Part II: The Growing Gap and Philanthropy’s Role

This persistent and growing gap between the haves and have-nots – now wider than at any time since the beginning of the Great Depression – has given our philanthropic work greater meaning and urgency than ever. Just when many states throughout the nation are coping with major budget deficits, the numbers of people desperately needing social services – from quality education and affordable housing to health insurance and healthcare – are also are growing.

It is a time when the net worth of the wealthiest one percent of American households exceeds that of the bottom 95 percent. Just as startling, from 1995 to 2001, the median net worth of the wealthiest 10 percent of American families jumped two-thirds – from $785,000 to $1.3 million – while the net worth of America’s bottom 25 percent remained stagnant at only $1,100.

Some would suggest that we are witnessing the making of a “perfect storm” – with diminishing public services running headlong into a growing population of increasingly diverse Americans and the resulting need for a broader, stronger social safety net. At a time when governments at all levels are considering transferring some of their most important social services to the private sector, we are seeing lawmakers turn to the philanthropic sector – and to foundations in particular – to help address the growing gap and shoulder more of the burden of caring for the neediest, most disadvantaged citizens. The question is what role can philanthropy play in making a difference?

Let’s begin by putting things in perspective. The combined assets of all foundations in the nation are slightly less than $500 billion ($480 billion), and the national deficit in 2004, we are told, will be approximately $540 billion. Obviously, even if foundations gave away all of their assets, they still could not offset the deficit. Nevertheless, what foundations can do, and in some cases are doing, is to leverage resources to influence policies and effect sustained change.

Consider, for example, the impact of the Julius Rosenwald Foundation’s efforts on public education of African Americans in the Deep South. I can speak about this very personally because between 1917 and 1932, when my mother was getting her early schooling in Alabama, the Rosenwald Foundation, which was influenced by Booker T. Washington, constructed more than 5,000 schools for blacks in the rural south, helping to establish an academic infrastructure that continues today. Before 1917, dating back to the Civil War, there had been no funding for schools for black children other than relatively small amounts provided by the Freedmen’s Bureau. The point is that the Rosenwald Foundation made an enormous difference in the lives of many southern black children, and, frankly, who knows where many of us would be today without that foundation. Most important, we must not forget that what we do through foundations will have an impact on children and families yet to be born; we simply cannot gauge today what the impact of our efforts will be tomorrow.

Another foundation – the Marguerite Casey Foundation, based in Seattle, and on whose board I serve – also provides an excellent model, emphasizing collaboration with government and community-based non-profit groups to improve the lives of children, youth, and families. It was created by the Casey Family Programs just two years ago and builds on the Casey legacy of helping families, youth, and children achieve their full potential. Listen for a moment to the Foundation’s mission: “to help low-income families strengthen their voice and mobilize their communities in order to achieve a more just and equitable society for all.” The emphasis is on empowering families and the assumption that families, with support, have the potential to make a difference in their own lives. It’s reassuring to me to know that the Marguerite Casey board and staff base their grant-making strategies on the two leading indicators of children’s success – the education level of parents and the economic conditions of the environment in which they are raised. Often working with other foundations, and bringing together community organizations, schools, government agencies, social service providers, policy experts, and academics, the Foundation is focusing on challenging communities in a variety of areas – from the Deep South and the U.S.-Mexico border to South Central L.A. and the South Side of Chicago.

As an aside, board members have opportunities to visit with grantees to get a real sense of the challenges that families and children are facing. While in Washington, D.C., visiting the “For Love of Children” program, board members were inspired by one little boy we met – Joseph – whose face and voice Foundation President Luz Vega-Marquis frequently challenges us to remember as we do our work.

Similarly, in my own town, Baltimore, we see the Annie E. Casey Foundation working with two other local foundations on whose boards I serve – the Baltimore Community Foundation and the France & Merrick Foundations. They are reaching out to the city’s civic, faith, and business communities to enlist support of Baltimoreans and to raise millions of dollars in private funds for the Reason to Believe campaign to address the needs of young families in crisis, underachieving preschoolers, disconnected adolescents, recovering addicts, and families living in unsafe neighborhoods.

As we consider philanthropy’s power and promise in both today’s climate and tomorrow, it is important to look beyond total expenditures to measure the effectiveness and full value of our foundations. Years from now, people will not judge us simply based on the size of the grants we make. Most important, we must be advocates for the public’s common good, and more than ever, we must become facilitators of partnerships to effect substantive change and transform lives. To ensure that our dollars are well spent, foundations will often need to support grantees by providing them with comprehensive services and technical assistance, emphasizing both best practices and strong evaluation.

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