Katrina’s Aftermath Requires Bold Action

When President Bush spoke to the nation from New Orleans to present his ideas for rebuilding the Gulf Coast after Hurricane Katrina, he said: “We have a duty to confront this poverty with bold action.”

Here’s a bold action for philanthropy: The nation’s wealthiest foundations should pour all their resources into the recovery over the next few decades, and then go out of business.

In so doing, grant makers could go a long way to helping the country get past the centuries-old American tragedy laid bare by Hurricane Katrina and its aftermath: We live in a country that permits poverty and profound racial discrimination to occur, even while we claim that all are entitled to “life, liberty, and the pursuit of happiness.”

Perhaps no other incident in U.S. history — since the founders of this nation wrote those immortal words in the Declaration of Independence — has exposed so vividly to so much of the world America’s willful and systematic neglect of the poor or its inability to offer the needy a way to escape poverty.

Close to a century after some of the nation’s largest foundations were created to right what was wrong with America, the world watched a city of African-American poor people drown and starve to death, watched while not one leader of a major foundation publicly said: This is wrong, what caused it is wrong, and we as philanthropists must do everything in our power to end it.

The outpouring of charitable donations by individuals after Hurricane Katrina speaks volumes about the willingness of Americans to help feed the hungry and house the homeless. Yet most of the donations by individuals have gone for short-term relief. These contributions will not cure the systemic ills that created the horrors made so visible by the man-made disaster in New Orleans. But America’s best-endowed foundations could do so by contributing all their assets to such a goal.

If the premise of American philanthropy is to do good and to solve big problems, rather than to study them, then America’s big foundations everywhere should spend all their money to solve the nation’s biggest, longest-standing problem.

The small sums foundations spend each year on social justice are not enough to eliminate poverty and racism; big money and the clout of wealthy foundations are needed to rebuild our society in ways that eliminate the stark inequities between rich and poor, whites and people of color across the United States. America’s 66,000 foundations now have more than $435-billion in assets. That is the kind of money that can make a big difference if grant makers spend it quickly and strategically.

The inability of the poor to escape neglect and abuse does not exist only in New Orleans, and the unwillingness of America to eliminate poverty causes suffering of nationwide proportions and huge costs.

Indeed, a new report by the Brookings Institution, Katrina’s Window: Confronting Concentrated Poverty Across America, says: “The choice for policymakers, then, is this: fail to act and consign another generation to those distressed neighborhoods, or take bold steps to prevent the next ‘social Katrina.’”

America’s big foundations do not have to spend all their money today. They could set a goal of spending all their assets by 2076, 300 years after “life, liberty, and the pursuit of happiness” was written. Then, the descendants of those who escaped Katrina, the Superdome, and the Convention Center could be assured that the suffering of their great-grandparents had prompted America to finally meet its promise.

What could the major foundations, working alongside a generous American public, and its governments and corporations, create over the next seven decades? Here’s a short list:

• Affordable and decent homes for the poorest Americans.
• Environmental protections that do everything possible to protect people from illness and death, whether it is on the Gulf Coast or in California’s earthquake zone or anywhere else in the United States.
• Employment policies that require all jobs to pay enough for people to live above the poverty line.
• Schools that educate all children to take advantage of the opportunities available to them.
• Universal health care.

Creating this America is the job foundations should take on, instead of saving most of their resources for future catastrophes that may never occur.

Here’s the argument I would make, if I were sitting in one of those foundation boardrooms today:

Curing the disease is cheaper than treating the symptoms. Forty-three years after Michael Harrington wrote his landmark book about “the other America,” and 41 years after President Johnson said we needed a “War on Poverty,” poverty is as great as it has ever been in America; the people who have historically suffered the most still do; and the regions of the country where poverty was the greatest then are still the worst-off now.

Wealthy American entrepreneurs are creating new foundations practically every day. Just this month, Google announced that it will commit $276-million for a new giving program. Plenty of money will be available to deal with new problems because new philanthropists will want to commit their resources to the problems of their day. Certainly, they should be able to do that, not have to heal the centuries-old sores still festering.

Government cannot cure the problem. The greatest federal debt in our nation’s history means that the federal government, even if it wanted to, would be unable to sustain either its current level of spending (which is already inadequate) or increase its spending to cure either the immediate, post-Katrina problems or the longer-term problems that will occur. Those problems include, for example, chronic homelessness; illiteracy; the low wages that keep so many working Americans in poverty; mental-health crises; and inadequate job training.

Ending poverty cannot be done incrementally. Making the decision not to operate in perpetuity will require foundations to undertake the strategic thinking and bold actions that incremental investing doesn’t require — just the kind of thinking that is needed in the face of the monumental problems caused by Katrina.

Eliminating racism is vital to the nation’s success. The failure to take bold action will exacerbate the deepest division among Americans — race. The divisions among Americans of different races have impelled disorder, violence, and even wars in our nation’s past. No one wants that again.

Foundations receive a tax subsidy because their role is to provide value to society. If major institutions don’t solve major problems, or, looked at another way, don’t create major goods, what is their value? In the corporate world, when they don’t, they wither and die; investors cease to invest.

Why should donors continue to get big tax breaks to create foundations, costing American taxpayers big money, if they fail to create good?

One can imagine the day when taxpayers might stop wanting to make such a big investment.

The great American foundations should take a lesson from the Aaron Diamond Foundation, which pledged at the outset of the HIV/AIDS epidemic to distribute all of its assets in a decade so it could do all it could to fight the deadly disease.

Research financed by the foundation led to the discovery of the drugs that today mean AIDS does not have to be fatal.

Dealing with the race-and-poverty divide in the United States once and for all — and all the inequities it has spawned in education, health care, environmental protections, and so much more — is too difficult a challenge for any single grant maker to take on. But working together, and putting all their money and other resources into the effort, the nation’s wealthiest foundations now have the greatest opportunity they have ever had to right what is wrong in America.

Rebecca Sive is a Chicago consultant to nonprofit groups.