If Foundations Want to Tackle Inequality, Labor Must Be a Partner

This past summer, the Ford Foundation made waves with a major announcement. As the headline in the Chronicle of Philanthropy read, “Ford Shifts Grant Making to Focus Entirely on Inequality.”

While Ford will not focus exclusively on economic inequality (it is also aiming to address disparities based on gender, race, and ethnicity), the growing gap between the rich and the poor—in America and beyond—provided crucial context for this decision. With its shift, Ford is joining foundations—including the Russell Sage Foundation, the Kresge Foundation, the Open Society Institute, the California Endowment, and the Robert Wood Johnson Foundation—that have also developed initiatives to tackle inequality. More broadly, there is widening consciousness about the social costs of inequality, with publications from The New York Times to Psychology Today reporting on how increasing economic stratification has negative effects on public health outcomes and other quality of life measures.

Yet the decision of one of the largest philanthropic institutions in the United States to focus on promoting greater equality also raises an important question: What about the labor movement?

Historically, labor unions have been the primary institutions responsible for advocating for worker rights. In previous eras, they have played a vital role in narrowing the gap between rich and poor. During America’s economic boom in the wake of World War II, good union jobs for working class families birthed the middle class, providing living-wage employment even for those without college degrees. The erosion of middle class economic security since the 1970s has paralleled the decline of unions. 

Yet, despite the important accomplishments of unions, organized labor is often excluded from the social landscape of many nonprofit and philanthropic practitioners. In a 2006 article, SSIR managing editor Eric Nee asked a timely and provocative question: “Why do nonprofits talk a lot about partnering with business and government, yet rarely talk about building partnerships with trade unions?” 

Nee argued that “Unions and nonprofits are natural allies, sharing many of the same concerns about health care, education, housing, social justice, and the environment.” Moreover, owing to its role in building the middle class, organized labor has allowed millions of Americans to secure decent health insurance and to afford stable housing—thus allowing nonprofits to focus on a smaller number of clients in need. As Nee put it, “The nonprofit sector would have a lot more work to do if it weren’t for unions.”

The too-common distance between unions and nonprofits is mirrored in the philanthropic world. In the past, the relationship between labor and foundations has been fraught. Legally, labor unions are funded by their members and are prohibited from taking money from foundations. Culturally, unions are organizations of working people, while foundations are organizations of the affluent, setting the stage for tension and acrimony. So great has the chasm been between labor and philanthropy that literature on the subject is scant. Back in the 1990s, one of the few writings on this topic came from Richard Magat, whose dissertation at Columbia University was later published in 1998 as a book entitled Unlikely Partners: Philanthropic Foundations and the Labor Movement. Magat argued that the relationship between the two groups was ambivalent at best and went downhill from there. 

Fortunately, in the time since Magat began writing, the relationship has evolved considerably. Beginning in the 1990s, unions and their allies in community groups began experimenting with creating a new class of nonprofits—organizations that were not unions themselves but would help in advocating for workers rights, enforcing labor law, and shining a spotlight on the exploitation of low-wage employees. Because these groups would be 501(c)3s, they would be eligible for funding from not only labor organizations, but also foundations. Today, the new class of non-union workers’ groups that have risen to prominence in the past two decades is known as “alt-labor.” A variety of alt-labor organizations, including the National Domestic Workers Alliance, the Partnership for Working Families, and the Restaurant Opportunities Centers United, have been central to some of the most prominent battles for living wages and employee protections in recent years.

The rise of alt-labor has helped create a new role for philanthropy in the fight against inequality, and has opened new avenues for partnerships between foundations, unions, and nonprofits. Early philanthropic funders of alt-labor groups included the Unitarian Universalists Veatch Program at Shelter Rock, the McKay Foundation, the Solidago Foundation, and the New World Foundation. All of these philanthropies had smaller endowments. However, the Ford Foundation began getting involved in the late 1990s, providing a major boost to alt-labor’s prospects. (In 1997, Ford awarded a grant to Working Partnerships, a labor-community collaboration in Silicon Valley I founded in 1995.) Today, the Ford Foundation’s BUILD program, a five-year initiative to strengthen the infrastructure of social change groups, includes many prominent alt-labor groups as grantees. 

If donors are serious about tackling inequality, they need to provide more of this type of funding. Support for education, workforce development, and job creation is laudable, but it is not enough. We need to back advocates who are working to make sure the jobs created in our society are good ones—jobs that provide living wages and family-supporting benefits. In periods when the American middle class has thrived, many of the most visionary and skilled of these advocates have come from the ranks of organized labor. In our new Gilded Age, foundations and nonprofits will be far more likely to succeed in combating inequality if they are willing to search there for partners.

Read more stories by Amy B. Dean.