Philanthropy plays a pivotal role in American society, helping to uphold, safeguard, and support some of our most important traditions, institutions, and key social and environmental causes. In 2021, Americans gave a record $485 billion to a multitude of good causes, making us once again among the most philanthropically generous people on Earth.
Why then do we seem to be unable to make a dent in some of our most pressing economic and social problems? Why are poverty rates so stubbornly high? Why does the U.S. routinely fall below other developed nations on literacy, education, and health outcomes? Why is economic inequality so rampant in the U.S. versus other countries?
The truth is that tackling the root causes of our most intractable societal challenges requires a new way to think about philanthropy. Specifically, it requires transformational philanthropy that’s focused on the systems that are creating and compounding these root causes. Often, we see philanthropy interact with and support broad-based public policy change, or make specific, tangible interventions in one area or another. But there’s something vital missing. And that’s a push to catalyze the private sector to do more of the heavy lifting.
The math is obvious: At $21.6 trillion, the private sector is more than four and a half times the size of the public sector and 44 and a half times bigger than the philanthropic sector. Just as importantly, however, focusing on the private sector helps create a leverage effect so these vast resources can be marshaled to help us solve our greatest challenges, rather than exacerbate them.
JUST’s transformational vision
Consider this: 165 million Americans work. It’s one of the major through-lines of the American experience. The workplace connects people, families and communities in every county in the country. How people earn a living is directly connected to societal outcomes.Yet JUST research focused on the top 1,000 public U.S. companies shows that 51% of those workers still don’t earn a family sustaining living wage at the local county level. If the 50 largest companies alone increased their minimum wage to a local living wage, we’d lift up roughly 10 million families and boost economic growth. If we shifted a mere 1% of private sector capital flow in a more just direction, that’s still more than $600 billion a year being channeled to support higher wages, better benefits, stronger communities, better protection of human rights and the environment, and more.
Imagine if we could get companies to improve job quality and invest more in their people. Think of the incredible social and economic benefit we would see if workers today had enough to support their families, put food on the table, cover childcare and preventive care, buy a home, save to send their kids to college, and begin to build wealth for the future.
Imagine if we could incentivize companies to invest more in the communities where they operate – to prioritize veterans and second chance hiring, ensure equality of opportunity within every workplace, support women- and minority owned suppliers, and invest in better healthcare and community education.
Imagine if we could get companies competing to do more to lower greenhouse gas emissions, reduce their environmental footprints, develop solutions to climate risk, protect fragile ecosystems, and safeguard water and land quality.
All of this is good for business, and good for society. This is JUST Capital’s vision – to drive competition and change within the country’s largest corporations to build more just business practices, and through that, a more just society.
Philanthropy as a catalyst for business and market-led solutions
To bring our vision to life, we focus on the 1,000 largest publicly traded companies in America. They create jobs for tens of millions of people; affect the lives of hundreds of millions; touch communities and supply chains across the U.S. and around the world; and have enormous social, political, and environmental influence. They set the agenda for best practices and social norms for business throughout the country and the world.
Transformational philanthropy doesn’t produce change overnight. It requires patience, creativity, and commitment. It requires more complex system thinking. It requires proponents to form communities of practice and to forge unlikely alliances and collaborations. But when it works, it produces lasting change at real scale.
At JUST Capital, for example, over the last several years we’ve seen over 120 companies lift wages, benefiting 6.5 million workers. Over 350 companies now disclose conducting pay equity analyses (up from 132 in 2018), which is essential for fair pay practices to become the norm. Our Worker Financial Wellness Initiative comprises 13 corporations representing 935,000 workers, of which 12 have completed at least one financial wellness assessment of their workforce, five have announced wage increases for hourly workers, and seven have implemented new or expanded benefits programs.
Because we focus on the whole system, we also work closely with the media – our partnership with CNBC gets data on how companies are doing on these issues in front of millions of business and financial professionals on a regular basis – and with investors, so we drive capital to just companies as an incentive. We support 11 different investment products, including the JUST ETF, and we’re now working with some of the largest asset managers and asset owners in the country.
That’s just a snapshot of the transformational impact we’ve already achieved through our corporate engagement, partnerships, investor work, and more (take a deeper dive here). And, at JUST, all of this is grounded in the American public’s priorities. Our polling and public opinion research gets to the heart of what everyday Americans want companies to tackle – mainly, paying a fair, living wage and investing in workers. We use this as a base to incentivize change from the country’s largest employers, and partner with media outlets, nonprofits, and academics, and investors.
Taken together these efforts create a mutually-reinforcing suite of activities in support of systems change.
A new structure for transformational philanthropy
To be truly effective, transformational philanthropy also needs to be structured a bit differently.
It must have a scalable funding structure. That’s why, in JUST’s strategy, we are working to create pathways for funding flows from the corporations and investors we engage, in addition to increasing support from foundations, individuals, and other partners. In this model, philanthropic support is used to build the systems that will create a future funding flywheel, in much the same way that catalytic venture funding can help for-profit startups achieve financial sustainability.
It must also bring together people and partners who can provide more than simply grant money. It needs creative problem solving and expertise from those who understand the power of industry, believe in capitalism as a force for greater good, and see wealth and capital as a means to an end.
One of our longtime supporters, Darren Walker of the Ford Foundation, often points to a particular quote by Rev. Dr. Martin Luther King, Jr. when he talks about philanthropy, one that I believe embodies a transformational approach: “Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary.” It is these circumstances that transformational philanthropy seeks to address. And unless and until the private sector is inspired to do more, traditional philanthropy will continue to fight an uphill battle.
To learn more and explore ways to get involved, please connect with us. An investment in JUST Capital will generate high-impact outcomes for workers, communities, and society at large, leveraging the power of business as a force for greater good – and transformational philanthropy – in America.