A Philanthropist's Guide to Working with Government and Local Communities

18 mins


No matter what your philanthropic quest is, government funding and policy is bound to affect your philanthropy. Here's how to work with--and around--government.

Whether your philanthropy quest is to end homelessness, fight poverty, enable gender and racial equality, lower teen pregnancy rates, or provide a path to college for disadvantaged youth, government funding and policy are bound to affect your results. This is especially true in today's climate of fiscal austerity and political polarization.

As an example, consider work towards ending homelessness. Chances are that any homeless shelter you would choose to fund draws most of its revenue from government and is seeing that revenue steadily decline, which puts more pressure on its already unsteady finances. Even if a particular nonprofit has foregone government funding, as some do, it will now be seeking private funding in a much more competitive philanthropic market as peer organizations seek to backfill shrinking public funds.

Success in philanthropy often depends on working with or around government.

Since success in philanthropy often depends on working with or around government, we've put together advice on how to approach these collaborations. The first section covers some promising approaches to how philanthropy can work in partnership with, or to accelerate the work of government. The second discusses how some innovative city leaders and their partners are using data to make headway on social progress and ways philanthropists can help. The third discusses community collaboratives, through which leaders from government, nonprofit, philanthropy, and business are truly moving the needle on challenging social issues—and how they're making that happen.

Note: Each section of this guide is adapted from a paper on its respective subject, which we've listed at the top of each section and in Resources (with links) at the bottom of the page.


Section One
Three Approaches to Working with and Around Government

This section is adapted from "Philanthropy in the New Age of Government Austerity," by Daniel Stid, Alison Powell, and Susan Wolf Ditkoff.

Historically, philanthropists have used advocacy as one of their preferred paths to solving social issues, but today that path is fraught with difficulty. Elected officials from Capitol Hill to City Hall are struggling to cope with shrinking revenues and service cutbacks, and as a consequence, advocacy efforts to expand government spending and the role of government often become zero-sum games in which increasing spending in one area entails decreasing it in others. Even if funds were available to pay for proven or promising initiatives, our political parties seem incapable of working together to craft them. In this climate of fiscal austerity and political polarization, how can philanthropists work with and around government to address social sector problems?

To understand the scope of the problem, we analyzed a random sample of more than 400 $1 million-plus gifts over the past decade from The Million Dollar List, and determined that ~40% of such big gifts were connected in some way to government (17% of which went to state universities). Therefore, we found that 23% of million-dollar gifts sought in some way to shape what government does, improve its ability to function, or increase the effectiveness of nonprofits that governments rely on to implement their policy.

Given the sizable amount of philanthropy engaged in such causes, we identified three paths for philanthropists to consider in order to maximize the results of their giving.

Invest in government institutions.

Business leaders have long realized the importance of investing in leadership development, innovation, and other capacity-building efforts in their own enterprises, but the resources and will to do this have typically been lacking in government. To remedy this issue, some philanthropists have invested in leadership- and capacity-building for government employees. The Broad Foundation embodies this approach. A decade ago, it set out to address a leadership development gap in America's public education system, government's largest single expenditure. Today, almost one third of the nation's 75 largest districts have superintendents or other highly placed central-office executives who have undergone training at the Broad Residency in Urban Education and the Broad Superintendents Academy. Moreover, the Broad Foundation reports that the program has shown impressive results such as a high percentage of graduates who are outperforming comparison groups.

Help high-performing nonprofits make better use of public funding.

Today, many nonprofits are increasingly being asked by government to do more with less, thus exacerbating what Bridgespan calls the "starvation cycle," in which funders only pay for program services and skimp on the ability to sustain and improve those programs. This issue is especially acute in government, which relies on siloed funding streams. Yet, not surprisingly given the complicated and interwoven nature of the most pressing social problems, the best nonprofits address issues in a holistic manner. The Nurse-Family Partnership (NFP) is one such nonprofit. It had demonstrated its ability to improve the lives of low-income mothers and their children, but to grow, NFP needed to develop a measurement system to ensure program quality at expansion sites. When no government agency stepped in with funding, several foundations did, which in turn laid the groundwork for government to make a major investment in it and similar programs.

Help to mend broken political processes.

