{"id":2958,"date":"2014-04-17T11:57:00","date_gmt":"2014-04-17T11:57:00","guid":{"rendered":"https:\/\/six.stimulatingminds.co.uk\/?p=2958"},"modified":"2022-07-07T11:22:07","modified_gmt":"2022-07-07T11:22:07","slug":"the-re-emerging-art-of-funding-innovation","status":"publish","type":"post","link":"https:\/\/socialinnovationexchange.org\/legacy\/the-re-emerging-art-of-funding-innovation\/","title":{"rendered":"The Re-Emerging Art of Funding Innovation"},"content":{"rendered":"\n

As the strategic philanthropy movement has swept across the field, many grantmakers have lost their appetite for funding experimental and innovative projects. Recently, however, a number of funders have begun exploring how to deliberately reintroduce risk-taking into their processes and portfolios in search of breakthrough change.<\/p>\n\n\n\n

The term \u201cinnovation\u201d is now used so widely and so vaguely that it has come to mean almost anything, or almost nothing at all. Long before it became a buzzword, though, innovation played an essential role in philanthropy<\/a>. The field has a rich history of private funders using their resources to seed experiments with the potential to produce outsized social returns.<\/p>\n\n\n\n

This innovative spirit prompted the Robert Wood Johnson Foundation<\/a> to support the regional pilots that spawned the national 911 system almost 40 years ago, at a time when ambulance services were provided largely by morticians (partly because their hearses were one of the few vehicles that could accommodate a stretcher, and partly because if you needed urgent trauma care, your odds of survival weren\u2019t high).1 And it was philanthropy\u2019s willingness to take risks that spurred the Aaron Diamond Foundation<\/a> to dedicate a large share of its resources to propel the field of HIV\/AIDS research and establish one of the first dedicated AIDS research labs, which produced the drug cocktail that transformed the fight to control the virus in the late 1980s.2<\/p>\n\n\n\n

But over the last decade, many funders have lost their appetite for experimentation and risk, even as they trumpet their desire to make big bets. The strategic philanthropy movement has swept across the field and helped funders align their programs and grantmaking with carefully designed theories of change to produce clear and quantifiable results. But the pendulum may now be swinging too far, to a place where foundations are willing to support only safe, established programs. Funders are often treating grantees as mere subcontractors, paid to execute pre-designated plans and outcomes.<\/p>\n\n\n\n

Yet in many cases, existing approaches are proving insufficient to truly crack the intractable social and environmental problems that we face. The solutions to these large, complex issues\u2014what design theorist Horst Rittel called \u201cwicked problems\u201d\u2014are not yet known. So philanthropy needs to experiment and find new approaches to create breakthrough change.<\/p>\n\n\n\n

Over the past few years, a small group of funders have begun to return to their roots by deliberately reintroducing innovation into their philanthropic processes and portfolios. They seek out ideas with transformative potential, take risks on less proven approaches, open themselves up to exploring new solutions, and recognize that innovation requires flexibility, iteration, and failure.<\/p>\n\n\n\n

For more than a decade, the Monitor Institute3 has been working with many of these modern-day innovation funders\u2014including the W. K. Kellogg Foundation, Rockefeller Foundation, David and Lucile Packard Foundation, Robert Wood Johnson Foundation, New Profit Inc., and Acumen. Over the course of our work, we have interviewed many of the world\u2019s leading innovation strategists, corporate innovation specialists, venture capitalists, and social entrepreneurs to help us build a picture of what it means to find and fund social innovation.<\/p>\n\n\n\n

Now, as part of Deloitte Consulting LLP, we have begun to convene an emerging community of practice focused on funding innovation. The effort began with a gathering of representatives from 10 early innovation funders in Chicago in November 2012. With support from the Robert Wood Johnson Foundation, the session brought together practitioners from the Bill & Melinda Gates, California Healthcare, David and Lucile Packard, John D. and Catherine T. MacArthur, John S. and James L. Knight, J. W. McConnell Family, Lemelson, Open Society, Robert Wood Johnson, and Rockefeller foundations, providing them with an opportunity to jointly explore emerging best practices in promoting social innovation. Although the group acknowledges that supporting breakthrough innovation is challenging and still much more of an art than a science, it\u2019s becoming clear that there is a growing body of experience about what it takes to fund innovation, and how doing so differs from more traditional grantmaking.<\/p>\n\n\n\n

