Among Foundations, Who’s Watching Out for Workers?

American workers have had a good run this year. Quite apart from a steadily tightening job market, labor has scored a number of victories: boosting the minimum wage in Los Angeles to $15; voluntary wage hikes by Walmart and other companies; and a new federal rule to raise overtime pay.

As well, various new initiatives are underway to help workers—particularly young people—improve their skills and move upward in the job market.

Philanthropy has played a role in some of this forward progress, and through various foundation-backed efforts we’ve been reporting on, workers are poised to score even bigger gains in the next few years.

Here’s a Labor Day rundown of some of what philanthropy is doing for American workers.

Updating Labor Laws

The Obama administration’s recent step to raise the antiquated pay threshold at which workers qualify for overtime pay is a big deal that could mean higher compensation for over 5 million workers. It didn’t happen out of the blue.

As we’ve reported, two policy organizations in Washington—the National Employment Law Project and the Economic Policy Institute—played crucial roles in advocating for the new rule. The Ford Foundation has given NELP some $15 million since 2009, while a number of funders have long backed EPI’s work.

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Ford has also bankrolled efforts to overhaul another archaic part of U.S. labor law—how restaurant workers are paid. The federal tipped minimum wage for these workers—many of whom are people of color hovering near the poverty line—has been stuck at $2.13 since 1991, and these workers are often the victims of labor abuses, especially wage theft. Since 2009, Ford has invested over $4 million in the Restaurant Opportunities Center, which advocates scrapping the tipped minimum wage. Partly as a result of ROC’s work, more restaurants are looking beyond tipped-based wages, as the New York Times recently reported.

In addition to Ford, a range of other funders have backed ROC over recent years include Annie E. Casey, the Open Society Foundations, the California Wellness Foundation, the Kellogg Foundation, and the New York Foundation.

Paid Leave

The lack of paid time off to deal with illness or family needs is another anachronistic feature of U.S. labor laws, and foundations have been working for change here, too. Again, the Ford Foundation has been in the lead, giving Family Values @ Work over $13 million since 2009. As we’ve reported, this nonprofit had been leading the charge at the state level to enact paid leave time for over a decade.

Related: Why This Advocate Gets Big Bucks from Ford to Push Family Leave Policies

The group claims it has helped achieve paid sick days in 21 cities and 4 states, as well as other victories. And with Hillary Clinton and other presidential candidates now discussing this issue, and more legislation pending in various places, further victories appear likely. While Ford has been the biggest backer of Family Values @ Work, a range of other funders have also supported this group, including the Bauman, Annie E. Casey, Surdna, and Public Welfare foundations.

Inclusive Economies

Another thread of grantmaking we’ve been reporting on aims to push employers and communities to embrace more inclusive approaches to economic development.

Earlier this year, we spotlighted the Rockefeller Foundation’s efforts to convince employers to change their business models to consider the quality of the jobs they are creating and the inclusiveness of their hiring practices—all with an eye toward helping disadvantaged youth. The director of that effort, John Irons, says the larger goal is to win acceptance in the business world for the idea of “shared value” or “inclusive capitalism.”

Related: To Create an Inclusive Economy, Rockefeller Coaxes Business To Change How It Thinks

Likewise, we reported recently on the Surdna Foundation’s Strong Local Economies work, which aims to to promote good quality employment—that is, jobs that pay above industry standards, have health care benefits, and offer the potential for career mobility. As we wrote, Surdna is keenly interested in changing the “broader debate about economic development. It wants to help communities recognize what constitutes good quality employment and advocate for inclusion of those aspects in economic development for their city, state or region.”

Related: How Surdna Is Pushing to Make Local Economies Work for Everyone

As a number of other funders have been working to promote shared prosperity, the notion of inclusive capitalism has gotten new traction in recent years. President Obama has talked often of “middle-out economics”the idea that long-term growth depends on paying workers enough to join the middle class and become consumers.

Workforce Development

Meanwhile, foundation efforts to help young workers build new skills and get into the labor market—a longstanding focus of philanthropy—are more popular than ever. In particular, corporations have developed a number of big new initiatives in this area in recent years, as we’ve been reporting.

Earlier this summer, we wrote about a new effort led by Starbucks to put at least 100,000 "Opportunity Youth"—marginalized 16 to 24 year olds—on pathways to meaningful work by 2018.

Related: Behind a Big Push on Youth Jobs: A Rising Philanthropist and New Approach to Equity

We’ve also written extensively about the efforts of top banks to bolster the skills and career readiness of young people. JPMorgan Chase launched a $250 million initiative along these lines early last year, while Citi and other banks also have major efforts underway. As we’ve pointed out, banks are some of the largest employers of young people in major cities, and so have a strong self-interest in ensuring that an increasingly diverse cohort of millennial workers is ready to excel in the workplace.

