Gates Foundation takes on poverty in the U.S. with $100 million commitment

GRAND ISLAND, Nebraska — In recent years, city leaders in Grand Island, Nebraska, have noticed that many workers and students walk or bike long distances to work or school. So when City Manager Laura McAloon heard of an opportunity to study developing a bus system to meet those transportation needs, she jumped at it.

The opportunity was funded by the bill & Melinda Gates Foundation, in partnership with the International City/County Management Association, a network of local government officials. And it sent McAloon to Washington along with other local leaders to learn about strategies and policies to lift people in their communities out of poverty.

The Gates Foundation announced Thursday that it will donate $100 million to expand its work on economic mobility — a move the nation's largest foundation says marks a change in the way it operates, putting more power in hands comes from the beneficiaries who want to increase the speed. what impact his gifts have. The commitment is part of the $460 million the foundation said in 2022 it would donate to this part of its portfolio over four years.

Ryan Rippel, the founder and director of the Gates Foundation's economic opportunity and mobility strategy, said the grants represent an important and deliberate change in the way it works, with large grants going to organizations that will have a large degree of autonomy in managing their own work and the work of sub-grantees.

The strategy, he said, is the result of feedback they received from conversations with others in the field and the people they hope to help.

“I went to a conference in Washington and spoke very proudly about a data investment we had made that we think could actually help governments make very different decisions about resource allocation,” he said. “And in the back of the room a woman stood up and shouted, 'I just need a tank of gas.' And that really stuck with me. And it has remained a profound lesson for our team that these are very concrete, everyday needs.”

The portfolio is a small portion of the foundation's overall budget, which was $7 billion last year, but has grown significantly. Rippel said this is because they have learned so much about the strategies, interventions and organizations that can lift people out of poverty. The continued expansion of their work, he said, depends on them achieving their goal of improving economic mobility for 50 million people in the U.S. who earn 200% of the poverty level or less, which equates to $29,160 in annual income for an individual.

The foundation will fund organizations committed to expanding support for local government that implements evidence-based policies, connects people with skills but without college degrees to jobs, helps people claim government benefits, and influences small and medium-sized businesses to adapt working conditions to help people find their balance. personal and business obligations. Grantees include Opportunity@Work, Families and Workers Fund, Prosperity Now, Pacific Community Ventures, Results for America and the Urban Institute.

At a meeting in Washington in May, where the Urban Institute introduced the tools and research they have developed to help cities and counties understand the barriers to economic mobility, Grand Island's McAloon realized that her city of 53,000 residents, roughly 150 miles west of Omaha, needed to gather more information.

“We looked at each other and said, we don't know that we have the data, the statistics to show that this problem exists that we said we would come up with a solution for,” said McAloon of her colleagues. from the local community college and public school district that attended her.

By the end of the conference, they had changed their objectives and launched a data collection and analysis project that included interviewing local residents with the help of translators at a summer festival and consulting with the human resources departments of major local employers.

What they learned is that transportation was a problem for workers, but when the meatpacking plant and other manufacturers raised wages during the period of low unemployment after the pandemic, many households could afford a car. According to the employers, the problem was housing.

“It's a multifaceted approach to actually creating opportunities for economic growth and personal income growth,” McAloon said. “There is simply no one silver bullet. There is not one problem. You have to tackle it all to really bring about significant change.”

The Gates Foundation is far from alone in this regard; Major funders like philanthropist MacKenzie Scott and Blue Meridian Partners have also made multimillion-dollar commitments in recent years, sometimes to the same organizations.

Last week, Blue Meridian Partners announced it is giving $50 million each to three municipalities, San Antonio and Dallas County in Texas, and Spartanburg County, South Carolina, each of which has also raised at least $50 million from other sources, in support of specific interventions such as doubling income. the number of young adults earning a living wage and the percentage of high school students enrolling in secondary education.

Jim Shelton, president and chief investment and impact officer at Blue Meridian Partners, said that while the interconnected issues that keep people in poverty are complex, there is growing evidence of policies and programs that can have an outsized impact on people's life trajectories . .

“Once you start breaking down the problem in that way, you start to realize that there are solutions everywhere that really work,” he said. “But what we're missing is the coherence to bring it all together in a way that consistently changes people's lives.”

When asked whether growing inequality in the US played a role in the decision to increase funding for economic mobility, the Gates Foundation said: “Our increased investments are based on promising work from partners in the early years of the strategy and our belief that the foundation can play a unique role in improving systems that help people get back on their feet in times of need and advance economically.”

At the end of Grand Island's study this fall, McAloon said they determined it won't be possible to establish a bus system, in part because of federal funding rules. Instead, they are exploring a van pool funded partly by employers and with state money.

But because of new communication and coordination between agencies, schools and local organizations following the investigation, her office learned that a lack of plumbers and electricians was holding back new housing projects. She contacted the community college, which is now creating a technical training program to guide high school students into those professions.

“It was just a matter of a few emails,” she said. “And they are already developing the curriculum and creating an internship program that will hopefully make an impact on the issue that is keeping us from building more homes.”

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