Office of Social Innovation and Civic Participation

Office of Social Innovation and Civic Participation Blog

  • Investing in What Works: Federal Agency Awards Inaugural Pay for Success Grants

    This week, the Corporation for National and Community Service’s Social Innovation Fund (SIF) announced the federal government’s most robust action to date in support of Pay for Success (PFS), a promising model for expanding innovative, highly effective social programs that achieve better results and can save tax payer dollars. 

    Doubling down on its remarkable successes to date in advancing the President’s Innovation Agenda, the SIF is providing $12 million in new grants to support PFS solutions, a move that was enabled through broad, bi-partisan congressional support.

    PFS is a presidential priority that offers new ways to support social sector innovation, driving better results while conserving government resources. It is a type of performance-based contracting that allows governments to pay providers for rigorously measured outcomes, not just the promise of success, as is often the case. PFS strategies often involve PFS financing, sometimes referred to as “social impact bonds”, through which mission investors fund the cost of preventive services and can be repaid from government savings that are generated when the services reduce demand for more costly safety net programs.

    After a highly competitive process launched in June, today the SIF announced eight grantees, which will help communities develop Pay for Success transactions, while expanding diversity in the PFS field in terms of new intermediaries, geographic reach, social issue areas and approach. The inaugural cohort of SIF Pay for Success grantees is a group of high-performing organizations with experience in evidence-based policy, including: the CSH, Green & Healthy Homes Initiative, Harvard Kennedy School Social Impact Bond Technical Assistance Lab, Institute For Child Success, National Council on Crime and Delinquency, Nonprofit Finance Fund, Third Sector Capital Partners, and University of Utah David Eccles School of Business PFS Lab.

    Announced at an event co-hosted by the U.S. National Advisory Board on Impact Investing, SIF, and the Beeck Center for Social Impact and Innovation at Georgetown, the SIF’s PFS investments aim to address limited availability of funds for planning, feasibility studies, deal structuring, and pipeline development, all of which have constrained growth of the field. The investments have the potential to lead to dozens of Pay for Success transactions across the country, which can increase capital flow to solutions that work while strengthening communities and transforming lives.

  • Enabling Business, Expanding Impact

    Last week, the U.S. Small Business Administration announced a series of important new measures to expand its landmark Impact Investment Fund. Inspired by the President’s vision of a more inclusive and sustainable economy, the Impact Fund was launched in 2011 as one of several federal initiatives designed to support America’s impact investment industry. 

    The SBA launched the Impact Fund in 2011 as a five-year, $1 billion pilot initiative to capitalize investment funds that seek both financial and social return. This announcement reaffirms SBA’s commitment to impact investing beyond 2016. The agency will continue to allocate roughly $200 million of its $4 billion annual investment authority to Impact SBIC’s investing in underserved areas and sectors of national priority.

    The SBA is excited to announce that it has expanded the Impact Fund to continue beyond FY2016 as a feature of the Small Business Investment Company (SBIC) Program. The transition reflects the agency’s commitment to support the growth and development of the country’s impact investing industry. SBA has long played a role in driving capital toward America’s underserved communities and its most innovative sectors. Many of America’s first venture capital funds were SBICs that then funded leading companies such as Apple, FedEx, Costco, and many others. With the Impact Fund, the SBIC Program is seizing another opportunity to foster the development of an emerging and transformative approach to small business financing.

  • 20 Years of Lifting Up Communities

    For two decades, the Community Development Financial Institutions Fund (CDFI Fund) has been an important element of an economic strategy designed to create opportunity for all and strengthen communities by increasing access to capital. Today, the Obama administration celebrated its 20th anniversary by convening government officials, business executives, and community leaders at the Treasury Department to mark the achievements of the CDFI Fund and to look at the prospects for its continued success. 

    The CDFI Fund plays an important role in addressing the economic needs of low-income communities, making progress to ensure all parts of our economy are able to grow together. Its programs help attract private-sector investment to communities that lack access to mainstream financial institutions. It provides financial tools to nearly 900 CDFIs, mission-driven financial institutions that serve low-income borrowers in underserved urban and rural areas. Since its creation, the CDFI Fund has awarded more than $2 billion through its monetary award programs and allocated $40 billion in tax credit allocation authority. It has also issued $525 million in guarantees for community development under recent awards of its bond guarantee program. Combined, these programs have responsibly leveraged billions more in private capital, advancing economic development and creating jobs in underserved communities.

  • Demonstrating What Works at the White House

    For the past five years, the Social Innovation Fund (SIF), a program of the Corporation for National and Community Service, has transformed how charitable funds flow into communities. SIF has been used as an investment model to expand the reach of results-driven programs.

    Last Friday, capping off a week of celebrating SIF’s first five years, the White House hosted the first-ever “What Works Showcase”: a live, interactive event that featured a diverse selection of SIF investments, including social entrepreneurs leading innovative nonprofits and social enterprises transforming lives and strengthening communities across the country. In this science fair-style event, 10 high-impact organizations presented their proven, novel solutions to address some of our toughest challenges in the areas of economic opportunity, healthy futures, and youth development. 

