creating seedbeds for social innovation
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Creating Seedbeds for Social Innovation
Advanced Policy Research 2006-2007H. John Heinz III School of Public Policy and Management
Carnegie Mellon UniversityPittsburgh, Pennsylvania USA
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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
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Creating Seedbeds for Social Innovation
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
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Creating Seedbeds for Social Innovation
• 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
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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
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Social innovation’s impact on the economy
Economic
Development
Social
Innovation
Factors
Can we demonstrate
this relationship?
Can we demonstr
ate
this
relationsh
ip?
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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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Creating Seedbeds for Social Innovation
• 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
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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:
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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
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Creating Seedbeds for Social Innovation
• 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
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U.S. hubs of social innovation
Organization Count
1 - 9
10 - 20
21 - 40
41 - 60
61 and greater
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Ratio: Population to Organization
Population per Socially Innovative Org
0200000400000600000800000
100000012000001400000
Alb
uque
rque
Aus
tin c
ity,
Bos
ton
city
,
Cin
cinn
ati c
ity,
Dal
las
city
,
El P
aso
city
,
Kan
sas
City
Mem
phis
city
,
Nas
hvill
e-
New
ark
city
,
Phi
lade
lphi
a
Por
tland
city
,
San
Jos
e ci
ty,
St.
Lou
is c
ity,
Was
hing
ton
City
Po
pu
lati
on
per
1 O
rg
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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
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Boston block group locations
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Boston control group: changes in median household income
1990 2000
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Boston sample group: changes in median household income
1990 2000
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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
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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
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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
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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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Creating Seedbeds for Social Innovation
• 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
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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
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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
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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
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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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Creating Seedbeds for Social Innovation
• 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
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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
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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.
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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?
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Thank youfor attending
Advanced Policy Research 2006-2007H. John Heinz III School of Public Policy and Management
Carnegie Mellon UniversityPittsburgh, Pennsylvania USA