The Social Innovation Fund (SIF) is a bold five-year experiment launched by the US government in 2010 to test a new model for supporting and evaluating innovative and effective solutions in three areas: health, youth development, and economic opportunity. Administered by the Corporation for National and Community Service (CNCS), the SIF operates through two key elements:

• It funds intermediaries to select and re-grant to nonprofits that demonstrate some evidence of success, while expanding services and building a base for more rigorous assessment.
• It requires a one-to-one match of non-federal funds from intermediaries and sub-grantees.

The 16 SIF intermediaries selected in 2010 and 2011 by the CNCS have acted with lightning speed compared to most public programs. Using $95 million of public funds, the intermediaries have generated $250 million in private support for 200 nonprofits in 31 states, 100 cities, and Washington, D.C. to help 70,000 low-income people attain a better education, achieve greater access to healthcare, and gain employment.

At REDF and New Profit Inc., two intermediaries selected in the inaugural group of grantees, we have been assessing the SIF’s value for the social sector. One immediate assessment concern is whether government support for this initiative can be maintained long enough to prove out the SIF model. Although the SIF is a priority program of the Obama Administration, with a small, but growing set of champions in Congress—and has survived two difficult federal budget cycles—its future is not secure. Still, we believe there are lessons to be gleaned from its first two years.

The SIF requires that all sub-grantees submit five-year evaluation plans to increase the rigor of their program assessment. For some of New Profit’s sub-grantees, this requirement has accelerated work that they long intended to do; what had been missing was access to the funding and technical assistance to develop a strong evaluation plan and select a third-party evaluator. For others, this requirement has highlighted how far even the most established nonprofits need to go in developing rigorous evidence of impact. New Profit is a national venture philanthropy fund that helps innovative social enterprises improve opportunities for children, families, and communities.

For REDF, a venture philanthropy that assists social enterprises that create jobs for people who face barriers to employment, the SIF helped fund the comprehensive data collection we have done for many years with organizations in our portfolio, as well as further deploy the use of that data to drive performance management. The SIF helped REDF advance our approach to social return on investment, and pushed us to work with sub-grantees to more clearly define core model elements, such as the job requirements and types of employee supports that most effectively support long-term job retention, so that multiple organizations deliver services using agreed-upon best practices before they undertake a rigorous random assignment study.

We are pleased that the CNCS and its evaluation consultants understand the importance of evaluating in a developmentally appropriate fashion. Two of New Profit’s six sub-grantee organizations are conducting implementation studies prior to their impact studies to ensure that the impact studies are based on the right questions. This is important to prevent spending on premature impact studies, which can lead to errors and set back learning.

Although the result of this evolutionary approach is that evidence of impact may not be complete by the end of the five-year funding period, organizations will have developed valuable data that will strengthen their ability to provide the highest quality services. For example, they are likely to better understand how to integrate evidence of results into their performance management systems, changing and improving day-to-day practices in response to outcome data. We also will be able to offer new insights to others in the field about what is and isn’t effective. For example, we may know more about whether and under what circumstances partnerships between government funders and intermediaries produce significantly better results than direct funding of nonprofits.

One great challenge for the SIF and its intermediaries and sub-grantees is that in Washington, D.C.’s charged political environment, those that determine budget allocations are impatient for results. But are important policy decisions ultimately influenced by hard data? Elected officials just as often face other political considerations—pressure from local constituents or the seductive charms of programs that may generate media attention but do not have hard evidence of impact.

Yet the lack of connection between program impact and funding was one of the factors that propelled the creation of SIF in the first place. The coming budget cuts only increase the need for the Social Innovation Fund. We must use our scarce resources to serve disenfranchised people’s needs and demand that evidence of results play a greater role in funding decisions.