Facing Pandemic and Recession, Will Philanthropy Get Serious About Economic Justice?
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Photo: Steve Sanchez Photos/shutterstock
In an announcement that surprised no one, the National Bureau of Economic Research has officially declared a recession. The toll of this downturn, singular in its cause, has been catastrophic. Tens of millions of people are out of work, state and local government revenues are taking a beating, and many of the sectors most affected—like restaurants and retail—employ workers who already received lower wages and fewer benefits. Crisis, when it comes, hits the most vulnerable the hardest.
Although payroll employment rose by about 2.5 million in May (after falling by 22.1 million between February and April), a cautious reopening doesn’t guarantee a quick “V-shaped” economic recovery. COVID-19 is far from gone, and some epidemiologists predict a second or even successive waves of infection. And the stock market, buoyant for a time on stimulus, intercession by the Fed, and investors’ hopes for a speedy recovery, may yet enter another tailspin.
Given all the uncertainty, it’s understandable that economic opportunity funders have oriented most of their new grantmaking over the past several months toward rapid response and direct relief. At the same time, COVID-19 has broadened the conversation around economic justice. Longtime funders are thinking big, more donors are moving closer to workers’ rights and advocacy, and some of the barriers and political hangups that have kept philanthropists away from this space seem to have weakened—at least for the moment.
“There’s a space of reimagining what’s possible that’s opening up—a focus on understanding the root causes of longstanding class and racial inequities and lifting up bigger, bolder, structural solutions,” said Michelle Natividad Rodriguez, chief of programs at the National Employment Law Project (NELP).
Along with the National Domestic Workers Alliance (NDWA), Restaurant Opportunities Center United (ROC) and other labor movement nonprofits, NELP’s aim is to elevate worker voices and build worker power. That fight isn’t easy, but the pandemic has laid bare some of the realities that workers’ rights advocates have long understood—such as the link between worker health and public health, or the fact that many so-called “unskilled” workers fill essential roles.
As labor movement organizations look to the future, many of their funders are doing the same. It’s still uncertain how many new funders will step into the economic justice arena in the wake of COVID-19. But it’s clear that this moment of profound crisis is also a chance to reexamine the structural factors that have greased the skids for the few and made life harder for the many. Philanthropy has a role to play in that story.
Out of the Frying Pan, Into the Fire
When COVID-19 hit and the economy ground to a halt, many funders went into emergency mode, loosening restrictions on existing grantees and setting up response funds. Most of those funds benefit workers in some way, and a number of them focus directly on vulnerable workers. As we’ve reported, philanthropy went into high gear this spring to support frontline healthcare workers, restaurant workers, immigrant workers, you name it.
Much of that funding has taken the form of direct cash transfers, a topic that’s been in the news as the federal government disburses its CARES Act stimulus checks and Congress debates the need for more. In the fiscal arena, progressive think tanks and advocacy organizations have been pressing for stimulus packages that do more for low- and middle-income Americans. They’re also calling for more federal aid to state and local governments, whose ground-level services are at risk as budgetary shortfalls loom. The labor market consequences of diminished state and local budgets could be severe.
With all that going on, it can be hard to pick out grantmaking that’s actually boosting the movement for worker power. It has never been very plentiful. Only a few grantmakers—mostly legacy funders—support labor movement organizations on a regular basis. Corporate philanthropy and living donors tend to fund less edgy workforce development projects, research on poverty and related issues, and partnerships with local governments.
That makes a certain kind of sense: Philanthropy channels wealth founded on private enterprise, while the labor movement, by its nature, confronts capital. It’s also true that philanthropic giving by conservative and libertarian foundations has underpinned longstanding ideological efforts to delegitimize unions in the public eye and erode worker protections. Left-leaning grantmakers’ comparative failure to back workers’ rights and labor policy is one reason why philanthropy hasn’t made much of a dent in economic inequality.
