After studying the issue for two years, the Bill & Melinda Gates Foundation said it will devote $158 million to help Americans break free from poverty, marking the first nationwide effort by the country’s largest philanthropy to address economic hardship in the United States.
“The economy is changing, and jobs today are different,” said Ryan Rippel, a Gates strategy adviser who led the work on the new plan. “Folks are working very hard and aren’t necessarily able to make it.”
With its four-year commitment, Gates joins a number of U.S. grant makers, including the Ford, Rockefeller, and Walmart foundations; the Ballmer Group; and Google.org, which have made poverty a key issue.
Rippel hopes the size of the Gates pledge and the resources it has at its disposal will be a draw for other donors and experts to jointly create solutions.
“Poverty is very complex,” Rippel said. “It’s not going to take one foundation that moves the needle for the whole country. It’s going to be a lot of actors working together at all levels.”
Collecting Data
The plan was developed after more than two years of study by the U.S. Partnership on Mobility From Poverty, a group of 24 experts housed at the Urban Institute that Gates supported through a $3.7 million grant.
The work of the partnership, as well as previous Gates-supported research that collected comparative nationwide data on eviction rates and tracked economic mobility in cities, helped inform the foundation’s approach.
Gates will continue to gather data on the factors that contribute to poverty. It will make that information accessible to local leaders and connect them with experts to help make sense of the data and come up with solutions.
“It’s not enough to produce data for data’s sake,” Rippel said. “We want to make sure it’s a useful tool to inform decision making and help local leaders assess what’s needed in their communities.”
The foundation will also attempt to change negative stereotypes that persist about poor people. Such narratives — that they are dirty or unpleasant — can be changed so that the poor are seen as “needed,” according to an essay in CityLab by Arthur Brooks, president of the American Enterprise Institute, and john a. powell, president of the Haas Institute for a Fair and Inclusive Society at University of California at Berkeley. Both Brooks and powell were members of the Gates-funded partnership.
The foundation will also support research on how to develop “career ladders” in emerging industries so that people are given job opportunities and employers are guaranteed a steady stream of workers.
Rippel said the foundation is still developing much of the plan and will listen closely to local leaders.
“Folks in their own community are going to have the best insight into some of the barriers and are going to be the best people to design some of the strategies,” he said. “Our hope is to be a resource for those actors and help them have the best data and tools.”
40 Million in Poverty
Despite decades of efforts trying to address poverty, millions of Americans remain in its grip.
One reason past philanthropic approaches haven’t had much success, says Gordon Berlin, president of MDRC, a social-research organization, is that the causes of poverty are constantly shifting. A decade ago, few would have predicted the opioid crisis. And the Great Recession came as a big surprise to many Americans.
“Many people clawing out a middle-class existence suddenly found themselves on the fence of poverty,” he said.
To gain any ground, government resources will be necessary because the problem is so big, Berlin said. But he said in the current hyperpartisan political climate, where Congress suffers from paralysis, philanthropy can be vital by helping to test what works.
“At moments like this, philanthropy can play its biggest role,” he said.
More than 40 million Americans lived in poverty in 2016, according to the most recent U.S. Census figures. For a family of four, using current Census thresholds, that means a household income of less than $24,858 a year. The poverty rate fell from 14.8 percent in 2014 to 12.7 percent in 2016. Still, the percentage of people living in poverty has not dropped below 11 percent in the past half century.
“The economy just isn’t working for everyone,” says Rachel Korberg, an associate director at the Rockefeller Foundation.
Like Rippel, Korberg believes local communities will come up with many of the ideas that could solve the problem. That mind-set helped Rockefeller and the Chan Zuckerberg Initiative develop Communities Thrive Challenge, a $10 million grant challenge. The two grant makers are looking for ways to expand economic opportunities for low-income people. After a peer review and vetting from experts, the applicants will be winnowed down to 80 and then 20 finalists. After site visits, the grant makers will award up to $1 million each to 10 winners.
Organizations are invited to apply on the initiative’s website before a June 19 deadline.
Echo Chamber
For Korberg, a visit to Unlimited Future, a business accelerator in Huntington, W.Va., affirmed the need for local organizations to design their own poverty solutions. After her visit, where she toured a farmers market that was supplying local jobs and a retraining program for out-of-work coal miners to gain new skills, Korberg excitedly typed up a long email to her colleagues in New York while her plane taxied on the Huntington airport’s tarmac.
A challenge approach would work best, she reasoned, because organizations like Unlimited Future would never have gotten on the venerable philanthropy’s radar. Under the rules of the challenge, nonprofits that have received a grant from either organization within the past 10 years are ineligible, which would force the organizations to consider groups outside of their established network.
“We can’t come up with these answers in a skyscraper,” she said. “This is about getting outside of the coasts and outside our echo chamber.”
Long History
While the challenge aspect of the grants is new, Rockefeller has a history of anti-poverty work, Korberg said, beginning with its support of research during the Depression that helped lead to the creation of the Social Security System. Korberg said that under Rajiv Shah, who took over as president in 2017, the foundation would place more of an emphasis on fighting poverty in the United States.
The Chan Zuckerberg Initiative has made grants totaling $8.4 million to promote economic opportunity to the Family Independence Initiative, Code for America, and Opportunity@Work.
Others are putting money on the table, too. In 2015, the Ford Foundation made reducing inequality, including income inequality in the United States, the hallmark of its grant making.
Corporations and corporate foundations have also taken note: Their approach to poverty is focused on job training. Last month, Mastercard devoted $500 million to the Center for Inclusive Growth Fund, which will invest in creating economic opportunity in the United States and internationally. Google.org has dedicated $50 million to support nonprofits that train people in skills for emerging jobs. The Walmart Foundation and the Ballmer Group, started by former Microsoft executive Steve Ballmer and his wife, Connie, have both made educating a new work force a centerpiece of their philanthropy.
Carmen Rojas, co-founder of the Workers Lab, a group that helps design solutions to social problems, sees a greater interest in poverty among philanthropists. Recent efforts, she said, have tended to seek to address root causes of problems, such as a lack of sustainable jobs, rather than offering palliative, short-term remedies.
Rojas, who was a consultant on the Communities Thrive Challenge, said more foundations are looking for local leaders to come up with anti-poverty approaches, rather than supporting national nonprofits that allocate grants across the country. Going local, she said, might help tailor solutions to each locality.
“What’s going to work in Dubuque is not going to work in Miami,” she said.
Despite the massive investment in poverty announced today, education is still the mainstay of the Gates foundation’s domestic work, Rippel said.
“Our commitment to our existing U.S. priorities is not shifting in any way,” he said. “Education remains the priority for the foundation in the U.S., and it’s a fundamentally important lever for increasing economic mobility.”
Correction: A previous version of this story misstated the names of the Chan Zuckerberg Initiative and the Communities Thrive Challenge.
