Foundations: Want to Start Winning on Healthcare? Talk to This Guy

 The Colorado state capital

The Colorado state capital

America's healthcare sector spent $509 million in 2016 lobbying the federal government on behalf of hospitals, drug makers, doctors and health insurers. It spent another $266 million in 2015-16 on political contributions to sway federal elections. It devoted tens of millions more to influence policy in the states.

No other industry spends more money for a seat at the table with elected leaders and regulators at every level of government. In contrast, political and advocacy health spending on behalf of consumers and the public is negligible. Such spending is so small that it's not included in the federal lobbying and election expenditures databases. Consumer health doesn't even register as a category.

At stake is the direction of a $3 trillion U.S. healthcare system and the well-being of 320 million Americans. 

This lack of alignment between the public interest and political influence on health issues has long concerned some foundations and philanthropists, and there's a long history here. But lately, we've seen an uptick in giving as new mega-givers try to level the playing field. Most notably, Michael Bloomberg and Laura and John Arnold have lately used both philanthropic dollars and 501(c)(4) donations to influence public health policies. Last fall, these donors collaborated on winning campaigns—financed with millions in political contributions—to tax sugary drinks in several places, including San Francisco and Oakland. Together, Bloomberg and the Arnolds spent a reported $20 million to enact new taxes in those two California cities. In Philadelphia, the Arnolds recently gave a $500,000 grant to the city government to defend a soda tax in that city. 

Bloomberg and the Arnolds have succeeded in a political arena that health-focused foundations tend to avoid for a host of reasons, starting with concerns about their nonprofit status. 

But Jake Williams, the executive director of Healthier Colorado, a 501(c)(4) created by the Colorado Health Foundation, believes that more funders need to get political—and he shows a way to this. In a recent white paper, Williams writes that "Americans do not have a focused political apparatus to effectively advocate for their health interests. This void is conspicuous given that Americans have dedicated advocacy infrastructure working on behalf of their interests in realms including environmental, civil rights and reproductive issues." Williams sees a critical role for philanthropy in empowering citizens at both the national and state levels when it comes to health issues. "The existing set of nonprofit organizations who fund health programs and advocacy on behalf of consumer interests are in a position to lay the foundation for this needed political apparatus."

The heated town hall meetings in congressional districts across the country over Obamacare demonstrate what can happen when the public is engaged in healthcare policy, and watching how representatives vote. With that law on a deathwatch, this is a pivotal moment for health-focused foundations in the states. 

Williams recently told Inside Philanthropy that grantmakers have more freedom than they acknowledge to exert influence on policymakers. And his own work in Colorado showcases how foundations can back advocacy and lobbying. Healthier Colorado was created in 2014 with funding from the Colorado Health Foundation, which has an endowment of $2.4 billion. Williams came to the job of leading the group with a strong background as "a grassroots union organizer, a political fundraiser, and an environmentalist," as we reported at the time. Healthier Colorado describes its mission as "raising the voices of Coloradans in the public policy process to improve the health of our state’s residents." Beyond Williams, it's run by staff who understand grassroots organizing, lobbying and electoral politics. 

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Since it started, Healthier Colorado has run a number of campaigns around public health, including  pushes to raise taxes on tobacco and sugary drinks. Most recently, as the ACA has come under fire, the group rolled out a statewide social media campaign encouraging residents in the Rocky Mountain state to tell their healthcare stories as part of a grassroots effort to pressure the state's congressional representatives, especially its four Republican House members, to preserve the Affordable Care Act. 

A half-million Coloradans receive their healthcare through some provision of the ACA. In addition to this coverage, pressing issues for Coloradans include what happens to rural hospitals if the GOP-controlled Congress guts Obamacare and the expansion of Medicaid to the states. Also, high-mountain communities pay more for health coverage than do the lower regions, and pricing disparity is a major concern here. The potential loss of coverage for mental health treatment in a state with the 10th-highest suicide rate in the country is another concern for ACA advocates. 

Foundations played a major role in enacting and successfully implementing Obamacare. But not a lot of funding has been flowing lately to defend this landmark law. By creating Healthier Colorado a few years ago, the Colorado Health Foundation put in place vital capacity for defensive work in the state that's now coming in very handy. 

Regardless of what happens with the ACA in coming months, Williams foresees ongoing battles ahead on healthcare at the federal and state levels, and he's on a mission to educate funders on how they can effectively engage in these fights. His white paper walks through the advantages of foundations taking a 501(h) election, which allows limited engagement in lobbying. (See more.) A 501(c)(4) has far fewer restrictions on direct lobbying and election activities.

Williams notes in his white paper, "In 2014, about $5 billion in health-focused grants were distributed in the U.S. If 5 percent of that was spent on lobbying and electoral engagement, that amount would be $250 million."

This kind of money could allow health funders to really compete against private industry when it comes to influencing public policy. A big hitch, though, is that such work is viewed warily by many foundation executives and board members. Health funders tend to pass on the chance to do healthcare lobbying out of legal and financial concerns, as shown by research from Grantmakers in Health. Board members of these institutions often come from the healthcare sector, business, law, academia, management and science. Very few have backgrounds in politics, or familiarity with the intricacies of nonprofit regulations. 

And to be sure, funders with an interest in lobbying and political engagement need to know what they're getting into, Williams says. "For the vast majority of health funders, because of legal restrictions, it is not necessarily as simple as taking a chunk of money from existing grant budgets and investing in legally restricted advocacy," he writes. "There is, however, a path for the community of consumer health interests to create full and focused political advocacy on health."

Williams suggests that funders set up separate entities with their own resources, which is what the Colorado Health Foundation did when it created Healthier Colorado.

A private foundation can fund non-lobbying activities of a 501(c)(4) through a restricted grant, he notes. His paper offers detailed suggestions for funders looking to move into political advocacy, which are largely drawn from lessons learned from the creation and early life stages of Healthier Colorado. Undertaking such work is "no small project," yet Williams believes it's critical for making progress on America's healthcare challenges.

He sketches out steps that could be taken both nationally and in the states, and how such work could be coordinated and funded over the long term by foundations. He explains, "Once these structures are created, 501(c)(4) funders or those with (h) election capacity can fund at least part of the lobbying activities of these advocacy organizations. Finally, many expenses incurred by these advocacy organizations are not expenses for which lobbying-eligible dollars are required, and thus any funder could fund those activities through an attached 501(c)(3) organization."

A bottom line, says Williams, is that politicians must come to understand that votes on healthcare will be remembered at election time, and that won't happen absent a strong advocacy infrastructure that works on behalf of the public's interest. Philanthropy can and should help build that infrastructure.