Getting Federal Dollars to Communities: An Action Agenda

It’s not sexy, but it’s true: the most important part of policy is implementation. It is all well and good to have bill signing ceremonies, such as when President Joe Biden signed the Inflation Reduction Act. But legislation only creates the opportunity for social change. 

Federal legislation like the Infrastructure Investment and Jobs Act, the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, and the Inflation Reduction Act could be game changers or duds. Without serious support and targeted investments, federal resources will not readily flow to the people that need them most—namely, economically distressed, BIPOC, and rural communities.     

The goals of clean energy development, infrastructure replacement, and improvements in manufacturing—along with provisions to benefit underserved communities—are significant opportunities, as is the potential for high-quality job creation. Moreover, if federal legislation results in tangible benefits that people connect to federal investments, their sense of what the federal government can do for them could expand, a potentially positive outcome for our democracy in general. Realizing these opportunities will require robust community organizing, public engagement, and government accountability. 

Without serious support and targeted investments, federal resources will not readily flow to the people that need them most.

Philanthropy and movement building organizations—which we define as community-based organizations that try to alter systems to benefit marginalized groups through policy change and/or participating in local decision-making—can play a major role in addressing these challenges and capturing these opportunities.      

As two recent former federal appointees, who also bring experience in philanthropy and movement building efforts, we see three major challenges that need to be addressed to help underserved communities access these federal resources. 

1. The number and nature of federal implementation opportunities are overwhelming.
2. Many local governments and community-based organizations do not have the expertise, experience, or capacity they need to capture and/or use these resources without assistance. 
3. And finally, there is, to be kind, an uneven commitment to equity principles among state and local governments through which most federal money will flow.

Understanding the Challenge

It probably will surprise few that the federal government is often incredibly bureaucratic. What this means in terms of implementation is fragmentation. While there were four main legislative packages that were passed—the three named above, plus remaining flexible state and local funds included in the American Rescue Plan Act—the infrastructure and IRA bills alone contain 163 new programs with more than $300 billion in funding. 

Figuring out how to access this range of programs creates a myriad of challenges, including understanding the nature of the programs and their timelines, connecting local needs to the right programs, connecting these actors to the technical assistance they need, and organizing communities to impact these investments.

In many states, local governments—particularly in rural and majority BIPOC areas—are chronically underfunded, leading to staff and expertise challenges. Few federal programs and too few philanthropic sources cover operating costs outside of direct program costs and rarely fund capacity building expenses. As a result, often communities that would have the strongest claim on federal funding programs are least likely to be able to craft their applications to obtain them. The scale of resources flowing to states poses further challenges, as some states may opt out of key programs due to politics—or write rules that limit the funding chances of disadvantaged communities.

What Philanthropy Can Do

To help BIPOC and low-income communities access these resources, philanthropy must focus on moving money to help others access these dollars. This will require many actions—including support for effective local economic development organizations; strong community organizing; skilled and trusted technical assistance; strategic communications; targeted and collaborative research capacity; and partnerships between local government, labor, and community-based organizations.  

The challenge and opportunity for foundations is to get out of their funding silos and deploy their resources as quickly as possible while maximizing their impact. In addition to expanding support for existing grantees, our experience points to several strategies that would advance inclusive implementation and address the challenges outlined above.

Without local organizing . . . low-income and BIPOC communities are not as likely to see [federal infrastructure] dollars benefit them.Support community readiness: There are multiple and overlapping new efforts to ensure underserved communities have access to the technical skills, planning and design expertise, and staff capacity—including organizing capacity—that they need. Prominent examples include the 10,000 Communities Initiative (supported by the Milken Institute), Communities First Fund (housed at Race Forward and Amalgamated Foundation), the Local Infrastructure Hub (supported by the US Conference of Mayors, among others),and the new Resource Rural effort developed by the Heartland Fund. These efforts merit support.

Invest in pooled funds: A foundation doesn’t have to have deep climate or infrastructure expertise to support communities’ abilities to access these funds. Multiple pooled funds are forming to support regranting in pursuit of equitable federal implementation. Two examples are the Families and Workers Fund and the Rural Climate Partnership. These funds are providing local communities with tools to understand which federal programs fit them and to track and share what approaches to implementation work best.

Focus on high-leverage opportunities: Some federal opportunities cut across agencies, provide foundational infrastructure, are particularly flexible, and are targeted at underserved communities. A few key ones include the Broadband Equity Access and Deployment (BEAD) program and the Greenhouse Gas Reduction Fund. Also key are investments that meet critical community needs and help amplify the stories of public investment outcomes, such as Jackson, MS  leveraging federal funds to begin addressing its water crisis. These will require a range of support strategies but could have high returns for underserved communities. What Works Plus, Hyphen, and PolicyLink are all intermediaries that can assist with this work.

Support place-based organizing, advocacy, and communications: Accountability will require organizing at the state or local level. Without local organizing efforts sharing local voices, highlighting success stories, and advocating for inclusive rules and distribution, low-income and BIPOC communities are not as likely to see these dollars benefit them. Key national networks (with local affiliates) in this area, include Community Change, People’s Action, Jobs with Justice, and the Rural Democracy Initiative.

Connect with and support regional funders: Given the diversity of resources, programs, and communities, national philanthropy will need to connect with regional or place-based funders. These funders can be conduits to place-based organizations that can best support BIPOC and rural low-income communities. National foundations can also partner with regional or place-based funders to host information sessions, as the Liberty Hill Foundation in Los Angeles did this past April. 

