Case studies in funding innovation: Reverberating impact has been saved
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Project ECHO began in 2003 as a way of using connective technologies to help remote communities fight hepatitis C. But it had the potential to be much more. Over the next decade, the Robert Wood Johnson Foundation helped the project expand its vision and grow from seed to scale.
Innovation has long been an essential part of philanthropy. But the process of searching for and supporting new approaches can be messy. The reality is that the path from idea to impact is often long, winding, and unpredictable, and there is no simple, step-by-step methodology for finding and funding new ideas.
That doesn’t mean, however, that philanthropic funders can’t be intentional about the approaches they use to seed and scale social innovation. In our 2014 Stanford Social Innovation Review (SSIR) article “The re-emerging art of funding innovation,”(1) we highlight the ways that the processes, strategies, and structures required to deliberately seek out and support early-stage, breakthrough ideas can be quite different from those used in more traditional grantmaking.
To further illustrate what it really takes to fund innovation in practice, we have developed five case studies that aim to capture the realities of the innovation funding process. Each looks at the process of supporting innovation from a different angle:
None of these cases alone tells the whole story of what funding innovation looks like; they explore a range of approaches that emphasize very different aspects of the process. But we believe that the collective set of case studies begin to paint a well-rounded picture of many of the processes and approaches that innovation funders can use to nurture and scale new ideas with transformative potential.
It’s important to recognize that these stories are not about the innovations themselves. They don’t explore whether Kiva should actually be considered a truly game-changing financial innovation, or whether the Gates Foundation’s Grand Challenges program should have hit a “home run” already after 10 years of operation. Those are questions for another time and place.
But each of the examples described in the cases is showing important signs of promise, and because creative funders were willing to embrace a different way of working, the innovations have been able to grow from the seeds of ideas to full-fledged experiments. It’s still too early to answer whether they will ultimately prove to be transformative—but it’s clear that if the funders involved had been wedded to more traditional grantmaking approaches, we might not even be able to ask the question.
The innovation processes described in the cases here are inherently complex, full of stops and starts, iterations, and failures. And one of the clearest takeaways looking across the stories is that there is simply no straightforward recipe for funding breakthrough ideas. But the cases do help to illustrate an emerging set of “innovation funding principles” that can allow funders to better identify and support early-stage, high-risk, high-reward projects:
Perhaps unsurprisingly, these principles mirror many of the key elements that were discussed in our 2014 SSIR article related to the sourcing, selecting, supporting, measuring, and scaling of innovation. As we explained in that piece, innovation funding shouldn’t be seen as an alternative to, or replacement for, strategic philanthropy; funding innovation is actually an integral part of good, strategic philanthropy. And we believe that embracing these innovation funding principles can help with virtually all aspects of a funder’s grantmaking.
For many funders though, taking risks on high-potential projects won’t be necessary or appropriate for all of their work. Instead, the principles are better applied to just a subset of their giving activities. And much as financial investors try to build a diversified portfolio—placing the majority of their assets in investments with safe and steady returns, but using a smaller percentage for higher-risk opportunities with the potential to produce outsized rewards—funders, too, should consider using a portion of their resources to support innovation alongside their investments in more consistent and proven approaches.
Eric Schmidt, the former CEO of Google, used to describe what he referred to as his 70/20/10 rule: 70 percent of management’s effort should be dedicated to core business tasks, 20 percent should be focused on projects related to or adjacent to that core, and 10 percent should be dedicated to unrelated but high-potential new businesses.(5) Using this type of portfolio approach allowed Google to focus the majority of its resources on proven strategies that formed the heart of its business while ensuring that it wasn’t missing out on important new opportunities and impact.
For funders, 70/20/10 may not be the right ratio. Each foundation and donor will need to think about its own unique risk-reward profile. But imagine the potential impact if all funders dedicated 10 percent of their giving to experiments that may have a high likelihood of failure but that, if they succeed, could transform a critical system. With so many more ideas being supported, if 1 in 10, or even 1 in 100, of the innovations could succeed, it could change the world.
