International Aid Charities Will Soon Be Eligible for Federal Innovation Funds

San Francisco

The Obama administration is again drawing on the field of social enterprise for new ideas about how to solve social problems.

The United States Agency for International Development is starting Development Innovation Ventures, which will be modeled on a venture-capital fund, to identify creative approaches to international development and help them grow, Maura O’Neill, the agency’s chief innovation officer, announced here at the Social Capital Markets conference.

The new fund will accept applications from both nonprofit and for-profit entities.

While the fund will be modeled on the venture-capital process, the money will be awarded in the form of grants. The agency will divide the awards into three stages. Early-stage projects will receive up to $100,000. Efforts that are in the second stage will receive up to $1-million, and projects that have grown to significant scale in one country and have started in two or three other countries will receive grants of up to $6-million.

Ms. O’Neill hopes that by awarding money in a different way, the agency will uncover important new ideas.

“If we’re used to doing business the same old way, then all the solutions look like the same old solutions,” she told the audience.

The agency will be announcing eight grant recipients from a test of the Development Innovation Ventures model conducted this summer. Ms. O’Neill said that one of the winners is a project that uses cellphones to help citizens monitor voting integrity during elections.