15 of 69 SIP Applicants Seek to Address Youth-related “Challenges”

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Up to 10 winners, chosen in July, could provide sub-grants of at least $100,000 to nonprofits

Fifteen of the 69 applicants vying for a share of $50 million in Social Innovation Program (SIP) matching funds – offered by the Corporation for National & Community Service (CNCS) in support of “transformative” solutions to social challenges – have submitted applications under the youth development/school support priority area.

In a conference call briefing on the SIP program yesterday, Marta Urquilla, senior adviser for social innovation at CNCS, said 16 other applicants are proposing programs that cut across more than one priority area, which also include economic opportunity and healthy futures.

Not a Panacea

The Obama administration has gone to great lengths to describe SIP – authorized under the 2009 Edward M. Kennedy Serve America Act – as a new way for the federal government to support social programs – first lady Michelle Obama went so far as to call it “dramatically different.”

Nell Edgington, president of Social Velocity, a nonprofit management consulting firm, agreed to the extent that SIP has elevated the idea of “social innovation” to a national audience. Edgington said social innovation aims to create new kinds of financing vehicles for nonprofits beyond traditional direct services grants – such as funds for start-ups, fundraising, evaluations and more.

SIP is a step toward developing a “capital marketplace for nonprofits,” she said, akin to the way venture capital firms finance business start-ups and help them grow.

“But [SIP is] not a panacea,” Edgington added, particularly since she said the request for proposals (RFP) was structured around social innovation models developed by the big players in the field, such as New Profit Inc., where Paul Carttar, now director of the SIP, once served as executive partner. Officials with New Profit told the Chronicle of Philanthropy in early April that the organization submitted a SIP application in the youth development area.

Edgington did not criticize the relationship between New Profit and Carttar, and said she’s “just happy to get this train moving.” But, she said, the nonprofit field, especially the more than 80 percent of organizations with budgets under $1 million, needs “so much more.” Expanding on this on her blog, Edgington writes that small nonprofits “often lack basic infrastructure and capacity for large scale growth, and by that I mean they don’t have the ‘evidence,’ or research, to prove that their solution is really working, let alone basic funding to drive operations, create a strategy for growth, etc.”

Sub-grant Potential

All of the money won’t end up with the larger organizations, which are required to sub-grant much of it on a competitive basis. However, the February 2010 SIP RFP states that intermediaries must support “subgrants that reflect more substantial investment in programs that show the highest levels of effectiveness,” which could mean that more of the sub-grant money could go to well-established programs that have proven their mettle and not to the type of organizations that Edgington sees as needing the most support.

In a question-and-answer document published in early March, the corporation said that this year it will limit funding “to promising social innovations with evidence of effectiveness.” But it adds that CNCS “anticipates that intermediary portfolios may include some programs with preliminary or moderate evidence.”

Seven to 10 intermediaries will be selected from the group of 69 for cooperative agreements ranging from $1 million to $10 million each. Youth nonprofits or other types of organizations with projects that fit into the intermediaries’ winning “portfolio” will be eligible to compete for a share of the SIP award. Winning sub-grantees, which must serve low-income communities, are to be supported by the intermediaries with evaluation, capacity building, and replication and evaluation.

The federal grant announcement will be made in July and “all of the intermediaries are required to hold an open and competitive sub-grant selection process within six months of award,” Urquilla, of CNCS, said. “Open and competitive” means that within the intermediary’s geographic and issue area, “any community nonprofit organization that deems itself eligible to apply should be able to have access to that opportunity.”

Wraparound Services

Because the application review process is now under way, Urquilla did not discuss the types of youth services and school supports the intermediaries have proposed.

Urquilla said the issue areas were left broad on “purpose” so CNCS did “not limit the scope” of ideas. But the youth development/school support priority area was envisioned to fund the “glue” that will bind together other social investments, especially in education.

“We did not want to be seen as overlapping or duplicating” what the U.S. Department of Education is supporting in the realm of academic improvement, Urquilla said, “but we understand in order for those solutions to work, and to stick, there are some wraparound solutions that need to be simultaneously supported and developed.”

Successful intermediaries have to provide a one-to-one match of the federal grant; CNCS officials estimate that the initial $50 million SIP investment will generate $150 million or more in private matching support. Urquilla said the Obama administration is requesting $60 million to continue SIP in fiscal 2011.