The following is a conversation between Sonal Shah, Executive Director and Professor of Practice at the Beeck Center for Social Impact and Innovation at Georgetown University, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.
Sonal Shah © Getty Images
Denver: The Beeck Center at Georgetown University embraces a cross-disciplinary, citizen-centric approach to building solutions for communities, and it is led by a woman who is a living embodiment of that with stints at the Treasury Department, Goldman Sachs, and Google, and is a founder and director of the Office of Social Innovation & Civic Participation during the Obama administration. She is Sonal Shah, the Executive Director and Professor of Practice at the Beeck Center for Social Impact and Innovation at Georgetown University. Good evening, Sonal, and welcome to The Business of Giving.
Sonal: Denver, it is so great to be here and so great to meet you. You’re a legend.
Denver: Sure, I am! Tell us about the Beeck Center, how it got started, and of its mission and purpose.
Sonal: Beeck Center at Georgetown was founded by a very generous gift from Alberto and Olga Maria Beeck who are alumni of Georgetown, and it was really a center to think about how to teach students to solve for social problems…teaching them not only how to do it from a practice perspective. We teach classes on solving impact that scale, but we also do research on what are the systems that need to change. What are the financial models? Or, how do you use data and technology in today’s times? How do you make sure citizen feedback is part of every problem we’re solving, and make sure that it’s actually solving it for people, not just for the policymakers? So, it’s been great. It’s been great to be there, and we are really focused on how do we scale solutions that work in communities that can have real impact on lives.
Denver: Fantastic.
You were the Director of Social Innovation & Civic Participation in the White House during the Obama administration.
What was the impetus for starting that?
Sonal: Similar to the Beeck Center, we were thinking as the government was coming in, we were looking at innovation and policies. I led the President’s Advisory Board from the start during transition on technology, government, innovation, and one of the areas that we really focused on was social innovation. If we really want to resolve social problems, we’re going to have to think differently.
You can’t use the same tools that we’ve been using for 25 years and say we’re going to get a different result because times have changed. Not because the ideas are bad, but because times have changed, and social innovation was really thinking about how does government think differently about solving problems. How do we partner with communities? How do we do effective public-private partnerships? How do we use innovative mechanisms like pay for success… social impact bonds to actually solve problems, and that was our goal.
Denver: Changing government policy is a big, big deal, and that’s, of course, going to depend on having good information.
How can research be assembled in an intelligent way to best inform government about policy?
Sonal Shah: One of the most interesting things that happened in the last 20 years is that access to data has become much more available. We have more information on what’s happening in cities, in communities, in states. Collecting that information and knowing what’s happening in each of those cities and communities, states… and knowing what works and what doesn’t work allows us to make smarter policy.
The challenge for government, especially at the federal level, is you don’t want to make policy for one idea. You need to make and ensure that it’s not affecting someone inadvertently across the board. But collecting that information, collecting that data and knowing where it’s working, and then changing policy to allow and accelerate that change is what policy can do and has the potential to do.
Denver: We’ve had a lot of social entrepreneurs on this show. Invariably, when I talk to them about their work, they said they all wanted to do it without government at first. But invariably, they come back and say, “Boy, if I’m ever really going to make any kind of change that’s a big deal and has any impact, I can’t exclude government from the equation.” So the question then really becomes about the 21st-century public sector. It’s hard to change the public sector. A lot of us don’t think about the public sector and innovation in the same breath.
What are some of the things that you’ve done to create a culture of innovation, to see that it’s human-centric and that it is really focused on outcomes?
Sonal: Three things. One: just teaching even government officials how to do innovation. We used to run a council when we were at the White House that just allowed executives, but also civil service, to work together in saying: What are innovative ways Agency A is doing versus Agency B? So, if Health & Human services in doing something really cool, or DOD is doing something really interesting. Are there ways to learn from that to make that happen? So just across the board, making it available and opportunistic for government to be able to do that.
