Eight Questions with Hyphen on Philanthropy’s $4 Trillion Opportunity
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Archana Sahgal, founder and president of Hyphen
Hyphen was built for this moment.
The nonprofit intermediary, launched two years ago, is on a mission to ensure philanthropy makes the most of a once-in-a-generation opportunity to improve lives in the United States, which the group’s founder and president, Archana Sahgal, among others, likens to a “21st-century New Deal.”
Four federal bills — the American Rescue Plan, the Bipartisan Infrastructure Law, the CHIPS and Science Act and the Inflation Reduction Act — have unleashed a torrent of federal spending that estimates collectively put at nearly $4 trillion. Yet historic barriers and current inequality mean those investments may not be equitably spent.
Sahgal and the rest of Hyphen’s eight-person staff are working to both bridge the gap between philanthropy and the federal administration, state governments and others, and make sure the resulting investments reach people of color and low-income communities that have too often been left behind by federal largesse. The approach has racked up some big wins.
The team leads the $100 million Initiative for Inclusive Entrepreneurship, which was announced by Vice President Kamala Harris last October and has a mix of corporate and foundation backers, including JPMorgan Chase and Skoll Foundation. The aim is to help small businesses owned by people of color access a nearly $10 billion Department of Treasury credit initiative that grew under the American Rescue Plan.
Hyphen also worked with the White House and pulled in support from 16 funders on an 18-month, $7.4 million initiative on gun violence and public safety, the Community Violence Intervention Collaborative (CVIC). My colleague Philip Rojc profiled the effort shortly after its 2021 launch. Work now continues through the Coalition to Advance Public Safety (CAPS), which has attracted $22.5 million in grants and is composed of the four Black-led community-based groups that served as training partners for CVIC.
The team is also doing strategic communications on infrastructure investments, and past work includes a vaccination outreach campaign and helping establish three funds to support refugees and asylum seekers, including the Welcome Fund, which helped Afghans and others seeking refuge in the U.S.
Through these efforts and in meetings with grantmakers and a wide range of federal agencies and nonprofits, Hyphen has both helped create spaces for philanthropy to act, and urged the sector to put forward funds equal to the task of realizing what this federal legislation makes possible.
The gargantuan scale of today’s funding opportunities was the leading theme of my conversation last month with Sahgal and Hyphen’s senior advisor Cecilia Muñoz. The pair have the experience to know, with resumes that stretch across government, philanthropy and beyond. Muñoz was a member of President Obama’s senior staff, including five years as director of the Domestic Policy Council. She earlier spent two decades at the National Council of La Raza (now UNIDOS US), one of the nation’s largest Hispanic policy and advocacy organizations.
Muñoz also knows her way around philanthropic board rooms, serving as a trustee for the Kresge, MacArthur and Joyce foundations, and on advisory committees for the JPB Foundation and Open Society Foundations. That service gives her particular appreciation for the challenge and possibility of this time.
“Foundations have long-term plans that they made before legislation passed. They're not necessarily in a position to drop one set of things in order to do another set of things,” she said. “But an opportunity like this comes maybe once a generation. The leverage is so enormous — it's unlike anything any of these philanthropies are gonna see again, at least while their present staff are around.”
Sahgal’s career, meanwhile, has spanned roles in the Obama White House, including at the Department of Commerce; serving as a U.S. program officer at Open Society Foundations; advising the Democracy Alliance and NoVo Foundation; and most recently, directing the National Immigration Law Center’s 501(c)(4) fund.
A disclosure: I’m friends with two of Hyphen’s other senior staff, Daranee Petsod and Felecia Bartow, from years working together at Grantmakers Concerned with Immigrants and Refugees.
That said, I’m not the only one impressed. Hyphen’s gun violence initiative earned positive reviews in Politico and the Associated Press. Many foundations clearly value Muñoz’s vision, and the organization’s funders include the James Irvine Foundation, MacArthur Foundation, Raikes Foundation and Skoll Foundation.
“What's exciting about Hyphen is that they bring a lot of inside government experience, and so can offer a different sort of brokerage role, where they really understand what's needed on the inside and how to coordinate,” said Prithi Trivedi, special initiatives director at the David and Lucile Packard Foundation, another Hyphen funder.
Before Climate Week brought the launch of several more implementation funds and collaboratives, including BuildUS, I spoke to Muñoz and Sahgal about the opportunities available to philanthropy today and how funders can make the most of them. Here’s our conversation, edited for length and clarity.
Cecilia Muñoz, Senior Advisor at Hyphen
Why was Hyphen needed?
Muñoz: Government doesn't always understand how philanthropy works, and philanthropy doesn't always understand how government works. It was clear from the beginning, even before some of these bills had passed, that there was a need for somebody to help each side communicate with the other. And to help develop strategies where philanthropy is investing alongside what the government is trying to do, so that resources move beyond the typical channels, especially to communities that don't always see federal dollars.
Sahgal: Hyphen is a first-of-its-kind organization. There are incredible organizations that are doing policy implementation. But we methodically work alongside the Biden administration to build these high-profile, high-impact public-private partnerships and collaborations that benefit marginalized families, children and communities across the country. We see this moment as akin to the 21st-century New Deal — historic amounts of resources, trillions of dollars that will not flow into local communities, communities of color and other underserved communities, but for a leveraging of private dollars to help pull down public dollars.
How is philanthropy doing on implementation?
Muñoz: Philanthropy is stepping up, which is great. We've seen pooled funds develop. There is an active conversation among foundations about engaging in implementation, which, for many of them, is new. All of that is to the good. We also think there's room for a lot more; $4 trillion over 10 years is both a lot of money and a long time horizon. We're hoping to see a conversation about sustained effort over time, and greater scale.
