Ann Stern, president and CEO of Houston Endowment, and Elena Marks, president and CEO of Episcopal Health Foundation, argue that while philanthropy plays an important role in addressing social problems, it cannot replace government spending on public goods and services.
Declining state revenue in the face of growing needs in education, health, child welfare and infrastructure is leading many to look to philanthropy to fill these gaps. As the Houston Chronicle editorial board recently noted in urging the Houston Independent School District to accept $7.5 million from the Kinder Foundation, “philanthropic gifts are needed in an environment where the state Legislature is abdicating its constitutional responsibility.”
As presidents of two of the largest Houston-based philanthropies, that statement sounded an alarm for us because philanthropy cannot, and should not, replace government spending on public goods and services. According to The Giving Institute, U.S. philanthropy hit a record-setting peak in 2015, when donations reached $373.3 billion. The federal budget for 2016 is $3.95 trillion.
Simply put, philanthropy is a relative drop in the bucket. There is no conceivable way to make up for inadequate public spending through philanthropy.
Locally, HISD is facing a $162 million loss in revenue due to the state’s public education funding system, and we are spending $70 million in Harris County property tax revenue due to the state’s refusal to accept federal funds to insure low-income citizens.
Our foundations’ missions are broader in geography and scope. But even if we focused all of our efforts on these two government-generated shortfalls, the amount needed is more than twice our combined annual budgets. Sound public policy, not philanthropy, is the solution to these problems.
There is an important role for philanthropy in working alongside government that plays to our respective strengths. Philanthropy is nimble and interested in experimentation, whereas government tends to move incrementally and may be risk-averse, especially when there is uncertainty about budget implications. Philanthropy can support government innovation by funding pilot programs and underwriting start-up costs that enable government to experiment with relatively little risk.
Our foundations are currently co-funding such an initiative. Working with the Harris Center for Mental Health and Houston Police Department, we are underwriting the costs of a pilot program that places mental health counselors at HPD’s 9-1-1 call center so that counselors rather than police officers respond to calls that are best handled by the mental health professionals. The two-fold goal of the pilot is to provide appropriate help to 9-1-1 callers and to reduce HPD costs associated with dispatching police officers where they are not needed.
If the pilot is successful, we expect HPD to institutionalize this practice. If the pilot is not successful, all of us will have learned new information, and the two foundations – not the governmental entities – will have absorbed the financial costs.
We appreciate the opportunity to work with government. Together, we can improve lives and, in some instances, reduce government spending. But make no mistake: We cannot close gaps or solve problems created by poor public policy choices. We’re here to help, but government must step up to the plate and do its job.