Targeting Support: Behind a Big Impact Investment by the Ballmer Group

  pixelheadphoto digitalskillet/shutterstock

 pixelheadphoto digitalskillet/shutterstock

Founded in 2000, Social Solutions is an Austin-based tech firm that provides performance management software for the likes of Harlem Children's Zone, the Annie E. Casey Foundation and the U.S. Department of Housing and Urban Development. Social Solutions' software products, called Apricot—for small and mid-sized shops—and Efforts to Outcomes (ETO)—for the largest outfits—help organizations measure the progress that they make with participants and families. Now comes news that billionaire couple Steve and Connie Ballmer have invested $59 million over five years for a stake in Social Solutions. The funds will accelerate the development of the firm's Apricot software and make it more widely available for nonprofits working with K-12 students.

I recently spoke with Social Solutions CEO Kristin Nimsger to find out more about the recent infusion from the Ballmers and how the technology company was able to get on the wealthy couple's radar. 

Nimsger explains that while Social Solutions has long been a leading provider of software to case management and outcomes causes, the company has lately been going through a transformation, pivoting toward leveraging data in new ways. Social Solutions connected with the Ballmers last year and found aligned visions for harnessing data and technology.

In an era when many philanthropists, nonprofits and government service providers want to better track impact and target resources, a key selling point of Apricot is that it offers ways to do both of those things. Nimsger explains that the capabilities "help leverage the collective intelligence and experience of the sector in order to make recommendations on programmatic work that individuals should be in at the moment when they have the need, or even before they have the need. That’s the real driver behind this latest partnership."

Steve and Connie Ballmer launched the Ballmer Group a few years ago to improve economic mobility for children and families in poverty. Connie has a longstanding interest in at-risk youth, which was sparked after reading stories about kids lost in Washington State's foster system, and she played an instrumental role in founding a regional nonprofit, Partners for Our Children. 

As we've reported, the Ballmers have made a string of big moves to support nonprofits working on poverty and education. At the same time, they've trained an eye on the larger issue of better connecting efforts in this corner of the social sector. Connie has said, "We believe that the best work in philanthropy happens when multiple sectors—public, private and nonprofit—come together to tackle problems. Everybody brings a different perspective, and sometimes it’s a little painful because we are all so different, but we think that’s where the power is. Together, we all go farther."

New collaborations are key. But the Ballmers also see a need for improved data and technology. In announcing the Ballmer Group's partnership with Social Solutions, Connie said that better measuring the impact of services for poor kids is a key to faster progress. "Social service organizations can often be 20 years behind the private sector in the availability and use of data and technology, and so in order to help nonprofits and the families they serve, we want to support leaders in this field like Social Solutions."

Connie has seen the tech challenges in the social services space close up. A few years ago, she was part of a committee trying to bring new technology to Washington State’s child welfare offices, replacing cumbersome boxes of case files. The committee opted to build a software system called OLIVER, and the Ballmers bankrolled it with $9 million. But while caseworkers loved the software, it was a custom system, so broadening it to more agencies and adding more features had to be done from scratch, as well. The price tag cited was between $50 million and $200 million. To do it, “you were basically starting a software company,” Connie explained to Bloomberg news. So the couple pulled the plug. There had to be a better way. 

"To build this kind of software requires a for-profit company rather than donations to nonprofits," Steve Ballmer said. “There’s just a lack of money in this sector,” Connie added. “Ten years ago, investing some of your incredibly precious money into data or tech would have been nice, but nobody could afford it. Now, it’s mission critical, so they are making room for it.”

This is where Social Solutions comes in. The Ballmers are especially excited about Apricot's potential within K-12 public school systems. 

The software can monitor school data and use algorithms to determine which students are doing well and may need accelerated programs, and which students may be at risk for falling behind or dropping out. Apricot also combs the resources available in local nonprofits and suggests services such as tutoring, after-school care or meal support. “The software will be able to make recommendations and actually facilitate the referrals within the program,” Kristin says. "It's sort of the Netflix of philanthropy." Social Solutions will eventually expand beyond education, but first priority will be helping kids in the K-12 public school system.  

The Ballmers did a fair amount of research before coming into conversation with Social Solutions. Kristin explains that last fall, the firm was able to convince the couple that not only was its software the market leader, but also that "we had the right technology strategy, right team, to deliver our audacious vision." 

It's important to note that efforts to use new technology to track and assess students haven't always worked out. Most famously, a $100 million student data project backed by the Gates Foundation, called InBloom, famously crashed and burned in 2014. The initiative sparked strong resistance from educators and parents worried about student privacy. Meanwhile, critics of big K-12 technology investments persistently raise questions about who's profiting from such efforts, and whether funds could be better used elsewhere in an era when teachers often use their own money to buy basic supplies for their classrooms. 

All that said, philanthropists may be more excited than ever about using new education technology to transform how students learn and how schools operate. In addition, as we've often reported, foundations across many issue areas are tantalized by the potential to better use data to drive impact. 

Given the number of funders looking to move the needle on education, often by focusing on specific niches like STEM education for girls or students at risk of dropping out, Social Solutions is in the right space at the right time. Its software allows schools to target support for specific demographics of students and tailor programs specific to their individualized needs and desired outcomes.

To better serve the funding community, Social Solutions has developed a funder portal that the Ballmer Group will be the first to use. The idea here is to allow funders to access and analyze data to see the impact of their donations on the causes they care about.