Transformation and Experimentation Funding innovation starts with a fundamental shift in mindset. Innovation funders intentionally trade off probability of success in return for greater potential impact. Instead of just supporting proven, incremental solutions, they focus on transformation<\/em>\u2014investing in approaches that may have a higher risk of failure, but the potential to be lasting and truly game changing if they succeed. \u201cWhen you\u2019re doing innovation, the first question is not \u2018Is this going to work?\u2019 but rather, \u2018If it works, would it matter?\u2019\u201d says Eric Toone, the former principal deputy director of the US Department of Energy\u2019s Advanced Research Projects Agency (ARPA-E).<\/p>\n\n\n\n

In addition to distributing bed nets to reduce the spread of malaria, for example, an innovation funder might also pursue research to genetically alter mosquitos so they can\u2019t transfer the parasite (an effort theGates Foundation<\/a> is now actually exploring).4 With these types of high-risk, high-reward bets, the impact from one or two big, transformational successes in a portfolio can justify the opportunity cost of many failures. The approach is similar to venture capital, where the outsized returns of a single \u201chome run\u201d investment can offset nine or ten less profitable enterprises. <\/p>\n\n\n\n

Read the full article here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

As the strategic philanthropy movement has swept across the field, many grantmakers have lost their appetite for funding experimental and innovative projects. Recently, however, a number of funders have begun exploring how to deliberately reintroduce risk-taking into their processes and portfolios in search of breakthrough change. The term \u201cinnovation\u201d is now used so widely and … The Re-Emerging Art of Funding Innovation<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":6442,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[170],"tags":[33,10,55],"class_list":["post-2958","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-philanthropy","tag-finance","tag-north-america","tag-united-states"],"acf":[],"yoast_head":"\nThe Re-Emerging Art of Funding Innovation - SIX | Social Innovation Exchange<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/socialinnovationexchange.org\/legacy\/the-re-emerging-art-of-funding-innovation\/\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/socialinnovationexchange.org\\\/legacy\\\/the-re-emerging-art-of-funding-innovation\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/socialinnovationexchange.org\\\/legacy\\\/the-re-emerging-art-of-funding-innovation\\\/\"},\"author\":{\"name\":\"Anna Proffitt\",\"@id\":\"https:\\\/\\\/socialinnovationexchange.org\\\/legacy\\\/#\\\/schema\\\/person\\\/e1d49628f22499f93a16142826eec696\"},\"headline\":\"The Re-Emerging Art of Funding Innovation\",\"datePublished\":\"2014-04-17T11:57:00+00:00\",\"dateModified\":\"2022-07-07T11:22:07+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/socialinnovationexchange.org\\\/legacy\\\/the-re-emerging-art-of-funding-innovation\\\/\"},\"wordCount\":876,\"publisher\":{\"@id\":\"https:\\\/\\\/socialinnovationexchange.org\\\/legacy\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/socialinnovationexchange.org\\\/legacy\\\/the-re-emerging-art-of-funding-innovation\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/socialinnovationexchange.org\\\/legacy\\\/wp-content\\\/uploads\\\/2014\\\/04\\\/mat-napo-ejWJ3a92FEs-unsplash.jpg\",\"keywords\":[\"Finance\",\"North America\",\"United States\"],\"articleSection\":[\"Philanthropy\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/socialinnovationexchange.org\\\/legacy\\\/the-re-emerging-art-of-funding-innovation\\\/\",\"url\":\"https:\\\/\\\/socialinnovationexchange.org\\\/legacy\\\/the-re-emerging-art-of-funding-innovation\\\/\",\"name\":\"The Re-Emerging Art of Funding Innovation - 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