Invest in emerging needs: For funders who invest directly into organizations who are working on federal implementation, general support grants that provide flexibility will be most useful, as they allow organizations to respond to changing circumstances. Common organizational needs include staff and organizing capacity, policy and research partnerships connected to community-based organizations, resources to pay for technical assistance, strategic communications capacity to highlight successes while also promoting accountability, and funds to support federal match requirements.

Increase transparency: To fully gauge whether federal investments are meeting their equity, job creation, and job quality goals, ongoing quality data collection and analysis is important. Foundations can fund researchers and think tanks to partner with states and localities to collect and analyze this data. This data can help community groups hold policymakers accountable. Additionally, if the data is collected and analyzed on a regular basis, community groups, unions, and philanthropy can use them to create feedback loops to federal agencies to help them be more responsive and improve programs since these investments are projected to last for 10 years.

What Movement Building Organizations Can Do

While billions have already come into states and localities, lessons from the American Rescue Plan Act reveal that many were slow to use these critical funds to meet community needs. The reasons ranged from local politics to a need to shore up “rainy day” or emergency funds to address the COVID pandemic. Currently, about $25 billion of the ARPA State and Local Fiscal Recovery Funds remain to be allocated before the end of 2024.

Movement building organizations can help ensure that remaining federal dollars are truly centered on equity, and meet needs as defined by underserved communities. Here are some actions they can take:

Follow the money: Movement building organizations can play a critical role in tracking and analyzing the funding flows to help communities and partners better navigate the plethora of federal investments. 

This includes looking into such matters as:

• State and local government plans for distributing “formula fund” expenditures
• State and local government plans to apply for competitive funds
• A designated person or office that coordinates expenditures 
• Any state or local plans for public engagement sessions 
• State or local plans to apply for any planning grants in which community groups should participate

This type of scoping analysis—especially done in partnership with local research or academic institutions, unions, and other state or local advocacy organizations—can help community groups better understand the scope and scale of these investments in their communities and develop strategies to impact or access them. 

For example, in Los Angeles, the Los Angeles Alliance for a New Economy and Strategic Concepts in Organizing and Policy Education, along with a few other community-based organizations, have jointly raised philanthropic funds to hire a consulting firm to research the various funding streams to identify points of leverage with their current housing, climate, and jobs campaigns.

Connect to the issues communities care about: Federal funds can often be leveraged to further core organizational projects. For example, there might be opportunities to engage a base, develop leaders, advance policies, and engage in actions that align with existing work. This is exactly what People’s Action is doing with their state and local affiliates as they work to identify levers in these federal investments that will further their climate, housing, and transportation justice work. 

Convene coalitions of aligned groups: Partnerships will be key to success. This requires bringing together existing and new partners in labor, community and economic development, community services, civil rights organizations, climate advocates, research institutes, academics, and state and local funders, to develop holistic plans to impact these federal investments. These tables can divide up tasks based on organizational strengths, such as policy and research expertise, help with power mapping to determine the opportunities as well as potential threats, and keep each other informed and updated. These partnerships, especially between community groups and labor, can also play a critical role in building power in communities and holding elected officials and agency leads accountable.

In many communities, coalitions already exist but require new resources to meet this moment. Jobs with Justice East Tennessee is activating its coalition of labor and community partners, with the support of Jobs with Justice nationally, to seek federal funds to meet the critical infrastructure needs of the former mining and industrial communities in the region. They also aim to leverage philanthropic and pension investment funds to build a robust apprenticeship system that ensures the construction and manufacturing jobs created by the federal funds offer family-sustaining careers with equitable access.

Track challenges and barriers: It is important to systematically track the challenges and barriers communities face in learning about, accessing, or impacting these investments. Groups can analyze whether guidance materials, technical assistance programs, and community engagement sessions are allowing for full participation by community groups or leading to greater confusion and alienation of those most impacted. This information provides a means to establish ongoing feedback loops with government agencies on the state, local, and federal levels. 

Federal, state, and local agencies may also benefit from learning about more innovative engagement styles and programs, especially if they intend to meet the needs of underserved communities. For example, United Today, Stronger Tomorrow, as part of a set of American Rescue Plan Act wins across four states, was able to get $5 million allocated for workforce development. Another example, Salt Lake City, Utah was able to use ARPA resources that bundled a pre-apprenticeship program, toolkits, and childcare after the White House interceded on their behalf and clarified that local county officials could use these funds in this manner. 

Meeting the Moment

We are in a unique moment. Underserved communities could see major benefits if federal funds land in a meaningful way. And with investments in organizing and communications, those benefits could help disengaged populations see the upsides of participation in democratic processes. But there are persistent and significant barriers to these funds flowing to communities in the most need.

What is clear is that it will take significant efforts from multiple actors to ensure that communities win, significant climate progress is made, and meaningful jobs are created. None of these efforts will be simple or quick, but a failure to invest now in building community capacity will make achieving favorable community outcomes far more difficult.

Philanthropy and movement building organizations each have important roles to play in ensuring that federal resources translate into meaningful quality of life improvements. The stakes, in short, are high. In this moment of opportunity, both must step up to the challenge and make sure federal funds go where they are truly most needed.