We hope you enjoy the story of innovation funding that follows, and we hope that it illuminates some of the ways that your organization might embrace supporting breakthrough ideas as part of your funding portfolio in the future.
(1.) Gabriel Kasper and Justin Marcoux, “The re-emerging art of funding innovation,” Stanford Social Innovation Review, spring 2014, http://www.ssireview.org/articles/entry/the_re_emerging_art_of_funding_innovation.
(2.) For more information on this topic, see Gabriel Kasper and Justin Marcoux, “How to find breakthrough ideas,” forthcoming as a blog post in Stanford Social Innovation Review.
(3.) Kasper and Marcoux, “The re-emerging art of funding innovation.”
(5.) CNN Money, “The 70 percent solution,” December 1, 2005, http://money.cnn.com/magazines/business2/business2_archive/2005/12/01/8364616.
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When the Project for the Extension for Community Healthcare Outcomes (Project ECHO) first began in 2003, you wouldn’t necessarily have recognized it as an innovation with the potential to fundamentally transform global models for health care delivery in underserved communities.
Back then, Project ECHO was an experimental approach for helping rural and remote communities fight hepatitis C, a deadly liver disease, by using secure videoconferencing technology to share the knowledge of leading medical specialists with dozens of local physicians treating patients in their own communities.
The idea lacked any of the types of technological breakthroughs we usually associate with innovation. It used modified videoconferencing and was shrugged off by many as an interesting, but ultimately ordinary, use of telemedicine. In fact, when Project ECHO originally applied to the Robert Wood Johnson Foundation (RWJF) for funding, it was rejected.
But embedded within Project ECHO was an idea about continuous, one-to-many training with the potential to transform care for hepatitis C, change systems for specialized health education, and even extend to any issue where expert knowledge is locked up in the minds of a few and needs to be shared widely.
The story of how this innovation emerged and has developed over the last decade with the help of the Pioneer Portfolio, the dedicated learning and innovation unit within the Robert Wood Johnson Foundation, can help demonstrate what it looks like for philanthropy to support a revolutionary new idea as it grows from seed to scale.
Hepatitis C is a liver disease that affects 3 million in the United States and more than 170 million people worldwide. The disease is the leading cause of cirrhosis and liver cancer in the United States and is responsible for 350,000 deaths globally each year.1 Transmitted by blood, hepatitis C is often spread through needles—affecting intravenous drug users and prisoners with makeshift tattoos and piercings—and has been called a malady of “America’s untouchables.”2 Back in 2003, hepatitis C was a grim diagnosis, but with new, aggressive, chemotherapy-like treatments, it could be cured in 45–70 percent of cases.
Administering the treatment, however, was not easy. The main drug used to address the disease, interferon, was highly toxic and was associated with a host of physical, psychiatric, and neurological side effects. Patients had to be monitored closely for adherence, diet, and side effects.3 Because primary care physicians didn’t necessarily have the skills to manage this treatment, it had to be handled by specialists like Sanjeev Arora, a hepatitis C expert at the University of New Mexico Health and Science Center.
It takes years of sophisticated training for doctors like Arora to develop their knowledge and expertise.
It takes years of sophisticated training for doctors like Arora to develop their knowledge and expertise, so there are relatively few specialists (or “knowledge monopolists,” as Arora likes to call them) in the field. Hepatitis C specialists were so rare around the turn of the millennium, in fact, that patients were forced to drive from every corner of New Mexico to Arora’s offices in Albuquerque, covering hundreds of miles for each of the 12–18 trips it would take to cure the disease. Patients could wait up to eight months to see him, some dying in the process because no one else could help. Many more would go undiagnosed.4 Arora knew that there had to be a better way. So, in 2004, he launched Project ECHO with $1.5 million in grant funding from the federal Agency for Healthcare Research and Quality. He recruited physicians from 21 local clinics (16 in rural areas and 5 in prisons) to join weekly video conferences (called teleECHO clinics) where the remote clinic doctors would share their cases with a team at the University of New Mexico that included Arora, a pharmacologist, and a psychologist who could collectively advise the local doctors on how to treat the patient. The university team served as a hub for guiding treatment, and Arora and his colleagues would also present any new or relevant information about the disease to the group. Local doctors got access to the specialized expertise they needed and learned on the job while at the same time building a cadre of peers and mentors to help them through the process.