I’ll give you a great example: Veterans Affairs. When Shinseki was head of Veterans Affairs, he ran this competition internally for how to make Veterans Affairs work better. He had 30,000 ideas from internally itself for how they can improve services for veterans from Veterans Affairs. Everyone from a doctor to someone running a technology system to somebody working in a hospital.
Denver: They were waiting to be asked.
Sonal: They were waiting to be asked. So, giving people the permission to think creatively and innovatively to solve problems is one way of doing it. Secondly, it’s giving them the tools to be able to try new things, whether it’s “pay for success,” whether it’s impact investing, public-private partnerships. But giving them the tools to say: Here are other models that you can use to go do that. And that’s super important!
Three: recognizing that people have views. Yelp works. We should understand that we should know what’s happening in communities, real-time, and being able to feed that back into: Should something change because it’s not working for people. Veterans is a great example. When something’s not working for them, we should be able to take real-time feedback in saying: How do we change slightly? It doesn’t mean you have to change policy, but you can change the way you approach a problem.
Denver: You took a lot of the heat for that, I know, in the office. You said, It’s okay to fail. You’ve got to try and be able to fail. That’s not usually what people think about in government. They’re just trying to make sure that nothing goes wrong.
Sonal: Nobody wants government to fail, right? Everybody’s like “This is taxpayer dollars. Don’t fail.” I would say: “ I think we have to test out ideas because if we don’t test and try and fail and if we don’t do it rapidly; we shouldn’t take 10 years to fail. We should actually figure it out very rapidly to do that.” Then we’re not also being supportive of communities and citizens. We have to do better by our citizens, and the way to do that is to learn.
In New Zealand, the government actually took a very unorthodox approach, and Australia’s also following this example of saying: If we’re building and operating prisons, then we’re going to give it to the private sector. Then they are going to get paid for reducing recidivism. We want to reform. You are going get penalized if people don’t get reformed, but you are going to get a benefit if you do reform.
Denver: Speak a little bit about incentives, Sonal, how they need to be aligned, but sometimes how they are misaligned to solve our social problems.
Sonal Shah: Incentives are such an important part of how people solve problems. You made a great point, Denver, about why government matters and the social entrepreneurs that come in. The government is the largest spender on social services in the world, in the United States, in every city, in every state…. I was just in Indianapolis last week; $26.2 billion is what the state government spends on healthcare there.
So, if we’re not addressing the government, it doesn’t really matter. Incentives matter. What are we paying for? Are we paying for the number of people that came into the health clinic, or the number of people that were touched? Or are we actually paying for somebody not having to come back to a health clinic?
If the incentive is: I’ll pay you if you get a thousand more people. Our prisons are a great example. We pay per bed cost. So, it’s like a hotel room. The more people that are occupying the prison, the more effective it is economically. But that’s not really what we want out of prisons. We want to rehabilitate people, put them back into communities so they can be productive members of society.
Why are we treating prisoners like hotel rooms and not like we’re solving problems? Similar with healthcare. Why are we just filling beds in hospitals for the per occupancy rate, as opposed to saying: How do we ensure people don’t come back with staph infections… people don’t come back with more diabetes problems? How do we help people get better?
Denver: A good example you site is what they’ve done with prisons in New Zealand.
Sonal: Correct. In New Zealand, the government actually took a very unorthodox approach, and Australia’s also following this example of saying: If we’re building and operating prisons, then we’re going to give it to the private sector. Then they are going to get paid for reducing recidivism. We want to reform. You are going get penalized if people don’t get reformed, but you are going to get a benefit if you do reform.
And they do become productive members of society. So, they changed the incentives, but it required the government looking at data differently. How often were people coming back? What were they coming back for? And to require the private sector to think about prisons differently. How do they train their wardens to help people leave a prison? How do they train their prisoners to actually reform and live within communities? And they incorporate it. They work with the business community. They worked with the community itself to see how to reform work effectively. And Serco who runs it in New Zealand is going around the world trying to figure out: How do we close down prisons. That’s impressive. How many times do people go and say, “I’m going to go around the world to see where prisons close down and how they’ve done it well.” That’s an incentive change.
