In December of last year, the Federal Reserve raised short-term interest rates for the first time since the Great Recession. While a lukewarm recovery during early 2016 has left the Fed wary of additional hikes, a trend toward higher rates seems inevitable. That said, there is continued skepticism about how healthy this recovery really is. Employment statistics may look promising, but should the Fed ease off on its stimulus-oriented monetary policy so soon?
According to the Center for Popular Democracy (CPD), the answer is a resounding no. Since 2014, the progressive advocacy group’s Fed Up campaign has organized an effort to persuade the Federal Reserve to adopt monetary policy that prioritizes employment, especially among low-wage workers.
This year, the Open Philanthropy Project (a collaboration between Good Ventures and Givewell Labs) has continued its support for Fed Up with $1 million, plus up to $1 million to match what the campaign raises from other sources. Through the Open Philanthropy Project, Good Ventures has contributed an escalating level of funding to Fed Up for the past two years.
A network of 24 advocacy groups, unions, think tanks, and community-based organizations, Fed Up is a unique effort to influence the Federal Reserve—a hugely powerful but insulated institution. The campaign is pushing for pro-worker monetary policies as well as greater transparency and public engagement in how the Fed chooses its leadership. See here for a summary of Fed Up’s coalition of partners.
We haven't seen many other major funders that care about what the Federal Reserve does. So chalk this up as another example of Good Ventures' different approach, which we've come to expect from a Silicon Valley foundation created by two millennials, Facebook’s Dustin Moskovitz and his wife Cari Tuna.
Much of Good Ventures’ grantmaking is focused on global health and poverty, through, for instance, a partnership with GiveDirectly. But this funder also focuses domestically, with the Open Philanthropy Project taking the lead in this area. You can see why it'd be interested in a federal agency that has so much power over the U.S. economy.
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Good Ventures explains its support for Fed Up by arguing that “we see the negative humanitarian impact of a point of unemployment as significantly greater than the humanitarian impact of a point of inflation." That calculus illustrates the foundation’s willingness to delve into monetary policy, virgin territory for many philanthropists. The Open Philanthropy Project's case for the grant lays out, with considerable frankness, the “risks” this grant may pose (namely, that Fed Up could motivate a backlash from the opponents of accommodative monetary policy), and a broad-based reading of the Fed’s evolving role as well as its post-Recession shortcomings.
The Open Philanthropy Project’s grantmaking began in 2012, and has been weighted heavily toward policy research and advocacy in a variety of areas. In addition to CPD’s Fed Up campaign, it has supported economic policy efforts by organizations like the Center on Budget and Policy Priorities, the Center for American Progress, and the Peterson Institute for International Economics.