By Nancy Roob, The Edna McConnell Clark Foundation
Why the SIF?
The Edna McConnell Clark Foundation (EMCF) thought long and hard before it applied in 2010 to become one of the initial intermediaries of the Social Innovation Fund (SIF). After deliberating, we concluded we could leverage SIF funding to strategically advance our goals. I’d encourage any organization interested in becoming a SIF intermediary to engage in a similar process, exploring how the SIF fits into and furthers your objectives.
The SIF made sense for us because our plans already included extending our experiment in coordinated, collaborative investment, which we call “growth capital aggregation.”
History & Context
To give some context, EMCF dates back to 1969, when Edna McConnell Clark, a daughter of the founder of Avon Products, and her husband, Van Alan Clark, set a fresh course for what had become a quite large but unstaffed family foundation. For a long while we focused on systems reform, but over the years we began to question the impact of this strategy and whether it was deploying our limited resources to the greatest advantage. A little over a decade ago, we shifted our attention from systems reform and began to concentrate entirely on disadvantaged youth, ages 9-24, and on strengthening the pool of nonprofits delivering direct services to them. We began to invest only in programs with strong evidence of their impact on the most vulnerable and hardest-to-reach kids, and to explore how our investments could help scale those programs to benefit more youth.
How We’ve Used the SIF
We decided to pursue the SIF at the same time we were exploring how we could apply the lessons learned from our Growth Capital Aggregation Pilot (GCAP). Launched in 2007, GCAP raised with 19 other private funders $120 million to support three EMCF grantees: Citizen Schools, Nurse-Family Partnership and Youth Villages. These investments, each of which was structured individually, helped all three organizations serve more youth, earn more revenue, and better position themselves as proven programs to secure additional funding—all of this during the most severe economic downturn since the Depression. [For more, see Bill Ryan and Barbara Taylor’s report, An Experiment in Scaling Impact: Assessing the Growth Capital Aggregation Pilot.
We knew growth capital aggregation held promise for individual grantees, but could we expand this approach to support an entire portfolio of organizations? The SIF provided us the opportunity to find out, and the answer so far is encouraging. Now, in addition to working with co-investors in a single organization’s growth plan, we are leveraging and pooling private dollars with 14 partners in what we call the True North Fund, which supports all 12 of our SIF grantees. These organizations are now using federal SIF funds, EMCF funds, True North Fund dollars and funds from other private investors to evaluate and expand their programs, reaching over 91,500 additional youth across the nation by the end of 2013. Our most recent investments are benefiting kids and communities in need in Chicago, North Carolina, South Carolina, Georgia and Florida.
A bonus of this expansion of capital aggregation is the learning community it has created among co-investors, who join in quarterly reviews of the portfolio’s performance and provide strategic advice. In what may turn out to be a model for the sector, some co-investors are adapting what they learn from this collaborative experience to their own work, while we in turn are learning from our partners—and all our grantees are benefiting from co-investors’ expertise as well as their funding.
The SIF has been a catalyst in all this, accelerating EMCF’s progress toward its goals and lifting its trajectory. We’ve taken advantage of the SIF to leverage additional growth capital, build the evidence of grantees’ effectiveness, and help them draw closer to scale. The open competition we conducted for SIF awards introduced us to promising programs we might not have discovered otherwise. The SIF has also provided us with opportunities to collaborate and learn from our peers doing similar work. [We recently published a report by researcher Melinda Tuan, A Midpoint Report on the True North Fund, documenting the progress to date of our True North Fund grantees.
Being a SIF intermediary is a major undertaking. As an unprecedented public/private partnership, it presents new challenges: working with a government agency, adapting policies and practices to comply with federal standards, factoring in additional staff time and costs…. EMCF has been able to meet these, however, and the benefits of participating in the SIF have far outweighed the challenges. Thanks to the SIF, we have furthered our investment goals and made an impact on many more young people and communities.