    These demonstrations helped translate evidence-based policy into tangible, real-life stories. We featured organizations such as Single Stop, an organization that helps solve the barriers facing low-income students and increase their chances of earning a college degree. SIF funding has enabled Single Stop to go from serving nearly 24,000 students in the first two years of their Community College Initiative to more than 100,000 over the next three years, and it is enabling their next phase of growth to reach over 1 million people annually.

    We also hosted Medical AIDS Outreach of Alabama, which is bringing HIV specialty care to rural Alabama and elevating the standard of, consistency of, and access to care for rural Alabamians. They demonstrated telemedicine technology providing medical services to HIV-positive individuals living in rural Alabama. As a result of an SIF-enabled investment from AIDS United in 2010, Medical AIDS Outreach has been able to provide access to care in 47 of Alabama’s 67 counties and offered better access to HIV-specific primary medical care by eliminating long-distance travel for these services.

    In just five years, SIF has invested more than $700 million in public and private funds, empowering over 200 nonprofit sub-grantees representing more than 35 states, and in turn serving hundreds of thousands of individuals in need. When it comes to tackling the most pressing problems, SIF has catalyzed impact across the country.

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    The Social Innovation Fund (SIF), a key White House initiative and program of the Corporation for National and Community Service (CNCS), combines public and private resources to grow the impact of innovative, community-based solutions that have compelling evidence of improving the lives of people in low-income communities throughout the United States. The SIF invests in three priority areas: economic opportunity, healthy futures, and youth development. In just a few years the Social Innovation Fund (SIF) and our private-sector partners have invested more than a half a billion dollars in compelling community solutions-- $177.6 million in federal grants plus $423 million in non-federal match commitments in 20 intermediary grantees and 217 nonprofits in 37 states and the District of Columbia.

  • AmeriCorps Expands Presence in Tribal Communities

    During his June visit to the Standing Rock Sioux Tribal Nation in Cannonball, North Dakota, the President re-emphasized the Administration’s focus on strengthening Native American communities through education and economic development. Thus, as part of the Obama administration’s commitment to create lasting change in Indian Country, we are pleased to announce $3 million in AmeriCorps grants to support Native American communities. 

    These funds will bolster President Obama’s priorities for tribal communities and increase the number of AmeriCorps members serving these communities by 41 percent. AmeriCorps members serving in these programs – most of whom will be recruited from Indian Country – will be eligible to earn $1 million in education scholarships to help pay for college or repay their student loans -- putting them on track for greater economic opportunity in the future.

    Through these 17 tribal grants – the highest number approved in the past decade – the Corporation for National and Community Service (CNCS) will support more than 250 AmeriCorps members serving with tribal organizations in 13 states. AmeriCorps members will serve side-by-side with tribal elders and local leaders. They will work to tackle key issues facing Native American communities:

  • Executive Actions to Accelerate Impact Investing to Create Jobs and Strengthen Communities

    Today, at a White House roundtable on impact investing, senior Administration officials met with more than 20 private-sector investors answering the President’s call to action by announcing their new commitments to make more than $1.5 billion in investments that intentionally generate sound financial return as well as measurable social or environmental impact.  New Administration actions will catalyze additional private sector impact investments and support these companies and entrepreneurs.  Finally, according to a new private sector report released today, such smart policy interventions could help grow the global impact economy significantly.

    President Obama has described this as an “all hands on deck” moment that requires all of us to pull together to create the change we seek.  To tackle our most significant challenges, from combating childhood obesity to fighting climate change, from ensuring all hard-working Americans have the skills to get ahead to preparing American students for a 21st Century economy, to doubling access to power in sub-Saharan Africa, we need cross-sector collaboration fueled by a mix of improved regulation and public resources with private capital and philanthropic support.  “Impact investing” stands out as one fast-growing model that brings together these strands. This model of investing to generate economic value as well as measurable environmental and social benefit is gaining traction across the country and around the world. 

    As part of today’s White House event, firms such as Prudential and the Capricorn Investment Group; foundations such as the McKnight, Ford, and MacArthur Foundations; and a wide range of family offices participated and discussed new impact investments.

    Building on President Obama’s year of action using his pen and phone, the Administration will take a number of significant steps to encourage even more investors, foundations, businesses, and entrepreneurs to embrace this model. This includes announcements by SBA, USAID, and Treasury designed to facilitate the flow of private capital toward sustainable business models.  These steps are just the latest in the Administration’s ongoing effort to support the growth of private sector led impact investing as a strategy to create jobs and strengthen communities in the U.S. as well as to advance the President’s global development goals.

    Finally, the private sector U.S. National Advisory Board to the Social Impact Investment Task Force also released Private Capital, Public Good: How Smart Federal Policy Can Galvanize Impact Investing – and Why It’s Urgent. The Advisory Board, which participated in our White House event, includes a blue chip group of 27 leaders from across the investment, business, foundation, academic, and non-profit sectors. 

    For more information on all of these commitments, see the Background on the White House Roundtable on Impact Investing.

    Byron Auguste is Deputy Assistant to the President and Deputy Director of the White House National Economic Council

    Tom Kalil is the Deputy Director for Technology and Innovation at the White House Office of Science & Technology Policy

    Jonathan Greenblatt is Special Assistant to the President and Director of the Office of Social Innovation and Civic Participation in the Domestic Policy Council