Millions to Improve Job Skills From a Top Funder May Help Workers Move Up. But How Far?

photo: MB Images/Shutterstock

photo: MB Images/Shutterstock

Workforce development is a popular strategy among philanthropists who want to move the needle on economic mobility. It turns out that Steve and Connie Ballmer are part of that cohort of funders. Their most recent gift was a $4.5 million grant to the National Fund for Workforce Solutions.

With a fortune estimated at nearly $40 billion, the Ballmers are an important couple to watch. Steve Ballmer was an early employee at Microsoft, eventually serving as the company’s longtime CEO. Over the last few years, the Ballmers have been ramping up their philanthropic giving.

Through the Ballmer Group, the couple has made a clear commitment to promoting economic mobility for kids and families. What’s more slowly becoming clear is how they intend to do that. 

The Ballmer Group rarely announces grants, so gifts become public typically only when grantees decide to reveal them. That can make sussing out the funder’s strategy tricky because there are many grants never made public. When a grant is announced, it’s worth examining, given the growing reach of this funding operation and the vast wealth waiting in the wings. Ballmer giving also raises important questions about how far even the most deep-pocketed funders can go in tackling entrenched inequities in U.S. society—especially if they're cautious about challenging the underlying power arrangements that govern the economy and American life broadly. 

The new workforce grant will cover three-year projects at four groups of regional cross-sector funders that the national fund will announce by the end of the year. Each regional project will address a structural barrier to economic mobility for low-wage workers. The fund hasn’t picked its regional partners yet, so it’s not certain what each of the four projects will look like. One possible direction the nonprofit suggested would be to partner with a big employer to work on an advancement program that would help employees secure higher-skilled, better paying jobs at the company.

The grant is part of a growing number of national commitments from the Ballmer Group. The group has also prioritized regions the couple had personal ties to—including Los Angeles, the Pacific Northwest and Detroit, where the funder recently opened a regional office. Earlier this month, Ballmer helped launch a fund to support Los Angeles public schools, part of its extensive recent grantmaking in the city.

Related: Beyond Charters: Will Philanthropy Step Up for Public Schools in Los Angeles?

However, this grant to the National Fund for Workforce Solutions joins a number of recent grants with a wider, national focus. Back in 2016, the Ballmer Group joined Blue Meridian Partners, a grantmaking collaborative dedicated to providing $1 billion in funding to successful nonprofits that bring children out of poverty.

Earlier this year, there was a $20 million grant to train recent graduates as college counselors in a bid to get more low-income students into colleges. That gift joined previous grants to support national organizations working at the nexus of education and poverty, like StriveTogether and Communities in Schools. Last week, we reported on Ballmer’s $20 million grant to help kids stay out of the justice system.

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The gift to the National Fund for Workforce Solutions represents a different tactic in the fight against poverty. The Ballmer grant will back improving workforce development policies, educational training and outcomes, and employer practices. As part of the fund’s model, it partners with regional funder collaboratives that bring together partners from across sectors to help workers develop new skills, increase access to good jobs and connect businesses to trained employees.

This isn't Ballmer's first grant to support workforce development. On the national level, the group has backed Genesys Works, a nonprofit that trains high school students with technical skills needed by companies, and National Skills Coalition, which advocates for state and federal policies that invest in training workers. Regionally, Ballmer has given to Los Angeles Trade Tech College and SLATE-Z, which serves the residents of South Los Angeles. 

"We’re giving in this area because we believe that in today’s labor market, economic mobility requires a credential beyond high school, early work experience, and access to a good job," said Jeff Edmondson, managing director of the Ballmer Group. "Work-based learning and apprenticeships play an important role in enabling young people to move up the economic ladder and prepare for a career that can support a family."

The growth of the National Fund for Workforce Solutions underscores rising funder interest in workforce development, a trend we report on often. Since its creation in 2007, the group has raised $30 million from its own backers, and leveraged $300 million through matched and aligned support from more than 700 regional and local funders.

The fund’s supporters include corporations and foundations. Boeing, JP Morgan Chase, Prudential and Walmart make up the fund’s corporate backers. On the foundation side, the nonprofit has gotten support from the Harry and Jeanette Weinberg Foundation, the Joyce Foundation, the JPB Foundation, the W.K. Kellogg Foundation and the now closed the Hitachi Foundation.

The Joyce and Kellogg foundations are particularly well known for their commitments to fighting economic inequality and the structural barriers that accompany it. That they’re joined on that list by Walmart—a company that's come under fire for low wages and scarce benefits—is a testament to the popularity of workforce development initiatives.

But as a tactic to fight poverty in the long term, workforce development has obvious limits. Many of the jobs created in the United States are in low-wage, low-skill industries like retail and restaurants. Teaching workers new skills can help some move up to higher-paid jobs, but leaves far more behind. In 2015, the National Employment Law Project (NELP) estimated that 42.4 percent of American workers make less than $15 an hour. Many of these workers hold jobs that come without health or pension benefits or paid time off. Even as the economy approaches full employment, wages for most workers have barely risen.  

In the past, gains in wages and benefits in manufacturing and other industries were the result of strong labor unions, public policies that favored workers and a corporate culture more inclined to let employees share in the profits. Writing recently in the New York Times, economist Jared Bernstein wrote that low or stagnant wages for most U.S. workers "is mainly the outcome of a long power struggle that workers are losing."

While some national funders, most notably Ford, are funding organizations like the Restaurant Opportunities Center and NELP that seek to address this core structural driver of inequality by empowering workers and changing public policy, the Ballmer Group has not yet supported such approaches that we know of. Like many philanthropies backed by business leaders or corporations, it seems hesitant to engage fundamental issues of class, race and power in its anti-poverty funding.

As we've argued in the past, grantmakers are unlikely to make greater headway on inequality without bringing a strong political economy lens to their work. Incremental strategies can only do so much for low-income Americans, given the degree to which the deck is stacked against them.