It’s safe to say that most leaders at large foundations are grappling with how the emergence of AI is reshaping their institutions’ strategies and approaches to grantmaking. This challenge has been particularly top of mind for James Irvine Foundation President and CEO Don Howard.
The foundation’s singular goal of ensuring that all low-income workers in California have the power to advance economically is colliding with the likelihood — some would go as far as to say inevitability — that AI will disrupt, or even displace, many jobs that enable workers to climb the economic ladder. At the same time, Howard, much like other funding leaders in the workforce development field, also recognizes that in some cases, a sunnier and less fatalistic scenario could emerge, where AI complements or even improves existing jobs.
“AI poses a significant challenge to low-income workers’ economic opportunity, and within that, some potential for benefits,” Howard told me. “I am not an AI alarmist, but I do have a lot of concerns, and I think for us to be AI realists, we need to be getting out ahead of the potential labor market impacts of the deployment of AI across the economy.”
The Irvine Foundation started exploring AI in 2023, with the aim of ensuring that the technology strengthens economic mobility for low-wage workers. Over the last few years, it’s disbursed about $3 million toward that end, backing grantees advocating for AI policies and governance that benefit workers, and using AI to improve economic mobility. “This builds on grantmaking we’ve been doing over many years to ensure that technological change benefits workers and is over and above about $10 million in grants that our initiatives will make this year to their core grantees for their AI strategies,” Howard said. “It’s fast becoming a big part of our work.”
I caught up with Howard during what seemed like an abnormally busy time, even by the frenetic standards of a foundation leader tackling a set of potentially existential challenges. Among its other lines of work, the foundation recently announced a new seven-year, $185 million commitment to its Just Prosperity initiative, it is demanding that the OpenAI Foundation benefits the public in Irvine’s role as a member of the EyesOnOpenAI coalition, and it is laying the groundwork for an effective gubernatorial transition in California.
This interview has been edited for length and clarity.
Before we dive into AI, I’d like to hit on the foundation’s new commitment to Just Prosperity. Can you walk me through the initiative?
Just Prosperity’s goal is building power for low-income workers so they can affect the decisions that impact their lives. We do that by supporting organizations that advocate for policy changes that low-income workers need to ensure they have the opportunity to get ahead economically. The foundation’s North Star is to ensure every low-income California worker has the power to advance economically, and Just Prosperity puts the “power” in that sentence.
Each of our initiatives has a fixed timeframe, and they typically get refreshed every seven years. The latest approval [for Just Prosperity] was for the second phase of the initiative — $185 million over seven years. It’s a very big envelope of grantmaking, and I’m really proud of the institution, our grantees and the board for putting forward and approving that amount.
How is the refresh altering Just Prosperity’s grantmaking strategy moving forward?
There are three areas of greater focus, one of which is the affordability crisis. Our grantees are ahead of us, so they were working on issues of affordability, such as putting forward policies that make it easier to get quality childcare at a reasonable cost.
The second area is to assess and educate folks on the effectiveness of different public policies. This speaks to the notion that well-intentioned policies might have unintended consequences, so it’s about understanding what those effective policies are.
The third focus is investing in efforts to build a bigger tent by creating partnerships with unlikely allies. Our grantees were again ahead of us on this, and have been, for instance, doing outreach around protecting immigrant rights in the agriculture community. So those are the three new pieces: affordability, policy effectiveness and building a bigger tent.
The policy piece is especially interesting because we’ve found that it can be the third rail for some foundations.
The way we think about that is that everyone should have a say in the policy-making process. There are some folks with a lot of resources, and our job is to ensure that low-income workers have their say. We’re not trying to put a thumb on the scale; we’re trying to make sure that the bigger thumb is balanced out. We don’t take policy positions as an institution. As a private foundation, we don’t electioneer or get involved in policy legislation or legislative activity, but we do want to make sure low-income workers have a voice.
OK, so with that as a preamble, I’d like to move on to more tumultuous AI waters.
How much time do we have? [Laughs]
Not enough, that’s for sure! I figure I’ll just ask the blanket question: How is the foundation thinking about AI as it pertains to its mission?
AI is already transforming the worker economy, but this conversation often centers on coders or paralegals — folks who we might call white-collar workers and recent college graduates. There is far too little conversation about the impact of AI deployment on low-income workers, and it’s significant. Some of the most exposed jobs that are low to moderate in terms of income to AI deployment are office, clerical, customer service, health and human services.
