Ethics & Public Policy Center

Beware of Blind Spots

Published in Philanthropy Magazine on July 19, 2016


Dear President Darren Walker and friends at the Ford Foundation:

Your recent decision to direct all of the revenue of one of America’s larger foundations to reducing inequality among our people is an ambitious approach to a serious problem. Millions of Americans are having trouble advancing economically and are losing hope. Private foundations like yours have the advantage over government of being able to invest in higher-risk, region-specific, religious-influenced, or experimental efforts that can pioneer new approaches. We wish your effort every success. And rather than just wishing, we want to offer some ideas, unsolicited but offered in good faith, that might otherwise get overlooked in the normal processes of a large, liberal foundation.

We can all agree that the causes of income inequality defy easy partisan explanations and that solutions will be needed from all corners of our society to fight this pressing problem. This includes addressing our blind spots—those areas and gaps our ideologies skip over. What follows are some attempts to fill in those gaps: particularly in the progressive philanthropy establishment’s conventional understandings of poverty and economic stagnation.

While income inequality has increased steadily since the 1970s, that’s because the rich are getting richer more quickly, while the middle class is getting richer at a slower pace, and the bottom 20 percent of households are getting richer at a lower rate still. Let’s start by recognizing that while this is not desirable, it would be worse if the income gap was narrowing because everyone was stagnant or getting poorer.

The social pattern most treasured by those of us on the center-right side of the opinion spectrum is not equality but income mobility. A dynamic society where overall wealth is increasing and “have-nots” get opportunities to become “haves” is where human dreams are most often happily fulfilled. It’s when reduced opportunities to rise are combined with stalled overall economic growth that social resentments and divisions tend to become most inflamed.

Among most Americans, there remains a fair degree of economic mobility today. Our problem is found near the bottom of the income scale, where mobility is weak and people often get stuck. As Isabel Sawhill and Ron Haskins of the Brookings Institution put it: “for low-income Americans…going from rags to riches in a generation is rare. Instead, if you are born poor, you are likely to stay that way.”

 

The deep sources of stalled social mobility

In his book Our Kids, Robert Putnam sketches the social roots of stalled mobility. The educated and wealthier put a heavier emphasis on family stability and community cohesion. Parents invest time and resources in their kids—including the early childhood interaction that Putnam calls “Goodnight Moon” time. These families move themselves to places with better schools. If schools don’t live up to expectations, there are tutors or moving vans. When children get into trouble (as youngsters of every background do) there are lawyers, psychologists, and addiction-treatment counselors. In this world, children are more likely to participate in extracurricular activities and church-related groups, where they learn important social lessons. They are more likely to have links to adults beyond their family who can help with advice, internships, and jobs.

Our blue-collar and low-income classes, in contrast, often live with family instability, community breakdown, and economic stagnation. The connection between childbearing and marriage has been broken, and the role of the father has become voluntary. Chronically stressed single parents are unable to invest in their children. Community institutions, including public schools, are often weak. And though research proves that churchgoing kids are less prone to things like substance abuse and delinquency, poor families are now less religiously involved, even though, historically, religious participation for the affluent and the poor was similar in the U.S. Thus, when children get into trouble, there are fewer “airbags” that deploy, as Putnam puts it. The result is a class divide that is fundamentally at odds with the American ideal.

Many of these social and cultural problems are related to the collapse of the blue-collar economy. Global economic trends and the soaring importance of technology in work have made rewarding careers rarer for people with limited education. As their wages stagnate, more low-income people leave the workforce entirely, relying on transfer payments and other arrangements. This can further socially isolate the poor.

There are thus three problems that any philanthropist interested in increasing mobility and breaching class divisions must take interest in.

First, how can the breakdown of families be stopped and reversed; how can the positive involvement of fathers in the lives of their children be strengthened; and how can we provide practical help to single parents raising children?

Second, how do we give more Americans the education, skills, and social capital to compete in a modern economy, and reinvent themselves when industrial winds shift?

Third, how do we invigorate civic institutions in distressed communities, in order to build individual character, and provide the mentors, role models, and economic networking that a rising generation needs.

 

Reinforce family responsibility

Ford and any other philanthropy that aims to improve life for the most vulnerable should start by bolstering the family­—society’s most important contributor to human happiness and success, and the place where children get the social impulsions that influence them for the rest of their lives.

Promoting marriage, and keeping childrearing families together, communicating and working in healthy ways, is difficult as a matter of policy. But there is no better antidote to the root causes of income inequality. Local civic initiatives designed to strengthen family life exist in nascent form. (See this article from this issue for a description of a new effort that is testing ways donors can equip and strengthen our most vulnerable families.) There is enormous room for expansion of groups like First Things First (which provides education on marriage, fatherhood, and parenting), Family Bridges (which counsels adults and helps children forge stronger connections with their parents in the wake of a divorce), and Project 1.27 (which mobilizes and reinforces church members to provide foster-care and adoption for hard-to-place children).

