Enlightened Philanthropists are Part of the Problem, Not the Solution

Marty Levine

June 25, 2021

We know that poverty harms every aspect of life. We know that its impact on children is particularly dire. We know that for too many, poverty is generational, a fact of life over multiple generations, and that over time the harm it does multiplies. We know that generational poverty differentially impacts Black communities that have been robbed of wealth over centuries.

We know that government and private efforts, all well-intended, have not worked. Breaking the ongoing cycle of poverty is a huge societal problem that we have failed to solve.   As 2021 began, activist Paul Buchheit  described how pervasive economic hardship remains in our very wealthy nation:

“Poverty, as defined by the  World Bank, is a “pronounced deprivation in well-being.” This describes the millions of Americans who are unable to pay for medical treatment; who suffer the stress of delinquent rent and mortgage payments; who see a steady decline of jobs that pay enough to support a family; and who are victims of the surge in drug and alcohol and suicide “deaths of despair” that continue to increase among poor Americans during the COVID-19 crisis.”

And we know how large the economic toll remains on Black America.  We find that Black families are over 16 times more likely than White families are to experience three generations of poverty (defined as the bottom fifth of the income distribution).  According to a new Brookings paper by Scott Winship, Christopher Pulliam,  Ariel Gelrud Shiro, Richard V. Reeves,  and Santiago Deambrosi “three-generation poverty occurs among one in 100 Whites, but it describes the experience of one in five Black adults. Black Americans are 41 percent more likely to be in third-generation poverty than White adults are to be poor. The grandparents of Black adults had much lower incomes than the grandparents of their White counterparts had; this initial inequality has been compounded by lower rates of subsequent Black upward mobility out of  poverty and by greater Black downward mobility.”

For some, those with a mindset that views poverty as the result of personal, not societal, failure, the answer is quite simple.  No need for new programs or policies. Everyone can sink or swim on their own. If you are one of them no need to read any further.

If you are still reading, then you join me in the ongoing effort to find a better solution so that additional generation of children are not inheriting this plague and that the impact on communities of color is recognized and resolved.

With the problem so visible, a target so easy to see,  why is it we cannot solve it?

Because of this, I was interested when I came across a headline in The Chronicle of Philanthropy this week proclaiming that  “Billions Flood Into Blue Meridian as It Seeks to Help Innovative Nonprofits.”

That is a lot of money. And it was going to a philanthropic organization whose mission is to take on generational poverty head-on: “Blue Meridian Partners seeks to transform the life trajectories of young people and families in poverty.”  

They recognize that “solutions to the challenges that trap young Americans and families in poverty do exist. But even the most promising solutions cannot reach far enough, fast enough without significant, long-term investment—the kind that that no one investor can take on by themselves. 

And they think they have found a different way to do what others have failed to do before. They are reframing the canon of American Philanthropy from one based on individual rich people using their wealth to do good works to one that values collaborative and innovative efforts. By bringing many larger philanthropic investors together it unlocks “substantial philanthropic capital and invests it in visionary social sector leaders so they can dream bigger, look to the long term, and vastly extend their reach, impact, and influence.  We provide significant, flexible capital to allow leaders to scale evidence-based solutions that remove systemic barriers to opportunity and target key drivers of poverty to meet the magnitude of these problems. Across our five portfolios, we invest in nationwide and place-based approaches that provide pathways out of poverty for young people and families at all ages and stages of life.”

Blue Meridian wants to become an effective philanthropic venture investor, harnessing the approach that has fueled startups from Facebook to We Works. “We believe our performance-based investing approach – combined with our model of capital aggregation – has the potential to change the funding paradigm for solving problems in the social sector”. The Chronicle of Philanthropy captured their Blue Meridian’s approach as it is put into action: identify “nonprofits that have developed promising ways to solve social problems but need coaching and guidance — and especially money — to take those approaches nationally and help a greater number of people. Blue Meridian promises patience, few restrictions, and a group of megadonors who provide advice and connections with other donors outside the collaborative.”

While there have been prior efforts at philanthropic collaboration Blue Meridian wants to go further. As Heather Grady, a vice president at Rockefeller Philanthropy Advisors, told the Chronicle they are different because  “They make really big investments and think in a 10- to 12-year timeline. And that is still pretty rare in philanthropy. Even funders who say they support systems change may only [provide] funding for three or four years.”

Making big and long-term investments is important. It allows the organizations they fund time to hone their approaches and learn from missteps as they move forward.

I would like to cheer them on. They have unlocked themselves from the chains of short-term, narrowly targeted funding that is the bane of the non-profit sector.  They bring the seductive energy of driving entrepreneurs to the work of improving our society.

And yet, as novel as this is, is it really leading us down a path that can solve this problem?  Is it not just more of the same?

The focus on finding scalable solutions to the human problems of poverty diverts us from fixing the system. It is a system in which poverty is a feature and not a flaw.

Social critic Anand Giridharadas, in a recent New York Times column, recognized that enlightened philanthropists like Mackenzie Scott and enlightened Philanthropies like Blue Meridian are the problem and not the solution. “But as America slouches toward plutocracy, our problem is not the virtue level of billionaires. It’s a set of social arrangements that make it possible for anyone to gain and guard and keep so much wealth, even as millions of others lack for food, work, housing, health, connectivity, education, dignity, and the occasion to pursue their happiness. There is no way to be a billionaire in America without taking advantage of a system predicated on cruelty, a system whose tax code and labor laws and regulatory apparatus prioritize your needs above most people’s.”

Improving our education system, stabilizing housing, ensuring access to quality healthcare do help people deal with the cost of economic insecurity and poverty. But they leave untouched the core of the problem, one that we refuse to center on:  our economic system allows wealth to be unequally shared.  It permits the rich to get richer at the expense of everyone else. It allows people to work for wages that still leave them far away from a financially secure life. It allows a few people to amass huge wealth, the very people who then can become Blue Meridian investors, through a skewed tax structure.

Systemic reform requires us to focus on real change. Ensuring every worker earns a living wage, ensuring that those who cannot work have a safety net of supports that are fully supportive, breaking down entrenched privilege and bias are critical. Ensuring that no one can horde resources that are needed by all of us, and that government has the resources to do its job. All of this most happen as we worry about the hurt of the current victims of poverty.