Why the elderly hold the future to social innovation
June 13th, 2013
Social innovation tends to care disproportionately about the young. For instance, take a look at the initial investments from the Obama Administration’s Social Innovation Fund and you’ll find over a third are explicitly targeted at youth, with the rest heavily concentrated on relatively young families and those early in the labor pool. There is not a single initiative on that list that is targeted at the elderly.
This absence is striking on pure demographic grounds. The elderly already comprise 13% of the total population and their numbers are increasing so quickly that in less than two decades they are projected to comprise one in five Americans.
However, social innovators must address the issues facing this population for reasons beyond demographic coverage. The state of the elderly will actually determine the fate of our entire social innovation field.
Social innovation in the era of fiscal scarcity
As a nation (and world), we are entering a new era where the dominating reality is intense fiscal scarcity in government at all levels. Historically, it is public sector funding – which dwarfs private philanthropy by about four to one – that ultimately determines which innovative ideas go to scale. But government – especially local government in large states like California – appetite for new ventures is shrinking dramatically as they fight for fiscal survival.
This shrinkage will continue until new solutions are devised for a fundamental question every society in history has asked: how will we care for the elderly? Almost every city and state facing severe budget shortfalls does so because of two runaway cost items related to the elderly: pension obligations and health care. Both reflect how our society’s model for senior care is broken: the first reveals that we can’t afford previous expectations of how the elderly will live and the second is hugely correlated to how our health care system can’t afford the way the elderly get sick – and die.
Until successful new models for senior care are developed, all other forms of social innovation will be constricted. There simply isn’t enough money or government attention to go around.
A case study in innovation: Jewish Family and Children Services
In an attempt to find out what new ideas were happening in the senior care field, I recently spent some time with one of the most well regarded agencies in the Bay Area: Jewish Family and Children Services (JFCS). JFCS is the oldest public charity west of the Mississippi, and serves elderly from the entire community, not just the Jewish one. In the 1980’s, it began struggling financially due to a variety of factors. Amidst its fiscal crisis, Anita Friedman took over as the Executive Director of JFCS and vowed to reinvent the agency’s business model or go out of business trying. Over the next twenty years, she radically reshaped JFCS into a thriving $30M organization that enters the new era of fiscal scarcity far stronger than the typical social services agency.
Her reinvention included several components. But I found one particular idea as especially worthy of special contemplation: the adoption of universal versus targeted services.
Universal versus Targeted Services
Perhaps the most radical move JFCS made was to shed the typical nonprofit model of providing services targeted towards the low income needy. Instead, JFCS aims for the broad market of seniors needing care, many of them with meaningful financial resources. JFCS would build its new incarnation with this population as its core financial base such that today, 65% of its revenue comes from earned income. This financial strength in turn allows JFCS to forego fundraising aggressively for core operating support, and instead to raise funds to subsidize low income clients.
Achieving this shift required JFCS to compete with the for profit sector for resourced clients who – unlike the poor – had choices outside the nonprofit world. Judy Lynch, Director of JFCS in home care services, described how the agency had to aggressively market itself as NOT a nonprofit for the poor, but rather as a potential provider for all elderly consumers. This new identity and the new competitive environment required JFCS to raise its game significantly. In my own tour of JFCS, I was struck by how it did not “feel” like a nonprofit, but more like a polished commercial operation.
This universal versus targeted approach could be a critical strategy in the new era of fiscal scarcity. It offers a pathway for greater financial stability as agencies themselves tap into broader revenue streams. And innovations that can adopt a universal approach will have a greater likelihood of broader adoption. Scholars studying the history of social policy innovation have demonstrated how in times of scarcity, new programs that establish a cross class base survive while new programs targeting the needy suffer the most.
Can the rest of us follow?
I am aware that not every field can adopt this universal versus targeted approach, and there will be some agencies that are called to focus exclusively on the neediest. But more can happen along these lines.
Take education for instance. Many resources and energy in our sector are devoted to addressing the “education gap” in our country. But both in common programmatic design and public rhetoric, only one side of the gap is targeted. I have clients who are pouring an incredible amount of smarts and energy into targeting the lowest performing public schools. What has struck me is how many of their ideas would benefit any child, including my child who attends a school that represents more the middle tier in our city’s large school district. Yet the targeted approach will likely bypass her and her classmates. In so doing, these programs forego a whole swath of financial and political support that could propel them to widespread adoption.
Dispelling the illusion of “solutions”
While the senior care field may offer helpful programmatic ideas to the rest of us, I believe the most important contribution may be a philosophic one. Social innovators, especially the younger they are, like to talk about solutions. Poverty, the education, youth unemployment – these are “problems” that can be “ended,” “gaps” that can be “closed” and “trends” that can be “reversed.”
There is no such rhetoric in the senior care field. Even the name of the field suggests a different philosophic orientation: the condition is one that calls for “care.” No one working in the field deludes themselves that they are going to solve the inevitable decay and death of human beings. As such, there is a modesty of ambition and a humility to their promises.
Social innovators striving in the new fiscal era are going to need to borrow those traits. We have to accept that while many social problems can and should receive our “care,” in many cases we may not be able to afford true “solutions.” This acceptance of the inevitable – our sector’s own version of coming to terms with aging -- may shape programmatic design. It certainly must shape our rhetoric and internal expectations. Otherwise, disillusionment will grow among our funders and the public, and even within ourselves.
And that will get old fast.