Major Philanthropies Launch $50 Million Fund to Shepherd Federal Dollars on Jobs, Climate

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A group of eight of the country’s largest legacy foundations and billionaire philanthropies launched a $50 million pooled fund today to help ensure the landmark federal spending bills of recent years not only help decarbonize the country, but also translate into wins for workers.

Called BuildUS, it is the latest effort by the country’s mega funders to make the most of the once-in-a-generation torrent of federal funding unleashed by the American Rescue Plan (ARP), the Bipartisan Infrastructure Law (BIL), the CHIPS and Science Act and the Inflation Reduction Act (IRA), which offer a long list of high-leverage opportunities for philanthropy.

The new fund, in its own words, hopes to create a “cleaner, fairer, worker-centered economy” and help Americans across the country “see and feel” the investments made possible by those four bills. It has yet to award any grants, but is weeks away from making an initial round of awards, according to organizers. 

The founding backers include both legacy funders — the William and Flora Hewlett Foundation, Carnegie Corporation of New York, Marguerite Casey Foundation and the W.K. Kellogg Foundation – and the philanthropic operations of several billionaire donors — the Omidyar Network, the Open Society Foundations, the Skoll Foundation and Wellspring Philanthropic Fund. BuildUS hopes to recruit others.

Several people familiar with its plans praised the emergence of more much-needed funding to meet the challenge and opportunity of ensuring communities across the country receive federal dollars, and that investment boosts not only industry but workers, especially in often overlooked corners of the country.

But BuildUS has also sparked concerns that its funders remain stuck in self-limiting issue silos amid the historic opportunity and existential threat of climate change, as well as doubt that one more regrantor is the best solution in a philanthrosphere crowded with intermediaries — a trend that’s been particularly prominent in environmental giving. Organizers say multiple factors, including the nature of the legislation and complexity of the challenge, led to setting up a new fund.

The fund arrives two months after a group of major climate philanthropies, including Hewlett, launched the $180 million Invest in Our Future fund (IOF), also focused on making the most of the flood of federal dollars. Alongside that effort, BuildUS offers a second lesson in both the motivations and tendencies behind how some of the country’s most prominent philanthropies — and mostly progressive ones, in this case — are mobilizing for this moment.

“We have an opportunity to actually and concretely advance economic justice the likes of which we haven’t seen since the Great Society, 60 years ago,” wrote Hewlett Foundation President Larry Kramer in a solicitation email for the fund obtained by Inside Philanthropy. “As important, if these laws are not implemented well, we won’t see another such opportunity for another 60 years… I honestly don’t think there is anything close to this important that any of us are funding right now.”

Hewlett committed $10 million over three years to the fund. That money is in addition to both its economy and society program budget, which is $16 million this year, and its commitment to Invest in Our Future, which consisted of a $40 million direct commitment and $20 million in aligned funding. The Omidyar Network, too, has committed new money, earmarking $5 million above the standard $12 million annual budget of its Reimagining Capitalism portfolio, according to a spokesperson. The aim was to not disrupt current funding.

"Mass philanthropic mobilization is critical to meet this moment,” said Gretchen Phillips, managing director of Omidyar’s Reimagining Capitalism portfolio, in a statement. “However we are clear-eyed about the risks inherent to pooled philanthropic funds — among them, that the resources used to fulfill fund commitments might be diverted from existing programs and their associated grantees.”

What everyone agrees on is that more is needed. The Build US fund’s prospectus, for instance, sets a goal of $100 million. The prize, after all, is leveraging trillions of dollars of federal spending and private investment over the coming years. 

“While philanthropy has stepped up, the scale of its investment doesn’t match the historic level of federal resources,” said Archana Sahgal, founder and president of Hyphen, a nonprofit intermediary focused on government-philanthropy partnerships, in a statement. “Much more is needed to ensure that these federal resources benefit underserved communities.”

How will it fund?

BuildUS approach focuses on four key areas. Jennifer Harris, the fund’s acting executive director, walked me through how she envisions each. The first is maximizing state and local access to funding, which Harris described as technical assistance for both state and local officials and community groups, albeit in a “pretty bespoke, high-touch way,” she said. “Technical assistance is often only as good as trust that its users have in the relationship.”