Denver: That’s very smart. Speaking to the private sector, you have been a great champion of private-public partnerships as the most effective way to solve problems.
Particularly in this era of constrained resources, how are these partnerships evolving? And what are some of the elements of difference between just a normal partnership and one that is truly dynamic?
Sonal: Public-private partnerships have largely been in the past where the government pays the private sector to deliver a service that the government doesn’t want to do or can’t afford to do – build a road, build a prison, go run it, and stay away from the government; then we’ll manage the contract. The evolution of public-private partnerships is where the government is also at the table with the private sector to solve a problem. New Zealand’s a great example on prisons, but even in the Obama administration, Michelle Obama’s work on food and healthy food where companies came to the table and said: How could we provide food that’s healthier? We’ll look at the way we market food, we’ll look at the way where we put food. Walmart changed the way they put healthier food up front, so people would buy it.
There were lots of ways that the public sector highlighted what the options and opportunities were. They worked with the USDA to change how to put plates of food differently… how to tell you what’s healthy and what’s not. Then on top of all of that, the companies came to the table and said: We can do our part to make that work. But it was a partnership. It literally was a partnership. It wasn’t the government telling the private sector what to do. It was really the private sector coming to the table and saying: How do we also participate in healthier food and healthier eating?
Denver: Innovative solutions are very, very nice, but they’re usually not enough. What’s needed is to unlock social impact and scale.
How can philanthropy be smarter in helping us achieve that?
Sonal: Philanthropy has one of the best abilities to be creative and innovative and frankly to take risk at the early stages. But then identify where scale needs to happen. I think in the past, 101 of Philanthropy scale was organizational scale. We’re going to take this organization and scale it. But as you mentioned earlier, it’s about policy shifts also. How do we change policy for multiple organizations to be able to achieve scale, not just one organization?
Denver: issues more than organizations.
Sonal: Philanthropy’s getting there, but I think really thinking about: How do we shift the way we change from advocacy of an organization to advocacy for policy change that can have real scale and scalable impact, but also bring the private sector to the table because the private sector is an important player in today’s game. To assume that it’s just the public sector and no private sector is not really the game we’re in. We have to get the private sector. They are doing better distribution. They know how to get access to consumers. There’s a way to bring the private sector to the table, and philanthropy has the ability to be that bridge.
Denver: I think it’s going to have to take a change of mindset on the part of boards. Because we do live in this collaborative world. But our boards, Sonal, are set up as organizational boards, and they’re looking at: How much money did we raise? How many people did we serve? But if you’re going to be dealing with things on an issue basis in collaboration with others, you have to have — getting back to your metrics of success –they need to change. That’s going to take a while. It’s going to take some work.
Sonal: It takes mindset shifts. It’s also: We can make the organization change, but if the board is only measuring how much money you raised, then all you’re going to do is go raise money, as opposed to saying: How many collaborations did you build? How many more corporations are you working with? How are those relationships changing? We’re not asking those questions. It requires a mindset shift.
To break down silos requires finding new solutions.
Denver: Along those same lines, we’re not going to solve things if we stay along vertical axes anymore. It’s going to have to take place across horizontal axes, which includes different organizations, different disciplines, and different sectors; A new way of thinking. As part of that is breaking down silos. It’s easy to say we need to break down silos, but I can’t think of anything more difficult to achieve than breaking down silos.
What have you found that successfully addresses the issue of breaking down silos?
Sonal: First, it’s not easy to break down silos because people like to do their jobs, and they get very good at doing their jobs. It doesn’t mean that they’re bad at what they do, and they don’t want to make things different. But they also know how to do their job well, and accountability-wise they don’t want to get in trouble. We have to recognize that that’s the mindset somebody’s coming from. It’s not because they don’t want to do right. They are doing the right thing by what they know.
To break down silos requires finding new solutions. Some of the best ways I’ve seen is sometimes organizations create innovation units in the way we did at the White House that allowed people a place to learn and to think about how to do it and where to do it; and give them experimental dollars, abilities to go do that, and the protection if something doesn’t work to not get in trouble for it.
