services

Perhaps the most radical move JFCS made was to shed the typical nonprofit model of providing services targeted for low-income seniors. Instead, it aimed to help all seniors, including those with significant financial resources. The financially able group generated JFCS’s core financial base, and today, 65 percent of the organization’s revenue comes from earned income. This financial strength allows JFCS to forego aggressive fundraising to cover core operating costs and instead to focus on raise funds to subsidize low-income clients.

Achieving this shift required that JFCS compete with the for-profit sector for resourced clients, who—unlike the poor—had choices outside the nonprofit world. Judy Lynch, director of JFCS in home care services, described how the agency had to aggressively market itself not as a nonprofit for the poor, but rather as a potential provider for all elderly consumers. This new identity and competitive environment required that JFCS raise its game significantly. In my own tour of JFCS, I was struck by how it resembled a polished commercial operation.

This universal versus targeted approach could be a critical strategy in the new era of fiscal scarcity. It offers a pathway for greater financial stability as agencies themselves tap into broader revenue streams. Also, innovations that can adopt a universal approach will have a greater likelihood of broader adoption. Scholars studying the history of social policy innovation have demonstrated how in times of scarcity, new programs that establish a cross-class base survive, while new programs targeting only those who are most in need suffer the most.

Can the rest of us follow?

I am aware that not every field can adopt this universal versus targeted approach. But more can happen along these lines. 

Take education for instance. Many resources and much energy are devoted to addressing the education gap between rich and poor in the US. But in common programmatic design and public rhetoric, only one side of the gap is targeted. I have clients who are pouring an incredible amount of smarts and energy into targeting the lowest-performing public schools. What has struck me is how many of their ideas would benefit any child, including my daughter, who attends a middle-tier school. The targeted approach will likely bypass her and her classmates, and in so doing, these programs forego a whole swath of financial and political support that could propel them to widespread adoption.

Dispelling the illusion of “solutions”

While the elderly care field may offer helpful programmatic ideas to the rest of us, I believe the most important contribution may be a philosophic one. Social innovators, especially younger ones, like to talk about solutions. Poverty, education, youth unemployment—these are all “problems” that can be “ended,” “gaps” that can be “closed” and “trends” that can be “reversed.”

There is no such rhetoric in the elderly care field. Even the name of the field suggests a different philosophic orientation—the condition is one that calls for “care.” No one working in the field believes that they are going to solve the inevitable decay and death of human beings. As such, there is a modesty of ambition and a humility to their promises.

Social innovators striving in the new fiscal era are going to need to borrow those traits. We have to accept that while many social problems can and should receive our attentive care, in many cases, we may not be able to afford true solutions. This acceptance of the inevitable—our sector’s own version of coming to terms with aging—may shape programmatic design. It certainly must shape our rhetoric and internal expectations. Otherwise, disillusionment will grow among our funders, the public, and even within ourselves.

And that will get old fast.

Read more stories by Curtis Chang.