COVID-19’s decimation of the labor market can obscure the fact that low-wage workers were already hurting before the pandemic. In November 2019, Brookings released a detailed look at America’s low-wage workforce, which it found to comprise a full 44% of all workers aged 18 to 64. The pandemic has exacerbated that already precarious situation. “Before the pandemic, workers were one emergency away from crisis, and now with the pandemic, they have been the first to lose income and the last to receive support,” said NDWA's Executive Director Ai-jen Poo in April.
Practiced Hands and Partnerships
All that being said, there is some reason for optimism. “This crisis has emphasized how critical these workers are to the survival and basic functions of society,” said Sarita Gupta, director of the Ford Foundation’s Future of Work(ers) program. “Our interest over the long term is what an incredible opening this moment has created to lift up the experiences and needs of low-wage workers.”
Gupta heads the workers’ rights portfolio of a foundation that has long been a solid supporter of organizations like NDWA and NELP. When the COVID-19 crisis began, Ford recognized philanthropy’s swift mobilization to address public health, and saw the need for a similar mustering of resources to address the economic crisis. That was the spark for the Families and Workers Fund. It’s a new collaborative initiative with the dual purpose of providing direct cash relief to “those who are most likely to be left out of the government’s emergency policy response,” as well as a longer-term aim—centering vulnerable workers in an economic recovery that may last for years.
The Families and Workers Fund began with an initial $7 million commitment from a diverse group of funders: Ford Foundation, Schmidt Futures, Open Society Foundations, the JPB Foundation, the W.K. Kellogg Foundation, the Annie E. Casey Foundation, Amalgamated Foundation and Morgan Stanley. The fund aims to raise $20 million for its grantees, which will likely include many of the advocacy and policy groups currently leading the charge on workers’ rights and protections. The idea originated at Ford, Gupta said, and the Amalgamated Foundation joined early on to provide a platform to disburse the money.
What’s interesting is that Schmidt Futures also helped lead the charge. Channeling the fortune of former Alphabet CEO Eric Schmidt, Schmidt Futures has had economic opportunity in mind from the get-go. But like most other living donors, Schmidt hasn’t been keen to back labor advocacy. While Schmidt Futures’ involvement in the Families and Workers Fund stemmed from an interest in direct relief rather than worker power, it’s significant to see Schmidt operating so close to the workers’ rights sphere—and, indeed, spearheading a fund with worker advocacy on the agenda.
While longtime workers’ rights funders like Ford and new initiatives like the Families and Workers Fund often focus on national policy, there are good arguments to be made for a narrower geographic lens. After all, state and local governments can enact a wide range of laws to better support low-wage workers, such as higher minimum wages and COVID-relevant policies like paid sick leave and hazard pay.
The James Irvine Foundation is one prominent regional funder that has gone all-in on worker advocacy. The state of California is its focus. For several years, Irvine has been honing a strategy to serve low-wage workers with grantmaking that encompasses worker power and movement building, workforce development and local projects in specific communities. At the start of April, the foundation announced plans to provide $22 million in flexible support to carry its grantees and some new grassroots organizations through the COVID-19 recession.
Andre Oliver, who leads Irvine’s Fair Work program, said the foundation prefers to “lead from behind” when it comes to workers advocacy organizations. Irvine “supports collaboration, alignment within the field, and commits to making investments that strengthen the ecosystem of organizations within the state,” he said. Since 2018, Irvine has granted in excess of $30 million through Fair Work, and intends to raise that total to $45 million by the end of 2020.
In addition to simply supporting worker organizing, Irvine wants to build partnerships between labor advocates and the public sector. For instance, the foundation backs the California Strategic Enforcement Partnership, a collaborative effort between the state Labor Commissioner’s Office and over a dozen workers’ rights and legal advocacy organizations. The project’s objective is to combat wage theft and bolster worker advocacy across typically low-wage industries like agriculture, restaurants, janitorial services and residential home care.
Of course, Irvine benefits from operating in a deeply blue state where public officials are less opposed to worker empowerment. Yet Irvine’s field-building approach can still be a model for funders in other states. “California has some of the best [worker protection] laws in the country,” Oliver said. “During COVID, we’ve seen labor, worker organizations, academia and policy groups come together around immediate needs, and as importantly, think about centering workers’ needs in policy innovations over the long term.”