Related: Why Banks Are Giving Big to Bolster the Work Skills of Young People

Preparing lower-income young workers for health care jobs is another thread of grantmaking we’ve been covering, including by foundations like Kellogg and Robert Wood Johnson. We’ve also reported on targeted efforts to help low-income women enter and succeed in the labor force, particularly by the Walmart Foundation.

Philanthropy and Workers: Blind Spots and a Dark Side

Even as foundations have mobilized in new ways to help workers who are trapped in low-wage jobs, or are marginalized from the labor force altogether, philanthropy has been far from perfect in this area.

For starters, the plight of millions of struggling workers is still a low priority for foundations in the grand scheme of things. Most funders who worry about opportunity pour their money into education, even though lots of research suggests that the U.S. economy is going to keep generating tons of jobs that don't actually require college degrees. For example, I wrote last year about how Sobrato Philanthropies is admirably stepping up its work to reduce poverty and inequality in Silicon Valley—yet seems to have few solutions to the fact that many of the jobs created in this region don't require many skills and don't pay a living wage. Inequity is baked into today's service economy in a way that many funders just don't want to admit. 

Related: As Inequality Rises In Silicon Valley, Can This Foundation Get Out of theBand-Aid Business?

Another failing is that explicit efforts to foster growth and job creation haven't been all that high on the agenda of the philanthropic world. In particular, funders haven't tended to do a lot in the way of supporting entrepreneurs, whose businesses create many of the new jobs that propel growth. That’s finally changing, as we recently reported, but it’s fair to say that funders have been more interested in improving the jobs that exist than in creating new ones. Of course, both are important. One clear way to raise the pay and benefits for workers is by spurring growth that leads to tighter labor markets and, as a result, wage hikes.

Related: Trendwatch: Foundations Get Serious About Backing Entrepreneurs and Businesses

Globalization and trade comprise another blind spot of philanthropy. It’s no secret that globalization has been a boon for better educated workers and a disaster for those in unskilled jobs. But where are the grantmakers who are investing heavily in trying to ensure that globalization and open trade benefit all U.S. workers? In fact, remarkably few private foundations fund in this area.

A result is that most of the policy and advocacy work on international economics is supported by corporate funders whose agenda is often quite different than that of workers. The leading Washington think tank on global economic policy and trade is the Peterson Institute for International Economics, which is named after a private equity billionaire and funded mainly with corporate donations. Who’s representing workers on these crucial issues? Well, while there are few places that try to do this, like EPI and the Center for Economic and Policy Research, they don’t have nearly the resources of corporate-backed policy groups. The same might be said, by the way, about debates over macro-economic policy, an area that hugely impacts the labor market. 

Related: Yikes, Look At All the Corporate Money Behind This Washington Think Tank

Finally, speaking of corporate philanthropy, it’s worth noting that plenty of nonprofit work is going on in Washington and state capitals that pushes back against efforts to raise wages and benefits for U.S. workers. Think tanks like the American Enterprise Institute and the Heritage Foundation, heavily backed by wealthy financier and corporate leaders, are on the forefront of these efforts in Washington. In the states, the American Legislative Exchange Council often spearheads such work.

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There’s more interesting grantmaking I could mention. But quite apart from all the funding that is directly focused on work and jobs, foundations have elevated the general issue of economic inequality in a host of ways that we’ve reported on. For example, the Russell Sage Foundation has bankrolled a long, deep dig into the effect of inequality that has sounded the alarm about the fate of American democracy in a second Gilded Age. The donors working through the Democracy Alliance have poured money into a bunch of groups putting forth a progressive analysis of the economy. And various funders, including the Sandler Foundation, have put a spotlight on predatory lending and other challenges facing low-income workers.

Related: Inside the Russell Sage Foundation's Epic Dig Into Why Inequality Matters

All this work has created an environment in which a resurgent labor movement is scoring new victories as it pushes for higher wages—particularly for restaurant and retail workers. What’s more, there are no signs that foundations are backing away any time soon from the equity issue. Just recently, Ford said that it was doubling down on its push to reduce inequality.

Keep in mind, though, that little of what foundations are doing to elevate poor workers aims to mount a deeper structural critique of an economic system that, right now, is heavily stacked in favor of capital and against labor. On this point, see Benjamin Soskis’s excellent recent essay in the Chronicle of Philanthropy.

See more IP coverage of Work & Opportunity grantmaking