Root Cause

Government "Hopeless at Innovation"? We think not.

<!--StartFragment-->

Matthew Bishop has written an interesting comment on the Huffington Post about his time at Davos and his call for the chief executives of the world's 500 biggest firms to commit $2 million or more to a fund to support social entrepreneurs.

 

He says that six famous global leaders spoke about philanthrocapitialism can lead the world in this time of crisis, making three main points:

 

1. First, leaders need to demonstrate their personal commitment to give back.

2. Second, philanthrocapitalism is about innovation and risk taking in the name of social progress.

3. Third, philanthrocapitalism is about doing well by doing good.

 

As Bishop discusses innovation, he argues that:

 

"Both Clinton and Blair pointed out that government tends to be hopeless at innovation, unlike the private sector, both for-profit and non-profit. If there is to be change we can believe in, government must embrace these changemakers in new partnerships, especially social entrepreneurs. Yunus is the poster-child of social entrepreneurship, having won the Nobel peace prize for his role in developing microfinance (financial services for the poor)."

 

While we agree with much of what Bishop has to say, we firmly disagree that government is "hopeless at innovation". It’s harder in government, no doubt, and there are certain structural barriers to the public sector that discourage innovation and entrepreneurialism. Yet we have seen plenty of examples of innovations within government – from our own state and city partners, from Harvard’s Ash Institute Innovations in Government award winners, and others.

 

But it clearly does take a convergence of a certain number of elements to spur an innovative approach by government. Can we start a list of what some of those factors might be? What would you add to it?

<!--EndFragment-->

 

Comments

Colleen, Thanks for hosting the discussion on Social Edge and for trying to keep it going here. I'm doing the same on my own forums. In response to your question I'll report a story from a recent focus group I was in. The major community foundation in my area was holding a focus group to get feedback about the great things they had done over their 75 years of existence. I was one of a group of about 10 people, most of whom had received major funds from this group, or were peers, or in leadership roles with them. In my case I had received some funds in the past, but none recently. It seemed to me they were asking leading questions, fishing for complements on how innovative they were. The person sitting next to me was a VP of a major bank. I turned to him and said, "If your CEO gave you millions of dollars and said 'go solve that problem' what would have happened if you had reported back with little progress?" Immediately peope said I was being unfair. The Foundation had done many innovative things. I said, "Yes, they have. But poverty is as bad today as it was 40 years ago." Have they really been as innovative as they think they are? Big government has even more money, but the problems that vex us remain pretty much the same. In fact, I posted a link on my web site recently to a book titled "So much reform, so little change" , written by Charles Payne and referring to school reform efforts. From reading Paynes book one of the problems is that we give up on good ideas too soon. It takes a long time to change a culture in a school and even longer to change the educational support system in a high poverty neighborhood. No matter how good the program, as poltical leaders change, the commitment, and funding to sustain such programs also seems to change. That can be true in the private sector, too. In fact, I feel that too much philanthropy is based on "random acts of kindness" and not enough long term commitment to make a difference in the problem being addressed. Thus, what might governmnt do to increase continuity across diffrent administrations, or to support long term private sector investments in helping innovations grow from good to great, and then stay great long enough to do good? What will it take for CEOs making $500k or more per year to not only donate 10% or more of their wealth, but to keep doing so for 10 or 20 years?

Dan - thanks for your insightful comment.

 

This reminds me of an article I read recently in Time Magazine about debate in the stimulus bill over, for example, repairing roads vs. building new roads. The ribbon-cutting ceremony that goes with a new bridge or new highway has a lot more excitement to it and provides a lot more political capital to an elected official than a pothole-filling project.

 

The point - we're always drawn to things that are new and they will always hold appeal. So when elected officials think about policy, they know they're more likely to be remembered as the person who started a new program or built a new structure - rather than the person who made the current infrastructure run on time and work more effectively.

 

And this instinct can, of course, run counter to actually solving the problems. I'm trying to think back on examples where government has stayed committed to something over the long haul - can you think of any? For me, the space program comes to mind but I have to admit that I don't know that much about it.

 

And would a stronger system of measuring results help to counter this instinct to continuously start over? If we can show proof that something is working better than all the alternatives, would an elected official be more likely to throw his or her sustained support behind it?