Omidyar: Outlier or Early Adopter?
As longtime labor funders like Ford and Irvine deepen their commitments, the COVID-19 moment has sparked new interactions with the worker advocacy movement from some unlikely funders. One example is Schmidt Futures and the Families and Workers Fund. Another, stronger example is the Omidyar Network, founded by another big tech winner. Pierre and Pam Omidyar have always been philanthropic mavericks, and they’re quite unique among their techie peers in prioritizing worker power.
In May, the Omidyar Network announced a three-year, $35 million investment toward its Reimagining Capitalism focus area. As the name suggests, the folks at Omidyar believe the current system is due for a rethink.
“We believe fundamentally in markets and capitalism, but they need to be completely reimagined to meet today’s challenges,” said Omidyar Network’s CEO Mike Kubzansky last month. “These failures were readily apparent when we set this course for ourselves in 2018, and the COVID-19 crisis makes this blindingly obvious for everybody.”
Omidyar’s Reimagining Capitalism funding will help grantees like NDWA and the Lift Fund sustain and build a labor movement whose nonprofit mainstays, unlike unions, rely in part on donors’ largesse. That is a weakness, and it’s intriguing to see Omidyar both acknowledge that fact and signal support for innovative revenue models, including tech products and portable benefits platforms like NDWA’s Alia.
On top of its primary $35 million commitment, the Omidyar Network also started a COVID-19 Economic Response Advocacy Fund this spring. The fund will distribute $1.5 million in 501(c)(4) money to advocacy groups pushing for structural change. Its initial grants have gone to national groups like the Roosevelt Institute and Jobs With Justice, as well as state-focused organizations like the Maine People’s Alliance and the Michigan People’s Campaign.
Like the Omidyar Network, Blue Meridian Partners likes to project an innovative image. Though its list of funders isn’t restricted to tech billionaires, it includes a fair few—Gates, Ballmer, MacKenzie Bezos and Sergey Brin. Joining them are other major living donors like Barbara Picower, George Kaiser and Lynn Schusterman. We’ve written before about Blue Meridian’s model, which involves big commitments from its “general partners” and sizable investments to bring just a few promising ideas up to national scale.
Blue Meridian wants to confront barriers to economic mobility, and its investments cover a lot of ground, from job skills training to family planning, and even bailing low-income people out of jail. However, Blue Meridian has yet to partner with the economic justice organizations building worker power and advocating for structural change. That is, until now.
When the pandemic hit, Blue Meridian committed $100 million for emergency relief. The overall aim, according to chief investment and impact officer Jim Shelton, is to fulfill urgent needs, “particularly in hard-hit communities, including low-income, black, Latinx, and Native American individuals and families who have been disproportionately affected by the pandemic.” One part of that is direct cash relief, disbursed through intermediaries that include some prominent labor movement groups like One Fair Wage, NDWA and the Workers Lab. Blue Meridian also wants to help eligible people access federal aid. Grantees there include New America, Code for America, Benefits Data Trust and the Center on Budget and Policy Priorities.
Several things stand out. First, although Blue Meridian considers its direct relief investments to be “one-time actions to support people in crisis,” this is probably the first time many of these donors have had much to do with groups like NDWA and One Fair Wage. Moreover, helping people access public benefits may not be the sexiest of causes, but it does speak to a willingness to engage with a strong government role in the recovery.
Finally, Blue Meridian seems very attuned to the racial disparities in the impact of COVID-19. “The pandemic has changed the reality of our work and that of our investees,” wrote CEO Nancy Roob. “The historical inequities long experienced by communities of color are being intensely exacerbated by the crisis. As we look ahead, we are focused on making sure that our resources go to preparing and planning for a more equitable future.”
