A Turning Point for GreenLight Fund – the Social Innovation Fund Story

By: Paul Carttar, initial director of the SIF and long-time board member of the GreenLight Fund

When reflecting on its past, any organization that has been able to sustain distinctive success and impact for two full decades is likely to spot some key points where transformative progress was made, not only because of extraordinary skill, but because of a fortuitous collision between skill and good fortune that presented unanticipated but profound opportunities.

For the GreenLight Fund, one such instance would surely be its engagement with the Social Innovation Fund during the first term of the Obama Administration. The story of this relationship, which began just five years after GreenLight’s founding and extended over most of the next decade, deserves to be told, as it offers insight into GreenLight’s development – and also involves key elements such as anticipation, risk, disappointment, resilience, innovation and triumph – that simply make a good tale worth remembering.

Context: the Social Innovation Fund
The presidency of Barack Obama began with enormous hope and promise, especially in the US nonprofit sector, which had never before seen two of its own – both the POTUS and FLOTUS having held responsible positions in the sector – scale such heights. Much of the sector’s excitement centered on a particular program, the Social Innovation Fund (SIF), which the President himself had embraced and promoted as a “new way of doing business for the federal government” that could deliver and document social impact greater than that of traditional federal grant programs.

Funded with $50 million per year in public money, this out-sized promise was a function of the SIF’s design, which combined several distinctive features:

1. large multi-year grants of $1-10 million per year for 3-5 years;
2. reliance on “experienced nonprofit grant-making intermediaries” who would themselves select and support service-providing nonprofits;
3. open, competitive grant processes based on comprehensive proposals emphasizing high ambitions for impact and evidence of results;
4. strong incentives for collaboration and partnerships, including mandatory matching of each federal dollar received by three dollars from other public and private sources; and
5. the requirement that each nonprofit funded would undergo rigorous, formal evaluation to build knowledge of what programs actually work.
   

My entry as the first Director of the SIF was quite unexpected. Although I had held leadership positions with some high-profile nonprofits including the Bridgespan Group, the Kauffman Foundation and New Profit Inc. – which had actually developed the SIF concept – so had many others who were also more connected politically. But once appointed, my small team and I seized the challenge of transforming this concept into a well-functioning and effective program for the federal government, which was enthusiastically supported by officials from the nonprofit sector and the administration, including President Obama himself.

Year One Disappointment
Energized by the prospect of competing for and winning a large grant that provided powerful incentives for bold thinking and opportunities for increased national visibility, the GreenLight Fund was one of 69 intermediaries from all around the country that decided to submit applications in the SIF’s first year. Although GreenLight was still operating only in Boston, in April 2010 it submitted a very ambitious proposal, requesting $5 million per year for five years to drive a national expansion. The plan was to formally collaborate with eight community foundations – Arizona, Baton Rouge, Boston, Columbus, Southeast Michigan, New Hampshire, New York and St. Paul – that would partner with GreenLight to implement its model in seven new metro areas.

The competition was stiff, with the 69 applications involving over 260 distinct organizations that were seen by SIF management to “represent the breadth and diversity of the nonprofit and philanthropy sectors.” They came from foundations, nonprofits, universities, local governments, private donors and businesses; from 25 states and the District of Columbia; and they embodied requests for $125 million in federal funding, half of which had already received firm match commitments.

The process for deciding the grantees was rigorous and inclusive and involved more than 60 national nonprofit experts evaluating the applications over three rounds of competition. GreenLight made it to the second round but was not chosen to advance. While reviewers admired the consortium’s ambition, record on evidence, experience in grant-making, and regional breadth and diversity, the application lost favor due to concerns that the plan was “too much, too fast” and might be impaired by the operational and management challenges of coordinating the actions of so many large, established organizations spread over such a vast geographical area that had no experience working together.

Year Three Success
SIF management recognized the high-stakes nature of the grant competition, given the public attention and relatively small number of “winners”. Still, we hoped that many of the organizations not selected in year one would embrace the feedback and commit to learn, improve and try again. Only a few did – but GreenLight was one of them, choosing to fundamentally rethink its approach and come back in 2012 for the SIF’s third competition with a much stronger approach. By then, GreenLight had moved forward to launch two new sites on its own, Philadelphia and the San Francisco Bay Area.

The revised proposal, which requested just $1 million per year for five years, focused on strengthening and growing its core model in these sites rather than relying on other operational partners. The application described its program as “concentrated on importing and sustaining innovative, high-performing nonprofits serving low-income children and youth in the cities where we operate.” The plan received strong reviews by judges in all rounds, and on July 31, 2012 the SIF announced GreenLight and just three other organizations as recipients of SIF awards.

The press release stated that the new grantees “presented compelling, innovative proposals designed to tackle persistent community challenges.” Specifically regarding GreenLight, it stated that GreenLight “will impact the lives of 20,000 low-income children by improving school persistence and academic achievement, increasing high school graduation and GED attainment, and increasing college access, credit accumulation and degree completion.”

Epilogue
I left the SIF in the Fall of 2012 after the third year competition was completed. I joined the board of GreenLight in 2015 and was able to observe not only the progress made to that point but how the GreenLight team continued to leverage the SIF’s funds and support to drive further maturation and growth.

As a direct result of the SIF, GreenLight was able to expand its own portfolio of grantees by bringing six innovative organizations to Boston, Philadelphia and the SF Bay Area in those first few years, which together have generated impressive impact on people’s lives.

In addition, funded by SIF and a requirement of the grant, a qualitative evaluation of GreenLight’s own impact was undertaken. The findings from that study were very positive and a third-party validation of GreenLight’s approach and model.

Perhaps of even greater long-term importance, in the opinion of key GreenLight leadership, was how SIF afforded GreenLight the opportunity to build two solid, data-backed proof points outside of Boston and to prioritize learning and operations effectiveness to support continued growth.

Ultimately, the SIF grant has led to the systematic addition of 11 sites, one each year, reaching the current total of 14 across the US – a number that ironically exceeds the aggressive growth targets presented in GreenLight’s original $5 million first application to the SIF.

This past year alone, GreenLight’s 55 portfolio organization investments across 13 sites impacted nearly 750,000 individuals and families, far beyond the initial 20,000 across three sites projected in their proposal. The three original SIF sites and their investments are thriving, continuing to develop and leverage partnerships and funding across the private, public and social sectors. The spirit of the Social Innovation Fund carries on.