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

18 mins

Summary

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.
  • Providence brought together community leaders across the board for an evidence-driven, community-wide approach to helping children. Providence is also making that data accessible to the public.
  • San Antonio used evidence to set city priorities and determine how best to invest limited public dollars in a way that would make the most difference for children and open up life-long opportunities.

(Note: The complete report also features one initiative from London.)

How can federal, state, and philanthropic partners support cities?

Based on observations drawn from the six city examples, we uncovered ideas that city leaders and their federal, state, and philanthropic partners can use to improve outcomes. The following recommendations are aimed philanthropic leaders, as well as at federal and state leaders, who can all play a critical role in helping cities advance their use of data and evidence.

Fund local data infrastructure and know how.

Becoming a "geek city" rests on reliable access to data at a granular enough level to identify and prioritize needs, and measure program effectiveness. This sophisticated analysis typically depends on costly technology and skilled workers. While cities should be prepared to invest at least some of their own funds in such infrastructure, external resources may be necessary to fund data systems and hire expert analysts. In Providence, for example, Bloomberg Philanthropies is contributing $5 million toward measuring and analyzing the Providence Talks program's effects on early language learning among toddlers in low-income families. Bloomberg Philanthropies is also investing $1 million to build an open-source predictive analytics platform for Chicago.

Foster promising solutions, and help them expand.

For more cities to invest in what works, the menu of promising models must continue to expand. A strong cadre of programs and practices with evidence behind them will make it increasingly feasible for cities to sell the idea of acting in a results-oriented way both inside city government and with residents. Federal and state governments and philanthropy have begun these efforts through initiatives such as the Social Innovation Fund (SIF); Investing in Innovation; state-level grants and programs to give cities incentives to invest in evidence-based programs or evaluation; and private foundation support of grantees. For example, New York's Center for Economic Opportunity (CEO), in partnership with the Mayor's Fund to Advance New York City, secured SIF grants of $5.7 million per year for five years to replicate its most effective anti-poverty programs in eight urban areas across the country. In those locations, more than 30 local and national philanthropic funders have contributed more than $50 million to bolster the SIF grants. MDRC supports the effort as the lead evaluation partner and as a provider of technical assistance on program implementation and financial management. This type of investment can catalyze city leaders to adopt and scale proven programs.

Promote existing research and support evaluation.

City leaders need access to reliable sources of information on what works if they are to choose appropriate models for their own cities. Already, the What Works Clearinghouse and foundation-funded databases are providing this service in some areas. Expanding this work will enable more cities with limited time and resources to avoid reinventing the wheel. Research and evaluation are also needed to address gaps in the evidence base, but the cost of evaluation is prohibitively high in too many cases. To that point, promising efforts to find lower-cost ways to evaluate models using existing administrative data are already underway, with the Coalition for Evidence-Based Policy in Washington, DC, leading much of this work. Government leaders and philanthropists can help this effort by supporting experiments to test new methods of assessing more quickly and inexpensively when a program is working.

Fund technical assistance in city government

As the layer of government closest to the everyday problems people face, city officials provide many of the services people rely on and expect. Embedded support, in the form of research experts, consultants, and dedicated fellowships, can help translate very complicated information and train city officials in the language of data and evaluation. One such initiative is IBM's Smarter Cities Challenge, a $50 million grant program that pairs the company's top talent with city leaders to analyze a city's data and systems and help officials make better choices. For example, IBM is supporting Louisville Metro Government's effort to create a data-driven strategy to improve prevention and treatment of asthma in the city. (See "Providence Talks and Propeller Health" on page 27 of the full report for more detail.)

Section Three
How Some Community Collaboratives Are Moving The Needle On Change

This section is adapted from Needle-Moving Community Collaboratives by Michele Jolin, Paul Schmitz, and Willa Seldon.

Many working for social change consider community collaboratives an area of great potential—for good reason. When government, nonprofits, philanthropists, businesspeople, and citizens work together to create social change, great things can happen. To this end, President Obama created the White House Council for Community Solutions to demonstrate the power of engaging "all citizens, all sectors working together" in December 2010. The Council decided to look beyond individual programs showing success with limited populations and instead look at communities that are solving problems together and improving results for the whole community. It partnered with Bridgespan to identify a number of needle-moving community collaboratives—those that have achieved at least 10 percent progress in a community-wide metric—to uncover the keys to their success, and recommend ways to drive more collective impact, particularly to address the challenges of disconnected youth. Together, we identified 12 successful community collaboratives, such as the Milwaukee teen pregnancy prevention initiative, Philadelphia's Project U-Turn, and the Strive Partnership of Cincinnati and Northern Kentucky, all of which are committed to dramatic change.

Given the highly cooperative effort required to create a needle-moving community collaborative, our focus was on characteristics of the concerted effort, rather than a discussion of each sector's—for example, philanthropy's—role.