The second goal is building worker power. “It's not just playing defense and making sure that workers aren't made net worse off — we think there's a chance for offense here, too,” she said. That will likely include funding in states that have not been traditional destinations for labor, with the South a prime target, according to Harris. It arrives amid ongoing mass strikes by actors and auto workers across the country, and under a presidential administration that has frequently voiced its sympathy for workers.

Third, the fund wants to help address bottlenecks and opportunities. Zeroing out U.S. emissions will require a nationwide construction spree of unprecedented scale and speed. That means wading into the politically thorny but transition-essential topic of permitting reform. “We think that there's ways to reinvent some of the process [to] do better on speed and on equity,” Harris said. A complementary area may be community benefits agreements, which she believes will become standard in renewable projects.

Fourth, the fund plans to back strategic communications. One element is simply helping everyday citizens hear about benefits they can apply for. But Harris also has a bigger vision. “Part of the job is to deepen the root structure of support across the country, across the political spectrum,” she said, and that will influence how the fund approaches communications.

All that said, Harris sees growing alignment by partners on combining these areas. “One of the happiest surprises that I’ve had … is that we really are converging towards one strategy, not four — and I think that’s how you do this work well,” she said. “It is finding the two-fers and three-fers,” i.e., funding that can unlock multiple benefits.

On top of that, the fund aims to be place-based, which means local context will determine how it funds. Though its chosen cities and states are yet to be announced, the potential for economic boosts, expanded public support and partnering with other funding efforts will guide geographic choices. “We want to go into hard places,” Harris said. The fund will start off with teams in seven to 10 key states or cities, according to the prospectus provided to IP. 

The fund has yet to make any grants, but Harris said one branch of its support would be for national community organizing networks, naming Community Change, the Center for Working Families and People’s Action as examples. “After building that muscle, over decades, of a lot of patient funding on the part of many funders who are part of BuildUS, it feels like malpractice not to figure out how to direct the basic muscle of community organizing, and the power that has been built up through organizations like that, to this work,” she said. 

Who’s in charge?

In choosing Harris, Hewlett and the fund’s other backers have chosen both a familiar face, and someone who worked on the bills it seeks to maximize. Harris only recently left the Biden administration, where she was serving as special assistant to the president and senior director for international economics on the National Economic Council and National Security Council. As I reported in 2021, she originally joined the administration from Hewlett, where she led its economy and society, and helped develop its Beyond Neoliberalism program. 

The three other members of the fund’s national team are Sameera Fazili, a Biden administration alum who, like Harris, served on the National Economic Council; Manu Prakasam, a veteran of electric truck maker Rivian; and Kokei Otosi, a former staffer of IBM, the NYC Economic Development Corporation, and the Van Alen Institute, an urban planning nonprofit. The fund is fiscally sponsored by Amalgamated Foundation. The aim is to be “leanly staffed” and “pretty ruthless on our overhead,” Harris said.

BuildUS originally planned also to hire state-based teams for each of its chosen geographies, but is no longer planning to directly hire state-level staff, according to a Hewlett spokesperson supporting the launch of the fund. Like many pooled funds, BuildUS board seats are reserved for its biggest donors, with funders who contribute $5 million or more receiving a spot.

Why start another fund?

Four people familiar with the fund shared concerns that it reflects a continued inability and unwillingness among the nation’s biggest philanthropies to partner outside of funding silos, even amid the once-in-a-generation opportunity of these bills and the existential threat posed by climate change. All were granted anonymity to candidly share their concerns without damaging relationships.

The federal bills, and particularly the IRA, intentionally intertwine economic development and decarbonization goals, along with other aims. Instead of following that lead, major funders have set up two separate funds (so far) — BuildUS and Invest in Our Future, focused on workers and decarbonization, respectively, albeit with some overlap — with which grantees must build relationships and submit proposals. Some see a risk of reinforcing a philanthropic perception that climate funding is just about emissions reduction, not economic development, let alone equity or health or other issues.

Most of those consulted also saw this effort as costly duplication within a climate funding field that already has a dizzying number of intermediaries, and indicative of the major funders’ unwillingness to give up power. The field’s regrantors not only include several funding worker power through a climate lens, but also funds started by or guided by the communities that funders often say they wish to empower.

