Can Philanthropy Save a City?

The cash-strapped city of Stockton is hoping so, courting millions of dollars from private investors to solve a whole host of social problems.

The philanthropists came on air-conditioned buses from big cities like Los Angeles and San Francisco. They were driven past vacant lots overrun with weeds, auto-repair shops and fast-food restaurants and meat markets, and deposited at a construction site that had once held a liquor store that police had long tried to shut down because it was dominated by drug dealers. And there, they were asked for money: money to pair single mothers with case managers, money to provide low-income families with a “word pedometer” and biweekly coaching from trained home visitors, money for mental-health clinicians and anti-violence counselors and college coaches and green spaces and sustainable-food hubs and a psychotherapy center. All together, the philanthropists were told, the opportunities to invest in Stockton totaled $28.6 million dollars. “I truly believe that in the next 20 years, Stockton will be a model city for urban transformation,” the mayor, Michael Tubbs, said to the crowd.

Tubbs, who is 27, became a Stockton City Council member at the age of 22, and the city’s first black mayor at the age of 26. He inherited a municipality that had been ravaged by the housing crisis, was just emerging from bankruptcy, and was trying desperately to fight its image as America’s “most miserable,” as Forbes put it (twice). He came in with big plans, including a universal-basic-income project that has made national headlines. But this careful courting of philanthropists may be his biggest swing yet.

Along with a handful of local community organizations, Tubbs is hoping to attract tens of millions of private dollars to fill gaps left after the bankrupted city slashed services—and, in the process, turn Stockton into a petri dish for all sorts of social programs. The mayor says his is a “cradle to career” approach to intervening in various stages of a poor child’s development, and that by having dozens of donors fund dozens of different interventions and seeing which work, Stockton can be a model for other struggling communities. “I think Stockton, for so long, has been ground zero for problems,” Tubbs told me. “A big part of my administration will be making Stockton ground zero for solutions.”

Stockton, where the median household income is $46,000, is just the latest city to look to wealthy individuals for help. In Kalamazoo, Michigan, two donors have given $70 million to fill potholes and repair streets, all so the city doesn’t have to raise income taxes. In Detroit, national foundations contributedmore than $300 million during the city’s bankruptcy to help protect the city’s art museum and shore up its pension systems. New York City’s Office of Strategic Partnerships has raised $400 million in philanthropic money to eradicate inequality. Perhaps most famously, Mark Zuckerberg pledged more than $100 million in 2010 to improve the Newark public-school system.

Skeptics say that cities shouldn’t rely on rich people’s money to operate. In Kalamazoo, one of the two city commissioners to vote against taking donations told The Chronicle of Philanthropy that depending on the benevolence of billionaires to run a city sets a dangerous precedent. In Detroit, it was funders who worried that giving money to a financially struggling city wasn’t sustainable. Zuckerberg’s Newark donation was widely scorned by people who accused him of failing to engage the local community and teachers—many educators and parents in the city first learned of the donation after Zuckerberg announced it on The Oprah Winfrey Show.

But Stockton is different, the mayor and local nonprofits say. Rather than letting philanthropists come in and decide where they will spend their money and what policies they want to fund, the city and community groups have spent years thinking about what programs should be funded, and inviting donors to choose one, or a few. On the bus tour, residents—single moms, teachers, social workers—talked earnestly about how they had come together during the bankruptcy and collectively conceived of a list of ideas about programs they’d like to see. Tour participants—70 potential funders from well-known philanthropic groups like the Bill & Melinda Gates Foundation, the Chan Zuckerberg Initiative, and the California Endowment—received a folder with detailed data about how community organizations are trying to change Stockton, and how philanthropists can help. The opening letter, signed by Tubbs, promises that “your time, treasure, and talent will transform Stockton from a city of problems to a city of promise that is a national model for revitalizing urban centers.”

