The War on Poverty

In January 1964, President Johnson declared war on poverty. During the days leading up to and immediately following the 50-year observation of that declaration, many have commented on the progress, lack of progress, or outright failure of that “war.”

In the January 7, 2014 Wall Street Journal, Robert Rector of the Heritage Foundation noted that in the U.S., living standards among the poor are much improved over those of 50 years ago. He also pointed out that the “collapse of marriage in low income communities has played a substantial role in the declining capacity for self support.”

In the January 5, 2014 New York Times, Ron Haskins of the Brookings Institution also emphasized that “Children in single-parent families are more likely to be poor, fail in school, have mental health issues and be idle as young adults, all of which reduce self-sufficiency.” Haskins concluded his piece by stating that “we don’t need another war on poverty as much as we need to improve the programs we already have and create the conditions for more personal responsibility regarding education, work, marriage, and child bearing.”

In the same issue of the New York Times, Scott Winship of the Manhattan Institute emphasized that “expanding opportunity for poor kids will require that we ‘incentivize’ the right behaviors, attitudes, and values, through economic carrots and sticks. Culture, not just economics, must be a front in the war on immobility.”

And in the January 9 New York Times, Nicholas Kristoff emphasized the importance of early interventions including parent coaching to get pregnant women to drink and smoke less and to encourage at-risk moms to talk to their children more. Among the successful programs he mentioned is Nurse-Family Partnership, which Goodwill is implementing in Indianapolis.

Kristoff also emphasized the importance of programs that encourage jobs for the most at-risk groups, and both he and Rector mentioned the earned income tax credit as a benefit to the working poor and for society. On a related note, Harvard’s Gregory Mankiw wrote in the January 5 New York Times that in efforts to help those struggling at the bottom of the economic ladder, the most effective solution would be to increase the skills of those low-wage workers.

While there is general agreement that more needs to be done to reduce poverty, there is certainly no consensus on what should be added, increased, modified, or eliminated. Bringing this closer to home, though, reading these and numerous other commentaries has reinforced my belief that the directions we have taken at Goodwill are on target. The older youth and adults who enroll in our Excel Centers represent “low hanging fruit” in efforts to raise education attainment levels. In addition, our emphasis on continuing to support our graduates until they earn post-secondary credentials and become established in the workforce is likely to play a major role not only in helping our graduates become economically self-sufficient, but also in ensuring a quick economic return to society for its investment in our schools.

Nurse-Family Partnership is part of a long-term solution to generational poverty that also has a strongly positive economic return to society. In addition to improving pregnancy outcomes, NFP helps parents learn how to provide competent care that will enhance the health and development of their children. NFP also helps parents improve their economic self-sufficiency by developing plans for their future, continuing their education, and finding work.

Everything we do at Goodwill ultimately plays a part in helping individuals and families increase their economic self-sufficiency. Cumulatively, these efforts can – at least in our small corner of the world – begin to reduce generational poverty and the various social problems that accompany it.

A Macro Approach to Reduce Social Problems

As I’ve written before, despite the spending of billions of dollars by the public and not-for-profit sectors on all kinds of social problems, progress toward solving some of the problems is slow or nonexistent. One reason is that many of the problems are interrelated – they reinforce and compound each other, yet we tend to treat each of them in isolation from the others.

The public sector operates through silos that generally don’t communicate well with each other, while the not-for-profit sector is incredibly fragmented. Individually, many organizations do good work. But collectively we are not solving the big problems.

Bottom line: Overall, resources are not being utilized as effectively as they should be. Different approaches are needed. Here’s one.

  • At a high level (e.g. state or community), develop a scorecard that includes goals and metrics toward which resources can be aligned. High level goals should be designed to:
    • Drive up desirable social indicators such as high school graduation rates, post-secondary enrollment and completion rates, etc.
    • Drive down undesirable social indicators such as obesity, smoking, incidence of pregnancy among unmarried teens, recidivism rate of first-time offenders, etc.
  • Create networks of organizations that leverage their resources to accomplish what none could accomplish on its own. Each network must have one or more clear, measurable objectives that are aligned with the overall high level goals. The participating organizations should have complementary resources and mutual trust in one another. Their respective roles must be clearly defined, and they should strive for collective impact.

There must be a “backbone” organization with a strong infrastructure at the core of the network. The backbone organization “owns” the overall effort and is accountable for the results. It creates the network, keeps the various parts aligned toward the common goal, provides support as needed to the various players, and tracks and analyzes data. In some situations, a backbone organization might help strengthen the network by strengthening a strategically important partner. For example, the backbone organization might provide back office services to a partner organization that provides important direct services, but has a weak infrastructure. Of course, there might also be times when the backbone organization will find it necessary to replace a partner.

