For Donors, a Game Plan to Attack Concentrated Poverty, With a Hefty Price Tag

A while back, we published a piece titled "7 Reasons Why Philanthropy Hasn't Made Much of a Dent in U.S. Poverty Rates." One of those reasons was simple enough: Donors and foundations just weren't that interested in poverty, with this challenge commanding only modest philanthropic dollars amid a wide range of other funder priorities such as medical research, higher ed, climate change, the arts, and so on. Another reason we cited was that many of the funders who do focus on poverty tend to prioritize direct services over efforts at systemic change, leaving the basic causes of the problem unaddressed. As well, we made the point that the scale and complexity of U.S. poverty, which affects some 50 million people, doesn't lend itself so well to philanthropic intervention, given the modest resources of private funders. 

Related: 7 Reasons Why Philanthropy Hasn't Made Much of a Dent in U.S. Poverty Rates

This is a tough challenge, so we've been excited to follow the Bridgespan Group's efforts to bring new thinking and hope to issues of equity and opportunity. Since this spring, Bridgespan has released a series of reports on what it calls “billion-dollar bets”: major philanthropic investments designed to achieve systemic change with the goal, broadly speaking, of expanding social mobility for those on the bottom.

One reason it's encouraging to see Bridgespan on this case is because this firm is tuned in to the needs and concerns of top emerging philanthropists, a group it works with closely. Many of these donors have loads of money and big ambitions, but are daunted by the task of identifying scalable ways to promote a more equitable society. So in effect, Bridgespan set out to deliver a menu of options on a silver platter—and without fear of attaching high-price tags. 

RelatedIs Making "Big Bets" for Social Change Really So Hard?

Bridgespan’s fifth report focuses on how a billion dollars could best reduce place-based concentrated poverty. The authors acknowledge this field’s risks: Problems persist in spite of a good deal of time and money spent “fixing” distressed urban neighborhoods. Poor, underserved communities get some attention from local nonprofits, but national-level philanthropy hasn’t overcome either of the challenges within these communities or the patterns of residential and racial exclusion that keep people from escaping to better neighborhoods. Gentrification, which drives the poor into ever more concentrated pockets of poverty, has only made things worse. The overall result is often to entrench "individuals and families in poverty across generations."

As in many of its other reports, Bridgespan sees the most potential in top-level interventions that think systemically and connect the dots. Big philanthropy should, in effect, set up a nonprofit infrastructure to coordinate across regions, work with local governments, and oversee partnerships on the ground. From the top down, this approach gives anti-poverty campaigns the heft they need to advocate for regional policy changes. From the bottom up, it can weave together the vital work of isolated community organizations.

The report stresses housing mobility, an anti-poverty approach that has lately been gaining ground with funders, as we’ve discussed before. Housing mobility addresses concentrated poverty head-on by helping poor households relocate to areas with more opportunity. This means offering them guidance and support as they navigate the uncertain terrain of housing choice vouchers. It can also mean dealing with the social fallout that comes with “forcing” areas to integrate by race and class.

We’ve seen an uptick in philanthropic activity toward housing mobility, but there still aren’t many funders working in the area. One interesting approach is Pay for Success, which brings private investment into the mix, highlighting the community-wide economic gains that emerge from mobility and better-integrated communities. Another is the Kresge-funded Mobility Works, a first attempt to assemble expertise and combine talents in what has been a very localized field.

A relative lack of funders may contribute to the challenge of making a definite impact. But it also reflects the conflict between housing mobility (fleeing “bad” neighborhoods) and the work of community nonprofits to help people where they're at. The Bridgespan report says this doesn’t have to be either-or: Housing mobility and direct aid to neighborhoods can happen together, especially if funders focus on the regional level.

The report’s first suggested investment is to create a national nonprofit to “serve as a hub for expertise” on housing mobility. The next step is to zero in on 20 to 25 regions, coordinating with local housing authorities to expedite and expand housing mobility programs. Further investments involve studying each region closely and creating a regional plan for effective direct aid. A key step, which we haven’t seen much of yet, is funding advocacy campaigns to promote the benefits of integration in prosperous communities.

There's a lot more in this report to discuss, so take a look for yourself. These are interesting and ambitious ideas, offering possible routes around obstacles that have often stymied anti-poverty efforts. We should add that philanthropists interested in improving education should also be paying attention here, since one way to get low-income students into better schools is to help them move to those communities that have such schools. This is ripe terrain not just for new thinking, but big new money. And one thing is for sure: Today's emerging donors have plenty of that.