These bodies — and there are a lot of them — include worker and implementation-oriented groups like the Just Transition Fund, the Fund for Frontline Power, Justice40 Accelerator, Communities First, Building Equity and Alignment for Environmental Justice. There’s the group of front-line-focused regrantors that have received major support from Jeff Bezos and legacy foundations: Hive Fund for Climate and Gender Justice, the Climate and Clean Energy Equity Fund, Solutions Project and NDN Collective. And there are smaller, place-based or rural-oriented intermediaries like Heartland Fund or Midwest Environmental Justice Network. There’s also the national climate regrantor, Energy Foundation, that is deeply involved in state-level work. The list could go on, and on, and on. Hewlett, notably, has funded or helped launch several of these groups.

The BuildUS team and funders cited a number of reasons for both setting up two separate funds and the choice to work through them versus existing intermediaries. Ultimately, the effort is “committed to working collaboratively across the philanthropic landscape,” said Brian Kettenring, director of the economy and society initiative at Hewlett and a BuildUS board member, in a statement. 

“A pooled fund is, by definition, an effort by funders to get out of their individual silos and the grantees they each fund — to work together to develop a shared set of priorities and execute a shared strategy supporting grantees working in a particular sector or state,” he said. “And while BuildUS and Invest in Our Future both aim to use philanthropy to augment the transformative potential of these historic public investments, the foundation partners in each fund are bringing their own expertise, in economic development and climate, respectively, to that shared goal.”

Groups like Energy Foundation will be among the partners, according to a spokesperson, but another concern of organizers that led to establishing a separate fund was the relative lack of current collaboration among existing intermediaries.

Harris presented several reasons to me that the team felt it was necessary to pool money and grant through “two funds,” as she and Kettenring put it in our initial conversation, referring to BuildUS and Invest in Our Future. A leading concern was the range of specialties involved — decarbonization, economic development, transportation, industrial policy, labor, community organizing, etc. “There's a lot of different disciplines that we're trying to stitch together to do this well,” she said.

She also told me the backers of BuildUS wanted to set up their own fund to further their own understanding. “They wanted to figure out how to get close enough to that work to do the learning that they need to do,” she said. “If spending $3 trillion dollars in public and private investment isn't changing one's philanthropic strategy on how you're doing economic equity or racial justice, you’re probably missing something.”

Harris acknowledged there are “a lot of overlaps and synergies” with IOF, but emphasized that BuildUS was structured intentionally by her “to maximize the possibility of working seamlessly” with IOF. After all, the two advised each other on early steps, she noted.

Herding cats

Ultimately, critiques of BuildUS and Invest in Our Future are only partly about its principal organizers, who have brought new funds and new funders into this space at what constitutes a philanthropic gallop. A lot of this comes back to what major funders and philanthropy more broadly are willing to do.

Trying to get, say, George Soros and Bill Gates on the same page is a challenge even for the force of nature and fundraising powerhouse that is Larry Kramer, not to mention his staff at Hewlett and all the other folks trying to make the most of this legislative bonanza. Ultimately, Soros’ Open Society Foundations backed BuildUS, and Gates’ Breakthrough Energy supported IOF. Whether they would have aligned on a single fund is impossible to say. Even beyond those bold-faced names, it is notoriously difficult to get funders to align.

And that reflects climate philanthropy as a whole. Hewlett has been a lead architect, along with the David and Lucile Packard Foundation and others, in constructing an infrastructure through which the funders hoped a new outpouring of climate philanthropy would flow, whether by setting up the ClimateWorks network or bankrolling some of the funds listed above. Parallel if not always intersecting efforts by funders like the Kresge Foundation or the JPB Foundation have built similar networks. But a variety of pressures and tendencies mean a new effort often requires yet another new fund, even if one (or a dozen) have already been built for more or less this kind of thing.

Amid a once-in-a-generation opportunity for leveraging federal dollars, the funds and partners that BuildUS has brought into the fold are dearly needed. Its lead organizer, Hewlett, knows better than most the value of collaboration, given its hand in so many of the field’s pooled funds — and I expect we will see that in how BuildUS operates. Perhaps this fund, and most importantly, the needs of the field (not funders) will kickstart a knitting together of climate philanthropy’s fast-growing, yet — to the many fundraisers I speak to — increasingly overwhelming array of regrantors. One can hope.

Update: This article has been updated to reflect that Jennifer Harris intended to reference the Center for Working Families, the 501(c)(3) arm of the Working Families Party (WFP), as an example grantee for BuildUS, not WFP itself.