Friday, 23 April 2010

White House Centre for Social Innovation

Amazing to hear David Cameron quoting Saul Alinsky on community organisation last week. And of course Alinsky taught Obama all he knew about community organisation. Not surprisingly both Tories and labour have had people from the Obama campaign advising them.

One of Obama's key pledges in the campaign was to establish a Centre for Social Innovation and a Fund to support it.

I have been at the White House Centre talking about the new Social Innovation Fund that has been set up. They have just announced the appointment of the new CEO, Paul Carter.

I was seeing Michele Jolin who I first met here a year ago, just after she had been appointed by the President. She has been the key individual behind the design of the new Fund. This will be a five year programme, with $50m pa which will be distributed via intermediary bodies like foundations. However the intermediaries have to match the money they receive with an additional $50m. When they allocate funding the groups receiving it match with further funding to make it a potential $200m fund.

The aim is to support emerging innovative projects and to achieve scale. We talked about the potential and the possibility of loans as opposed to grants as part of the mix. At this stage this is a grant programme but they are interested in the possibility of some of the match funding being loans from institutions. I talked about the work of the Social Investment Business with the DH social innovation investment fund. I am going to organise further talks for them on this.

They are struggling with just the same types of issues we do on innovation: how to evaluate and how to take to scale. How do you determine that something really is innovative and has the power to engineer change, as opposed to a good interesting idea that may not be applicable anywhere else.

We talked through the problems of taking innovation to scale and they have seen a lot of the work of the UK Innovation exchange on this.

I think the concept of using intermediaries is right. They took the view that as Government they are not good at making decisions on grants, but that organisations in the sector are. An approach that our own Government have correctly taken.

They are fascinated with the work of social investment in the UK and I talked through some of the recent successes of SIB. Although the US has over 20 years experience of social investment they have not yet achieved some of the scale we have managed, and we are in advance of thinking on bonds, for example.

However the banks play a much bigger role in financing the sector here than in the UK. It seems that organisations find it easier to get bank loans and the concept of using loans is better entrenched. This is largely due to the Community Reinvestment Act - a lesson we have to learn. There is also a big secondary investment market with organisations buying a loan book and releasing more funding for new initiatives.

There are also lessons from their slightly longer experience too. Clara Miller, of the Non Profit Finance Fund in NYC, warned me of the lessons thay have learned from putting loans into buying buildings, which then become a running liability, with organisations having to devote time and energy into building maintenance not promoting their mission. It can also drive mission drift with programmes focused on building use not client need. I'm getting their research evidence on this as we need to beware the plans of both the Tories and Labour to transfer more assets to community bodies. Beware the Trojan horse of an economically unfeasible building: a liability not an asset.

Have been staying with a truly wonderful old friend, Miles Young, who I knew at Oxford, naturally. He is now in the very exalted post of Global CEO of Ogilvy and Mather, I believe the world's largest advertising agency.

The firm are kindly working with ACEVO on how we present a modern day charity sector to people at large so our image matches the reality of today's professional sector.

Always good to get together with a fellow Brit to discuss the joys and the shortcomings of our American cousins over an agreeable cup of tea (indeed the only agreeable cup of tea I have ever had here!). And we even managed to get to a choral concert sung by the infinitely sublime Choir of New College, Oxford. Transports of delight!

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