When it comes to reducing inequality, philanthropy’s track record is spotty at best. Left-leaning funders can back all the studies and pilot programs they want, but what if public officials and the general public simply refuse to pay attention—or get behind policies that actually make inequality worse?
Maybe that’s why so many funders are looking for ways to support grassroots movement building, especially this year. Still, some wonky policy studies do make a splash.
Take the case of Charlotte, North Carolina. In an important 2013 study conducted by Raj Chetty’s Equality of Opportunity Project, Charlotte ranked dead last out of 50 American cities for upward mobility among children born into the lowest income quintile. That dismal result drew the attention of local civic, corporate and religious leaders, who banded together to form the Charlotte-Mecklenburg Opportunity Task Force. Their task: Figure out how to close the gap between Charlotte’s affluent residents and those who struggle to get by.
Earlier this year, the task force—composed of 20 volunteers representing a variety of sectors—released a detailed report identifying challenges and proposing ways to correct them. The report is one city’s take on deep racial segregation and the economic tyranny of the zip code, problems with parallels across the country. Philanthropy played a role in supporting the task force, with sponsors including the Foundation for the Carolinas, the Knight Foundation, the John M. Belk Endowment, and the Z. Smith Reynolds Foundation.
But a corporate funder, and one of the biggest, is picking up the bill as Leading on Opportunity, as the endeavor is called, enters its next phase. This month, Bank of America pledged $1.5 million over three years to the Leading on Opportunity Council, a successor group to the task force composed of mostly different people.
The Leading on Opportunity Council (LOOC) is “a representative group of 19 Charlotte-Mecklenburg leaders spanning a range of disciplines and backgrounds—grassroots, nonprofit, government, philanthropy, business, neighborhood and faith,” according to a press release. Charged with implementing the task force report’s recommendations, LOOC is currently identifying a permanent executive director. Bank of America’s pledge covers initial staffing and infrastructure.
Looking at the report, it’s not too surprising to see a big bank take the lead, here. The task force identifies three areas of focus: early care and education, college and career readiness, and child and family stability. Those priorities jibe well with finance philanthropy’s recent trend toward urban poverty alleviation, and we’ve watched a great deal of money go out to workforce and youth development, asset building, and even affordable housing.
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For its part, Bank of America has been spreading millions across the country for causes like youth employment, college readiness, and community development. But Charlotte, as the site of Bank of America’s headquarters, is something of a special case. While $1.5 million is only a minuscule portion of the company’s annual grantmaking (and a smaller portion still of its yearly revenue), CEO Brian Moynihan was personally on hand for the grant announcement, calling it a matter of “duty” to fix Charlotte’s economic mobility problems.
Andrea B. Smith, the bank’s chief administrative officer and one of five women on its top executive management team, chairs LOOC along with James E. Ford of the Public School Forum of North Carolina. Smith also chairs Charlotte’s Chamber of Commerce.
While Bank of America may predominate, representatives from US Bank and Wells Fargo also sit on the council, as well as people from Novant Health, the Foundation for the Carolinas, Lowe’s Home Improvement, and a number of “community at large” members. Between the task force’s preliminary activities and LOOC’s ongoing buildup, this is a substantial local undertaking likely to draw more support from Bank of America and elsewhere.
But like many of these bank-funded opportunity initiatives, LOOC is pretty new on the scene, and it’s still too early to determine whether it’ll make a real dent in some deeply entrenched problems. As we often point out, steps like community economic development, workforce training and improvements in education can have limited effects in the face of large structural economic forces such as globalization and technological change. Just ask the Mott Foundation, which has poured $1 billion into fostering equity in Flint, Michigan, over decades—only to watch the city become poorer and more isolated.
Still, it's striking to see the degree to which the philanthropy of big banks has come to focus on urban inequality, including such touchy issues as racial justice and urban segregation. Bank of America is even dipping its toes into criminal justice work, which is pretty much virgin territory for finance philanthropy.
It's a hopeful trend. While bank philanthropy has its skeptics, there's no denying the resources of the institutions to do some good. And I'm not just talking about grant money. Banks are also huge employers in major cities, and have huge employee volunteer programs. When they get behind an agenda, they can really help move it. JPMorgan Chase is an especially powerful actor in this regard, as we've reported. But Bank of America is almost comparable in size. If it focuses more on urban poverty, the effects could be significant—starting in its home city.