Social Finance Intermediaries and Social Innovation

This paper uses the social transitions framework to explore the ways in which foundations may partner with intermediaries to support social innovation for broad system change. It examines the efforts of a Canadian foundation to incorporate partnerships with intermediary organizations into its philanthropic investment strategy aimed at generating social innovation at three successive scales. The results demonstrate different patterns in the social innovation processes and in the foundation-intermediary relationships at each scale. These differences are explained by altered degrees of coordination and opportunities for learning, and by the types of intermediary organizations engaged at each scale. The most successful social innovation processes occurred when intermediaries had their own internal resources and when the initiative focused on transforming macro scale elements. As philanthropic funding becomes an important source of support for social innovation, these lessons are critical for those interested in ensuring that social investments build the capacity to respond effectively to societal challenges.