It's one thing to work around government, but can philanthropists actually help work "upstream" to alleviate fiscal constraints and resolve political polarization? Some philanthropists have attempted to do just that. In 2007, five big California foundations came together to address the whole process by which California state government made—or increasingly failed to make—major policy and budget decisions. The foundations pooled over $30 million to launch California Forward, a bipartisan organization focused on reforming state government to promote pragmatic, fiscally sound public policy that would be responsive to Californians. Although not all efforts of the organization have been successful, to date, California Forward has helped overhaul the redistricting process and restructure its primary process.

The three approaches above highlight some promising approaches that philanthropists have used in working with government. Drilling down further into our research, we offer six ideas that philanthropists can use to increase the likelihood of success.

Six Suggestions for Donors Working in and around Government

  • Garden in your backyard.
    While the media seem fixated on the federal government, state and local government is often where the action is. Some 80 percent of the government-related grants in our Million Dollar List sample were made at the state and local level. You can get your arms around problems at this level, and your personal relationships and networks will have much more effect.

  • Play the angles and levels.
    At the same time, recognize that the local, state, and federal levels of government can be highly interdependent. For example, if you choose a local problem such as fixing nearby schools, you will still need to recognize and join forces with others working at the state level to set higher standards for student learning. And there may be opportunities to secure federal funds to drive work in your district.

  • Learn from others, and share what you learn.
    There are 50 states and thousands of local governments. So if you are trying to accomplish something in your city or state, odds are that others have already tested solutions to the same problem in another "laboratory of democracy" to use Justice Brandeis's term for these sub-units of government in the United States. Take the time to learn what's out there, so that you're not reinventing the wheel—or worse, trying a failed strategy. And if you help invent something promising, publicize it so that others can apply and adapt it.

  • Accept the constraints; government can't—and shouldn't—turn on a dime.
    Government leaders are accountable to active constituencies and zealous taxpayers (i.e., all of us) who are just waiting to pounce on them when they bend the rules for expediency's sake. Don't get impatient at the time it will inevitably take for the flywheel of government to start to turn. Once it is rolling in a certain direction, it can accomplish great things given its resources.

  • Look for the change makers.
    If leadership is critical to get things done in the private sector or philanthropy, it is even more crucial within government. Almost every entrepreneur in the philanthropic or social sector has had his or her work enabled by someone who was just as entrepreneurial working for change from within the halls of government.

  • Complement, don't backfill.
    Philanthropic resources can't begin to match government resources dollar for dollar, nor can they make up for them as funds are cut back. The key is to identify high-impact opportunities to provide dollars that government is not in a position to supply or make investments that will leverage or increase the effectiveness of much larger sums of public funding.

Section Two
Geek Cities: How Data Is Fostering Social Progress

This section is adapted from "Geek Cities: How Smarter Use of Data and Evidence Can Improve Lives," by Laura Lanzerotti, Jeffrey Bradach, Stephanie Sud, and Henry Barmeier.

As mentioned above, focusing close to home is one idea philanthropists can use to effectively collaborate with government. In this vein, we delved into the practices of six "geek cities" across the United States—cities that are radically transforming their services by embracing analysis of hard data and evidence to drive results. In partnership with Results for America, an initiative of America Achieves, we researched how innovative city leaders are working to build evidence about the most effective and efficient practices, policies, and programs; invest limited taxpayer dollars in programs that demonstrate they work; and direct funds away from those that consistently fail to achieve measurable outcomes. On issues such as education, jobs, youth development, and preventing infant mortality, these cities are breaking down silos, and experimenting and inventing their way out of problems. Not surprisingly, philanthropists are playing an important role in these efforts. From dozens of pioneering efforts across the country, we chose initiatives in six cities that illustrate the major trends we saw in how leaders are embedding the use of data and evidence into practice. Here are some highlights:

  • Baltimore completely upended its budgeting process to implement one that is outcome-driven and focused on hard data, and, as one example, is shifting resources towards evidence-based interventions to eliminate infant mortality.
  • Denver embraced a data-driven approach to tracking and continuously improving its schools, and is investing in an in-house "academy" to teach city employees how to innovate, measure performance, and continuously track their data and improve results.
  • Miami revamped its education system by studying school performance data and regularly tracking that data on each child.
  • New York City chose to try out new methods of serving critical populations, while carefully tracking each method's success rates. New York then made the tough decisions to shift funding toward programs with evidence of success and away from programs that, according to evidence and data, were failing to get results.
  • Prov
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