As those things start to improve and get better, then incorporating it back into the system itself. The challenge that I think a lot of organizations face is they make the innovation unit in its own thing, but they don’t think about reintegration. What companies do extraordinarily well– the ones that do it well– is they integrate it in.
So, give you an example; when Google bought DoubleClick– which was the sales mechanism– they integrated it into the company, or Google Maps was also bought. Google didn’t create maps; it bought a company that was doing it. Then they integrated it into Google. Thinking about– for nonprofits especially– how do we integrate those ideas in and not let the innovations become their own silo? So, reintegration and integration are super important. Thinking about when those things work, how do we integrate it back into the system itself? That’s something that every organization that does it well has done that; they’ve integrated the idea back into the system.
Sonal Shah with Denver Frederick
Denver: I know the Beeck Center has studied all the new tools and approaches around financing that have come online over the past decade– impact investing, social impact bonds, development impact bonds.
Do you think that the reality has lived up to the promise?
Sonal: The reality is catching up to the promise. I think that would be the better way of saying it. It takes time for people to understand social impact bonds and how to do them and why it matters. When we started at the White House, it was just an idea. At the first conference, people are like: Oh, this is a really interesting idea. The last bill that just passed in Congress incorporated $100 million for social impact bonds. So, it’s changing, and the reality is shifting.
Denver: If I can, just take a moment to tell us what social impact bonds are and Pay for Success.
Sonal: Pay for Success, social impact bonds, are really a way for the government to test out innovative ideas without paying for it upfront. So, philanthropy or the private sector puts up money if they believe a project is working. So, I’ll give you an example. An organization called Nurse-Family Partnerships, a great organization. They’ve done a lot of work.
Denver: They’ve been on the show.
Sonal: Yes, they have been on your show. They’ve been doing really great work. They know that if you send nurses out into communities, they have better outcomes on child and mother outcomes especially when they’re pregnant. They have proven this, and now they’re running social impact bonds with cities and states saying: If we can prove that the outcomes are better than what you’re getting now, the private sector will put up all of the money to do this.
So for the nonprofit like Nurse-Family Partnerships, they get the capital upfront. If it’s $10 million, they get all of the $10 million to do that work as opposed to piecemealing $5 million here, a million there; they’ll actually get the full $10 million; they get to work on it for four years. If it succeeds, the government will pay a return on that investment. The government pays the private sector back $10 million plus some percentage — 4%, 5%. That’s not a huge amount of money, but if you think about the risk that the private sector is taking, it’s significant to make this work. If that works, then the community benefits; the organization benefits; the city and state benefit. The government has taken none of the risk; they’ve just paid for the outcome.
It’s not about polarized politics. It’s about your issues and whether you care about them and making sure you’re civically engaged. Democracy requires us as individuals to take our responsibility also seriously.
Denver: Very cool. We’ve talked about the Office of Social Innovation, but many people forget, at the end of that were the words “and civic participation,” a piece that I know you were equally focused on.
What are some of the new civic engagement technologies that will allow citizens to have greater voice?
Sonal: There are a lot of great organizations out there doing civic participation and getting citizens to engage, whether it’s on bills or in local communities. Whether it is actively engaging in local politics, whether it is engaging with policies and issues in their communities, but it requires vigilance. I think one of the things that we’ve seen in civic organizations and civic participation, especially technologies, is: it does really well for a period of time, and then it stops for a while.
As we all know for anyone that’s done this for a long time, it takes vigilance and a constant reminding people why this matters. Don’t just do it for the election, but do it continuously because people’s voices matter. I’ve seen this at very local levels. People win races by a hundred votes. It’s not 3000 votes. It’s not 5000 votes. Your vote matters. But your voice also matters in Congress. Just 30, 40, 50 phone calls to your representative from your community makes a congressman or congresswoman listen to your views and your perspectives. So, understanding that that matters. It’s not about polarized politics. It’s about your issues and whether you care about them and making sure you’re civically engaged. Democracy requires us as individuals to take our responsibility also seriously.
Denver: Do you think we are?
Sonal: I think we’re beginning to.
