Foundations Must Team Up to Create Change

As Congress and President Obama get serious about drafting a new health-care plan for America, nonprofit groups and grant makers that have long been working to promote change are seeking the best ways to influence the debate without running afoul of limits on lobbying.

One place to look for ideas is California, where foundations played a strong role when the state undertook an effort to provide insurance to virtually all of its residents.

After California’s governor, Arnold Schwarzenegger, unveiled an ambitious plan to provide such coverage in 2007, California’s four statewide health foundations — the Blue Shield of California Foundation, the California Endowment, the California HealthCare Foundation, and the California Wellness Foundation — saw his announcement as a chance to attain a goal they all supported.

For years, they had been patiently chipping away at some of the state’s most pressing health-care problems, each in its own way. The governor’s announcement forced them to reconsider their roles and tactics. All four foundations quickly developed approaches to meet the opportunity — in some cases building on their traditional approaches, and in others trying entirely new things.

The foundations soon found themselves outside their usual comfort zones.

“Foundations tend to be cautious and risk-averse, and we tend to pride ourselves in not getting involved politically,” said Robert Ross, president of the California Endowment. “But all this was happening in real time. There was definitely a sense of excitement, of urgency, of movement.”

Communication among the grant makers was key. While the four foundations had collaborated in the past — for instance, they had all worked together on children’s coverage at some point — decisions in the health-care fight often had to be made rapidly, and might have real-world political consequences.

Crystal Hayling, president of the Blue Shield of California Foundation, took the lead in setting up calls among the leaders of the four foundations, and the organizations’ program staff members also kept in touch frequently.

“It was all pretty informal. And we were respectful of each other in terms of different foundations taking the lead on different issues,” said Marian Mulkey, a senior program officer at the California HealthCare Foundation. “We were all able to play a constructive role, but those roles differed. Turf did not become an issue.”

Each of the four foundations staked out areas in which it felt it would make the most difference:

• The California HealthCare Foundation focused on policy analysis. It supported research by Jonathan Gruber, a policy analyst at the Massachusetts Institute of Technology who had worked on Massachusetts’s health-care overhaul effort, to supply ideas for California lawmakers about what might work. The foundation also financed a multidisciplinary team from the Institute for Health Policy Solutions to provide information to legislators about the implications of different proposals to expand coverage. It also supported a Web site that became the go-to place for people seeking information about the revamping of the health-care system.
• The Blue Shield of California Foundation expanded its support of the New America Foundation, a think tank, to enable it to assign a researcher to help the governor’s health and human services staff in vetting ideas, drafting position papers, and developing policy options. It also made a substantial commitment to advocacy, supporting town-hall meetings across the state organized by PICO, an activist network of faith-based community groups. The grant maker also organized a high-level working group to explore how California might be able to use more federal Medicaid dollars for some of the proposed coverage expansions.
• The California Wellness Foundation, which had a long history of supporting the state’s health advocates, continued to provide them with operating support and brought them together so that they could better coordinate their efforts. Through statewide public-opinion polls that consistently showed strong support for a health-care overhaul and through a series of reports from the University of California at Los Angeles documenting the limits of the existing system, it tried to maintain pressure on legislators to take action.
• The California Endowment, along with the California Wellness Foundation, took the lead in conducting policy research on other topics and populations that would be affected by a health-care overhaul. For example, the organization supported studies on the effect of health-care changes on lowincome people, on rural Californians, and on the labor market. The findings from those studies were distributed through print publications, Web postings, and articles in the mainstream news media.

The endowment also continued its support of children’s-health advocates, but broadened its message to push for universal coverage. It provided financial backing to two noteworthy coalitions of activists: It’s Our Health Care, whose members included the AARP’s California branch and the Service Employees International Union, and the Having Our Say coalition, which represents minorities and recent immigrants.

It also turned up the pressure on lawmakers by spending $6-million on a mass-media campaign highlighting the urgency of providing health coverage to everyone. Print and television ads ran for months and helped keep health care in the spotlight at a time when a protracted state budget debate had all but forced the issue off the policy agenda.

In addition, three of the foundations — the California Endowment, the Blue Shield of California Foundation, and the California Wellness Foundation — teamed up to support a high-profile statewide event called California Speaks. The event brought together some 3,500 Californians in eight locations for a full day in August (a time when enthusiasm for a health overhaul was flagging) and gave them an opportunity to weigh in on insurance-coverage issues, spreading their opinions via the Web. Equally important, California Speaks provided the governor and the state’s top legislative leaders with a forum in which they each publicly recommitted to revamping the health-insurance system that year.

The collaboration among the three foundations supporting California Speaks was unusually close. “We had frequent calls and meetings,” said Barbara Masters, the endowment’s director of public policy at the time of the health debate. “With only three months to get it done, it was a very intensive planning process, and deeply collaborative.”

A year after the governor announced his plans to remake California’s health-care system, the effort died in a Senate committee, brought down by both partisan politics and questions about its affordability.

Despite the disappointment, the foundations learned that they could help to advance major policy changes, even though success remained elusive.

Three lessons stand out:

• Because they have substantial resources but must, by law, be apolitical, foundations can fill key roles that those who have a vested interest in a particular result cannot. These roles include support for independent policy analysis; financing the work of advocacy groups to make sure that the interests of underrepresented minorities and the poor are taken into account; and maintaining pressure — through advocacy, opinion polls, public events, and the news media — to keep the policy process moving.
• Although foundations generally operate outside the day-to-day pressures of the political arena, the California experience demonstrates that foundations can move into a higher gear when necessary. Such windows of opportunity can give philanthropies a chance to advance change on a scale beyond that which is usually possible through regular grant making. The California foundations were able to react quickly because for years they had been making investments in, and developing relationships with, advocates and policy analysts who worked on health issues. Moreover, the grant makers knew the policy environment and possessed relevant in-house expertise. When the moment for action arrived, they were ready.
• Under the right circumstances, foundations can work together quite effectively, even when they have different perspectives on an issue. Because the key players knew and respected one another, they were able to build on each foundation’s strengths.

California failed to overhaul its health-coverage system for political and economic reasons, both of which are beyond the control of foundations. Yet even though foundations may not have the power to change the outcome, the California experience suggests that they can add real value to the process. With a revision of the health-care system — as well as other public policies — now high on the Washington agenda, foundations have a rare opportunity to learn from the California experience as they try to bring about social change on a national level.

Stephen Isaacs and Paul Jellinek are partners in Isaacs/Jellinek, a consulting firm that advises foundations and foundation grantees.