Individual organizations that desire to be part of a network must:

  • Understand their context. How does what they do relate to what others around them are doing? Where do they fit in the communities in which they operate?
  • Where do they fit in the field(s) in which they are engaged?
  • Have a realistic understanding of their strengths.
  • Determine how they might add unique value to help maximum long term impact.

The philanthropic sector can help by:

  • Supporting the development and/or growth of backbone organizations.
  • Supporting networks that are collectively working in focused ways toward a big goal.
  • Giving preference to evidence-based programs that have demonstrated long term impact.

Governments can help by:

  • Giving preference to funding of evidence-based programs.
  • Fostering the use of impact investing pay-for-success approaches that increase the productivity of tax dollars.
  • Creating their own networks to better leverage resources across public sector silos.
  • Focusing more on the change they want to occur as a result of the program or service they are funding and being less prescriptive about how the work must be done. They should focus less on how much is spent in various expense categories and more on the cost per outcome and, where possible, on ROI metrics.
  • As much as possible, ensuring that bureaucracies function in ways that are likely to enhance rather than detract from accomplishment of the goal.

Others might have better ideas than these. Regardless, the status quo is not an option.

A Disconnect

Several years ago a friend of mine told me, “Jim, I live on the northside (a relatively affluent part of Indianapolis), I work on the northside, I go to church on the northside. I don’t know any poor people.” I told him to come down to Goodwill and I’d introduce him to some.

More recently, I saw another friend of mine who has been tutoring some of the students in Goodwill’s Indianapolis Metropolitan High School. He grew up in a low income part of the city and has been heavily involved in the community for a long time. When I asked him how the tutoring was going, he quietly said, “Jim, I thought I understood the issues (related to the mostly poor, mostly minority students in the school). But until I got to know some of these kids one-on-one, I didn’t have a clue.”

Both of those friends are good, kind, well-intentioned people. So, I’m sure, are most of the politicians from suburbs and small towns who from time to time make statements and introduce legislation that indicate a near-complete lack of understanding of the kind of generational poverty that plagues the poorest, most crime ridden parts of our cities. If nothing else, it would be helpful if they simply acknowledged that no one chooses to be born into those circumstances. Some of us were just luckier than others.

Somewhat related to this lack of knowledge and understanding, an article by Ken Stern titled “Why the Rich Don’t Give” in the April 2013 issue of The Atlantic notes that “One of the most surprising, and perhaps confounding, facts of charity in America is that the people who can least afford to give are the ones who donate the greatest percentages of their income.” The author wonders if “the isolation of wealthy Americans from those in need is a cause of their relative stinginess” and states “It seems that insulation from people in need may dampen the charitable impulse.” I hasten to add that I do not draw a broad generalization about this, as I’ve known plenty of generous wealthy people (and a few stingy poor people, too).

However, even in an organization such as Goodwill that has been working with a high poverty population for decades, we sometimes don’t really understand some of the problems until we get to know the people relatively well. That was our experience after we entered the urban public education arena by opening the Indianapolis Metropolitan High School in 2004. Some of us quickly began to realize that we had only had a peripheral awareness of the kinds of problems many of those students faced outside of school. As we got to know them better, what we learned from the day-to-day contact over time has had a significant influence on some of the directions our organization has since taken.

In my work, I consider myself fortunate to have opportunities to get to know and work with people at just about every level of society. That contact and a lot of experiences over a long period of time have resulted in a firm conviction that, for those of us who are relatively well off, getting to know individuals in circumstances very different from our own will enable us not only to gain a more accurate awareness of the issues they face, but also to be in a better position to develop or support lasting solutions to some of the problems.

If nothing else, knowing such individuals reasonably well tends to make us less judgmental and at times intensely aware that we don’t know everything or have all the answers.

A perspective on the GED and why the Excel Center is a more effective option for many

The following excerpt from How Children Succeed: Grit, Curiosity, and the Hidden Power of Character by Paul Tough (Houghton Mifflin Harcourt; 2012) is one illustration of why I believe Tough’s book should be read by anyone who is seriously interested in finding long term solutions to a lot of persistent social problems.

“(James) Heckman wanted to examine more closely the idea that young people with GEDs were just as well prepared for further academic pursuits as high-school graduates. He analyzed a few large national databases, and he found that in many important ways, the premise was entirely valid. According to their scores on achievement tests, which correlate closely with IQ, GED recipients were every bit as smart as high-school graduates. But when Heckman looked at their path through higher education, he discovered that GED recipients weren’t anything like high-school graduates. At age twenty-two, Heckman found, just 3 percent of GED recipients were enrolled in a four-year university or had completed some kind of post-secondary degree, compared to 46 percent of high-school graduates. In fact, Heckman discovered that when you consider all kinds of important future outcomes – annual income, unemployment rate, divorce rate, use of illegal drugs – GED recipients looked exactly like high-school dropouts, despite the fact that they have earned this supposedly valuable extra credential, and despite the fact that they are, on average, considerably more intelligent than high-school dropouts.

