To Avoid Being a Supporter of the Status Quo, Ask “So What?”

Wednesday, January 27, 2016

To Avoid Being a Supporter of the Status Quo, Ask “So What?”

By Brandee McHale, President, Citi Foundation

The piece is excerpted from a chapter entitled “So What? Keeping Our Eyes on the Prize” in the book “What It’s Worth: Strengthening the Financial Future of Families, Communities and the Nation” published in 2015 by the Federal Reserve Bank of San Francisco.

The concept of two Americas is becoming increasingly prevalent. Americans are feeling more financially vulnerable than ever. As asset and income inequality continues to grow, the schism in our society is no longer a risk but an increasing reality. Philanthropists have never been more focused on results, but I wonder whether we are letting our focus with data distract us from the big picture — ensuring that the paths to opportunity and upward mobility still exist.

Whether they focus on income inequality, educational attainment, health outcomes, social development, or the various points where these issues intersect, policymakers and thought leaders recognize the challenge we face. The seeds of change were sown decades ago as middle class wages stagnated and the cost of goods increased more than incomes. Research conducted by the Economic Policy Institute, which has documented hourly wages for nearly three decades, shows that since 1979, the vast majority of American workers has seen their hourly wages stagnate or decline. But you don’t need complex economic analysis to know that when expenses exceed income, especially over long periods of time, financial stability erodes.

There is a role for philanthropy in funding interventions that treat the consequences of erosion. When families’ margin for financial error shrinks to the vanishing point, the task becomes all the more urgent to build their financial capability. But if we make treating the symptoms the goal — in other words, if we lose sight of the “So what?” — philanthropists risk becoming tacit supporters of the status quo.

I doubt any philanthropist would dream of saying, “Our task is to help you better manage your scarcity.” But that is exactly what you are saying, if you base grantmaking solely on program performance measures and outcomes. You are accepting that scarcity as a given, and defining “the problem” as the inability of some to manage within the confines presented before them.

Of course, it is futile to imagine that philanthropy alone can undo structural changes brought on by social and economic trends decades in the making. But every philanthropist who is seriously interested in having an impact should look beyond the data and make an effort to understand how to permanently contribute to opportunity and advancement. The role of implementing effective programming, whatever the particular tactical approach, is the job of trusted grantees. The job of staying focused on the “So what?” is, in a perfect world, everyone’s responsibility. But it is particularly the duty of philanthropists.

We all care about improving the financial well-being of American families. If we want to help people lead healthier lives, gain and keep good jobs, and obtain affordable and stable housing, then we also need to recognize the critical role that financial stability has in achieving these outcomes. Without supporting strategies that address the financial well-being and empowerment of the people in our communities, it is unlikely that we will ever fully succeed in improving peoples’ lives over the long-term.

As many of the contributing authors to this book have noted, financial insecurity is deeply embedded in a variety of social problems. Left unaddressed, the eroding financial security of American households will negatively impact our economy as a whole and threaten our country’s future. As philanthropists, we can work across traditional silos and use our investments to inspire families to believe in their own self-efficacy, invest in building social capital that will help them weather financial challenges, and support research and testing that deepens our understanding of how households adapt to socioeconomic challenges and opportunities.

Moreover, we should also be willing to use our philanthropic capital to challenge the status quo by investing in social movements that will bring greater awareness and understanding — both about the impact of financial vulnerability on our society and economy, and about the reasons why our success as a nation depends on reversing this downward economic cycle.

Because financial health is so inextricably intertwined with every other aspect of a person’s life, the Citi Foundation is deeply committed to approaching the issue from a holistic perspective. We work hard to break down our own internal funding and wisdom-sharing silos, and we believe in working in partnership with other institutions across sectors, including colleges and universities, municipalities, community development, public health and other agencies. Our vision is to enable these entities to build capacity, pool resources, develop a shared financial capability agenda, and ultimately, reach millions of low-income people. We are open to experimentation to move beyond what feels comfortable or safe, and we engage in an open dialogue with our partners to learn from mistakes as well as successes.

We also believe in sharing those lessons more broadly — to build a body of knowledge and catalyze collaboration with our fellow philanthropists. Adopting a shared narrative among practitioners, policymakers, and funders is important to achieve large-scale impact and create the systems change required to put more American families on the path to long-term financial success.

At the heart of our work is a constant effort to remember that philanthropy by its nature is more of an art than a science, and that it simply is not a business like any other where success can be empirically quantified. There is the old joke among doctors: “Oh, never mind the patient. The patient died on the table, but the operation was a brilliant success.” For philanthropists, the equivalent is that the economic divide may not be shrinking, but at least the program data look good.

Some will argue that without a single-minded devotion to data and outcomes, it is too easy to “hide behind the mission,” to say “well, we can’t prove it exactly, but we know we are doing good in the world.” I would urge my fellow philanthropists to remember that the risk runs in the opposite direction as well. If you can avoid metrics by hiding behind the mission, you avoid the mission by hiding behind the metrics. You can easily become the boastful doctor focused on the brilliant operation, instead of its impact on the lifeless patient.

Brandee McHale is on Twitter: @BrandeeMcHale



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