THE
CENTER
FOR
HIGH
IMPACT
PHILANTHROPY
1
The
Center
for
High
Impact
Philanthropy
School
of
Social
Policy
&
Practice
|
University
of
Pennsylvania
April
2009
Action
Agenda
Overview
Alongside government spending, there is acritical role for private philanthropy.Philanthropists have the ability—if they chooseto use it—to target programs, assess the cost/benefit of actions before spending the funds, anddirectly support the community organizationsengaged in alleviating and preventing the humancosts of the economic meltdown. Thoughdwarfed by public financing, privatephilanthropy brings a nimbleness andresponsiveness unmatched by government’sefforts.Unfortunately, not all philanthropic spending iseffective. Like any form of funding, privatephilanthropy can fail to deliver results. Worseyet, it can do more harm than good when notinvested wisely.To transform good intentions into meaningfulimpact, individual philanthropists requireinformation about what issues are most in needof philanthropic attention, what practices andmodels offer the best promise for impact, andwhat costs are involved to determine wheredollars can be used most efficiently. Over thenext three months, the Center for High ImpactPhilanthropy is working to provide thatinformation and will develop a
philanthropicinvestment guide
for individuals seeking toaddress the suffering caused by the currenteconomic crisis.
The
Needs
Unprecedented rates of foreclosures and risingunemployment have escalated need in three areaswhere private philanthropists have a unique roleto play: (1) housing, (2) health, and (3) nutrition.The foreclosure crisis that began in earnest at theend of 2006 is triggering significant instability among families and in communities across thecountry.
1
The scope is vast: the Mortgage BankersAssociation estimates that 2.2 millionforeclosures were initiated in 2008 alone.
2
Foreclosure can be devastating not only to theindividual household, but also to the broadercommunity as vacant properties corrodeproperty values and invite crime. Case in point:in August 2008, nearly a third of mayors andpolice chiefs in 124 cities reported an increase incrime that appears to be a consequence of thegrowing number of foreclosures.
3
Based on theexamination of foreclosures in Chicago,researchers estimate that direct municipal costs(e.g., costs related to inspections, court actions,police and fire department responses, unpaidwater and sewage bills, and trash removal) canreach $34,000 per unit. Plus, an additional$220,000 is lost in reduced property values andhome equity for the homes nearby.
4
High
Impact
Philanthropy
for
the
Economic
Downturn
The
US
and
the
global
economies
are
facing
a
contraction
not
seen
since
the
Great
Depression.
The
downturn
has
produced
much
hardship
for
those
directly
impacted—individuals
and
families
who
have
lost
homes,
jobs,
and
access
to
basic
necessities.
The
government
has
responded
with
nearly
a
trillion
dollars
of
public
financing.
But
no
matter
how
well
crafted
and
well
meaning,
government
financing
of
this
scale
is
too
diffuse
and
distant
to
reach
all
those
in
need
effectively.
HIGH
IMPACT
PHILANTHROPY
FOR
THE
ECONOMIC
DOWNTURN
THE
CENTER
FOR
HIGH
IMPACT
PHILANTHROPY
2
With increasing unemployment comes acorresponding rise in the number of uninsuredAmericans with limited healthcare access. It isestimated that for every one percentageincrease in the national unemployment rate,1.1 million more Americans will becomeuninsured and join the ranks of the 46 millionAmericans already without health coverage.
5
Research shows that uninsured adults andchildren are less likely to receive preventivecare. Such lack of preventive care will almostcertainly translate into worse health outcomesfor individuals and higher costs to society.A particularly troubling health-related impactis the growing number of people unable tomeet their basic nutrition needs. In March2009, the USDA confirmed that participationin the Supplemental Nutrition AssistanceProgram (SNAP) (i.e., food stamps) hadreached a historical high: in December 2008,about 32 million Americans received SNAPbenefits, 4.5 million more than in Dec. 2007. InDecember 2008 alone, recipients of SNAPbenefits increased by 700,000 people.
6
Foodbanks are also seeing an increase in demand. Ina survey of its members in late 2008 by FeedingAmerica (a national network of food banks),almost all member food banks (99%) reportedseeing more first-time users and wereexperiencing growth in demand between 28%and 37%. Nearly three quarters of these foodbanks (72%) also reported not being able tomeet the need adequately with the resourcesavailable to them.