From a policy point of view, this was a useful finding, if a depressing one: In the long run, it seemed, as a way to improve your life, the GED was essentially worthless. If anything, it might be having a negative overall effect by inducing young people to drop out of high school. But for Heckman, the results also posed a confounding intellectual puzzle. Like most economists, Heckman had believed that cognitive ability was the single most reliable determinant of how a person’s life would turn out. Now he had discovered a group – GED holders – whose test scores didn’t seem to have any positive effect on their lives.

What was missing from the equation, Heckman concluded, were the psychological traits that had allowed the high-school graduates to make it through school. Those traits – an inclination to persist at a boring and often unrewarding task; the ability to delay gratification; the tendency to follow through on a plan – also turned out to be valuable in college, in the workplace, and in life generally.”

Obtaining a GED is a successful completion of an event – passing a test. On the other hand, a diploma takes consistent effort over time to achieve. Students must earn credits, stick to their goals, set targets and deadlines, and work to reach the goals. It takes more persistence, grit, and motivation to achieve.

Part of the job of an Excel Center “coach” is to help students develop the traits that will improve their life prospects. Even after graduation, the ongoing relationship we offer with a Goodwill Guide is intended to reinforce those traits.

Excel Center students dropped out of high school for a wide variety of reasons. Our schools offer a new path to those persons and other older youth and adults who did not think they would ever have another chance. Not all will succeed, but many will.

Networks – a way to reduce social problems

Poverty, low education levels, crime rates, teen pregnancy, and a host of health issues are all interrelated. They tend to reinforce and compound each other. Yet, as a society, we don’t treat them as if they’re related.

The public sector consists of a lot of large silos – among them are health, education, social services, workforce development, law enforcement, housing, transportation – that don’t often communicate well, if at all, with each other. There are even silos within the silos that don’t communicate well with each other. Meanwhile, the not-for-profit sector is incredibly fragmented, consisting of hundreds of thousands of mostly small organizations that do good work, but that are typically focused on one problem or one target population or one often tiny geographic area. They have great difficulty aggregating capital or talent to replicate what works and achieve scale.

Neither sector is structured to deal effectively with complex social problems. Perhaps this is a major reason why so many social indicators have worsened over the last forty years, despite massive increases in public spending and a huge proliferation of not-for-profit organizations.

It is unrealistic to think we can remake either sector. And experience indicates that if add another layer of bureaucracy in an attempt to better coordinate the activities of various silos, we will most likely accomplish nothing significant other than to further increase costs.

So what can we do?

A lot of what exists is good. But we can do a much better job of aligning and leveraging the resources and capabilities of various entities in focused ways to improve overall impact and make much more effective use of the total resources. We can do this by creating networks that bring together organizations with common interests and complementary resources to work with each other to accomplish a goal with clear, measurable objectives.

There must be a strong organization at the center of the network; the roles of each participant must be clearly defined; and the participants must trust each other. If all of these ingredients are present, a lot can be accomplished. Here is one example from our own experience.

Recently, our organization has begun operating Nurse-Family Partnership in Indianapolis. This is a highly effective nurse-led home visiting program for first-time parents in low income households that begins during pregnancy and continues until the child turns two. Implementation in other states has proven to have immense long term impact. In our community, Goodwill is the implementing organization. Funding comes from a federal grant and is administered through a contract with the Indiana State Department of Health. Referrals come from an array of sources including hospital systems, other health-related organizations, schools and social services organizations. A community advisory board includes nursing experts in prenatal and early childhood, physicians, hospitals, and social services representatives. An independent continuous quality improvement system established under the direction of the State Department of Health measures and tracks performance.

In addition, Goodwill is connecting parents who are enrolled in the program with education and employment opportunities. Goodwill also provides assistance in solving problems related to housing, transportation, and child care.

Our approach enables families to access education, employment, health-related services, training in good parenting skills, and other services through a long term relationship that we believe can substantially improve the lives of the Nurse-Family Partnership parents and their children and help break a cycle of generational poverty. It is a holistic, whole family approach that leverages existing resources to help accomplish something that otherwise probably would not be accomplished as well, if at all.

This is one example in one community. But it illustrates an approach that could be taken by many organizations in many communities to help improve overall impact and the productivity and effectiveness of both the public and the not-for-profit sectors.