The available federal funding is relevant to many different philanthropy focus areas. Do you see a difference in the response based on different segments of philanthropy?
Sahgal: We know that strategic philanthropic investments can unlock billions of dollars in federal funding to advance a range of philanthropic priorities. Those could include carbon reduction and climate change goals, creating good union jobs, supporting low-wage workers and their families, the much-needed concrete racial equity priorities of the Biden-Harris administration. The administration is approaching policy implementation as a three-legged stool, to advance equity, climate change goals and good jobs. Hyphen really sees that opportunity as a three-legged stool, too.
Philanthropies oftentimes have their own priorities: You've got climate funders, you've got folks that care deeply about low-wage workers. Each of those philanthropies have stepped up in very specific ways. We're very eager to ensure that the totality of the priorities related to good jobs, advancing racial equity, reducing carbon and fulfilling our climate change goals are held together. We think there has been some incredible work in each of the verticals. But work needs to be done together to hold and make sure all three of those are integrated, especially around the racial equity priorities.
There’s four bills, dozens of programs and many funding timelines to track. That means there's significant funding going out the door today, but there's also multi-year funding. What should philanthropy know in terms of the timing of its funding?
Muñoz: In many cases, funding is going out over a 10-year window. To give an example, the Department of Transportation has about $660 billion under the Bipartisan Infrastructure Law, and they're dispensing that money over 10 years. If you are concerned about carbon, this is a really important leveraging opportunity. Those funds are either going to result in the pouring of concrete or in things which move the needle toward carbon reduction. There's much work to do to push the balance toward the latter. There are people at the Department of Transportation who are thinking hard about equity and eager to make sure that the dollars flow in ways that they don't typically flow. But that won't happen by itself. Philanthropy is really needed to influence what ends up on the department's desk.
Sahgal: Each of the bills have different timelines. One of the things that Hyphen has done is work with the Biden administration to identify where philanthropic support is needed to really implement the legislation and bring the biggest funders to help match funds and maximize impact — up against the timeline. In some cases, related to [the Bipartisan Infrastructure Law], it’s 10 years; in some cases, related to the American Rescue Plan’s State and Local Fiscal Recovery funds, they have to be obligated by the end of 2024. That’s why Hyphen has looked at concrete opportunities to move and leverage in short periods of time.
Is federal legislative implementation about moving funds and spending more? Are there other pathways for foundations to do implementation work, whether as a connector or otherwise?
Muñoz: All of the above, really. It’s an all-hands-on-deck moment. Some philanthropies have, for example, gone to their endowments, others have shifted funds or loaned personnel or both, and others are shaping a grantmaking strategy. At some level, all of these things are appropriate. The more creativity and resources that get unlocked in this moment, the better for making sure that federal dollars have their maximum impact.
What are the biggest obstacles that philanthropy can lift in order to make sure this funding is equitably distributed?
Sahgal: What I find really exciting is that there are many, many distinct opportunities to support federal implementation. There are multiple onramps, issues and strategies. Philanthropies can choose what aligns best within their missions and goals. There's a huge menu that's available. But the ideal is to take a cross-cutting approach. And time is of the essence. Some of the policies are being implemented today and now, and some have a 10-year horizon.
Muñoz: One example is the State and Local Fiscal Recovery Funds. They are essentially COVID funds. Our understanding is that tens of billions of those dollars remain unspent. That's an example of a really short time-horizon opportunity. I've been involved with philanthropies that support advocates who are trying to get a state government to spend money on child care or paid leave, etc. In this case, the money's already there. What's needed is to make sure that states and localities are actually spending it on areas that a community feels is a priority. Three-quarters of the battle is already done. That feels like an opportunity not to be missed.
I've heard rumors that some philanthropists are uncertain about their next steps because of the potential for a new administration to reverse course. Is that something you see, and what would you say to that?
Muñoz: In the political world, you can never be certain about what's next. That is precisely the reason you take advantage of the opportunity to lock in resources and affect their flow now.
Sahgal: One of the things that I love about philanthropy is how much it loves to analyze the political world, because that world is always an interesting topic of conversation. But Hyphen, as a 501(c)(3), knows that there is real, tangible, concrete work that needs to be done now and all of next year. Regardless of the potential future, there are billions of dollars that are being unlocked into communities across the United States — today, tomorrow, next month and next year. That requires a response from philanthropy that matches the scale — and the pace — at which the Biden-Harris administration is unlocking resources.
When trying to advance equity, foundations’ standard practices can get in the way of their success, particularly for communities that are not fluent in ‘philanthropese’ and the sector. Is that an issue here?
Muñoz: In the face of this opportunity, if what you're doing is business as usual, then you're getting something wrong. If you're sticking to your guns so much that you're not making changes to leverage this opportunity, you're really, really missing the boat — and an opportunity to have the kind impact that, most of the time, we can only dream of.
Sahgal: It is not easy to unlock new money from philanthropic institutions. It really is a testament to the leadership of many foundation boards, presidents and teams to have unlocked the resources into these pooled funds. And we know that resources do not flow equitably into communities across the country. Without philanthropic support, the funds will not reach the intended people, at the intended scale, with intentions hoped for by the Biden-Harris administration. That’s the piece where we’re excited to continue to engage our philanthropic colleagues.
A very strategic amount of philanthropic resources has the power to unlock billions of federal dollars for underserved communities. Hundreds of millions of dollars are able to propel tens of billions. But we're not quite seeing that from private philanthropy yet. We're definitely seeing tens and tens and tens of millions of dollars, which is fantastic. But millions are never going to unlock trillions. The passage of these policies is an incredible celebratory landmark success of the Biden-Harris administration, but it’s just a first step.
This story has been updated to clarify the relationship between CVIC and CAPS.