As Arora and his team built the capacity of these 21 clinics to serve patients with hepatitis C, the wait times to see him plummeted from eight months to two weeks because patients could now be treated closer to home. In addition, rural doctors were excited that they could now help their patients and that they had a community of other doctors and experts providing support.
Project ECHO continued to grow throughout New Mexico, gaining support from the State of New Mexico legislature and the New Mexico Department of Health. And because hepatitis C was not the only medical condition plagued by the problem of Arora’s “knowledge monopolies,” Project ECHO also worked to create additional teleECHO clinics to focus on rheumatology, substance abuse, and mental health disorders.
To expand any further, though, Project ECHO needed additional capital. And in the process of seeking additional resources, Arora crossed paths with the Pioneer Portfolio, the specialized innovation unit at the Robert Wood Johnson Foundation.
Founded in 1972, RWJF is the largest domestic funder of health and health care in the United States.5 In 2003, it adopted a new “impact framework” that focused its giving on six critical targeted strategies (such as health care coverage, vulnerable populations, and childhood obesity). But the framework also created a seventh team, the Pioneer Portfolio, to search for fundamental breakthroughs in health and health care as a complement to the more targeted program areas.6 “At the time, the other teams at the foundation were laser-focused on their goals,” explains Brian Quinn, assistant vice president of research and evaluation at RWJF and a former Pioneer Portfolio director. “But when you’ve got your head down, doing everything you can to push toward a set of ambitious objectives, sometimes you can miss opportunities for impact that are emerging outside your areas of concentration. Pioneer helps the foundation continuously look up and look out into the future to see potential game changers.”7
For many years, Pioneer’s goal was to identify and accelerate emerging trends, and to promote new ideas that could have far-reaching impact on people’s health in America. To do this, it used a multipronged strategy of supporting processes that help source new ideas and innovations; making early-stage grants to explore new fields and accelerate promising new ideas; supporting emerging opportunity spaces that have the potential to produce important breakthroughs in health and health care; and introducing new thinking, insights, and approaches to the broader foundation.8
As part of these efforts, in 2007, the Pioneer Portfolio partnered with Ashoka Changemakers to run an online competition to search for “disruptive innovations” in health care—ideas that could help deliver high-quality care at a greatly reduced cost. Project ECHO was one of over 400 entries that applied, and it was selected by a panel of experts as one of the three contest winners.9 Arora was invited to submit his full grant application to Nancy Barrand, a senior advisor for program development who was working with the Pioneer Portfolio at the time.
Pioneer helps the foundation continuously look up and look out into the future to see potential game changers.
At first, Arora’s proposal didn’t go over well. Barrand shared the proposal with her colleagues, and the team was disappointed. “It was boring,” Barrand recalls, because the proposal had lost the creativity that helped Project ECHO win the competition.10
As it turns out, an earlier proposal from Arora had been rejected by RWJF before the competition, so this time around he tried to write what he thought the foundation wanted to hear. Dismayed that the foundation seemed to be scaring away bold ideas, Barrand flew to New Mexico, where she was able to see the full scope and vision of Project ECHO and to work with Arora to better articulate its potential.
The Pioneer team found this sort of assistance was often necessary with early-stage efforts. As Barrand explains, “No innovation ever comes in fully baked.”11 And after iterating with Barrand on its concept in order to create a new proposal and a bolder vision, Project ECHO eventually received a grant from the Pioneer Portfolio for $5 million over three years—the first foundation grant in the project’s brief history.
The grant had two goals: to scale up Project ECHO’s operations in New Mexico, and to expand the Project ECHO methodology to more medical conditions and geographies. To do so, Arora needed more than just financial support. Looking back, he explains, “Clearly the money was important, but the other support that the foundation provided was even more valuable.”12
The Pioneer Portfolio connected Project ECHO with additional consulting assistance that helped Arora develop a business plan and imagine some of the ways that the project could grow.13 As the project solidified its strategy, Arora made an explicit decision to scale Project ECHO in a way that would keep it “open source”—allowing interested clinicians and university medical centers to get their staff trained on using Project ECHO’s technology and playbook for free. In making this decision, Project ECHO needed to be able to clearly communicate to the right people what it had to offer.
