How Foundations Can Win the Fight Against Inequality

06/25/2015 08:12 pm ET | Updated Jun 25, 2016

Tackling inequality seems to be the new buzzword on the philanthropic circuit.

The Ford Foundation became the latest to join in, declaring this month that all of it grants will be designed to focus on the issue.

That move came shortly after President Obama made clear that his focus after his presidency will be to jump-start programs to help black youth, extending his work with foundations and nonprofits under the My Brother's Keeper program he started in the White House. Already, dozens of corporations and foundations have pledged more than $300 million for programs to provide increased job opportunities, education, and health care.

Many other prominent foundations, including the California Endowment, the Kresge Foundation, the Open Society Institute, the Robert Wood Johnson Foundation, and the William Penn Foundation, have also started efforts to reduce inequality.

The response by foundations to the challenge of inequality has been overwhelming but somewhat vague and imprecise. Some foundations are citing measures to combat racial inequality; others are pointing to efforts to eradicate economic inequality; yet others are talking about gender or environmental gaps in efforts to gain social and economic justice. Ford and other grant makers seem to be focusing on all forms of inequality in our society.

While it's encouraging to see so much willingness by foundations and other donors to curb inequality, much would need to change for them to succeed. Not only would they need to overhaul their spending approach, but they would also have to play a stronger role in pushing for wholesale changes in how the nation's tax code and public policies work to promote greater equality. Economic inequality is based on more than income or wealth; it is also a structural matter involving financial institutions, taxation, governments, regulations, and traditional business habits.

Among the questions grant makers must confront: Will they be open to committing 40 percent or more of their grant money to general operating support, as Ford says it will because it believes only this approach can build strong, independent organizations capable of fighting inequality. After all, foundations today give just one in five dollars in unrestricted operating funds. And will they be willing to give big to the fight, spending more than the 5 percent of assets they are required by law to distribute annually?

Beyond the question of operating support and total spending, many nonprofits and other experts are right to be skeptical about whether foundations will do what it takes to fight inequality.

For example, President Obama, My Brother's Keeper, and the foundations he has attracted to support his work seem primarily concerned about the predicament of black youths, yet can any national effort succeed by not including poor white boys, especially in the South, Appalachia, and rural areas where whites form a substantial part of the population in poverty? A similar question can be raised about Native Americans trapped on their reservations, with unemployment rates ranging from 60 to 80 percent.

Among both minority and white youths and men, a major, if not the predominant, problem is the lack of jobs -- not inequality writ large. An adequate national jobs program cannot be launched or sustained by even a large number of foundations. It is the responsibility of the federal government, assisted by states. It is fair to ask why the president, concerned as he is about inequality, has not developed a large public-service jobs program.

The work of private foundations, while laudable, is also not going to transform the national state of inequality. Most foundation money is going into innovative services, increased job training, improved education programs, better research and data collection, or efforts to remove bias in police work and the criminal-justice system.

What's needed, however, is more money for advocacy, organizing, and legislative activities that can transform the fabric of our society, approaches that foundations are reluctant to underwrite. To date, only a relatively few foundations have been willing to embrace such an activist agenda.

For example, if we are to reduce economic and social inequality, the tax system will have to be modified to eliminate the loopholes, special breaks, and favoritism accorded to corporations and wealthy taxpayers. Campaign-finance practices will have to be changed to reduce the influence of big money. Voting rights for all will have to be ensured and gerrymandering ended. Increased government funds will be required to beef up federal assistance to poor college students and community colleges. Strenuous efforts will have to be made to bring about a substantial increase in the minimum wage.

These battles, and other campaigns to achieve equality, cannot be won with a handful of foundation grant programs. They must be won the hard way: through the mobilization of large armies of supporters and voters; strenuous and prolonged legislative fights; new regulations and enforcement; strong and persistent educational and media campaigns; and the building of new or strengthened nonprofits and coalitions.

This is a tall order for foundations, which for the most part have not yet demonstrated a taste for activism and action, nor a commitment to stay focused for the long haul. Will things be different this time around?

As foundations and some individual donors gear up to reduce inequality, they should be clear about what they can and cannot do, what they are willing or not willing to do. Is this their current fad, or are they committed to the long run?

Stan Katz, director of Princeton University's Center for Arts and Cultural Policy Studies, told The Chronicle's Alex Daniels, " I don't think foundations have ever been good at taking on big problems." Will today's foundation efforts to fight inequality prove that Mr. Katz is wrong?

Pablo Eisenberg, a regular Chronicle of Philanthropy contributor, is a senior fellow at the Center for Public and Nonprofit Leadership at the McCourt School of Public Policy at Georgetown University. His email address is