A Washington Group Gives Budding Innovators Support to Develop Their Ideas

Cultivating new ideas to help low-income workers build wealth has always been central to the Corporation for Enterprise Development’s mission. Several years ago the Washington group started the innovation@cfed program to give structure to that commitment.

“Otherwise, we were just relying on luck,” says Andrea Levere, the organization’s president.

The centerpiece is the Innovators in Residence program. The Corporation for Enterprise Development has identified five people who have tested wealth-building ideas in their communities and given them each a stipend of up to $50,000 over 12 to 24 months to help them refine their ideas and their projects. In addition to the money, the Washington group also provided assistance from its own program and policy experts as well as access to its network of outside contacts.

After just two years, several of the projects have begun to bear fruit.

One of the first innovators was Mindy Hernandez, a researcher at ideas42, a group of academics and other professionals who seek to use behavioral psychology and economics to solve social problems. Her project was to see whether tweaking antipoverty programs could influence the choices clients make to improve their lives. It worked.

For example, the Campaign for Working Families, in Philadelphia, helps low-income workers prepare their taxes and offers a special program for people who are self-employed. In orientation sessions, staff members explain that all business expenses that self-employed workers can document are tax-deductible, yet many clients arrive at their tax-preparation appointments with little or no paperwork.

Ms. Hernandez decided to test whether it would help to ask participants in orientation sessions to create tax-preparation plans and write down three steps they would take to get ready for their appointment. They then received the plan in the mail as a reminder.

The average refund for people who made a tax-preparation plan was $1,837 compared with $241 for those who did not.

Ms. Hernandez has since moved to Mozambique, but the Corporation for Enterprise Development and ideas42 have forged a partnership to extend the research she started and get the word out about the findings.

Faster Progress

When another Innovator in Residence, Stacey Epperson, was chief executive of Frontier Housing, in Moorehead, Ky., she started to experiment with prefabricated homes as a source of energy-efficient low-cost shelter, especially to replace aging, sometimes dangerous mobile homes.

The new homes made a real difference in residents’ lives. One elderly woman living on $800 a month saw her monthly utility bills fall from as much as $350 a month to roughly $100. The drop was so significant that the power company sent an investigator to make sure she was OK.

During her residency, Ms. Epperson negotiated a deal with Clayton Homes, a large manufactured-housing company, to help design new home models with the needs of low-income homeowners in mind.

She also developed the business plan for Next Step, a national network of nonprofit housing groups committed to using energy-efficient prefabricated homes in their work. The network currently has 10 members, a number Ms. Epperson hopes will increase to 22 by the end of the year.

The stipend provided by the Innovator in Residence program allowed Ms. Epperson to focus three-quarters of her time on the project. She resigned from her position at Frontier last year and now works full-time as Next Step’s chief executive.

Ms. Epperson doubts the organization would be as far along as it is now without the time the residency afforded her.

“Would we be here? Maybe, maybe not,” she speculates. “But definitely not this fast. It really catapulted us so we could get the work done.”

New Ways of Thinking

Raising money specifically for the innovation program has been difficult, says Ms. Levere, of the Corporation for Enterprise Development.

The group is in the midst of a strategic-planning process, and one of the questions the organization is considering is whether to continue running innovation@cfed as a stand-alone project or to incorporate efforts to foster innovation into its existing programs.

No matter which option the organization chooses, finding new and better ways to fight poverty will continue to be a key part of its agenda, says Ms. Levere.

“Tough economic times influence how you think about innovation,” she says. “It changes the questions, and it changes the challenges around innovation. But in tough times, innovation is more essential than ever.”