December 29, 2016

Don’t Spend More, Foundations — It Will Advance Trump’s Agenda


The prospect that President-elect Donald Trump and House Speaker Paul Ryan will seek to slash spending on programs like Medicaid and food stamps is creating a strong temptation for foundations to pour dollars into social services.

As foundations get ready to work with the Trump administration, many are considering ways to double down on spending to make up for federal efforts to drastically scale back the role of government in aiding the most vulnerable Americans.

Activists who work to curb poverty and climate change, promote economic development, and deal with many other issues likely to get attention from Mr. Trump are adding to the pressure, urging foundations to spend more than the legally required 5 percent of assets every year to fend off the challenges they expect in the years ahead.

This is exactly what philanthropy must not do. It should instead exercise strategic restraint. Otherwise, philanthropy is simply making it easier for government to abdicate its responsibilities for helping the needy.

Coming from a former foundation program officer, this might seem like a surprising recommendation. It certainly isn’t an easy one for me to make. But in my time at the George Kaiser Family Foundation, where I focused on early childhood development, I thought about the best way to protect the young children who benefit from Kaiser’s grants to expand access to the federal Early Head Start program. I reflected on other government aid those same young children receive that could be subject to cuts.

Focusing our attention on the beneficiaries of our work should force everyone connected with philanthropy to think about the consequences, intended or unintended, of increased philanthropic investment. Until we learn concretely what Donald Trump is advocating, foundations should make their highest priority becoming more politically nimble and more focused on local and regional politics.

Temptation to Spend

To be sure, we do know a few things about what to expect. House Speaker Paul Ryan now has the means to enact the type of changes he has been championing since he entered Congress 17 years ago. From the Republican activist Grover Norquist — who famously said he wanted government to fit into a bathtub — to Mr. Ryan, conservatives have long pushed to shift the onus for caring for the vulnerable from public tax dollars to private charitable ones. In fact, Mr. Ryan has called for replacing nearly 11 antipoverty programs ranging from food stamps to housing vouchers with "opportunity grants."

A Trump presidency abetted by Mr. Ryan’s leadership in Congress is likely to mean not only cuts in many programs to help the needy but reductions in the number of adults benefiting from Medicaid and protection for "clean coal" and a host of environmentally dangerous industries.

These sorts of legislative and regulatory changes send chills down the spines of many philanthropic leaders, as they reckon with the reality that many of the families they seek to help are potentially at greater risk than ever. And in moments like these, the immediate temptation for grant makers feels clear and powerful: In the absence of a government that sees fit to put a priority on promoting the general welfare of citizens, spend more.

Foundations need to resist the temptation, and instead garner more political savvy and skill. Yes, grant makers are relatively limited in their ability to fund explicitly political activities. But they should conceive their role more broadly. Foundations are public entities, whose acts — and dollars — carry significant influence. Grant makers control billions of dollars. They can use the power of persuasion that comes with great assets to advocate for the interests of those who don’t have voice to advocate for themselves.

Grant makers also make a big difference by working with local and regional political leaders, who are not nearly as likely to wage the bitter political fights we see at the national level. Local officials are concerned with effectively implementing and delivering services, like operating local health departments, improving criminal-justice systems, and investing in smart cities and early-childhood development.

While not entirely insulated from the changes at the federal level, this local work is more directly connected to the needs and concerns of vulnerable communities. Working locally also makes it easier to measure the impact of every philanthropic dollar spent. What’s more, concentrating grants locally makes it easier to experiment in real time on solutions to problems that are difficult and seemingly intractable.

New Way Forward

Trying to invest in large-scale national programs in this political climate too often thrusts foundations into a world where they cannot thrive. But take a look at the power of an effort like Blue Meridian Partners, wherein grant makers are collaborating on the tricky coordination of social services at the local level. This is the new way forward in the Trump era.

To many foundations, it might seem cruel to resist calls to spend more than 5 percent of assets and instead focus mostly on advocacy and local grant making. But if grant makers start to far exceed the 5 percent annual minimum, they will validate the conservative desire to strip money from government antipoverty measures.

And foundations cannot make up the difference; their resources are far more limited than those of government, with its power to levy taxes for important needs. Even the world’s wealthiest grant maker, the Bill & Melinda Gates Foundation, does not have sufficient assets to keep the state of California operating, let alone a whole nation.

As we enter this new era of government scaling down its role in solving problems like poverty and protecting the environment, foundations, too, will play a new role. They can no longer count on a White House Office of Social Innovation and Civic Participation aggressively collaborating with philanthropy to expand programs that have proven to be effective, nor on a Social Innovation Fund to finance them. Foundations must now focus on the significant political consequences of every dollar they spend, keeping in mind the people who depend most on philanthropy for support.

Caleb Gayle, a former program officer at the George Kaiser Family Foundation, is studying for master’s degrees in business and public policy at Harvard University.