To Crack the Poverty Code, a Big Bet on Data-Driven Interventions to Fuel Upward Mobility

Detroit is one of the targeted cities. Christopher Boswell/shutterstock

Detroit is one of the targeted cities. Christopher Boswell/shutterstock

When Bloomberg Philanthropies, the Gates Foundation, and the Ballmer Group teamed up last fall on a new initiative to advance economic mobility in cities, we noted the novelty of their move. The three philanthropic high-flyers are all recent entrants into domestic anti-poverty funding, turning to the issue as inequality and a stymied American dream take on greater urgency in the public conversation. Their joint $12 million commitment for data-driven “interventions” in U.S. cities represents only a small fraction of what these funders are dedicating to this space. But it’s a good indicator of the kinds of strategies the new billionaire war on poverty may employ, and what investments living donors from business will prioritize as they seek to repair long-broken ladders of opportunity.

Following a competitive process that weighed candidate cities’ willingness to tackle economic mobility in a distinctly Bloombergian mode—more on that in a bit—the funders recently announced 10 recipient cities. Over the next year and a half, the municipalities will develop and implement projects to enhance residents’ economic mobility, working alongside experts affiliated with Bloomberg’s What Works Cities initiative. 

Anti-Poverty Laboratories

The chosen cities’ projects fall into four broad categories. Cincinnati, New Orleans, Racine (WI), and Tulsa will pilot workforce development initiatives to advance the career prospects of youth and low-income adults. Albuquerque, Lansing (MI), and Rochester (NY) are focusing on financial empowerment and inclusion. Housing affordability and related services are the priority in Detroit and Newark. And Dayton (OH) will look into engaging parents with early childhood education.

The selected strategies fit well within the three funders’ grantmaking profiles, and they reflect the philanthropic mainstream. Workforce development, for instance, is something of a default for funders who want to boost economic opportunity, especially major corporate philanthropies. It’s been among the priorities of the Ballmer Group since the former Microsoft CEO began tackling poverty, making grants both nationally and locally, in L.A., Detroit and the Pacific Northwest.

Education, on the other hand, was the Gates Foundation’s sole focus in the U.S. for a long time. Its approach began to broaden last year, beginning with a $158 million commitment to address the problems students face outside the classroom. Access to stable housing is a part of that, along with navigating the path from education to stable employment. As Gates ramps up its anti-poverty work, it has expressed a desire that “more actors at all levels” pitch in to increase mobility over the next decade, especially local leaders tackling the issue “in isolation.”

Major coastal hubs like New York and Los Angeles are no strangers to yawning gaps between rich and poor. But those cities aren’t the focus, here. Instead, the three mega-funders are zeroing in on mid-size metros located in the post-industrial “Rust Belt” and red states like Oklahoma. That tracks with a recent ramp-up of the Ballmer Group’s anti-poverty giving in Detroit, where it’s paying attention to local know-how following a course already set by the philanthropy’s Los Angeles giving.


Data-Driven Localism: Promise and Limitations

In first announcing this initiative, leaders at the Ballmer Group and the Gates Foundation emphasized the need for better metrics and data analysis—which brings us to Bloomberg. As cities competed for these resources, their “willingness to use data and evidence to accelerate their progress” was taken into account, as well as whether they could field a dedicated team to spearhead the work.

It should come as no surprise that urban metrics are the focus of an initiative so deep within the Bloomberg orbit. The former New York mayor’s philanthropy has always been imbued with a strong faith in what local leaders can accomplish when they embrace savvy data analysis—tapping methodologies that helped power Bloomberg’s three terms as New York City mayor. Since leaving office, Bloomberg has backed lots of national (and even international) grantmaking initiatives to promote innovation and problem solving on the municipal level. Key to that effort is Bloomberg’s American Cities Initiative, which funds programs like the American Cities Climate Challenge, My Brother’s Keeper and Beyond Coal (to name a few), as well as What Works Cities itself. 

Bloomberg and the Gates Foundation (as well as the Chan Zuckerberg Initiative and the Overdeck Family Foundation) have also funded Opportunity Insights, a research institute based at Harvard that uses census data to illustrate differences in prosperity across the nation with groundbreaking granularity. The chosen cities will draw on the institute’s Opportunity Atlas to inform their own projects.

Bloomberg’s data-driven localist approach has its merits. For one thing, it suits the customization of support to fit specific local needs. And calling on hometown expertise can be more effective than dictating solutions from out of state. Since 2016, Mike Bloomberg has also actively championed the idea that forward-thinking local leaders can act as a counterweight to a regressive Washington, D.C. That narrative is most commonly associated with immigration and the climate movement, but it also applies here. As Bloomberg Philanthropies CEO Patricia Harris remarked in a press release, “mayors are at the forefront of efforts to increase economic opportunity for their residents.” 

On the other hand, mayors’ powers are limited when it comes to state and federal policy, and they can do little to counteract the broader systemic forces holding lower and middle-income Americans back. Consider the Mott Foundation’s long campaign to halt the decline of Flint, Michigan, laying out over $1 billion for few long-term gains. Or consider how decades of funder-backed local initiatives were dramatically set back by the 2008 financial crisis—a meltdown preceded by philanthropy’s deep inattention to regulating Wall Street. The place-based approach may yield measurable impact in the here and now, but what’s to prevent the next economic slowdown from wiping out those hard-won results? And how can philanthropy guarantee the effectiveness of its local investments in the face of the long-term fiscal squeeze that lurks ahead at all levels of government?

To avert those dangers, anti-poverty funders need to supplement by-the-numbers projects with grantmaking in less data-friendly territory, like grassroots power-building, state and national advocacy groups, and narrative change. They would also do well to engage levers besides philanthropy to champion effective policy in Congress and state capitols, something mega-givers like Mark Zuckerberg and Priscilla Chan—and more recently, Bill and Melinda Gates themselves—are indeed moving into. Bloomberg has become far more combative and partisan, pumping tens of millions of dollars into the last election cycle to elect Democrats.

In the end, of course, these are not either-or choices for billionaire donors who are sitting on vast fortunes that they’ve pledged to give away. There’s plenty of cash to scale up a much larger and more comprehensive push against poverty.

And to be sure, funding the nation-spanning research of places like Opportunity Insights helps create a powerful foundation for that push. That’s not just because granular data on neighborhood poverty can inform local efforts. It’s because of the powerful stories that data tells us about society’s stubborn inequities and the true breadth of policy reform needed to address them. In the hands of major media outlets, which are picking up on Opportunity Insights’ work, those stories can escape the offices of local bureaucrats and get in front of the voting public.