The Ford Foundation and other donors could launch public-education campaigns to help young people understand the “success sequence” that social scientists have shown to be powerfully connected to economic and emotional prosperity. We know that young adults who steadily pursue basic education, full-time work even at very modest wages, loyal marriage, and then parenthood, in that order, almost never languish in poverty. A person need not star at any of these undertakings to make progress. (Most of us don’t.) But this remains the best path to the middle class.

Public-education campaigns focused against smoking, drunk driving, and teen pregnancies have had success; this one is emphatically worth a try.

 

Embrace the education revolution

The second big influence on the economic success and mobility of the next generation of Americans will be their schooling. In this area, philanthropists have already energetically explored, proven, and made available in many localities positive alternatives to our disappointing status quo. Now we are at a stage where bold reforms can be rolled out on a large scale—if there is the will (and willingness to put the interests of our next generation ahead of the special interests that often predominate in our public schools).

One remarkable template for what could be done in hundreds of other places is the New Orleans school system—where after Hurricane Katrina a disastrously failed apparatus was replaced by a revolutionary, decentralized, competitive ecosystem of charter schools. More than 90 percent of that city’s children are enrolled in charters, and they have made remarkable improvements in learning. “The largest-scale experiment…in the United States” is how liberal writer Jonathan Chait describes it, “a complete overhaul, undertaken all at once,” where “the results have vindicated the strategy. As the authors [of a major assessment] concluded, ‘We are not aware of any other districts that have made such large improvements in such a short time.’”

Leaders of the Ford Foundation and all others who care about mobility should be seeking inventive ways to bring New Orleans-style charter-school revolutions to fresh fields of need. Exciting models exist not just in the Crescent City but all across our country. At KIPP’s charter high school in New York, for instance, the student body is 100 percent minority and 87 percent economically disadvantaged, yet the institution has a 96 percent graduation rate and is ranked as one of the best public schools in New York. The KIPP network, which now serves 70,000 students in 183 schools nationwide, and expanding rapidly, is perhaps our country’s single best example of the power of nonprofit social entrepreneurship in action. And there are now many other excellent charter-school chains with similarly impressive results, and vast upside potential.

Charter schools, like all institutions, vary, and not all are excellent. But studies by Stanford researchers and others have proven that, as a whole, they perform way above the average. In some places like Boston, the charter movement has not only changed the life course of even the most deprived children but done so, remarkably, without producing a single school that would qualify as a disappointing “lemon.”

Ford and other donors should also be supporting the extraordinary work of Catholic schools in lifting up underprivileged youths. Data show that Catholic high schools substantially increase high-school graduation and college enrollment rates, improve citizenship, and build character, with the greatest positive effects on urban minority students. Academies like St. Benedict’s Prep in Newark, New Jersey, despite being run on a shoestring, and enrolling student bodies that are almost completely low-income, minority, and non-Catholic, outperform peers in vastly better-funded public schools nearby. Tuition covers just a fraction of the budget at most Catholic (and other religious) schools; the rest is provided by donations. There are wide opportunities here for generous philanthropies. For reducing inequality among children facing high hurdles in life, you could hardly find a better bet than proven educational alternatives like religious schools, schools of choice, and charter schools.

 

Use civic organizations to build social capital

Some of our most serious economic-mobility problems at the moment involve immigrants. Supporting organizations that help new arrivals acculturate and participate fully in society triply serve those individuals, their communities, and our national ideals. Catholic Charities of Fort Worth is an example of the many groups now doing valuable work to help immigrants and refugees establish themselves in their new home. In addition to working one-on-one with many families, CCFW coordinates important social enterprises, like being the leading provider of translation and interpretation services in the Dallas-Fort Worth region, offering non-English-speakers better access to health care, education, and legal services. Such philanthropically launched and funded enterprises help immigrants become self-supporting, while also earning the charity revenue to fund its wider work.

If the long-term economic success and mobility of a household is the goal, then philanthropists must take an interest in much more than just providing immediate services and palliatives. The wrong kind of palliatives can even reduce mobility by locking a family into low-level subsistence instead of motivating it to seek something better. A crucial feature donors should look for is whether a charity strives to ultimately get its beneficiaries off of government assistance and in a position to support themselves. This “welfare to W2” mentality generates efforts to help individuals become the drivers of their own lives.

Another essential component to independence is financial literacy. There are now hundreds of local nonprofit projects that teach budgeting, credit-building, saving, and avoidance of expensive credit like payday loans to individuals who have little sense of such things. These are skills crucial to getting a first foot on the economic ladder. One example is the Doorways to Dreams Fund, which uses video games imaginatively to educate users on personal finance and provides prize incentives that spur savings. Other nonprofits and churches have organized lending circles that help members keep one another accountable, and allow them to pool money toward goals such as tuition payments, debt reduction, or small-business creation.

 

Safety and order are the foundations of success

To have a hospitable, economically healthy, and neighborly community, you need order. Nothing much good can happen by way of human development in settings that are dangerous, chaotic, or anti-social. That’s why progressive foundations like Ford need to be careful not to get pulled into activist movements that would undo the so-called “pro-active policing” revolution that has done so much over the past 25 years to make life safer for the urban poor. We must never forget that, to take just one representative example, there were 2,245 homicides in New York City in 1990, versus just 328 in 2014. There’s a whole lot of human relief and progress in that triumph over criminality.