Four core principles of needle-moving collaboratives

What sets a needle-moving collaborative apart from less-effective attempts? Our research uncovered four core principles that drive successful efforts.

  • Core principle 1: Needle-moving community collaboratives are committed to long-term involvement.
    Successful collaboratives make multi-year commitments because long-term change takes time. Even after meeting goals, a collaborative must work to sustain those goals.

  • Core principle 2: Key stakeholders—including philanthropists—get and remain involved as appropriate.
    In order to effect change, all relevant partners play a role, including decision-makers from government, philanthropy, business, and nonprofits, as well as individuals and families. In particular, funders need to be at the table from the beginning to help develop the goals and vision and, over time, align their funding with the collaborative's strategies.

  • Core principle 3: Shared data is used to set agendas and improve results over time.
    Data is central to collaborative work and is the guiding element for collaborative decision-making.

  • Core principle 4: Community members are engaged as substantive partners.
    Community members maintain involvement in shaping services, offering perspectives, and providing services to each other, not just as focus group participants.

Additional elements needle-moving collaboratives share

In addition to the four core principles of successful collaboratives, we also found five common elements that contributed to their success.

A shared vision and agenda

Consider for a moment the number of players that must be involved in creating a successful community collaborative, and it's not hard to see why developing a common vision and agenda are two of the most time-consuming and challenging tasks a community collaborative undertakes. Yet, they are truly among the most vital. When leaders from government, nonprofit, philanthropy, and business develop measureable community-wide goals, it can catalyze support and build momentum. Moreover, developing a clear roadmap to achieving such goals can help organizations look beyond narrow institutional interests and focus on the greater good.

Effective leadership and governance

Getting decision makers to the table is one thing, but keeping them there for the years of hard work is no easy feat. To fully engage stakeholders and coordinate their efforts, needle-moving collaboratives need strong and highly respected leaders at the helm who are viewed as neutral, honest brokers, and who attract and retain a diverse group of large and small organizations to guide the collaborative forward.

Deliberate alignment of resources toward what works

Successful collaboratives are proactive about staying attuned to new information and adapting their processes as it becomes available. Moreover, although at times they may push for new services to fill in gaps, much of their work focuses on getting philanthropists, nonprofits, government, and business to align existing resources and funding with the most effective approaches and services to achieve their goals. In many cases, this will mean working together to target efforts toward particular populations, schools, or neighborhoods rather than operating in a more ad hoc manner.

Dedicated staff capacity and appropriate structure

Having dedicated staff in the amount and structure that's right for a collaborative's plans and goals is critical to success. Effective teams can range from one full-time strategic planning coordinator to as many as seven staffers for more complex formalized operations. Formal collaborative structure allows for meaningful engagement of partners, but formats vary based on issues being addressed. Still, the vast majority of collaboratives do tend to have a steering or oversight committee.

Sufficient funding to support what works

Every truly needle-moving collaborative we studied made at least a modest investment in staff and infrastructure. This investment often included in-kind contributions of staff or other resources from partners. Sustainable funding itself becomes one of the collaborative's key objectives, as does a focus on strategic priorities.

Enabling a brighter future through collaboration

There's no doubt that government and communities face many difficulties today. Yet when philanthropists—with their unique and powerful ability to influence the most intractable-seeming issues—choose to work in and around government and partner with local communities in innovative ways, those difficulties are transformed. Through collaboration and a deep focus on results, philanthropists can catalyze dramatic change.

Resources

Philanthropy in the New Age of Government Austerity
By Daniel Stid, Alison Powell, and Susan Wolf Ditkoff
With fiscal belts tightened and political parties polarized, how should philanthropy go about working with government to address social sector problems? Bridgespan has identified three promising approaches and some of the philanthropists that are using them.

Geek Cities: How Smarter Use of Data and Evidence Can Improve Lives
By Laura Lanzerotti, Jeffrey Bradach, Stephanie Sud, and Henry Barmeier Forewords by Michele Jolin, Managing Partner, Results for America; Mayor Julian Castro, San Antonio, Texas; and Patrick T. McCarthy, President and CEO, Annie E. Casey Foundation

Bridgespan worked with Results for Amercia, an initiative of the nonprofit America Achieves, to discover and highlight innovative cities that are finding ways to use data and evidence to create positive social change.

Needle-Moving Community Collaboratives: A Promising Approach to Addressing America's Biggest Challenges
By Michele Jolin, Paul Schmitz, and Willa Seldon
A new kind of community collaborative—an approach that aspires to significant community-wide progress by enlisting all sectors to work together toward a common goal—offers enormous promise to bring about broader, more lasting change across the nation.

Also see:

Transformative Scale: The Future of Growing What Works
By Jeffrey Bradach and Abe Grindle
Social sector pioneers have started to tackle a fundamental question: How can we grow our impact to actually solve problems we care about? In short, how can we achieve truly transformative scale. We offer nine pathways to consider.

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