Responding to Inequities Revealed by COVID, Funders Set Out to Repair Workers’ Safety Net

COVID-19 shined a light on the gross inequities in American employment. As nearly half of the country’s lowest-paid workers lost their jobs, cracks in the system locked many out of critical lifelines like unemployment and put a hard stop to the weekly paychecks that regularly kept 40% of households afloat.

A full 80% of the nearly 10 million jobs lost belonged to the bottom 25% of wage earners; 4 in 5 made less than $14 an hour. And the rebound has been slow in coming. The U.S. Department of Labor estimates that the number of unemployed still hovers around 8.4 million.

But emerging from the dark recesses of a pandemic also poses a once-in-a-generation chance to create lasting change—in this case, a safety net that will work for all people, including people that have historically sat on the margins, like immigrants, women and people of color.

Toward that end, a major funding collaborative, the Families and Workers Fund (FWF), has launched a $51 million, five-year effort to help secure the future of American workers.

A range of funders

The collaborative is backed by a host of heavy hitters, and co-chaired by Darren Walker, president of the Ford Foundation, and Eric Braverman, CEO of Schmidt Futures. Both organizations were in on the ground level when FWF was originally established in April of 2020 as a short-term, rapid-response vehicle for reaching the pandemic’s hardest-hit.

They are joined by an executive committee that includes representation from Open Society Foundations, the Rockefeller Foundation, Skoll Foundation and—on the corporate end—the Amalgamated Foundation.

Other funders include mega-donors like MacKenzie Scott, Jack Dorsey and other big-name philanthropies: the Annie E. Casey Foundation, Craig Newmark Philanthropies, the Edna McConnell Clark Foundation, the Conrad H. Hilton Foundation, the Barbara Picower-led JPB Foundation, the MacFarlane Foundation, the Spitzer Charitable Trust, and the W.K. Kellogg Foundation. Luminate and Omidyar Network also stepped up, along with New York City’s largest poverty-fighting organization, Robin Hood, and Morgan Stanley.

Otis Rolley, senior vice president, U.S. Equity and Economic Opportunity Initiative for the Rockefeller Foundation, said part of the reason the investment was attractive was that it highlighted a “bottom-up and across” theory of change. Rolley said the collaborative is creating a grantee-centered way of moving dollars for maximum impact, one that recognizes that the “old normal cannot continue,” while bringing a diversity of perspectives to the table to strategize on critical issues of deployment.

Thinking about the equity agenda, Rolley noted, “you have corporate and non-traditional partners in and around equity to build back better in a real way,” each using their own theory of change.

Forming new partnerships

Funding will be deployed by the Family and Workers Fund. It builds on the initiative founded by Schmidt and Ford in April 2020: a short-term, rapid-response fund that quickly initiated cash transfers to 215,000 of the hardest hit.

Rachel Korberg, co-founder and executive director of the organization, said reaching the folks who fall outside formal systems, like undocumented workers, is what FWF is “designed to do.” Rather than employing individual cash transfers, FWF made nearly 30 individual direct grants to organizations that are trusted and considered authentic by groups like immigrant day laborers and unemployed members of the LGBTQ community in the South.

Korberg expects to build upon those partnerships to repair and reimagine systems that ensure economic security, create opportunity, and allow worker mobility.

Two tactics, two programs

The fund’s vision is to build a more equitable economy for all. Its efforts to create a more inclusive and effective public benefits system are aimed squarely at two goals: helping low-wage earners level up to better jobs that tap into the momentum of a post-pandemic world, and repairing and reimagining a 21st-century benefits system that’s equipped to meet future downturns.

By leveraging billions in new federal and employer funding to quickly achieve scale, the Recover UP program will partner with federal, state and local government to connect low-wage earners with high-quality jobs with real growth potential.

As an example, Rolley pointed to the Resilience Force, a grantee that sits at the intersection of equity, jobs and climate. The group is actively training millions to mount the response and recovery to the climate-related events that have become a fact of life in America. Support from the FWF will help the group rewrite the rules of recovery by building and training a workforce that meets the realities of the future, as storms like Hurricane Ida become the norm.

By spurring government innovation, civic tech and advocacy work, the 21st Century Benefits program will work to break the unemployment insurance cycle that lagged or failed many during the pandemic.

An illustration of how strong tech systems can help deliver funds, and the important role tech funders can play, is FWF’s recent support for New America.

The grant quickly surfaced ways that governments and nonprofits innovated on the fly to deliver unemployment insurance more quickly and equitably. The organization created a playbook to improve benefits delivery—with the guidance of FWF advisory board member Ryan Burke of Schmidt Futures—that has the potential to impact more than $2 billion in American Rescue Plan funding that’s already allocated for improving unemployment insurance systems.

There’s no question that the pandemic brought dark clouds to the ideas and ideals of economic equity, and that the status quo must change. But the fund hopes to harness the collective power of philanthropy to build back better.

“It’s not good enough to go back to how things were before COVID-19,” said Rachel Korberg. “The unexpected silver lining of this brutal pandemic is that we have all been reminded about how essential workers are.”

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