We are strong supporters of juvenile justice reform that attempts to interrupt the schools-to-prison pipeline. In too many juvenile justice facilities, violence is commonplace, solitary confinement is routine, and many inmates are diagnosed with mental illness. For some juvenile offenders, alternatives to incarceration such as “intensive family treatment” have shown great, humane promise—confronting risk factors such as lack of supervision and poor academic skills. Society often acts most effectively when it strengthens the ability of community institutions—in this case, families—to confront problems. And no one benefits when children are lost to a cycle of criminality, imprisonment, and recidivism.

Yet as states and communities pursue criminal-justice reform and work to end the excessive use of force, they must avoid undermining necessary police work and necessary incarceration. The spike in murder rates and other violence that some cities are experiencing is damaging impoverished minority communities most of all. Already, pressure on police combined with backlashes against prison terms and drug prosecutions are leaving more predatory recidivists on public streets. (That’s why the police chief of Washington, D.C., recently tied a crime wave to the loosing of small numbers of repeat offenders.)

Crime control is a crucial foundation for achieving almost any other social goal. That’s why aggressively maintaining public safety is ultimately one of the kindest and most helpful things that can be done for the urban poor. It is to be hoped that philanthropists will not forget this hard reality.

Philanthropists can also help by supporting organizations that intervene directly with gang members and other high-risk individuals. This is another area where there are many grassroots charities doing good work at the neighborhood level, all across the country. The Boston-based group Roca, to take just one example, attacks recidivism among juvenile offenders by way of intense mentoring relationships focused on life skills and job training.

Many of these efforts have a faith-based core. Churches and churchgoing volunteers are important in mentoring and guiding newly released prisoners, and in caring for family members left behind by the imprisoned. Programs like Amachi have served more than 300,000 children, and it is estimated that without effective intervention 70 percent of these children would likely have followed their parents’ path into prison.

 

Drug detox, housing, character: prime territories for philanthropy

Substance abuse is another destructive driver of antisocial behavior. And here too, charitable programs have outsized importance. From ubiquitous Alcoholics Anonymous chapters, to the Gospel Rescue Missions movement that provides 300 emergency shelters and long-term recovery havens across the country, to rehab programs like Outcry in the Barrio or Victory Fellowship, the mechanism of former addicts helping current ones detox, in a strictly disciplined but religiously loving environment, has proven effective. Outcry, for instance, has now spread to cities across North and South America. It turns no one away, provides its services for free, accepts no government funding, and boasts a greater than 60 percent success rate among those who complete the 90-day program. More donor funding could spread these helpful efforts.

Another important factor in building safe and healthy communities is to shift away from conventional public housing that densely clusters dysfunctional behavior and creates multigenerational poverty traps. There are many creative ways that philanthropy helps people secure good homes—rented or owned. These range from national efforts like Habitat for Humanity, to local programs such as ACTS Housing in Milwaukee, a combined real estate, property rehab, and alternate lending service. ACTS helps first-time homebuyers purchase vacant and vandalized houses, renovate them, and finance the effort through extended credit counseling and special lending partnerships. In so doing, it has enabled low-income families to own their own homes, and turned derelict, abandoned neighborhoods into functioning communities.

Another useful exemplar is Purpose Built Communities, founded by a donor who realized his years of traditional giving were not making a dent in poverty. He decided to focus on revitalizing a single gang-ruled neighborhood. In partnership with several nonprofits, he started a charter school, enhanced community services and infrastructure, and replaced 650 units of public housing with a mixed-income development. The transformed neighborhood attracted new residents and provided dramatically improved opportunities for existing residents. Violent crime decreased 90 percent, and the low-income employment rate went from 13 to 70 percent. Purpose Built Communities has now had similar successes in 12 other locations.

Donors can also play an important long-term role by supporting more general, and deeper, efforts to build human competence and character, and weave healthy social linkages. There are many worthy nonprofits that provide friendship and guidance to children, compassionate treatment of addictions, and tough-minded guidance on life skills and work training. One essential element of encouraging opportunity and mobility is building networks of volunteers and charitable staff that will take early, positive, active interests in the lives of disadvantaged children—before they become charges of truant officers and police and probation officers. There are many wonderful charities, ranging from the Boy Scouts of America to the Positive Coaching Alliance, that encourage productive habits and wholesome moral development in the young. These character-building organizations tend to be lightly funded, and with additional philanthropic angels could be expanded to create more of the “airbags” that struggling children need to protect them as they navigate life’s obstacles.

The worst gaps in our society are not measured in income or wealth—important as these are. The most serious gaps are shortages of education, skills, and human capital. Those kinds of gaps cannot be filled by transfer payments. They can only be bridged by people acting in true compassion to help fellow human beings in practical ways. That is the classic work of charitable action. And it can address the root causes of inequality, one young life at a time.

Michael Gerson is a visiting fellow with the Center for Public Justice and a syndicated columnist. Peter Wehner is a senior fellow at the Ethics and Public Policy Center and a contributing opinion writer for the New York Times.

 

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