Denver: There seems to be a shift going on here in the last couple of years.
Sonal: I think it’s been happening, I’d say, for a while. I just think we’ve not paid attention to it. It’s just happening at a more rapid pace. But I think people are voicing their opinions. You saw it in 2008; you saw it in 2016. People are voicing their opinions, and they’re getting out there and are really frustrated, angry. You may see it in elections. We’re just not listening to the noise everywhere else, and we should be.
Our job is to help them imagine how to do it and give them the tools and the abilities to get there.
Denver: You are doing so many different things at the Beeck Center, I don’t even know where to begin. I’m going to talk about a couple that caught my attention. One of the things you learn early on in life is that if you ever want to do something, you have to imagine it first. You have to dream it; you have to see it in your mind’s eye. It has to enter your consciousness before you can act on it, and that’s the approach at the heart of the Beeck Center’s new Imagine Series. Share with us what that’s about.
Sonal: Too often in the social sector, we’re solving yesterday’s problems. We’re like, “Oh that was a problem. How do we solve it?” We don’t imagine the future we want to see. If the future we want to see is a world without homelessness, more people coming out of recidivism and living, then we have to imagine, what do those solutions for the future look like, too? Where are the technologies? Where are the finance models? It’s an integrated process.
It seems siloed when you look at our website. It’s like you’re doing finance, or you’re doing data and technology. Really, at the end of the day, we’re solving a problem for a community and leveraging all of those different tools to do that. It requires an imagination to say: We want the world to be different, and we want to see if we can solve those problems. I think the social entrepreneurs get it. They’ve become social entrepreneurs because they believe that they can solve a problem. Our job is to help them imagine how to do it and give them the tools and the abilities to get there.
Denver: One of the things that might make the world a little bit different is the blockchain, and you have something called the Blockchain for Social Good Project. Tremendous possibilities, as well as risk, associated with the blockchain.
What are some of the things you’ll be looking at with this project?
Sonal: Blockchain for Social Good is a partnership with the Rockefeller Foundation. Our goal is to really think about how can we use Blockchain effectively to help communities. Refugee populations who lose their identities: Could we create an identity for them on a technology that allows them to carry it from where they are in the refugee camps to where they may live and stay over time. And refugees leave everything behind… land titles. Why should there be multiple people within land titles? Couldn’t we put that on, or can we take a picture? Can we give your name, your title and all that and leave it there and not have everyone meddle in the process of that?
Financial services: How do we make sure I can do direct financial services, and I don’t have to have multiple layers in between? There’s real opportunity in blockchain, and what’s interesting about the technology itself is that it doesn’t require one trusted authority. It’s multiple authorities who create the trust. In that way, for everyone… we are again… it’s part of civic engagement, too, right? We are now playing our role to make this truthful and make it work, and not as the potential for blockchain. It’s huge. The vigilance in this is to make sure that the way the code gets written is inclusive.
So, if I am already discriminatory, and I put this discriminatory code into the system, then it has now become the code that everybody uses. We see this with algorithms. It’s playing out in the public sphere today that if the algorithm is coded a certain way… and we don’t think about the biases we put in… then those biases become coded into a system.
So, the vigilance in the Social Good space especially is for those organizations that are using it to make sure we’re asking the questions: Whose data? How does it get verified? Who gets access to it? Why are they getting access to it? Are we authenticating it? Are we verifying it? All of those questions are super important, but go into it with your eyes wide open. Don’t go into it like: This is a technology that’s going to work; therefore, we should just buy it off the shelf.
Denver: Check all those assumptions. Everybody’s talking about bitcoin, but blockchain is the thing.
I’m looking at the Forbes List of 30 under 30 list of social entrepreneurs, and I say,Holy cow! Eight of them were Georgetown students. That is quite an accomplishment, Sonal, Congratulations!