7
Potential
Roles
for
Philanthropists
In our preliminary conversations with funders,policy analysts, researchers, and nonprofitleaders, several examples have already emergedwhere philanthropists are filling the gaps notcovered by government programs or funding.For example:
Helping those left out
. While new initiativesin the stimulus plan expand Medicaid coveragefor the poor and help offset the costs of continuing health coverage (COBRA) after lay-offs, many Americans still do not qualify forthese benefits. Located in high-needcommunities and governed by community boards, community health centers that servethe poor and uninsured are able to providecomprehensive, primary care services tailoredto local needs. A 2008 estimate of community health center programs’ impact on localeconomies found that for every $1 millioninvested in health centers, a $6 million rate of return can be expected, while providingneeded care for an additional 8,400 patients.
8
Philanthropists can support local community health centers to meet the growing demandsfor basic health services.
Covering the “last mile”
.
The federalgovernment’s plan to prevent foreclosuresincludes incentives for lenders to cut mortgagepayments for at-risk borrowers.
9
However, suchincentives will have little impact if borrowersare unaware of these options, or fall prey toillegitimate offers of refinancing. In fact, someestimate that more than half of those (someestimates reach as high as 80%) who have losttheir homes never contacted their lenders,
10
even though housing counselors trained tofacilitate a fair restructuring for the borrowerare available at no charge. Philanthropists cansupport “door knock” programs that sendrepresentatives of legitimate nonprofits to thedoors of homes at risk of foreclosure. For aslittle as $25 per household, these representativescan explain these options and help homeownersarrange meetings with housing counselors. Suchprograms cover that needed “last mile” of service delivery necessary for the success of federal intervention.
HIGH
IMPACT
PHILANTHROPY
FOR
THE
ECONOMIC
DOWNTURN
THE
CENTER
FOR
HIGH
IMPACT
PHILANTHROPY
3
Breaking down service silos.
Sadly, thebreadth and severity of this economic crisis hasmeant that more families are grappling withclusters of problems that include legal,financial, physical, and psychological needs.While programs exist to address food needs,childcare, health insurance, mental health, joblessness, etc., too often these programs arehoused in different agencies located across thecommunity, with different and oftentimescomplicated eligibility requirements, anddifferent procedures for securing desperately needed help. Philanthropists can break downservice silos and support single-stopcounseling centers that provide one-on-onecounselors to help low-income individualsnavigate the public benefits available to them.A McKinsey & Company study of one suchprogram in New York found that for every dollar invested, the program immediately returned to its clients at least $3 in benefits; $4to $13 in legal counseling; $2 in financialcounseling; and $11 in tax credits.
11
A
Call
to
Collaborative
Action
From now through June, the Center for HighImpact Philanthropy will examine these andother promising models for philanthropists tohave impact. Our goal is to produce aphilanthropic investment guide that outlinesspecific ways philanthropists can help.However, our ability to produce effectiveguidance relies on others joining our effort. Tothat end, we invite researchers, funders,policymakers, community leaders, andnonprofits to respond to the ideas outlinedhere and work with us to unlock thephilanthropic capital that is so urgently needed.
About
the
Center
for
High
Impact
Philanthropy
The
nonprofit
Center
for
High
Impact
Philanthropy
was
founded
in
2006
by
Wharton
alumni
and
is
housed
at
the
University
of
Pennsylvania’s
School
of
Social
Policy
&
Practice.
Our
aim
is
to
provide
information
and
tools
to
help
philanthropists
determine
where
their
funds
can
have
the
greatest
impact
in
improving
the
lives
of
others.
With
expertise
in
business,
medicine,
the
law,
and
public
and
social
policy,
our
team
brings
a
multidisciplinary
approach,
in
‐
depth
knowledge
of
research
methods,
and
seasoned
judgment
to
the
analysis
of
high
impact
philanthropic
opportunities.
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Action Agenda: High Impact Philanthropy for the Economic Downturn
The US and the global economies are facing a contraction not seen since the Great Depression. The downturn has produced much hardship for those directly impacted—individuals and families who have lost homes, jobs, and access to…
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