Building public will. I attended a seminar in Chicago yesterday about education inequity. One speaker made a logical argument for tax increases, then said, "no matter how logical, we can't get these changes because of bumper sticker politics". He meant that as soon as someone says "raise taxes" some opportunist says "he raised your taxes; vote for me" You can read about what I wrote on my blog and I hope you'll add a comment that brings my readers back to your blog, and to the Social Edge space.
The issue of tax revenue that Dan brings up here is a key, I think. Especially now, in the midst of our current financial crisis, the government needs to find a way of increasing their revenue. I just returned from a trip to St. Paul–my state's capitol–to talk with some legislators about issues of poverty, homelessness, healthcare, etc. during the current economic crisis. No matter how supportive any particular legislator was of certain solutions to these problems, they all explained that they believed cuts would have to be made somewhere. With it being hard enough to make the case for existing social programming with which the government is already comfortable, the case for innovation seems even more distant. I think the issue is most certainly a financial one. Without the financial wiggle room, decision makers will not feel they have the freedom to take risks. To gain this economic freedom in the midst of our current economic situation, we must increase governmental revenue. But, like Dan notes, increased tax revenue is a risky political move. We might need a bit of a paradigm shift in the mentality of the public in order for our policy makers to feel sound enough to increase revenue, putting the government in a place where innovation is plausible.
While the public money tree is the largest one at all, it comes with a lot of strings and conditions that lessen it's long term impact on innovation and solving social issues. Because of the change in political leadership, and the way leaders follow trends, long-term investment is hard to achieve, especially in multiple locations doing similar work in different areas of need. Thus, I focus on increasing private sector investment in volunteer-based tutor/mentor programs, building on the personal involvement of business volunteers who take growing leadership and advocacy roles the longer they stay connected to a youth, or a volunteer-based organization. I'm sort of a voice in the wilderness on this, so it takes a long term to have an impact. However, I started working with a program at the Chicago Bar Foundation/Association in 1994 when they were awarding a first gift of $2,000 to recognize an outstanding tutor/mentor program. I suggested they become the first foundation to fund general operations of constantly improving tutor/mentor programs throughout the city. We started working together toward this goal in mid 1994 and in 1995 they began awarding small grants, totaling $25,000 to $50,000 per year. Here are some images from past award ceremonies: http://www.tutormentorconference.org/LAHimages.asp By 1998 the lawyers were bringing together more than 1500 lawyers for fund raising events, and growing awareness in the legal community of the need for tutor/mentor programs. The breakthrough came in 2006 when a $2 million gift was made by the Chicago SunTimes, as a result of a class action law suit. In the past year the grant pool has totaled $240,000 in 2007 and $217,000 in 2008. If such a funding stream can grow from one industry, why not from many? In late November an alumni of the University of Chicago made a $300 million donation to the university. Why can't social innovators work together so that donations of this magnitude begin to be made to support the work we do in various social benefit sectors? While I may only be one person saying this, and trying to make it happen, this idea can multiply as others see the futility of chasing government dollars and become more creative in seeking other sources of revenue.

Hi Brandon!

 

Thanks for your comments. It's always interesting to hear the hands-on stories of what people are hearing from legislators during the crisis.

 

We've been constantly asking ourselves a question during the last months and keep wondering which way the scales will tip:

 

Given the downturn and the way that the economic crisis and discussions of government stimulus have been sucking the oxygen out of nearly every other issue, is the issue of supporting social innovation and social entrepreneurship destined to be successful only in more prosperous times?  Or - are times of crisis like these exactly the opportunity to demonstrate how important it is to focus on the impact of the dollars we spend, to be sure that every dollar goes as far as possible?

 

We, of course, hope it will be the latter...but only time will tell.  Did anything in your conversations give you any indication that the second option above was resonating?

 

Great to have you back with PI, Brandon!

Best,

Colleen

Colleen, I’ll echo your hopes that the economic downturn will show many of our legislators that certain changes are needed, and hope that support of social entrepreneurship will be recognized as a possible solution or response. As I understand it, the Public Innovators model recognizes that government bodies are often hesitant to take risks. The nature of social entrepreneurship, on the other hand, moves towards pioneering solutions specifically as a result of entrepreneurial risk-taking. The hope is that SE-government exchange takes the risk away from the government, while still allowing them to support the successful approaches to social issues. I think this model, in itself, recognizes that the government is hesitant to take risks. Frankly, I do not think the legislators with whom I talked would be that willing to sign on to anything labeled “innovative” at this time. However, if we were able to highlight that Public Innovators model can link government to social entrepreneurship strategies that have already proven to be successful, we might be able to stress that it could simply be a more effective way of dealing with the issues already present in their agenda. At this time change is certainly necessary on the part of the government, but risk is less likely than ever. I think the government could very well find a place for social entrepreneurship in the midst of the current economic situation, but we have to emphasize that the risk has already been taken by the entrepreneurs. Support of the successful strategies is what will be required—and what has the best chance of being accepted—on their end. Of course, we know this is innovative, but the government might not be ready to label it as such just yet.
While the economy seems to get worse every day, and the prospects of getting flexible dollars from government for innovation, or for sustaining innovation long enough to have impact, seems bleak, there is still an enormous amount of wealth in this country, and large amounts of wealth is being transfered through bequests and planned giving every day. In early December the University of Chicago received a $300 million gift. What efforts are innovators making to draw some of this wealth toward the non profit and SE sector? How might the government use a little of its money to encourage a large amount of funding from the private sector? I think this has less risk for law-makers and more potential for immediate, and long-term reward for society. Do you know of anyone who is focusing on this?

Post new comment

The content of this field is kept private and will not be shown publicly.