How Detroit Funders Teamed Up to Help Families Access the Child Tax Credit

While lawmakers wrangle over the future of the Child Tax Credit expansion, a unique, funder-led campaign in Detroit is ensuring that more families tap into the benefits while they last.

When the expanded Child Tax Credit became available to American families last spring as part of the Biden administration’s American Rescue Plan, experts predicted that the program would slash child poverty. But funders in Detroit realized there was a problem: Many of the families that could most use the benefits weren’t in a position to access them; some weren’t even aware that they qualified.

The issue was that the Child Tax Credit, which increased benefits and broadened eligibility, is accessed through the tax system. But many eligible families don’t file taxes because they don’t earn enough to meet the income threshold. “We looked at the tax regulations and we realized, ‘We’re going to miss these families,’” said Jonathan Hui, a program officer with the Kresge Foundation, which funds a broad range of programs to expand opportunity, with a focus on American cities and Detroit in particular. “And the families we were going to miss were the ones with the lowest incomes.”

To make sure Detroit families got the benefits, the Kresge Foundation, along with the W.K. Kellogg and Skillman foundations and the Ballmer Group, teamed up with local partners on the ground to launch Detroit’s Child Tax Credit campaign.

To date, the campaign has connected with 5,000 families, completed taxes for over 3,500 families, and generated $4.6 million in refunds. As the campaign gears up for its next phase, it provides a blueprint for how philanthropy, along with local partners, can supplement government programs to increase their effectiveness and make sure they reach the people who need them most.

“Public investments in public infrastructure are meant to work at the macro level, but they can get lost when it comes to implementation,” said Punita Dani Thurman, vice president of program and strategy at the Skillman Foundation, which focuses exclusively on Detroit, particularly its young people and their education and economic well-being. “This campaign shows how place-based philanthropy, working with local partners, can play an important role by making sure those investments are tailored to the local community.”

Once in a lifetime opportunity

“When the Child Tax Credit opportunity came up, partners around the city all had the same thought,” Kresge’s Jonathan Hui said. Hui downplays his own role, though coalition members say he was a major driver behind the campaign. “It wasn’t any single person or organization’s idea; all the partners around the table said, ‘We have this incredible resource from the federal government. How do we make sure that all families that are eligible in Detroit will actually get the money?’”

Thurman emphasized the strong relationships between the four funders, which all have deep roots in Detroit. “We have a long history of working together,” she said. “There are a lot of funder collaboratives, but this one is rooted in personal connections and trust. We know that we all approach the work with similar values. And by working together, our community and partners benefit.”

Community organizations were critical partners in the campaign, including the United Way for Southeastern Michigan, the City of Detroit, Community Development Advocates of Detroit, Poverty Solutions at the University of Michigan, and nonprofit tax preparers at the Accounting Aid Society and the Wayne Metropolitan Community Action Agency.

These funders and local organizations have collaborated on other projects over the years, so the campaign came together quickly, according to Megan Thibos, director for economic mobility initiatives at United Way of Southeastern Michigan, who also played a major role.

“In early May, we brought all of the stakeholders into the room for a coalition-building conversation,” Thibos said, describing the campaign’s first meeting. “And we basically said, ‘The child tax credit represents a once-in-a-lifetime opportunity to support the economic security of families with an incredible amount of resources. And to do it, it’s going to take all of the folks in this room.’”

The campaign employed a firehose approach to reaching families, including billboards, text messages, phone banks, and flyers; they also spread the word at day care centers, youth sports leagues, churches and hospitals. Poverty Solutions at the University of Michigan collected and analyzed data for the campaign and helped conduct a survey to find out where people were getting their news and information. Texting turned out to be the most effective communication method, so working with the state Department of Health and Human Services, the campaign sent text messages to people who were already signed up for state benefits.

“We were trying to think about how to meet people where they are,” Thibos said. “So it was a lot of relationship-building and sharing information with partners who then shared that information on to their networks. We had to go at it from multiple angles.”

When families were reached, they were given information about the Child Tax Credit program and connected with nonprofit tax preparers who helped them file tax returns to access benefits.

Next week, on January 31, the coalition will hold a press conference to announce the second phase of the campaign. During phase two, the campaign will continue to reach out to families to help them access last year’s payments and to access the balance of the Child Tax Credit benefits, due out during this year’s tax filing season. That will be the end of the temporary program, unless Congress renews it, which it has so far declined to do.

Easing poverty, feeding families

President Joe Biden has trumpeted his administration’s progress on reducing child poverty, calling it “the biggest drop ever in American history,” at a recent press conference. But that progress is likely to be reversed if the Child Tax Credit expansion isn’t renewed.

The Child Tax Credit was an important part of the administration’s anti-poverty agenda, and Biden had hoped to include a five-year extension of the program in his Build Back Better legislation, seeking to make the reduction in child poverty permanent. But opposition from the Republican party and Democrat Sen. Joe Manchin seems likely to block that effort—with devastating results for many families.

Abandoning the Child Tax Credit seems both misguided and just plain cruel, given evidence that it has made a real difference in the lives of many American children. Analysis by Columbia University’s Center on Poverty and Social Policy found that the tax credit reduced monthly child poverty by close to 30%. The center predicts that without the payments, the January child poverty rate could exceed 17%.

Senator Manchin has suggested that families will waste the benefit money or use it to buy drugs, but Census data shows that most used it for basic household needs, including food. In fact, the benefit eased food insufficiency, which is a daily reality for many American households, according to the Center for Budget and Policy Priorities. This fact alone should justify the continuation of the program.

If the Child Tax Credit is left out of Build Back Better, as seems likely, Biden has vowed to try to reintroduce it down the line. In the meantime, more families will fall into poverty—and more children will go hungry.

Permanent coalition

Far from Washington, Megan Thibos is hoping that the members of Detroit’s Child Tax Credit campaign will continue to work together. “Now that the infrastructure is in place, I’m hoping that it will translate into further work down the road,” she said. “I think it can serve as a model for improving access to benefits and other supports over time.”

She underscored the key role philanthropy played in the campaign. “The funders came in early, they came in with relatively large dollar amounts, and they were flexible,” she said.

Along with resources, Thibos emphasized the importance of the funders’ project management role. “They invested in all of the moving parts of the coalition, including the project management capacity. It actually takes quite a lot of bandwidth to bring together all these stakeholders and craft a strategy and make it happen. We’ve worked in coalitions before and I would say that this coalition formed more quickly and accomplished more in a short amount of time because we had significant support from philanthropic funders.”

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