A new report from The Bridgespan Group, "Billion Dollar Bets to Reduce Concentrated Poverty,” outlines how $1 billion of philanthropy could help to break apart the structural forces of racial and economic segregation that have created low-income communities, and also improve conditions in distressed neighborhoods. The report features impact projections that demonstrate how funding initiatives focused on reducing concentrated poverty could deliver returns of more than $8 for every $1 invested.
“The challenges of living in poverty are only exacerbated when living in low-income neighborhoods, where families often encounter higher rates of crime, poor and dilapidated housing, lower quality public schools and limited job opportunities. These barriers can entrench individuals and families in poverty across generations,” commented Debby Bielak, a partner at Bridgespan and co-author of the study.
According to the U.S. Census Bureau, the number of people living in neighborhoods with poverty rates of 20 percent or higher increased by more than 50 percent between 2000 and 2010, from 50 million individuals to nearly 77 million. This represents more than 25 percent of the U.S. population. Nearly one quarter of the increase came from growth in communities where more than 30 percent of the population lives below the poverty line.
“These neighborhoods are not a natural extension of housing markets, but instead reflect long histories of racially discriminatory policies and practices, combined with systematic underinvestment. Philanthropists are uniquely positioned to fund initiatives to both help individuals move to more economically vibrant communities, if they so wish, and also revitalize some of these high-poverty neighborhoods so they have more of the resources individuals and families need,” said Michelle Boyd, a senior associate consultant at Bridgespan and co-author of the study.
This report details a series of 10 investments, which focus on two core areas:
“In calculating the potential impact of our recommended investments, we only looked at the positive effects that a regional mobility program could have on young children who would otherwise be living in communities of concentrated poverty. Due to less-than-robust data on the effects of neighborhood transformation efforts on individuals and families, the estimates in this report focus solely on regional mobility, thus making our impact projections conservative,” explained Devin Murphy, a manager at Bridgespan and co-author of the study.
Added Bielak, “If a philanthropist were to make a $1 billion investment across our four recommended areas, we project that up to 182,000 families with children under the age 13 would receive vouchers and mobility assistance. Approximately 25 percent to 47 percent of families receiving vouchers would use them to move to higher-opportunity areas, with a $99,000 direct economic impact of improved lifetime earnings for each family. This would result in $4.5 to $8.5 billion of potential cumulative economic benefit.”
Bridgespan’s study on reducing concentrated poverty is part of the organization’s research project, “Billion Dollar Bets to Create Economic Opportunity for Every American,” which offers a data driven, field-informed perspective on 15 high-potential bets through which philanthropists could make the biggest improvement on social mobility with a $1 billion investment.
The Bridgespan Group (www.bridgespan.org) is a nonprofit advisor and resource for mission-driven organizations and philanthropists. We collaborate with social sector leaders to help scale impact, build leadership, advance philanthropic effectiveness and accelerate learning. We work on issues related to society’s most important challenges and to break cycles of intergenerational poverty. Our services include strategy consulting, leadership development, philanthropy advising, and developing and sharing practical insights.