Creating Seedbeds for Social Innovation

Creating Seedbeds for Social Innovation

Advanced Policy Research 2006-2007H. John Heinz III School of Public Policy and Management

Carnegie Mellon UniversityPittsburgh, Pennsylvania USA

Special Thank You To The Following Experts

Heather Arnet - Women and Girls Foundation • Terry Beggy - Pittsburgh Social Venture Partners • Marie Coleman – Institute for Social Innovation, Carnegie Mellon University • Diana Bucco - The Forbes Funds • Courtney Ehrlichman - Friendship Development Associates • Colin Lacon - Northern California Grantmakers • Al Mercer – Social Enterprise Accelerator • Elizabeth Lynn - The McCune Foundation • Harold Miller - PittsburghFuture.com • Jerry Paytas - GSP Consulting • Paul Shoemaker – Social Venture Partnership • George Duncan – Heinz School of Public Policy and Management, Carnegie Mellon University • Don Smith – University Partnerships • Richard Florida – George Mason University, The Richard Florida Creative Group • Steven Pedigo – Greater Washington Initiative • Kirsten Gagnaire – Social Enterprise Group • Gregg Behr – The Grable Foundation • Perla Ni – Great Nonprofits, founder of Stanford Social Innovation Review • Denise Rousseau – Institute for Social Innovation, Carnegie Mellon University • Tim Zak – Institute for Social Innovation, Heinz School of Public Policy and Management (Australia) • Tim White – University Partnerships • Donald Bonk – Carnegie Mellon University


AGENDA• Introduce project concept and definitions• Discuss the socially innovative organization

database• Correlate social innovation with economic

development• Launch the Fertile Ground Index• Share conclusions and facilitate Q & A

session


• Introduce project concept and definitions• Discuss the socially innovative organization



session

Social innovations are organizations in any sector that are motivated by a social mission and that are financially sustainable in one or both of the following ways: creating program-generated income or receiving resources from a Support Organization – whose mission is to support and promote Social Innovation (e.g., Ashoka, Echoing Green, foundations, Venture Philanthropic Partners)

Definition of Social Innovation

Social innovation’s impact on the economy

Economic

Development

Social

Innovation

Factors

Can we demonstrate

this relationship?

Can we demonstr

ate

this

relationsh

ip?

Measuring the relationship between social innovation and economic development

1. Build the database of socially innovative organizations

2. Analyze the impact of social innovation on a region’s economic development

3. Create the Fertile Ground Index – a model that indicates a region’s potential for social innovation





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Building the database of socially innovative organizations

• Ashoka• Center for the Advancement of Social

Entrepreneurship • Common Good Ventures Nonprofit

Partnerships• Echoing Green• Draper Richards Foundation• Fast Company Social Capitalist Award

2005-2007• Fusion• Kaufmann Foundation• New Profit• REDF (The Roberts Enterprise

Development Fund)• Schwab Foundation

• Social Enterprise Alliance/Community Wealth Ventures

• Skoll Foundation• Social Enterprise Accelerator• Social Enterprise Group• Social Innovation Forum• Social Venture Network• Surdna Foundation• University Network• Venture Philanthropy Partners• Yale-Goldman Sachs Business Plan

Competition for Nonprofit Organizations 2002-2005

- Over 800 organizations in the United States- Sources include:

Ranking of cities in increasing count of socially innovative organizations

Foundations onlyfunding socially innovative

organizations

Networks onlysupporting socially

innovative organizations

Akron, OHArlington, TXAurora, COBirmingham, ALHonolulu CDP, HIMesa, AZOklahoma City, OKOmaha, NERocky Mount, NCSan Antonio, TXSavannah, GASt. Petersburg, FL Stockton, CAToledo, OHTulsa, OKWichita, KSAnchorage, ALBuffalo, NYDurham, NCJacksonville, FLJersey City, NJLas Vegas, CA

Lexington, KYLong Beach, CAPhoenix, AZRochester, NYTallahassee, FLBethesda, MDCharlotte, NCColorado Springs, COConcord, CADallas, TXEl Paso, TXNashville, TNRaleigh, NCSacramento, CASan Jose, CAErie, PAIndianapolis, INLouisville, KY Memphis, TNMiami, FLSan Diego, CASanta Clara, CA

Santa Cruz, CAAlbuquerque, NMColumbus, OHDetroit, MINew Haven, CTNewark, NJSt. Paul, MNTampa, FLTucson, AZHouston, TXNew Orleans, LAPalo Alto, CAAustin, TXBerkeley, CACambridge, MADenver, COCincinnati, OHPortland, ORKansas City, MOSt. Louis, MOBaltimore, MDOakland, CA

