How Philanthropy Can Ensure the Bipartisan Infrastructure Framework’s Success
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The Detroit people mover. Belikova Oksana/shutterstock
The adjectives describing the $1.2 trillion infrastructure bill President Joe Biden signed into law are getting more super-charged by the day: “transformational” … “once-in-a-generation investment” … “unprecedented in American history” … even “FDR-like.”
All true and fitting in terms of the law’s financial magnitude, with billions flowing to states and localities that have been on a starvation diet for the better part of the last several decades.
And unlike in past deals, equity is deeply woven into the legislation’s impact and measures of success. Words matter, and it’s almost impossible to count the number of times in the bill’s 2,701 pages that the word equity, along with its multiple synonyms, appears.
For those of us who have long championed America’s cities, there is a lot to love in the Bipartisan Infrastructure Framework (BIF). But I’d like to broaden the view to include the special role philanthropy must play to ensure this law’s success.
Philanthropy’s positioning
Stop and think for a moment about all the ways that philanthropy has contributed to, or helped mitigate, the impacts of the physical environments of cities over the last decades.
Together with partners from all sectors, philanthropy is well situated to stretch our role even further. Although the federal dollars open the spigot of capital support, that’s only the first step. We can help influence for whom the built environment of the future is designed to serve. We can help reset who designs and builds that infrastructure, how systems of accountability are incorporated, and how local nonprofits are best leveraged.
The last time American society took a cut at this, it was deeply misguided by the principle of “urban renewal.” As a result, cities destroyed neighborhoods of color to create freeways that could suck suburban residents in and out of downtown business districts with maximum speed and convenience, tore down buildings that carried communities’ shared history and heritage, gutted mass transit, and sanctioned financial mechanisms designed to strip wealth from inner-city neighborhoods. We are still paying the price today for these terrible policy positions.
It’s too bad that earlier era—and the waterfall of policies, investments, behaviors and attitudes that followed on for generations—despoiled the construct of “urban renewal.” Because urban renewal of an entirely different kind is exactly what we need, and what the infrastructure bill gives us a real shot of achieving.
What the infrastructure bill sets out to achieve
So let’s explore a handful of examples of the “what”—which community renewal approaches are contained in the bill—followed by the pivotal issue of the “how.” Here are four areas of infrastructure the framework prioritizes:
1. Water systems. The bill doubles the minimum percentage of subsidy that Drinking Water State Revolving Loan Funds must direct to disadvantaged communities. It also expands states’ discretion to assist those communities through grants, negative-interest loans, community debt restructuring, and loan forgiveness. The bill’s provisions are a perfect invitation to pursue these solutions at a greater scale.
2. Public transit. The bill for the first time permits actors other than state departments of transportation to apply for funding for innovative state, regional and local transportation pilot programs. This is an incredible opportunity for local communities and transportation activists to partner with local actors to define their own transportation needs and the solutions that best fit their own context.
3. Transportation reparations (my choice of words). The bill authorizes $1 billion to reconnect and repair the fabric of historically underserved communities sundered by highways and other infrastructure projects of the urban renewal period. This is our opportunity to scale many of the solutions that philanthropy and the nonprofit community have been piloting for years in these disconnected and severed communities and to finally acknowledge as a society the damage done.
4. Climate resilience. The bill authorizes $50 billion to accelerate alternative energy investment, advance weatherization, and mitigate and adapt to flooding, droughts, heat zones and wildfires through both physical and natural systems.
But the trick to making these provisions work as intended will be guaranteeing that the benefits are pulled down fully to the neighborhood and community level.
How philanthropy can ensure implementation is successful
That takes me to the “how,” which is every bit as important as the “what.”
The bill’s toolbox is expansive and creative, including large government grants (both competitive and entitled) to be sure, but also incentives for public-private partnerships, private activity bonds, tax credit programs and many others that will be prescribed and circumscribed by agency regulation.
That diversity is all to the good. But the timelines, programmatic prescriptions and regulatory constraints the federal government imposes with new legislative initiatives—most notably under the American Relief Program—hems in local governments. It’s not generally possible to shift funds across funding categories. Localities most often must use it or lose it. And the requirements of one federal program often get in the way of, even conflict with, the requirements of another, freezing localities in place lest they make a mistake and have to pay the federal government back.
Hence, the importance of implementation. A poorly conceived tool in skilled hands can still deliver a beneficial result. And a perfectly designed tool in unskilled hands can still fail in its essential purpose (the most recent and vivid example being Opportunity Zones).
We don’t know yet which of the infrastructure bill’s countless provisions will be a poorly conceived tool or a perfectly designed one. But we do know from our work in Detroit in particular that the nonprofit sector will need to play an indispensable role in either event. Stated simply, the nonprofit sector is often the execution arm of the municipal public policy apparatus. Philanthropy will need to ensure that the right organizations are well-positioned, well-resourced and well-informed about the legislation in all its dimensions.
Philanthropy has an immense, and I’d argue pivotal, role to play in ensuring the BIF’s success. We must fortify and amplify the voice of nonprofit implementation partners. Second, we should use our social investment expertise to leverage multiple forms of capital into a financial solution to drive equitable results. And lastly, we must use our know-how and experience to be a convener, a table-setter and to spur the public, private, nonprofit and philanthropic sectors to engage in collective effort for the greater good.
Philanthropy’s role isn’t explicitly laid out in this infrastructure law; our role isn’t clear. But by bringing our resources, tools and experience to bear, we can, as a sector, ensure that this $1.2 trillion in federal dollars is transformative for our cities—and rights the many wrongs that still reverberate on today.
Rip Rapson is the CEO and president of the Kresge Foundation.
