Collaborate, Innovate, and Look to Investors

Action-oriented collaboration.
Positive deviance.
Unprecedented cooperation.
Profound transition.

Aren't those lovely phases? I especially like the last: it sounds rebellious but in a good way. These were the catch-phrases that Judith Rodin, president of the Rockefeller Foundation, passed on to the SIE conference. Technological, political, and cultural changes are causing a sea-change in the way nonprofits achieve their goals, she said, and those are the phrases that sum up the changes.

"Action-oriented collaboration" is the meshing of needs and resources in an innovative way. Think the Social Innovation Fund, which provides government money distributed through grantmaking institutions who match dollars. The administration has raised additional money through foundations. Only grantmakers committed to data collection and continuous improvement need apply to be an intermediary. Only evidence-based programs need apply to the grantmakers. A disciplined, results-approach is required these days.

Rodin noted four trends:

• Money matters, but it doesn't always correlate with success.
• Convening collaborating, strategic partnership -- the whole is greater than the sum of its parts. It's critical to increase connection.
• Great ideas percolating upward, from those on the front lines, from the side lines, and between the lines.
• More ways of delivering philanthropy are being tested, such as public-private collaborations (that word again!)

It's a fertile moment, though rife with pitfalls, she said. We need to have discipline and to use well-researched, sound methodology. New tools are being used used to source innovation -- crowdsourcing, collaborative competitions where people work together to revise and refine solutions so global needs, and user-driven innovation.

Imagine clients, the recipients of services are being asked what they want, need, and will use, which means that the solutions are more practical and gain acceptance more quickly. That's the "positive deviance" part. (I can't help but think of the UNIFEM project to end genital mutilation: Instead of having women become defiant pariahs by not undergoing the procedure, the UNIFEM project works with village elders to change the culture, end the custom, and allow the women to remain respected members of the village.)

"Unprecedented cooperation" is now the hallmark of the social impact sector, she noted. Governments and foundations don't have enough money to solve the problems we face so nonprofit sector must turn to private investors, who have much deeper pockets. But private investors want something back, some financial return, some measure of impact. 

It's not as shocking as it sounds. Low-income housing has been built by for-profits looking for a return. But it can be risky. Focus on returns can undermine social innovation. Look at what's happened in the micro-credit world. Now that the concept has been shown to be profitable, micro-loans are being made at exorbitant rates by companies who are not interested in the social benefits of the loans but only in the money to be made.

Private investment can, Rodin said, dramatically expand the good work that grant or public dollars fund. She listed three areas that need to be developed for this to happen: 

• Nonprofits and investors need to pioneer ways to collaborate.
• Investors need tools to measure social impact, such as IRIS and GIRS.
• Nonprofits prepared to take projects to scale need to focus on the demand side, and make themselves visible to the investing community. 

Every aspect of achieving social missions is changing, from the way ideas are developed to the way they are funded to the way they are delivered: Profound transition.

For complete coverage of the 2010 inaugural Social Impact Exchange Conference: Taking Successful Innovation to Scale, go to Ventureneer SIEX10.