These are workers who are high school educated, no college, in many cases, predominantly women, often women of color, and the chance of them being displaced by AI is high. We are not ready in terms of the need for retraining, reskilling and, unfortunately, where necessary, strengthening safety net supports for folks who are struggling to get back to work.
Of course, there are also countless scenarios where AI is likely to transform existing low-wage work.
If the first risk is displacement, the second is the degradation of work. There are folks who are going to be surveilled, who are going to be told by AI what to say and what to do, so jobs may not go away, but the quality of those jobs could be diminished.
And then there’s a chance for augmentation and improvement. I think there are situations where someone may offload repetitive work, and then skill up into better roles. Then there may be cases, like in customer service, where folks step up and other folks get left behind. So those are the three categories in terms of AI impacting low-wage workers: displacement, degradation and augmentation.
It goes without saying that these impacts all have huge policy implications.
We’re going to need to revamp our tax system to pay for the increased needs around AI-induced challenges. For instance, we need to incentivize the retention and upskilling of workers. Now, payroll taxes are such that we actually reward folks for getting rid of people.
I also think it’s intriguing to think about things like a sovereign wealth fund. Anthropic and OpenAI talk about this in their policy papers, as well as folks like Bernie Sanders and Donald Trump. Can we share the gains that are going to accrue from AI, and hopefully in a way that addresses the negative impacts?
Can you provide an example of how AI can support low-income workers?
We provided funding for the National Domestic Workers Alliance to develop a tool called Ask Aya, which is a coach that helps workers understand their rights and advocate for better working conditions. One of our underlying premises is that when workers and employees collaborate on the deployment of AI, you’re going to get greater dignity in those jobs, and we’re hoping to find more experiments we can support.
Earlier this month, you provided a LinkedIn update on how the EyesOnOpenAI coalition, of which the James Irvine Foundation is a member, asked California Attorney General Rob Bonta to examine whether OpenAI’s leadership is placing personal financial interests ahead of its charitable mission. Can you provide an overview of the coalition and its goals?
There are about 60 coalition members now — advocates and nonprofit and philanthropy leaders who work in the AI space — and it came together when it was first put forward that OpenAI would convert from nonprofit to for-profit status.
There’s a long history in California of conversions; many HMOs converted, and the result of that was the creation of foundations like The California Endowment. The idea is that you can create a for-profit, but some value that was created under the nonprofit form that belongs to the public is put into a vehicle to distribute those resources to the public.
Unfortunately, OpenAI was allowed to create a public benefit corporation, which is their for-profit, and the nonprofit, the OpenAI Foundation, received 26% of the equity, which, based on its last valuation, is equal to about $220 billion, so the biggest foundation in the United States, by far. Now, when I say “the Open AI Foundation,” I use air quotes because it’s set up as a pure 501c3 and has no payout requirement. They also have shared board members, except one, so decisions to use those charitable resources could advance the prospects of the public benefit corporation.
The coalition is advocating that, as part of its IPO, OpenAI be required to create a truly independent institution that has separate governance from the for-profit institution, because without that, those resources are not going to truly benefit the public.
In your latest blog post, you talk about how California’s upcoming gubernatorial transition is an opportunity for the state to write the “next chapter.” Can you elaborate on that point?
I’ve been working with my team on helping the incoming gubernatorial administration, and we’re doing that in collaboration with some other foundations. One piece that’s exciting is that we have funded a group called the Partnership for Public Service to support the transition. We’re also working to get our grantees to engage with the candidates to help them better understand the needs and opportunities for low-income workers.
There’s an opportunity in California to create something better, and AI could be one of those moments that compels us to rethink some of the systems that have not been working for low-income Californians. Our workforce development system is inadequate as it currently stands, so there’s an opening for someone who has a bold vision to rethink that system.
I feel like we’ve been in a defensive crouch for a couple of years, and I’m eager for us to start thinking about what’s next. AI is changing the world, and we’ve got to get on with it. California has no shortage of things that need to be addressed, and I hope we can be helpful, philanthropy-wise, but also to help set that new administration up for success. Let’s not miss the opportunity to write California’s next chapter in a way that really works for the people of California.
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