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

Russell Sage made his wealth in America's first Gilded Ageas a financier and railroad executive. Lately, that fortune has bankrolled a remarkably deep dig into the inequities of the second Gilded Age, with research grants going to scholars across the country who've looked at today's inequality and its consequences from every angle. 

The Russell Sage Foundation is a nonpartisan outfit overseen by academics, and it doesn't support advocacy. But its research has played a crucial, if subtle role in moving inequality to the center of politics and policy in recent years. 

The foundation is based on New York's Upper East Side, in a neighborhood that's home to some of the greatest fortunes of our time. While Russell Sage himself wasn't much of a philanthropist, his second wife, Olivia Slocum Sage was, and she inherited around $63 million when he died. Olivia was a progressive committed to education and women's causes. She established the Russell Sage Foundation with a $10 million gift in 1907. That money has now grown to an endowment of nearly $300 million.  

The foundation makes several million dollars a year in direct grants, but also hosts fellows in residence at its headquarters. It's a sweet deal: a year in New York with a nice paycheck to do your own research and plenty of smart people to talk to. Any number of top social scientists have come through RSF over the years, including Sheldon Danziger, who became the foundation's president about 18 months ago. 

"I was at a point in my career where I had done plenty of my own research and was open to other things," Danziger told me recently, explaining why he took the job. Danziger, who holds a Ph.D. in economics from MIT, had spent decades as an academic working on issues related to poverty and opportunity. Most recently, he was at the University of Michigan. (You can browse his 28-page CV here.) 

Danziger had gotten to know the Russell Sage Foundation in different ways over time and, among other things, had come to think that its last president, Eric Wanner, had a pretty swell gig. Who else got to deploy a multi-million research budget to use the "social sciences as a means of diagnosing social problems and improving social policies," as the foundation describes it mission? 

Wanner clearly enjoyed the job, since he kept it for 26 years. And it was Wanner who set in motion the foundation's deep dig into inequality, spending many millions on research in this area over a quarter century. (RSF works on other issues, too, that I'll mention later.) In fact, the foundation has been working on inequality for so long, that it backed a 1994 volume on this subject, Uneven Tides: Rising Inequality in America edited by Peter Gottschalk and, you guessed it, Sheldon Danziger. 

Wanner kicked RSF's research on inequality into higher gear in 2001, when the foundation launched its Social Inequality program to investigate this trend from various angles. The Carnegie Corporation of New York was initially a partner in this effort, which is still going. "We tend to stick with things for a long time," says Danziger. Clearly. 

While a rising gap in income and wealth had been well documented by 2001, the foundation set out to investigate a thornier matter: The social and political consequences of inequality. Is inequality bad for democracy? Is it bad for the social fabric of society? How does inequality affect economic mobility, educational opportunities, healthcare, and the well-being of children and families? Also: was America getting trapped into a self-perpetuating dynamic whereby inequality begets more inequality, with disparities becoming ever more entrenched? 

To some, the answers to these questions are obvious. Of course rising inequality is bad in a country premised on egalitarian ideals, liberals argue—whereas libertarians often say that uneven rewards are what keep people striving and makes America so dynamic.

To the social scientists around the Russell Sage Foundation, meanwhile, the big puzzle was showing a causal link between rising economic inequality and key trends playing out in U.S. society. Researchers could clearly see inequality's rise; but concrete evidence of its impact was more elusive. Inequality sure seemed bad; proving it was bad was another matter. 

Which is where millions of dollars came in. 

Under Wanner's leadership, the foundation pumped out an endless stream of research grants looking at inequality's many dimensions, and brought some of the nation's top political scientists, economists, and sociologists to New York as visiting scholars. It formed working groups, held conferences, and underwrote the collection of new data. 

Research grants from the Russell Sage Foundation don't tend to be huge. They generally range from $30,000 to $150,000. But that money can go a long way for scholars working in the social sciences, who are looking to fund research assistants or buy out some course time to finish a book. 

Anyway, what's most striking about RSF's inequality work is just how many different projects have been funded over the years. Last year, the foundation backed 23 projects in its social inequality program, on topics ranging from "Reverse Mortgages and Racial Inequalities in Wealth and Health" to "The Effects of Pre-K Access and Quality on Social Inequality."

Multiply last year's kind of tally over the past 14 years, and you get a sense of just how completely RSF has blanketed the academic world with money to learn more about inequality and its consequences. If you're a scholar working on equity, and you've missed this gravy train, you must be doing something wrong. 

