“Why don’t you do more at home?” It’s a question Bill and Melinda Gates hear a lot. So they’re giving $158 million to help Americans escape poverty.
Best-known for fighting disease and destitution around the globe, the Bill & Melinda Gates Foundation is now turning its attention homeward with a new initiative to help poor Americans move up the economic ladder.
The country’s richest philanthropy will spend $158 million on the work over the next four years, its first major anti-poverty investment in the United States.
“This is about the American dream and about making the American dream real for more people,” said Gates Foundation CEO Sue Desmond-Hellmann, who announced the new program Thursday at a conference in a low-income neighborhood in Washington, D.C.
Acknowledging that many others have attempted to root out persistent poverty with little success, Desmond-Hellmann said the foundation will focus on areas where its funding can be most effective, like collecting and sharing data on factors that contribute to poverty and upward mobility.
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The foundation also hopes to better coordinate the complex web of social services that tackle different aspects of poverty, and push for ways to improve the status of people whose service-sector jobs offer little economic security or opportunities for advancement.
“We’re not putting out a magic solution,” Desmond-Hellmann said in a briefing for journalists. “We anticipate there will be much testing, asking and answering questions about what works best in individual communities.”
David Callahan, founder and editor of the online magazine Inside Philanthropy, said Gates’ new investment is welcome and timely — though moving the meter on poverty is a daunting task.
“It’s one of those areas where philanthropists have famously tried and failed,” he said.
The new initiative was inspired, in part, by a question often asked of Microsoft co-founder Bill Gates and his wife: “Why don’t you give more in the United States?”
With an endowment of more than $40 billion, the foundation spends more than $4 billion a year to provide vaccines, fight diseases like malaria and tuberculosis and improve the lives of subsistence farmers in the world’s poorest countries. The foundation’s U.S. spending averages about $500 million a year, mostly devoted to its controversial and largely unsuccessful attempts to improve education.
Some of the lessons learned from that education work were another motivation for the new emphasis on poverty, Desmond-Hellmann said. While the foundation tried to improve education by focusing on issues like class size, testing and curriculum, they kept bumping into barriers from outside the classroom — primarily persistent poverty, she said.
For example, in King and Pierce counties, where the foundation works to reduce homelessness, they found many students were chronically absent or forced to switch schools because their families didn’t have stable housing.
Now, the foundation funds partnerships between housing authorities and school districts to focus on what’s best for the children and keep their education on track, said Ryan Rippel, who advises the foundation on poverty programs.
In laying the groundwork for its new initiative, the foundation invested about $5 million starting two years ago to bring together a “who’s who” of poverty experts, ranging from a conservative economist to workers’ rights advocates.
Called the Partnership on Mobility from Poverty, the group visited low-income neighborhoods across the country, from Atlanta to Washington’s Lummi Indian Nation.
They found that many people remain trapped in neighborhoods where the odds of escaping poverty are slight, and that it takes more than money to create a path out of poverty, said Nisha Patel, the partnership’s executive director.
“Equally important is power and autonomy and having a sense of agency over one’s life,” she said.
While education remains the most reliable bridge to well-paying, secure jobs, many people in today’s gig economy have low-paying jobs with no benefits and no upward path, Patel added.
Among the possible policy solutions are “portable benefits” funded by employers that travel from job to job with the employee, she said. But the foundation offered no specifics on its approach to improving so-called dead-end jobs.
Few philanthropists have ever been willing to tackle the political and economic forces that underlie low wages and inequality, Callahan pointed out.
Historically, factory jobs in the U.S. were poorly paid and low-skilled, he said. It wasn’t until labor unions and government policies protected workers’ rights that wages improved and those jobs helped elevate the middle class.
“Raising pay for these low-wage and low-skill jobs requires policy advocacy and changing labor policies and making it easier for unions to form — and most funders don’t want anything to do with that sort of stuff,” Callahan said.
By Gates Foundation standards, $158 million over four years is a modest investment, but it instantly makes the Seattle organization one of the biggest anti-poverty funders in the U.S.
Given the foundation’s historic approach to new areas, which includes funding several approaches to see what works best, there’s probably more to come, Callahan said.
“This may be the tip of the spear in terms of future funding.”