The packet outlined different goals—children entering kindergarten ready to learn, students successfully transitioning from high school to career, community members beginning to trust law enforcement more—and a number of opportunities to help realize them. They included building “Future Centers” to expose young people to college planning (estimated cost: $1.4 million a year), creating a center for children exposed to trauma ($6.8 million), and establishing a legal-aid fund for tenants facing eviction ($250,000). “It’s about, what are some big, bold things we can do, that haven’t been tested much in the U.S., that might improve the lives of residents?” said Michael Chasnow, a senior program manager at Tides, a San Francisco consultant to nonprofits and philanthropists that has worked with the Reinvent South Stockton Coalition, one of the community groups involved in planning the tour. “Let’s channel resources to do that.”

The pitch is working: On a panel during the funding tour, Don Shalvey, who runs education programs for the Gates Foundation, said that Stockton “is going to change the equation for kids and community, not only here, but throughout California, and perhaps the nation.” The Gates Foundation has given more than $1.2 million to involve parents in improving the schools in South Stockton. In January, with a $20 million grant from the California Community Foundation, the city launched the Stockton Scholars program, which will give college scholarships to students who graduate with at least a 2.0 GPA. A host of foundations, including the Silicon Valley Community Foundation, contributed to launch the Advance Peace program, which was approved by the Stockton City Council in January and which gives resources to perpetrators of gun violence as a means of crime diversion. And $1 million from the Economic Security Project paid to launch the country’s first municipal basic-income pilot program. Yet Stockton wants much, much more. “If we can do all this with two fishes and five loaves, imagine what we can do with the help and resources you all can provide,” Tubbs told the funders.

Stockton seems an unlikely place for this type of innovation. Its nonprofits are smaller and less media savvy than those in big cities like L.A. and San Francisco that typically attract funding—the Reinvent South Stockton Coalition doesn’t even have its own website, just a Facebook page. The organization has long been looking for an executive director, perhaps unable to attract leaders to the city, which is located in the sweltering Central Valley an hour south of Sacramento and two hours east of San Francisco. Nonprofits in places like Stockton “often don’t know how to play the grantsmanship game in a sophisticated way,” Robert K. Ross, the president of the California Endowment, an Los Angeles–based foundation, told me. His organization tends to fund nonprofits that operate nearby in L.A., and that have many years of experience pitching funders.

But a few things make Stockton appealing. It’s small enough that a little bit of money can make a big difference, and close-knit enough that getting buy-in on huge projects can be a pretty quick process. By contrast, “in L.A., it’s a gauntlet of bureaucrats and political leaders that have to sign off on anything,” Ross said. Tubbs, who has been the subject of numerous national profiles and TV specials, has himself inspired confidence in donors who want to be a part of Stockton’s change from the most dangerous city in America to a crucible of innovation.

And pitching Stockton not just as a needy city but as a blueprint for tackling poverty will likely appeal to many outside philanthropists who want to pursue “system change,” according to Ben Soskis, a research associate for the Center on Nonprofits and Philanthropy at the Urban Institute. There is precedent for local policies to be a model for national solutions. Andrew Carnegie paid for the construction of public libraries, which cities then adopted and funded. The Robert Wood Johnson Foundation laid the groundwork for today’s 911 emergency-response system. In its best form, philanthropy allows for big ideas and interventions that are too risky for the government to try, Soskis said. The more ambitious the goals, the more appealing they are to many funders.

Still, it will be a big leap from the roughly $30 million currently invested in Stockton—$20 million of which is dedicated to funding college tuition—to the $58.6 million total the city wants. But Moses Zapien, the president of the Community Foundation of San Joaquin, which coalesces giving around San Joaquin County, where Stockton is located, told me interest in Stockton is rising. Since the bus tour, his organization has received two grants from the James Irvine Foundation—one for $100,000 for general operating support, and one that will match other donations, dollar for dollar. Zapien said he’s been approached by a number of foundations that want to know more about what’s going on in Stockton. They see other funders coming into the city and wonder if there is a place for them. His message for them is simple. “If there was ever a time to invest in Stockton from a philanthropic standpoint,” he said, “that time would be now.”

Published by: The Atlantic
Author: Alana Samuels
Date: August 2, 2018