Sonal: We are so excited at Georgetown that 25%, almost 25% of the students… over 25% of the young people selected on Forbes 30 under 30 were Georgetown students. It just goes to the ethos of Georgetown, which is really: What can you do, men and women, for others? What can we do to make society better… make our colleagues better, make our communities better? And it’s exciting to see that that is also being recognized by Forbes and others, but our students are just incredible. I love working with them. I have to say I am so grateful that I graduated when I did because I would never have gotten into college with this generation. But they’re amazing, and some of them have come through the Beeck Center; others have been part of just the Georgetown ethos, and I am lucky to be a part of that.
Denver: Fantastic.
As a founding Executive Director of the Beeck Center, you’ve had the opportunity to create and shape the work culture there.
How would you describe your corporate culture? And what makes it unique and distinctive from other places?
Sonal: It’s taking a lot of the lessons from all of the places that I’ve worked over the years. We’re an open culture. If you come to our office at the Beeck Center, it’s an open space. It’s like coming into a WeWork building. Everybody has access to everybody and doing the work that they’re doing. Also, the questions we ask of each other are open questions. If you’re in a staff meeting, everybody equally gets to sit at the table and have our perspective… and making sure that we can create the openness of the culture, but also getting used to being able to ask the tough questions of each other without being angry or mean. Really thinking about: How do we create a culture that allows us to be critical and to ask the deep questions, but at the same time respect the work that others are doing? And that’s the culture I want to create, and it’s the culture I’d like to instill within the team that works there.
Denver: Healthy culture. Let me ask you about something completely different. A family business you started with your brother and sister…well actually, it’s a nonprofit, and it’s called Indicorps. Tell us about that journey.
Sonal: My parents are immigrants. As we were growing up here, we’ve lived in dual cultures. So we’re American. We have a heritage that’s Indian. What we wanted to do was think about: How do we take everything that we’ve learned here from the United States, and all of the good learnings, and apply it in another place of the heritage that we came from?
So we created a Peace Corps for India. How do Indians go back, participate in solving problems in communities, but at the same time realize what their dual identity means to them? We didn’t want to tell everyone how to do it. We wanted them to do it through service. So, we created the service culture, and when we first got there in India in 2001, 2002, the Indians would say: Why are you wasting your time here?
Today, as we look across India– which is almost 17 years later– people are saying service is a part of the culture of India. We feel lucky to have been a part of the wave of that movement. And many of the people who graduated from Indicorps started organizations like Teach for India in other places that service has become an ethos in the country.
Denver: Very nice legacy, and it’s still thriving. Let me close with this, Sonal. You’ve had such an extraordinary breadth of experience and have so many multiple perspectives. Maybe you can answer this question more thoughtfully than most, and that is:
Where is the world going today in social innovation? And what do you anticipate the next chapter is going to look like?
Sonal: I think silos are beginning to break down across the board. You see it in media. You see it in society. You see it in multiple places. I think the opportunity for social innovation is to recreate new institutional structures that have trust with society, trust with individuals, and try to solve for problems and be honest about it. How do we be authentic in our approach? Make the mistakes, but be authentic about the problems that we face? And at the same time, build trusted structures that actually can work together with communities to solve problems. As sometimes frustrating as it looks outside in the world, I actually think this is an opportunity to recreate that, and I think in social innovation, we’re at the cusp of making that change. And we can really accelerate it.
Denver: Exciting times. Well, Sonal Shah, the Executive Director of the Beeck Center for Social Impact & Innovation at Georgetown University. It was so great to have you on the show this evening. Your website is beeckcenter.georgertown.edu.
If visitors take that trip, what kind of information are they going to find there?
Sonal: They’re going to find out about all the work we’re doing, and all the great students that are working with us, and the changes that they’re making. Hopefully, they’ll feed back into the process of what they’re learning so we can also learn with them.
Denver: Thanks, Sonal. It was a real pleasure to have you on the show.
Sonal: It’s such a pleasure to be here. Thank you so much.
Denver: I’ll be back with more of The Business of Giving right after this.
Sonal Shah with Denver Frederick
The Business of Giving can be heard every Sunday evening between 6 and 7 PM Eastern on AM 970 The Answer in New York and on I Heart Radio. You can follow us at bizofgive on twitter and at facebook.com/businessofgiving.