So the Pioneer Portfolio brought in Ben Milder, senior vice president and director of public policy at Burness, a global communications firm. Milder and his team helped Arora tighten his message and tailor it to different audiences: clinicians who were considering signing up; university medical centers that might become hubs; and policymakers who would need to know what systemic changes would be required to support something like Project ECHO nationally. Burness also worked with RWJF to connect Arora to government officials who might be interested in replicating the model, such as leaders at the Department of Veterans Affairs and at the Centers for Medicare and Medicaid Services. The firm also helped Arora prepare a Health Affairs journal article in 2011 that helped demonstrate the efficacy of the model.
Project ECHO's current vision is to touch the lives of 1 billion people by 2025.
As Arora was working on his pitch to different audiences, articles like this gave him the evidence he needed to back up his claims. For instance, in a New England Journal of Medicine article, a prospective cohort study showed that patients treated for hepatitis C by primary care physicians at the local Project ECHO sites actually had even better outcomes than those treated by specialists at the University of New Mexico Health Science Center.14 And the ECHO clinics achieved these outcomes all while saving hundreds of thousands of travel miles and empowering local physicians to better treat the disease in their own communities. The article in Health Affairs showed that local physicians were happy with Project ECHO, with 90 percent agreeing that they were learning best-practice care.15
Measurement and evaluation were crucial for Project ECHO, but they were a means, not an end. Armed with the data, the project was able to better tailor its messaging and recruit additional university medical centers, local physicians, and funders. Between 2011 and 2014, Project ECHO exploded in size, adding partners such as the GE Foundation, Helmsley Charitable Trust, the US Department of Veterans Affairs, and the US Department of Defense to expand to new geographies and new areas of health.16
To help Arora keep up with all this demand, RWJF provided an additional $5 million of capacity-building support in 2013.17 As it turned out, Project ECHO was a compelling platform that others were eager to join—but without this flexible support, it would have been easy for such a platform to collapse under the growing demand.
Today, the expansion of Project ECHO continues. It now has 52 hub replication partners globally (including 41 sites in the United States and 11 additional programs operating in nine other countries), covering 39 distinct medical conditions. Project ECHO’s current vision is to touch the lives of 1 billion people by 2025.18
And Arora isn’t stopping with health care. He is testing Project ECHO as an approach for helping special education teachers in Wyoming work better with students with disabilities, and teachers in India better recognize early signs of autism. He also has plans to use the ECHO model on topics such as generalized teaching training, clean water, sanitation, and workforce development.
Arora argues that Project ECHO’s approach can change the way that society shares any kind of specialized knowledge. Existing strategies such as graduate school, apprenticeships, and specialized training are all effective at building specialized expertise, but they can also create a bottleneck where only a select few have necessary skills. As a result, shortages of experts are becoming a problem in nearly every industry and field. Arora believes that Project ECHO may hold the key to breaking these knowledge monopolies as a way to share specialized expertise and touch the lives of a billion people across issue areas and geographies.
Arora notes that, without RWJF’s support, Project ECHO wouldn’t be where it is today. And without the foundation’s Pioneer Portfolio, ECHO might have never even been discovered. The ways that Pioneer found, supported, and helped scale Project ECHO provide many important lessons for funders who want to better support early-stage innovation:
Seek out transformation. When the Pioneer Portfolio funded Project ECHO, the program had early signs of success but was still focused on only a handful of medical conditions in one state. Pioneer took a risk, knowing that Project ECHO could fail to take hold in new places or might not translate well to new medical conditions.
The Pioneer team believed in the transformative potential of Project ECHO, understanding that the project’s combination of connective technology and a networked support structure could prove a viable model to disrupt health care in a positive way. Barrand and the Pioneer Portfolio encouraged Arora to articulate and pursue a grand vision, knowing that success wasn’t assured—but that if Project ECHO could successfully spread, it could fundamentally change the delivery and quality of care for people living in remote, rural, and underserved places.