Actually, that's not fair. Danziger described to me a highly competitive process for making research grants. The foundation accepts letters of inquiry three times a year, and usually gets around 200 LOIs for each grant cycle. It then requests proposals from about 40 applicants, and those proposals are subject to external peer review. Only around 15 get funding. Most scholars who apply for money don't make the cut the first time around, with proposals often sent back for revision. 

The stream of books, articles, and papers on inequality that have been produced with RSF support is remarkable. (You can scroll through a seemingly endless list of publications here.) Interestingly, though, nowhere does the foundation neatly summarize the findings of this vast new literature. 

But one clear takeaway is that the growing economic chasm has affected just about every part of American life, and in negative ways. 

Some of the most striking findings relate to how inequality has perverted U.S. democracy. Two of the leading scholars working in this area backed by RSF are Larry Bartels and Martin Gilens. Both mounted big empirical projects to assess which Americans elected leaders and other policymakers really listen to. Both found that, in general, it's the well-off who mainly have the ear of those in power in our new Gilded Age.

“The American government does respond to the public’s preferences, but that responsiveness is strongly tilted toward the most affluent citizens," Gilens wrote in his 2013 book, Affluence and Influence. Indeed, under most circumstances, he found, “the preferences of the vast majority of Americans appear to have essentially no impact on which policies the government does or doesn’t adopt.” 

Bartels found pretty much the same thing. He wrote in his 2008 book, Unequal Democracy“the preferences of people in the bottom third of the income distribution have no apparent impact on the behavior of their elected officials.”

Other research funded by RSF is equally alarming, for instance about the grim fortunes of children growing up in a United States with less and less social mobility (a theme also central to Robert Putnam's new book, Our Children). 

What's been so powerful about this research is that the overarching picture that has emergedof inequality slowly subverting core American idealsis not coming from an ideological think tank or an opinion magazine or a politician. Rather, it's coming from the most respected social scientists in the nation, researchers who've piled up the evidence higher and higher. 

While it's hard to draw a link between this research and public debate, scholars backed by RSF have been everywhere in recent years. Lately, for example, Andrew Cherlin's RSF-backed book on the fall of the working class, Labor's Love Lost, has been getting lots of attention, with Cherlin writing op-eds and appearing on radio shows. A list of press hits on the foundation's website shows that its scholars are in the news nearly every day.

The sheer scale of the new research on inequality has helped bulldoze aside a small cottage industry that once existed on the right that denied or dismissed inequality. Now, politicians and policy leaders in both parties have taken up the issue. So this far this year, three top contenders for the GOP presidential nomination—Marco Rubio, Rand Paul, and Ted Cruz—have all expressed concern about inequality. Hillary Clinton opened her campaign for president on Sunday by saying the deck was too stacked in favor of the wealthy. 

Overall, inequality is now getting more traction as both a national and local issue that any any time since the early 1990s, and maybe since the New Deal era. And while various developments can account for that—the financial crisis, Occupy Wall Street, stagnant wages even as the economy rebounds—the research backed by RSF scholars seems to have played a key role in framing understanding of the inequality challenge, in its many dimensions. 

One area where it's easiest to draw a line from RSF research to policy action is with the foundation's Future of Work program, which looks at declining job quality and the plight of low-skilled workers. This problem, of course, is closely linked to rising inequality, and now is making news as workers press for higher wages. Danziger explains how RSF-backed scholars did some of the earliest research, years ago, on wage theft and worker schedules, two issues that have lately been the focus of policymaking attention.

“Sometimes it takes a long time for cutting edge research to sink into the public domain," Danziger says. What's remarkable is how big bets that RSF placed years ago to research inequality and work are now paying off in a spectacular way. 

The foundation has also been a pioneering funder on research on behavioral economics, backing work that's percolated into public and private sector decision-making over time. The whole concept of "nudging" people in small ways to make better choices—which is now mainstream—emerged from this research. 

Since arriving at the Russell Sage Foundation, Danziger has initiated a new project exploring the "social, economic and political effects of the Affordable Care Act," undertaken in partnership with the Robert Wood Johnson Foundation. While plenty of researchers are looking at how the law will affect health and healthcare systems, Danziger thought it was important to look at how the most sweeping social policy legislation since Medicare would affect the nation's levels of equity and prosperity. The foundation is now looking for research proposals in this area. 

Danziger expects that he'll eventually roll out a new major program at the foundation, but he doesn't now what that will be. One thing is for sure: Lots of social scientists will be interested to see where the next big wave of RSF grantmaking dollars will be going.