Foundations, Intermediaries, and Workforce Solutions

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Amid the national indicators of economic growth are all too-often reports of populations left by the wayside. The annual labor market reports produced by the Community Service Society of New York outline employment issues that ought to galvanize the attention of public- and private-sector leaders. The latest report [PDF] in the series includes these findings:

  • While the employment-population ratio for New Yorkers age 55 to 64 increased 7.2 percent between 2000 and 2006 and 5 percent for New Yorkers 65 and older, the story for young people in the labor market was the exact opposite: “The employment-population ratio for 16- through 24-year-old city residents has plunged by 9.5 percentage points, from 44.1 percent in 2000 to 34.6 percent in 2006.”

  • “Among men, job holding by Whites has reached its pre-recession 77.8 percent rate. But employment among Blacks and Hispanics at 60.3 percent and 70.6 percent, respectively, remain below their 2000 high-water marks.”

Despite overall employment growth, such backsliding on employment among these groups is not just a problem of labor-market connections, it is a story of continuing and exacerbating gaps between minorities and nonminorities. It isn’t just in New York City; it’s in urban and rural areas evolving into two nations. Political candidates did not just discover this. The “Other America” Michael Harrington described in his galvanizing book in 1962 has never left us.

For all their social-change rhetoric and concern about poverty, the philanthropic sector has never been strongly associated with labor issues—certainly not organized labor in the form of unions. As entities borne of massive corporate wealth, foundations possess historical DNA which doesn’t automatically warm to the concerns of labor.

But on September 6, the Council on Foundations announced the launch of the National Fund for Workforce Solutions, aimed at amassing between $30 million and $50 million to support regional and local “workforce partnerships.” As of September 6, the National Fund for Workforce Solutions had aggregated $15 million—largely from the Annie E. Casey Foundation, the Ford Foundation, and the Hitachi Foundation, the foundation arm of the Hitachi Corporation—a number that apparently bumped up to $20 million with a commitment from the Harry and Jeannette Weinberg Foundation. Other “partners” in the National Fund include the United Way of America, apparently charged with generating new future partnership sites, and Jobs for the Future, identified as the National Fund’s “implementation partner,” responsible for managing the National Fund’s grantmaking, site selection, technical assistance, and research and evaluation.

A distinctly different partner, in a clearly operational role, is the Council on Foundations (CoF), demonstrating perhaps a new trend under its current leadership to emulate foundations like the Annie E. Casey Foundation that mount and run their own initiatives. Since Steve Gunderson took the helm in 2005, CoF has taken this direction. Gunderson immediately launched CoF-sponsored dialogues on the foremost challenges of the foundation sector, such as foundation responses to the potential avian flu pandemic, disaster relief, nanotechnology, and workforce investment. For anyone familiar with Gunderson’s career after he left Congress, it’s no surprise that workforce development has become CoF’s biggest in-house program initiative; after leaving the Republican Main Street Partnership, Gunderson joined the consulting firm the Greystone Group, where he focused on workforce issues and wrote the book The Jobs Revolution: Changing How America Works. According to the National Fund’s Web site, CoF’s role is to recruit new funders to the funding collaborative, convene discussions, generate policy recommendations, and set up an advisory committee of corporate grantmakers to “provide strategic insights on programs and ideas to the National Fund for Workforce Solutions Investor Committee.”

Another partner was in the room: the U.S. Department of Labor. Everyone was polite to the Labor Department representative, who lauded the National Fund’s strategy of investments in workforce partnerships and committed [PDF] a half-million dollars to evaluate the CoF effort, but it felt like everyone was indulging an unwanted dinner guest. The official National Fund press release mentions DOL as a national partner, but not a word or testimonial about its role.

The press conference announced three-year grants of $450,000 to 10 workforce partnerships. Six of the partnerships had already received previous grants from a “pilot phase” of the National Fund, possibly a redefinition of past grant support from the Annie E. Casey Foundation and others to workforce intermediaries. (notably Casey and Ford have had a long history of workforce intermediary research and action, and CoF’s workforce materials and others appear to rely significantly on work done by the Casey Foundation’s Bob Giloth [.ppt] on workforce intermediaries). In any case, foundation attention to workforce development issues is important and should be encouraged.

The shortcomings of this picture can be remedied if foundations want to take the challenge and responsibility:

Show me the money. Maybe CoF has already hit the $50 million goal, but the National Fund’s Web site doesn’t say so. Therein lies a problem: the difference between the commitments of a handful of leadership foundations and the lack of commitment among the majority of the nation’s other 80,000 or so grantmakers. Despite CoF’s efforts to guide foundations into the workforce development field, in recent years the commitment of the foundation sector overall to workforce development issues has declined, not grown. The May 2007 Cohen Report noted this trend:

In 2005, for the largest foundations, the proportion of their grant dollars going to employment [and workforce development] issues was 0.7% or $114,357,000. That is down from the 2004 when foundations devoted 0.8% and $126,567,000 to this topic—or 2001, when foundation grantmaking for employment was 0.9% or $147,576,000. In absolute terms, foundation grantmaking for this issue has dropped 22.5% between 2001 and 2005.

It takes more than a handful of foundations putting money into a high-profile demonstration effort to reverse the fact that millions of foundation dollars don’t address the issue.

Show me the results. At the press conference, the Hitachi Foundation’s Barbara Dyer and the Annie E. Casey Foundation’s Ralph Smith emphasized the importance of adopting a “laser focus,” in Dyer’s words, and of ensuring that “this is about results . . . [about] holding ourselves accountable,” as Smith put it. But what results? The National Fund’s PR materials and the press conference touted Boston’s SkillWorks as one of the successes from the pilot funding round. The cited results were the placement of 400 people in jobs with wages between $10.60 and $12.27 per hour and wage increases between 13 percent and 34 percent for participants who received pre-employment programs.

All well and good, but what might the missing partner in the room have said? With corporations, foundations, and the U.S. Department of Labor in present, no one mentioned the word unions. It was a bit surprising, especially with all the talk about the need for public-policy changes in workforce investment programs. It was also surprising, since at least at SkillWorks there was tangible union involvement through funding support for a Service Employees International Union Local 615 program to help building janitors.[1]

An American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) workforce issues expert, contacted after the press conference,[2] suggested that the AFL-CIO was aware of the National Fund and had worked previously with Casey and Ford on workforce development issues. Overall, she applauded the foundations’ efforts but also cautioned that foundation investments should not replace the need for major federal investments, that the jobs that people get through the workforce intermediaries should be good jobs with portable benefits. More specifically she suggested that the measures should account for not only wage increases but also worker self-sufficiency. She emphasized the measurement of these jobs, wages, health care benefits, and retirement benefits against a framework of specific community or metropolitan self-sufficiency standards.

At the press conference, one of the National Fund honchos immodestly announced, “I know I speak for every worker in America when I say [to the funders] thank-you.” The National Fund might want to be a bit less presumptuous; at some point down the road, it may do some good things for workers in a small group of cities. But the jury is still out on whether a half-dozen foundations can influence an additional hundreds or thousands of foundations to come to the table and invest in giving American workers’ access to good jobs with good health care and retirement benefits—and whether they will use their economic muscle and philanthropic prestige to spur needed public-sector investment.

1. Information received by e-mail from a Council on Foundations press spokesperson, September 13, 2007
2. Interviewed September 17, 2007.