Study Outlines Billion-Dollar Philanthropic Bets to Address Poverty

Billion-dollar philanthropic investments in key areas could improve social mobility and revive "the American dream" for low-income families, a report from the argues.

The report, (33 pages, PDF), identified four areas in which investments of $1 billion could dramatically improve the lifetime earnings of low-income Americans — building skills and assets, addressing cultural and structural inhibitors, transforming communities, and building the infrastructure to implement and scale interventions that work. The researchers evaluated proven interventions and promising innovations in the four areas, which they then narrowed to six "big bets" — improving early childhood development, establishing clear and viable pathways to careers, reducing rates of conviction and incarceration, reducing unintended pregnancies, reducing the effects of concentrated poverty on those living in distressed neighborhoods, and improving the performance of public systems that oversee social services.

For each of those "bets," the study estimated the (22 pages, PDF) on $1 billion in philanthropic funding — as calculated in increased lifetime earnings for children and youth who would benefit — and came up with numbers ranging from $3 billion to $6.1 billion for improving social services delivery, to $7.3 billion to $14.7 billion for establishing clear and viable career pathways. The report also highlights risk scenarios for each intervention, including failures in innovation or implementation, inadequate incentives, and political backlash.

An earlier study by Bridgespan found that while 80 percent of the largest philanthropic donors aspire to create large-scale social change, only 20 percent of the grants of at least $10 million awarded between 2000 and 2012 were directed to social change initiatives.

"With access to capital that is flexible and adaptable, philanthropists are uniquely positioned to put social mobility on an upward trajectory," the report's authors write. "Philanthropists have lacked the sightlines into shovel-ready projects, and they've lacked the confidence that large investments would actually impact the economic lives of many people....If we build on what's already working and pursue the feasible set of outcomes entailed in each investment, the future of the American dream just might be a bit brighter than many among us now imagine."

"." Bridgespan Group Report 05/05/2016.