Why was Hyphen needed?
Muñoz: Government doesn’t always understand how philanthropy works, and philanthropy doesn’t always understand how government works. It was clear from the beginning, even before some of these bills had passed, that there was a need for somebody to help each side communicate with the other. And to help develop strategies where philanthropy is investing alongside what the government is trying to do, so that resources move beyond the typical channels, especially to communities that don’t always see federal dollars.
Sahgal: Hyphen is a first-of-its-kind organization. There are incredible organizations that are doing policy implementation. But we methodically work alongside the Biden administration to build these high-profile, high-impact public-private partnerships and collaborations that benefit marginalized families, children and communities across the country. We see this moment as akin to the 21st-century New Deal — historic amounts of resources, trillions of dollars that will not flow into local communities, communities of color and other underserved communities, but for a leveraging of private dollars to help pull down public dollars.
How is philanthropy doing on implementation?
Muñoz: Philanthropy is stepping up, which is great. We’ve seen pooled funds develop. There is an active conversation among foundations about engaging in implementation, which, for many of them, is new. All of that is to the good. We also think there’s room for a lot more; $4 trillion over 10 years is both a lot of money and a long time horizon. We’re hoping to see a conversation about sustained effort over time, and greater scale.
The available federal funding is relevant to many different philanthropy focus areas. Do you see a difference in the response based on different segments of philanthropy?
Sahgal: We know that strategic philanthropic investments can unlock billions of dollars in federal funding to advance a range of philanthropic priorities. Those could include carbon reduction and climate change goals, creating good union jobs, supporting low-wage workers and their families, the much-needed concrete racial equity priorities of the Biden-Harris administration. The administration is approaching policy implementation as a three-legged stool, to advance equity, climate change goals and good jobs. Hyphen really sees that opportunity as a three-legged stool, too.
Philanthropies oftentimes have their own priorities: You’ve got climate funders, you’ve got folks that care deeply about low-wage workers. Each of those philanthropies have stepped up in very specific ways. We’re very eager to ensure that the totality of the priorities related to good jobs, advancing racial equity, reducing carbon and fulfilling our climate change goals are held together. We think there has been some incredible work in each of the verticals. But work needs to be done together to hold and make sure all three of those are integrated, especially around the racial equity priorities.
There’s four bills, dozens of programs and many funding timelines to track. That means there’s significant funding going out the door today, but there’s also multi-year funding. What should philanthropy know in terms of the timing of its funding?
Muñoz: In many cases, funding is going out over a 10-year window. To give an example, the Department of Transportation has about $660 billion under the Bipartisan Infrastructure Law, and they’re dispensing that money over 10 years. If you are concerned about carbon, this is a really important leveraging opportunity. Those funds are either going to result in the pouring of concrete or in things which move the needle toward carbon reduction. There’s much work to do to push the balance toward the latter. There are people at the Department of Transportation who are thinking hard about equity and eager to make sure that the dollars flow in ways that they don’t typically flow. But that won’t happen by itself. Philanthropy is really needed to influence what ends up on the department’s desk.
Sahgal: Each of the bills have different timelines. One of the things that Hyphen has done is work with the Biden administration to identify where philanthropic support is needed to really implement the legislation and bring the biggest funders to help match funds and maximize impact — up against the timeline. In some cases, related to [the Bipartisan Infrastructure Law], it’s 10 years; in some cases, related to the American Rescue Plan’s State and Local Fiscal Recovery funds, they have to be obligated by the end of 2024. That’s why Hyphen has looked at concrete opportunities to move and leverage in short periods of time.
Is federal legislative implementation about moving funds and spending more? Are there other pathways for foundations to do implementation work, whether as a connector or otherwise?
Muñoz: All of the above, really. It’s an all-hands-on-deck moment. Some philanthropies have, for example, gone to their endowments, others have shifted funds or loaned personnel or both, and others are shaping a grantmaking strategy. At some level, all of these things are appropriate. The more creativity and resources that get unlocked in this moment, the better for making sure that federal dollars have their maximum impact.
What are the biggest obstacles that philanthropy can lift in order to make sure this funding is equitably distributed?
Sahgal: What I find really exciting is that there are many, many distinct opportunities to support federal implementation. There are multiple onramps, issues and strategies. Philanthropies can choose what aligns best within their missions and goals. There’s a huge menu that’s available. But the ideal is to take a cross-cutting approach. And time is of the essence. Some of the policies are being implemented today and now, and some have a 10-year horizon.
Muñoz: One example is the State and Local Fiscal Recovery Funds. They are essentially COVID funds. Our understanding is that tens of billions of those dollars remain unspent. That’s an example of a really short time-horizon opportunity. I’ve been involved with philanthropies that support advocates who are trying to get a state government to spend money on child care or paid leave, etc. In this case, the money’s already there. What’s needed is to make sure that states and localities are actually spending it on areas that a community feels is a priority. Three-quarters of the battle is already done. That feels like an opportunity not to be missed.
I’ve heard rumors that some philanthropists are uncertain about their next steps because of the potential for a new administration to reverse course. Is that something you see, and what would you say to that?
Muñoz: In the political world, you can never be certain about what’s next. That is precisely the reason you take advantage of the opportunity to lock in resources and affect their flow now.
Sahgal: One of the things that I love about philanthropy is how much it loves to analyze the political world, because that world is always an interesting topic of conversation. But Hyphen, as a 501(c)(3), knows that there is real, tangible, concrete work that needs to be done now and all of next year. Regardless of the potential future, there are billions of dollars that are being unlocked into communities across the United States — today, tomorrow, next month and next year. That requires a response from philanthropy that matches the scale — and the pace — at which the Biden-Harris administration is unlocking resources.
When trying to advance equity, foundations’ standard practices can get in the way of their success, particularly for communities that are not fluent in ‘philanthropese’ and the sector. Is that an issue here?
Muñoz: In the face of this opportunity, if what you’re doing is business as usual, then you’re getting something wrong. If you’re sticking to your guns so much that you’re not making changes to leverage this opportunity, you’re really, really missing the boat — and an opportunity to have the kind impact that, most of the time, we can only dream of.
Sahgal: It is not easy to unlock new money from philanthropic institutions. It really is a testament to the leadership of many foundation boards, presidents and teams to have unlocked the resources into these pooled funds. And we know that resources do not flow equitably into communities across the country. Without philanthropic support, the funds will not reach the intended people, at the intended scale, with intentions hoped for by the Biden-Harris administration. That’s the piece where we’re excited to continue to engage our philanthropic colleagues.
A very strategic amount of philanthropic resources has the power to unlock billions of federal dollars for underserved communities. Hundreds of millions of dollars are able to propel tens of billions. But we’re not quite seeing that from private philanthropy yet. We’re definitely seeing tens and tens and tens of millions of dollars, which is fantastic. But millions are never going to unlock trillions. The passage of these policies is an incredible celebratory landmark success of the Biden-Harris administration, but it’s just a first step.
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