Final Rules Unveiled for ‘i3’ Innovation Fund

By Michele McNeil

The U.S. Department of Education today unveiled the final rules for its $650 million Investing in Innovation, or i3, grant program, standing fast in the face of criticism that its proposed guidelines demanded too much from applicants in the way of private-sector match and evidence to back up their proposals.

In the final rules and application for the program, department officials left intact a demand that applicants secure 20 percent in matching funds from the private sector.

But in a nod to concerns that such a requirement could be burdensome, particularly to smaller districts and in a difficult economy, the department relaxed the timing so that prospective grant recipients don’t need to find those dollars until they’ve been notified that they will win as long as they secure the private funding.

In essence, a foundation or other organization will know that its matching donation is a sure-fire bet.

“Once you’re eligible to be a winner, we hope we’ve made it much easier to find those dollars,” said James H. Shelton, the department’s assistant deputy secretary for innovation and improvement.

In addition, the department is still allowing applicants to seek a waiver of the matching-funds requirement at the time they apply.

The matching requirement had been one of the most criticized elements of the i3 program’s draft guidelines, which were unveiled in October. Few other changes were made to the proposed guidelines for the grant program, which is meant to foster and expand innovative education strategies at the district level.

The competition, funded by the American Recovery and Reinvestment Act, is open to school districts and nonprofit partners working with a district or consortium of schools. It will provide awards of up to $55 million each. Applications are due in mid-May, with awards to be made in September.

The i3 program is the second of two high-profile competitive-grant programs funded by the economic-stimulus law, and is illustrative of the Obama administration’s desire to push education improvement through competition for federal dollars. The other program, the $4 billion Race to the Top competition, for which finalists were named last week, is only open to states. Despite its smaller prize, the i3 program has drawn intense interest because it’s open to districts and nonprofits, and is much more open-ended in the kinds of proposals being sought.

The heart of the i3 program also remains intact: The $650 million will be divided into three tiers of awards, with the most lucrative going to those proposals that have the most evidence of past success in helping students.

And despite complaints during the public-comment period that the Education Department wouldn’t be requiring enough evidence from applicants—or would be demanding too much—officials made no changes to how much research is needed to back up applicants’ proposals.

The largest, or “scale up,” grants—worth up to $50 million each—will require “strong” evidence, such as program evaluations that used random assignment of students.

The second-tier, “validation” grants of up to $30 million each will go to proposals that show “moderate” evidence, such as those that use sophisticated statistical techniques to try to measure the true effects of a program.

The final-tier, “development” grants are wild cards to a degree; they are $5 million awards to proposals that are each based on a “reasonable” hypothesis or theory. The department made one change to the timing of that third tier of grants: No longer will applicants need to get prescreened before submitting their applications; their applications will be due at the same time as all the other i3 proposals.

“The overall design of the competition tries to account for the importance of evidence at each stage of innovation,” Mr. Shelton said.

For each tier, the level of evidence required is an all-or-nothing eligibility requirement; an applicant that doesn’t have the research to back up a proposal for that particular tier should not bother applying.

While the level of evidence did not change from the original proposal, the final rules do spell out how much emphasis the department is placing on evidence—and what criteria will matter most for each level of grant.

Each tier will be scored on a 100-point scale, based on seven criteria: need for and quality of the project; evidence; applicant’s track record of success; quality of proposed evaluation of a winning project; ability to scale up; sustainability; and quality of management plan and personnel.

In the largest, scale-up grants, evidence is what matters most: It’s worth 20 percent of an applicant’s grade. For the smallest, development grants, evidence is worth just 10 percent. But those smallest grants place a significant amount of weight on the need for the project, and the applicant’s track record—each is worth 25 percent of the final grade.

“For innovation, it’s not just about coming up with cool inventions; it’s about finding things that can go to scale,” Mr. Shelton said.

The department also kept competitive priorities that will reward applicants with bonus points if their proposals focus on early education, college access, students with disabilities and limited English proficiency, and rural schools. Each of those categories would earn an applicant one bonus point, except for the rural schools category, which garners two bonus points on the 100-point scale.

The department is bracing for more than 1,000 applications, all of which will be judged by peer reviewers who will be hand-picked for their experience, and will be vetted to minimize or eliminate conflicts of interest.

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