According to Barrand, “The reason Sanjeev’s original proposal was ‘boring’ was because he was reluctant to promise us the world, which he didn’t believe he could deliver for a more limited budget. When we opened the door for him to come in with a larger proposal, it freed him of some of that constraint. It showed we believed in him and the idea of ECHO, which helped bring out the bigger vision for what Project ECHO could become. It was innovation funding, not project support.”19
Although the innovation initially appeared to be about telemedicine, the real breakthrough turned out to be rooted in Project ECHO’s unique approach to solving the persistent problem of knowledge monopolies. A more conservative funder looking for just well-proven, immediate impact might not have been willing to take the time to explore the broader potential of that idea.
Provide more than money. RWJF’s financial support was crucial in helping Project ECHO expand beyond New Mexico, but other types of assistance were also incredibly valuable.
Recognizing the Project ECHO was a promising concept, the Pioneer Portfolio wanted to do everything possible to help the idea develop. Barrand’s visits with Arora encouraged him to articulate and share his broader vision to spread Project ECHO beyond hepatitis C, beyond New Mexico, and eventually beyond the United States. And to help bring this larger vision to fruition, Pioneer knew that it needed to bring in specialized assistance to help with Project ECHO’s strategic planning, financial model, and communications strategy. The Pioneer Portfolio also introduced Arora and his team to other funders and influencers in its network, which helped ECHO spread.
The ECHO model uses university health centers as hubs with spokes that reach out to local clinicians.
This type of investment in grantee capabilities is a key success factor for many grantees, but it is especially true for seed-stage innovations, which often require early intervention and support as their strategies are still solidifying. How foundations choose to step in at these initial stages to provide formative guidance and connections can have an outsized effect on ultimate outcomes. And for funders that can’t provide this technical assistance themselves, having a group of “outsourced” consultants and support organizations in place can often pay real dividends.
Understand the difference between growing an organization and scaling an idea. When many funders think of increasing impact, their first instinct is to focus on growing an organization. Scaling strong organizations is often necessary for expanding the delivery of quality services. But sometimes spreading an idea can be even more powerful—and it can look quite different from the strategies traditionally used to grow an organization.
The ECHO model uses university health centers as hubs with spokes that reach out to local clinicians. But if the model was to spread, the University of New Mexico Health Sciences Center could never build enough capacity to centrally manage all of the thousands of different hub-and-spoke networks it hoped to create.
So Arora is trying to spread the model by teaching others to start their own networks. He has a five-person “replication team” that helps other university health centers adopt the model. The team conducts monthly video conferences for those who want to learn more about starting their own system and one-day orientation sessions where training materials are distributed freely. For those who sign up, Project ECHO provides additional onboarding support.20
This type of growth strategy was initially a difficult concept for RWJF. Barrand explains, “At first, the only way we could imagine that Project ECHO could sustain itself was to sell some level of the technical assistance that ECHO provided. But Sanjeev felt that it was hypocritical for him to make a big push to sell his knowledge while he was advocating for others to ‘demonopolize’ theirs. He helped us realize that we were too limited in our vision of how this could grow. And, as it has turned out, ECHO has spread so fast precisely because it was made open source.”21
Funders that support innovative ideas in the social sector always want to see their investments grow, but they also know that their support can’t last indefinitely. In many cases, it can make sense to recruit other funders to support later-stage innovation, connect innovations to markets in order to sustainably grow, or enlist the government’s support to fund innovations that are true public goods. But Project ECHO shows how funders can also consider the way innovations sometimes spread more organically by explicitly opening up the ideas for sharing, and by helping create networks that share the word and build capacity in others to implement new approaches.
Arora likens it to the way organizations such as Alcoholics Anonymous have made their approaches openly available so the model can be replicated across the globe. “We’re not trying to build a large organization,” he explains. “We’re trying to build a movement.”22
Consider the best structure for finding and funding innovation. Funding innovation in a systematic and repeatable way is extremely difficult. And it can be even more difficult for program officers in the midst of managing their regular grantmaking portfolios.
