Will the Social Innovation Fund Become a Beacon or a Distraction?

The nonprofit world is all atwitter over the Obama administration’s decision to create an Office of Social Innovation — and with good reason. After all, when was the last time the White House really paid attention to good ideas emerging from nonprofit groups?

Washington always pays lip service to nonprofit groups, but the current president and first lady appear to have a deeper commitment than most politicians to engaging nonprofit groups and donors in solving persistent social problems.

The White House certainly deserves to be applauded for creating a social-innovation fund. The question is whether the new government department will serve as a beacon — encouraging greater innovation across the nonprofit world — or a distraction.

The first and most obvious problem with the Social Innovation Fund is its size — $50 million.

In federal-budget terms, it’s just not enough money to make a significant difference. It calls to mind Doctor Evil of Austin Powers fame, who might say, with his pinky finger raised, “Fifty MILLION dollars.”

More to the point, if too much attention is focused on a tiny fund operating out of the White House, we run the risk of ignoring far larger and more relevant resources that can fuel innovation.

In truth, innovation can happen on a range of topics, and there are probably pockets of money to support innovation in every division of government. Nonprofit groups and foundations should not be mesmerized by the tiny bauble that happens to be associated with the glamour of the White House, when the real treasure lies elsewhere.

For foundations, the more important point is to challenge the conventional wisdom that philanthropy uncovers great new programs and the federal government will always bring the big money to carry out the great ideas on a larger scale. That’s not always the case.

In the field of public radio, for instance, the Surdna Foundation has provided important early support for organizations like Public Radio Capital, which has helped to expand the reach of public radio to millions of listeners through its involvement in transactions to buy stations and maintain their licenses. So far, those deals have been worth more than $200-million.

Likewise, Surdna was an early supporter of the Public Radio Exchange, an effort to harness the power of networked technology to deliver radio programs both more cheaply and more broadly.

In recent months, the exchange has led to the development — with partners at Minnesota Public Radio and National Public Radio — of the Public Radio Player, a wildly popular iPhone application that delivers content from hundreds of public radio stations to iPhone owners everywhere.

As a grant maker, Surdna is occasionally congratulated for supporting innovative efforts like Public Radio Capital and Public Radio Exchange. It’s flattering. But the truth of the matter is that some of the most successful and innovative work we have supported was simply following in the footsteps of seasoned bureaucrats.

In particular, the first grants to the Public Radio Exchange and Public Radio Capital were both shepherded by the late Richard H. Madden, vice president for radio at the Corporation for Public Broadcasting, who was a remarkably sensitive and farsighted steward for public radio, associated with many of the most enduring program innovations in the field of public broadcasting.

In addition to innovations in finance and technology, Mr. Madden was associated with fresh program concepts that have now become staples, like Marketplace, Fresh Air, and This American Life. And now there is hope for a new generation of innovation at the Corporation for Public Broadcasting, with the recent announcement that it has appointed Joaquin Alvarado, founding director of San Francisco State University’s Institute for Next Generation Internet, to be its next senior vice president for diversity and innovation.

But of course there are innovators elsewhere in the federal government. Some are already on the job and yet more will probably soon take their place in the Obama administration.

Arne Duncan, the secretary of education, has established a $5-billion fund to promote innovation and school improvement. And there are surely others.

One of the most important government programs to promote innovation across the nonprofit world may be the Broadband Technology Opportunities Program, part of a $7.2-billion program in the federal economic-stimulus law designed to deliver high-speed Internet services to communities, mainly through nonprofit media and educational organizations.

Clearly, the broadband inclusion in dollars alone will be significant, given that this one program will be more than 100 times the size of the much better known Social Innovation Fund. But even more fundamentally than the financial stimulus to nonprofit groups that receive the grants, it will deliver the power of the Internet to spur innovation in organizations and communities that have not yet experienced those benefits.

Indeed, the Internet itself is an excellent example of a federally supported program — created in the Defense Advanced Research Projects Agency — that has sparked the most sweeping generation of innovations in the history of information technology. In that case, the government was the sole sponsor of development work for 20 years before most people in philanthropy had even heard of the Internet.

And this brings us back to the notion of a public-private partnership in support of innovation.

In philanthropy, there is a hint of hubris among grant makers who believe they are in the best position to identify promising projects and programs, and thereby in a good position to guide the federal government’s spending decisions. But sometimes philanthropy would do well to follow federal money and not always lead.

Vince Stehle is a program director at the Surdna Foundation, in New York, overseeing its grants to strengthen the nonprofit world.