On Tuesday, Secretary of Education Arne Duncan and Assistant Deputy Secretary for Innovation and Improvement Jim Shelton released proposed priorities and selection criteria for the Investing in Innovation Fund (i3), a $650 million pot of funds intended to support the development and expansion of innovative models to improve student achievement and narrow achievement gaps. 

For those of us interested in creating a high-quality continuum of education programs from the earliest years up through third grade, there is a lot to like in the proposed priority list. But first, some background and broader details from today’s announcement:

i3 was created this spring under the American Recovery and Reinvestment Act (ARRA). Because the program provides a unique opportunity for the Department to invest in the development and scaling up of innovative practices, and because the ARRA legislation left a lot of details to be filled in about how the program will work, many in the education community have been eagerly awaiting further information about how the Secretary intends to implement it.

This week's Economist has an interesting article on the recent trend of mixing philanthropy with innovative "impact investing".

 The Clinton Global Initiative launched the Global Impact Investing Network (GIIN), comprising of twenty members representing big banks (including Citigroup and Deutsche Bank), donors (Gates, Rockefeller), the Acumen Fund and Generation Investment Management (which is Al Gore's green company). If this group succeeds in agreeing on a common language for social investing and lobbying for helpful laws and regulations, impact investing could grow to $500 billion, which accounts for around 1% of the world's total assets under management in 2008.

 Social investment is not new in itself. But the success of ideas like microfinance, which combines do-good with profit, has inspired mainstream financial institutions and investors to become interested.

 For example, Social Finance, a social investment firm in Britain, has introduced the "social impact bond," where funds raised by bond purchases contribute toward organizations with social missions.  Social Finance plans to try out this bond for several public services like rehabilitating released prisoners and improving community health services.