Philanthropic Funding for Community and Economic Development: Exploring Potential for Influencing Policy and Governance

Abstract

Philanthropic foundations are prominent participants in collaborations to revitalize some distressed cities. Their participation and vast resources raise questions about their potential to influence city policy, become part of local governing regimes, and alter regimes’ policy biases. Yet, no comprehensive, empirical studies exist to establish the potential scale of this phenomenon across a large number of cities. This study begins to fill that void by analyzing a unique database of foundation giving for community and economic development (CED) relative to other city funding sources in 30 legacy cities. I conclude that the potential for foundation influence on policy and governance is substantial for a subset of large legacy cities with especially high need and local, resource-rich foundations. Comparative case studies of these cities can provide critical knowledge regarding potential evolution of decision-making processes, governing regimes, and policy outputs in legacy cities.

Foundations of Influence: Intervention Pathways of Foundation Influence on City Governance and Policy

“…The first two traits I considered relate to controlling resources. My prior work (Thomson, 2020) demonstrated foundations in the study cities provided substantial CED funding, of which the overwhelming majority came from foundations with a significant, ongoing local presence that enhanced their potential for influencing policy and governance. Yet I examined only 1 year of funding and did not analyze the funding distribution across foundations.…”

“…Scholars have documented the effect of foundations' historical and new approaches on national and international policy (Anheier & Hammack, 2010;Heydemann & Kinsey, 2010;Minkoff & Agnone, 2010;Zunz, 2012) and state and local education policy (Clemens & Lee, 2010;Quinn et al, 2014;Reckhow, 2012). CED is particularly prone to foundation influence due to the relative absence, simplicity, or adaptability of institutional networks; high need for resources; alignment of foundations' and political elites' preferences; the public's thirst for action; and CED's localized nature (Thomson, 2020). Studies have analyzed foundation activism in CED in specific cities (Lowe, 2004;Martinez-Cosio & Bussell, 2013;Pill, 2019;Ravazzi, 2016;Thomson, 2019Thomson, , 2021.…”

“…The evidence of foundation governance and policymaking in CED is growing, but questions remain. Many studies consider foundations secondarily and/or do not directly investigate governance and policy effects, but their findings are suggestive (Thomson, 2020). There is little evidence of enduring influence on policy or governance in Los Angeles, Phoenix, and Denver (Clarke, 2017; Dantico & Svara, 2015; Shiau et al, 2015), though it is growing in Denver as constraints on city resources increase.…”

Elite philanthropy in the United States and United Kingdom in the new age of inequalities

“…Philanthropic engagement in CED has been welcomed as central government funding for regeneration projects in post‐industrial ‘legacy cities’ has shrunk, creating opportunity for philanthropists and philanthropic foundations to get involved in regeneration consortia alongside private‐sector partners, local government and government agencies (Toepler, 2018). In the US, foundation funding for CED rose by 160% between 2004 and 2016, while federal government funding declined by 57% over the same time (Thomson, 2020). By the end of the period, philanthropic funding for CED exceeded that of federal government in several large cities, strengthening the hand of market‐oriented philanthropists in place‐based decision‐making (Giloth, 2019; Lindemann, 2019; Thomson, 2020).…”

“…In the US, foundation funding for CED rose by 160% between 2004 and 2016, while federal government funding declined by 57% over the same time (Thomson, 2020). By the end of the period, philanthropic funding for CED exceeded that of federal government in several large cities, strengthening the hand of market‐oriented philanthropists in place‐based decision‐making (Giloth, 2019; Lindemann, 2019; Thomson, 2020). Public education reform meanwhile has been a singular focus for market‐oriented philanthropy over the past two decades in both the US and UK.…”