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In the most acrimonious atmosphere of this genera-tion, U.S. Sen. Todd Young of Indiana pulled off a rare bipartisan legislative feat that may well change philanthropy and social-service delivery in the next generation.
Partnering with his New Jersey colleague Democrat Cory Booker, Young fought to include their social-impact-partnership bill in a budget law signed in February by President Donald Trump. It was the culmination of six years of work by Indiana’s senior senator to create a demonstration project bringing market forces to social-service delivery, similar to a United Kingdom initiative.
The measure requires the U.S. Treasury to partner with state governments to evaluate the outcome of activities to improve social ills and reward those whose initiatives “outperform” the baseline. The rewards are capped at $100 million next year and are paid from savings that, theoretically, flow to the federal government. State governments and more sophisticated not-for-profits and for-profits are the essential partners for a smooth 2019 start.
As a policy-wonk, I find it a joy to watch the senator opine on his bill. Recently, he met with a Hoosier philanthropist working to transform charities with the means to do billion-dollar transactions. After a few pleasantries—first thing on a Monday morning following a brutal Senate schedule the prior week and an especially tough vote late Saturday—the senator soon shed his suitcoat and started vigorously diagramming the bill’s essential features on a conference room whiteboard.
The questions, slow at first, came faster and faster. Young argued persuasively that, if this approach bears fruit, it will transform both social-service delivery and philanthropy across America. This requires a change in government thinking (which is why the Treasury Department oversees it) and a robust partnership between investors capable of waiting for five- to seven-year paybacks and sophisticated providers. The least fortunate among us will get better help and government will, at a minimum, pay for more effective services. Governments might eventually spend less for better outcomes.
Perhaps we pay neighborhood nurses more for obesity reduction, diabetes mitigation and well-baby deliveries rather than in-home visits, blood-pressure checks and flu shots. As conservatives have long argued, Habitat for Humanity can provide housing needs to more people faster and with fewer dollars than HUD. Now we’ll see.
Such a development would dramatically alter the need for government design, oversight and administration of social-service programs. This suggests a future with much smaller buildings and bureaucracies in Washington that consume 50 cents of every social-service dollar.
The states or the federal government must define the desired outcomes with some specificity, and those who meet or exceed those targets would see a premium to either reinvest in additional care (philanthropy) or reward patrons (investments). Think of it as a bond that pays a base rate of return, but the return grows as outcomes improve.
Indiana has a proud heritage in civil-society innovation. Young’s predecessor, U.S. Sen. Dan Coats, authored legislation titled The Project for American Renewal to renew civil society. Upon retiring, he formed a foundation based on the project, which this author proposed and initiated for Coats in 1998 with surplus campaign funds. It also echoes a theme former U.S. Senate candidate Andrew Takami sounded, saying voters are ready to transform social-service delivery. Former Indianapolis Mayor Steve Goldsmith’s Front Porch Alliance was also a unique Hoosier innovation.
Such insights from Hoosier leaders put Indiana in the forefront of civil-society renewal and philanthropic transformation, contributing to our state’s rich social tapestry. For this reason, we all should cheer Young on. His success will be our success, too.•
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Smith is president of the Indiana Family Institute and author of “Deicide: Why Eliminating The Deity is Destroying America.” Send comments toibjedit@ibj.com.
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