Arlington, VAPhiladelphia, PALos Angeles, CAMinneapolis, MNPortland, ORAlexandria, VAMilwaukee, WICleveland, OHAtlanta, GASeattle, WAPittsburgh, PAChicago, ILWashington, DCBoston, MASan Francisco, CANew York, NY

Total: 82

0

1-10

11-20

21-40

41-70





session

U.S. hubs of social innovation

Organization Count

1 - 9

10 - 20

21 - 40

41 - 60

61 and greater

Ratio: Population to Organization

Population per Socially Innovative Org

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El P

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Kan

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City

Mem

phis

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New

ark

city

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Por

tland

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San

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U.S. hubs of social innovation samples

Hub Selection Criteria• Cities that represented different geographic regions• Cities in differing developmental life cycles• Cities that had higher than average number of socially

innovative organizations

Boston block group locations

Boston control group: changes in median household income

1990 2000

Boston sample group: changes in median household income

1990 2000

Case study cities exhibit significantly higher growth levels in areas with high concentrations of socially innovative organizations

Percent Change in Population: 1990 - 2000

-20%-10%

0%10%20%30%40%50%60%70%80%90%

100%B

osto

n

Pitt

sbur

gh

Sea

ttle

Urb

aniz

ed A

reas

USA

Region

Pe

rce

nt Sample

Control

Average

While population increased, the labor participation rate also increased

Percent Change of Civilian Population Not in the Labor Force

-30%-20%-10%

0%10%20%30%40%50%60%70%80%90%

100%

Bosto

n

Pittsb

urgh

Seattl

eU.S

.

Region

Pe

rce

nt Sample

Control

Average

Case study cities exhibit significantly higher income levels in areas with high concentrations of socially innovative organizations

Percent Change in Median Household Income: 1990 - 2000

0%10%20%30%40%50%60%70%80%90%

100%

Boston

Pittsburg

h

Seattl

e

Uraban

ized A

reas

USA

Region

Per

cen

t Sample

Control

Average

Economic development key points

• Correlation appears evident between the placement of socially innovative organizations and the level of economic development

• Organizations act in conjunction with other regional revitalization efforts in order to increase the standard of living and attract new growth in a given area





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Certain factors influence social innovation

Ideas

Resources Need•Education level•# of Patents•# of Universities•University R&D•Diversity•Voter breakdown

•Age•Cost of living•# of Foundations•New start-ups•Population growth•Transportation•Support Organizations

•Employment levels•Industry of employment•Household income•Poverty rate•Vacancy rate•Regional GMP

Quantitative Measures

Model selection

• Three Decision Criteria– Adjusted R-squared

• Reflects accuracy of the model

– Mallows C-p• Measures biases associated with the number of

predictors

– Sum of Residuals• Represents the prediction error associated with

each variable

Fertile Ground Index

Factors of Social Innovation

A = Foundation Count

B = Foundation Giving

C = Population Ages 22-34

D = Population Ages 35-64

E = Percentage of Participants in Labor Force

F = Percentage of Population Below Poverty

G = 9 – 12 Grade Educated Population

H = High School Educated Population

I = Percent Democrat

Your Region’s Score

Expected number of socially innovative organizations =

- 0.000111 + 0.008720A + 0.00000001B

+ 0.00039238C + 0.0003736D - 0.00021237E

+ 0.00014131F - 0.00037172G + 0.00014075H + 0.00000048I

Step 1: Normalize Data

Step 2: Insert normalized data into social innovation equation variables

Step 3: Solve equation

Model limitations

1. Relatively small data set2. High variance in actual organizations3. Under 90% R Squared4. Biases associated with large cities5. Biases introduced through data collection

method6. Scale of the city





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Recommendations for future research

• Update the database to include more cities and socially innovative organizations

• Apply model to international cities

• Apply economic development analysis to other hubs of social innovation

• Conduct additional qualitative research

• Examine attrition rates in socially innovative cities

Future directions

• Publish research to reach target audience• Provide policy recommendations for:

– Foundations• Support education and promotion of social innovation. Utilizing the FGI,

understand and recognize where funding will have the biggest impact in the region.

– Entrepreneurs• Utilize the FGI when assessing region to start social innovation.

– Researchers• Update this research via various methods. Track and evaluate applications

of the FGI and continually update the data and disseminate updated information.

– Economic developers• Attract more social innovations in revitalization efforts, see social innovators

as partners. – Government leaders

• Support local social innovators and economic developers and help facilitate relationship between the two. Create a more fertile seedbed in the region utilizing the FGI and investing in the appropriate factors.

Discussion questions

• Are there clarification questions from the presentation?

• In your experiences, which factors have contributed to/best fostered your organization?

• What are some qualitative/anecdotal examples of economic development driven by social innovation?

Thank youfor attending

Advanced Policy Research 2006-2007H. John Heinz III School of Public Policy and Management

Carnegie Mellon UniversityPittsburgh, Pennsylvania USA