As a result, some funders have created specialized units dedicated to finding, funding, and learning from breakthrough innovation. The Pioneer Portfolio has served that purpose at RWJF since 2003, and its development and evolution over the last decade can also provide important lessons for funders looking to get more deliberate in their innovation efforts. (For more on the Pioneer Portfolio, see the epilogue that follows.) But managing an innovation unit like the Pioneer Portfolio takes special care.
Pioneer is managed more like a well-balanced portfolio of investments than a focused program area. Lori Melichar, the current director of the Pioneer Portfolio, maintains a topical balance in the portfolio and works with team members to ensure they cover a wide range of key emerging areas that have potential implications for health, such as the sharing economy, behavioral economics, or machine learning. She also looks at funding allocations, making sure that the portfolio finds the right balance between investing in the discovery of new ideas and growing the impact of ideas that have already demonstrated initial success. And Melichar balances the internal use of resources to ensure that the Pioneer Portfolio invests administrative dollars appropriately to allow the team to do the travel, networking, and conferences needed to identify a strong pipeline of new innovation.
Team management is also a big part of the role, as she must manage a collection of strong, independent, and often differing perspectives in order to effectively surface wild-card ideas and new innovation. Melichar notes, “Though I try to make sure all opinions are considered when we evaluate an idea, I can’t really be consensus driven. I often let projects go forward that some people love and some people hate.”23 Consensus-based decision making can unduly weed out promising ideas, so she has developed systems that allow the Pioneer Portfolio to trust and systematically improve the intuition of team members.
In its early days, the RWJF Pioneer Portfolio focused mostly on finding breakthroughs like Project ECHO, providing them with early-stage seed investment, and then helping them grow. However, over time, the team has shifted its approach.
In particular, Pioneer has realized that with a limited budget, it is nearly impossible to both search for new breakthroughs and help existing ones grow. As former Pioneer director Brian Quinn says, “We were a good fit for exploratory ideas, but it was much harder to scale them. We found that helping ideas grow crowded out our capacity to search for new ones—both in terms of funding and in terms of staff energy.”24
Today, the team still looks for breakthrough ideas, but it has developed a new strategy with a focus more on discovery and learning. Melichar explains, “We still seek projects with ambitious goals, but we won’t make a grant unless we can learn something that can accelerate the efforts of others—within and outside the foundation’s walls—working towards a goal of building a ‘culture of health’ in America.”25
She gives the example of a recent grant focused on figuring out how to mass-produce custom-fit, 3D-printed prosthetics. While the project itself is pioneering and has breakthrough potential, a key motivation for the foundation was to learn more about the role of the emerging 3D printing space in health and to understand the barriers to and enablers for providing high-quality, lower-cost prostheses that can improve the well-being of vulnerable populations.
Connecting this sort of learning to other parts of the foundation is another crucial part of Pioneer’s work under its new strategy. “When we were focused on finding breakthrough ideas from unconventional pioneers in unusual places,” explains Melichar, “understanding what our colleagues were doing wasn’t a top priority.”26 This meant that sometimes the work of Pioneer didn’t feel well integrated with the broader work of RWJF.
As Pioneer has shifted, it has paid special attention to the work of the other, larger areas of the foundation and has found ways to support them. For example, Pioneer now hires “technologists in residence” to help other teams explore the impact of new technologies on their grant portfolios; promotes “blue-tray lunches” (an homage to the cafeteria at the foundation) to share findings more broadly within the organization; and deliberately takes time to understand what other program areas are working on to better connect them to innovations and innovators in the field. The increase in the number of projects that Pioneer co-develops and co-manages with other foundation teams or portfolios marks another important shift for the Pioneer Portfolio. As Melichar notes, “An effective way to help new ideas grow is to bring others along on that journey, so that together we are waiting with bated breath, all invested in the outcome.”27
And by more deliberately focusing on the learning and building these types of syndicates of support, Pioneer hopes that it will be able to do an even more effective job of finding and supporting the seeds of the next innovation like Project ECHO in the future.