Waylon Wong (2:17)

He's talking about all the change and chaos caused by the federal funding cuts last year under the Trump administration.

Kyle Caldwell (2:22)

And I think that creates for us a real challenge because philanthropy cannot step into the breach.

Stephen Bassaha (2:29)

To explain what he means by this, he pointed to a moment in Michigan when foundations did try to step in.

Waylon Wong (2:35)

This was during the government shutdown that started in October. The Trump administration said because of that it would not be sending out funding for SNAP in November. SNAP helps families pay for groceries, including around 1.4 million residents in Michigan. This caused a big concern that some families would go hungry.

Stephen Bassaha (2:53)

So Michigan turned to philanthropy. And the person who sent out the emergency signal was Dana Linnane. She's with the governor's office as the foundation liaison. So in a way, it sounds like you're the glue that makes the private and the public sides work well together.

Dana Linnane (3:08)

I like that. I'm gonna borrow that.

NPR Announcer (3:09)

Yes.

Waylon Wong (3:11)

Dana said 160 foundations answered that call and all got on a zoom to figure out what to do.

Stephen Bassaha (3:17)

What is a zoom room with 160 philanthropic groups look like, you know, zoom.

Dana Linnane (3:23)

Through, you know, the pages and pages. Well, certainly not everyone is introducing themselves.

Stephen Bassaha (3:30)

Yeah, you're not doing the icebreakers at that point.

Dana Linnane (3:32)

We're not doing the icebreakers.

Waylon Wong (3:33)

This ended up being multiple calls and conversations like how to even get the money out. They realized one group was already using an app to track about half of the Michiganders receive snap, and they already had a system set up to send out aid.

Dana Linnane (3:47)

We kind of said, whoa, this is huge. This is a quick turnkey solution where we know we can serve at least almost half of Michigan SNAP beneficiaries.

Waylon Wong (3:58)

Then it came down to convincing the foundations to send over the cash to cover those lost benefits.

Dana Linnane (4:03)

It was around just shy of $2 million, which is a lot. But when you have 160 funders on the call, you can quickly mobilize and say, okay, who's going to do this?

Stephen Bassaha (4:12)

So they got the money and started sending it out. More than 2,000 families got the aid before the federal SNAP funding was eventually unfrozen.

Waylon Wong (4:20)

And this sounds like proof philanthropy can step up a feel good story about private foundations joining together to fill in for missing government aid.

Stephen Bassaha (4:29)

But the truth is, they had to make sure those foundation boards were comfortable.

Dana Linnane (4:34)

They don't want to set a precedent to be a gap filler for federal government, for state government.

Waylon Wong (4:42)

And while the different boards did approve the aid, Kyle said they wanted to.

Kyle Caldwell (4:46)

Be clear that this was a very limited short term innovation on the part of philanthropy to fill a public sector gap that cannot be sustained.

Stephen Bassaha (4:57)

And the reason they didn't want to set this precedent.

Kyle Caldwell (4:59)

Everyone knows the math and the math doesn't work.

Waylon Wong (5:03)

The math being that for all the money that philanthropy has in the US it is just a fraction of the federal budget.

Stephen Bassaha (5:09)

To show his math work, Kyle points to the same federal program, snap, and asks, what if Michigan foundations took over all those payments in the state?

Kyle Caldwell (5:18)

They need $3 billion in one year. And realize we have the Kellogg Foundation, Kresge Foundation, Mott foundation, plus community foundations, corporate foundations. We only spend 2 billion in everything that we do, so we can't even carry one federal program for A full year.

Waylon Wong (5:38)

Kyle said the math doesn't work on the national level either.

Kyle Caldwell (5:41)

If you took all of philanthropy's resources nationally, everybody, the Kresge foundation, the Gates foundation, not just their grant making, but their endowments, gave it over to the federal government and said, here you go. How long do you think that you could run the federal government?

Stephen Bassaha (5:59)

I feel like you'd get maybe two, three months. Am I being generous there?

Kyle Caldwell (6:02)

79 days.

Waylon Wong (6:04)

You actually weren't that far off, Stephen.

Stephen Bassaha (6:06)

Yeah, right. Not a great number. And, you know, it's not like all this money is just sitting there. It would have to be pulled from elsewhere, like food banks and after school programs.

Waylon Wong (6:16)

This is why those groups were so reluctant to set that precedent. As generous as Americans are, there just aren't enough dollars being given to fill those gaps.

Stephen Bassaha (6:25)

This is also more than a math problem. There's another reason that Kyle said philanthropy should not just step in for the government. They're both good at spending money in different ways.

Kyle Caldwell (6:36)

Philanthropy can experiment. Public sector can scale.

Stephen Bassaha (6:39)

What he means by this is that philanthropy can be used to invest in risky early ideas that might not pay off.

Waylon Wong (6:45)

And sometimes those ideas are controversial for their time. The kind you wouldn't expect the government to be on board with funding.

Stephen Bassaha (6:52)

Alexander Berger is the CEO of Coefficient Giving, a philanthropy group that aims for high impact giving. And he says one example of philanthropy driven research that might. Might not be controversial today, but definitely was in the 1950s, contraception.

Alexander Berger (7:06)

One that I think doesn't get enough attention is FOIAP was really important in the development of the birth control pill.

Waylon Wong (7:11)

An activist named Catherine McCormick played a big part in funding that research. She wrote out a check for $40,000. That's big money in 1953. And she kept the funds coming until the pill came to market in 1960.

Alexander Berger (7:24)

You've seen sort of philanthropy being able to make these risky early stage investments in things that then become much more broader popular. Things where people start businesses or he.

Waylon Wong (7:34)

Says the government can then scale a program or intervention later. Philanthropy also played a big role in the spread of kindergarten. After those early privately funded projects are proven to work, government stepped in and scaled it up. That tends to be how this goes. Philanthropy handing it over to the government. So expecting the opposite. Philanthropy taking over government programs is a pretty big change.

Stephen Bassaha (7:57)

Yeah. And again, there's just not the funds to do that, despite how much Americans give, which averages out to about 2% of gross domestic product.

Alexander Berger (8:05)

And that's been really steady for many decades, actually. But also there's sort of some parts of the country or, you know, increasing growing demand for people to give more. And so you've seen things like the Giving Pledge where sort of billionaires are sort of committing to give away the majority of their wealth over the course of their lifetimes. There's this idea of tithing and people trying to give sort of 10% of their income to really cost effective charities. And if you're going from sort of 2% on average to 10%, then that can be a big increase and that actually could grow the pie a lot.

Stephen Bassaha (8:33)

So some optimism to end on. And hey, we've actually seen that here. Listeners have stepped up to fill some of the funding gap left by the loss of federal funding for public radio. So thank you for growing that pie and helping us continue to deliver economic stories.

Waylon Wong (8:48)

Yeah, thanks for buying our tote bags, everyone. Keep doing that.

Stephen Bassaha (8:52)

Appreciate it, really.

Waylon Wong (8:54)

This episode was produced by Julia Ritchie with engineering by Sina Lofredo. It was fact checked by Sierra Juarez. Keegan Cannon edits the show and the indicator is a production of npr.

NPR Announcer (9:07)

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