A Shifting Social Contract
It’s still too early to discern exactly how the pandemic will affect economic justice funding over the long term. What’s clear is that low-wage “essential workers” are held in higher regard than they were before. With that may come greater capacity to push for structural reform. “The advocacy environment has already changed due to the pandemic, and continues to change every day,” said Nicole Keenan-Lai, senior development manager at the Partnership for Working Families, another national labor advocacy organization.
The problems an emboldened worker movement could tackle have also come into higher definition. As Rodriguez of NELP put it, “The pandemic has exposed the deep fissures in our economic system and longstanding corporate tactics—preemption, forced arbitration, cutting corners on health and safety, undermining collective action, stagnant wages, and misclassifying workers—that have set up workers, and thus our country, for economic disaster.” Rodriguez also pointed to the erosion of the traditional employer-employee relationship and the resulting loss of security, benefits and protections—a trend that’s especially obvious in gig work like ride-share apps, and now, delivery services.
It’s possible COVID-19 will draw more funders toward workers’ rights, particularly as they collaborate with funders already in that space, or support direct relief funds at places like ROC, NDWA and One Fair Wage. Beyond those already mentioned, several philanthropies have been flirting with a more movement-oriented approach to economic opportunity lately.
There’s the Hewlett Foundation’s Beyond Neoliberalism initiative, a $10 million exploration into what it might look like to create “a new 21st-century social contract” not so beholden to market ideology. And Rockefeller Foundation President Rajiv Shah has talked about how tax and fiscal policies have evolved over the past few decades to favor capital over labor.
Rockefeller’s new Equity and Economic Opportunity Initiative, which debuted right before the pandemic began, seeks to expand the reach of tax credits like the EITC and make federal Opportunity Zones work better. It’s unclear if and how either foundation will expand on existing economic justice work in the COVID-19 era, but we’re likely to hear more this year.
Watershed Moment?
Notes of hope from funders and movement leaders notwithstanding, this is still a dire moment for much of the American workforce. And it didn’t need to be this way. Other wealthy countries like Germany and the United Kingdom have done a far better job providing for workers sidelined by the virus. We should always be asking ourselves why it should be up to private charities to provide vital aid, as government stimulus to individuals and small businesses quickly runs dry.
Here, I’ve focused on the funding prospects for workers’ rights and labor advocacy—the economic justice ecosystem—rather than the broader category of economic opportunity funding, which includes things like workforce development, community development, and other forms of service and research-based poverty alleviation. While those strategies are valuable, they often speak less clearly to the underlying power disparity between workers and employers, a gulf that’s widening along with the gap between rich and poor. What use is “upskilling,” after all, when the most plentiful new jobs pre-pandemic were in low-wage, “low-skill” sectors like retail?
At the same time, the distinction between labor advocacy and workforce development is kind of absurd. In either case, nonprofits’ aim is to improve the lives and livelihoods of workers. The distinction is political, not humanitarian. For grantmakers like Ford and Irvine, which fund in both categories, there’s a distinct sense that this may be the moment to escape those silos.
The funders backing the Families and Workers Fund don’t typically work together, Ford’s Gupta told me. “Foundations are trying to meet this moment in a different way. What we’ve experienced is a real desire from funders to have a holistic conversation around both relief and longer-term economic activity. To date, we haven’t had funders join and say they don’t want their money going toward one or the other.”
Irvine’s Oliver made similar remarks, calling this “a moment in time where we’re seeing a lot of collaboration and alignment across the field,” as well as “an increase in energy and awareness among funders and beyond funders of the role that building worker power plays in [a healthy economy].”
Driven by criticism of their ever-growing wealth during a recession, the super-rich involved in what we’ve called the “billionaire war on poverty” may eventually follow Omidyar’s lead. Or they might not. But it’s worth noting that there are thousands upon thousands of smaller foundations and donors out there that may change their work-related giving patterns as the conversation shifts.
A final thought: Whether they back worker power or not, most major economic opportunity funders are growing increasingly attuned to the intersection of workforce issues and race and gender inequities. COVID-19 has highlighted both. And with the George Floyd protest movement prompting almost every institution to sound off on racial justice, now seems more than ever like a watershed moment for multi-front advocacy.
