With the recent passage of the Serve America Act and, with it, an authorization for a Social Innovation Fund, there are a lot of questions about how this Fund is going to work.

These details are actively being developed by the Corporation for National and Community Service (CNCS), which is responsible for forming the Fund’s regulatory and structural features and serving as its administrator. These decisions will take into account the general framework for the Fund provided in the Serve America Act.

We’ve created the following FAQ to provide information about the basic design of the Social Innovation Fund as it is written in the Serve America Act.

What’s the purpose of the Social Innovation Fund?
The Fund is intended to increase the impact of social entrepreneurs and innovative nonprofit organizations by scaling proven programs and investing in promising new ideas. In essence, it enables a new role for government to partner with social entrepreneurs and philanthropy to fundamentally improve our nation’s problem-solving capacities.

How much Federal money has been authorized for the Fund?
In FY2010, $50 million is authorized to be appropriated for this pilot program. This amount increases incrementally to $100 million by FY2014.

How will the program operate?
This program, administered by CNCS, will provide grants to “existing grantmaking institutions”—or partnerships of grantmaking institutions, state commissions, and mayors or other local government CEOs—to establish Social Innovation Funds. These grantees will match the Fund dollar for dollar, raising the match from philanthropy, including foundations and private donors. (If a government entity is a grantee, it must provide between 30 and 50 percent of the matching funds. Matches may be reduced for philanthropically underserved communities.)

Grantees will then make subgrants to nonprofit organizations to expand or replicate proven initiatives, or, to support promising new initiatives in low-income communities. Subgrantees will also match their subgrants dollar for dollar. Thus, the grantee and subgrantee matches will ensure that each federal dollar will be matched by at least three additional dollars.

What types of activities can the Funds focus on?
The Funds may be focused on serving a specific local geographic area (for example a neighborhood, group of rural counties, city, state, or an identifiable region) or address one of the following issues:

• Education for economically disadvantaged students
• Child and youth development
• Reductions in poverty or increases in economic opportunity
• Health, including access to health services and health education
• Resource conservation and local environmental quality
• Civic engagement
• Reductions in crime

The legislation requires CNCS to also take into account whether the grantee proposes to support communities that are “philanthropically underserved,” and ensure that grantees are geographically diverse and reflect “broad community perspectives and support.”

What criteria for grants is specified in the Serve America Act?
The legislation directs CNCS to award grants on a competitive basis, taking into consideration:

• The quality of the potential grantee’s selection processes
• The grantee’s capacity to manage a Fund
• The grantee’s potential to sustain the Fund when the grant period ends

Grantees should:

• have experience managing collaborative initiatives or assessing applicants, or evaluating the performance of grant recipients for outcomes-focused initiative
• have the institutional capacity for, and commitment to, data-driven decision making and research
• for purposes of the grant, set measurable outcomes and consult with a diverse cross-section of community representatives.

Grantees should also ensure that the organizations they fund:

• have a well-defined plan for replicating, expanding, or supporting the initiatives funded
• are able to sustain the initiatives after the grant period end
• have strong leadership and financial and management systems.
• are committed to the use of data collection and evaluation to improve the initiatives and be able to contribute to knowledge in their fields

What are the size of the grants?
The legislation stipulates that grants to Funds will be from $1 million to $10 million annually for five years, renewable. Subgrants to organizations must be at least $100,000 and will be for not less than three years nor more than five years.