"In order for more of our neighbors to learn and earn their way to a better life, it’s going to take innovative thinking and cross-sector collaboration."

This blog post was written in response to a group blogging event, hosted by Living Cities, which asks, “What will it take to achieve dramatically better results for low-income people faster?”

The economic divide in the U.S. is a reality that will not disappear any time soon. To address today’s disparities, we’d be smart to engineer a poverty-fighting model that addresses the realities of U.S. economic inequality. If we want to achieve better results for low-income people faster, there is no time to wait for income and asset trends to reverse themselves. Our neighbors need affordable housing, quality education and career opportunities right away. Fortunately, solutions already exist to boost wages and living standards for the growing numbers of urban poor.

Our neighbors need affordable housing, quality education and career opportunities right away.

The Lever Fund was formed in 2014 to leverage the significant resources and talent of the Greater Washington area. To “fight poverty right here” in the Greater Washington region, we identify, fund and measure initiatives that significantly improve our neighbors’ earning power. We believe that this evidence-based approach to designing solutions that address economic disparities is one key to building a new urban practice.

Here’s how it works:

  • Capitalize on the local culture. As a startup, we’re thriving in D.C.’s entrepreneurial climate. We also benefit from an unusually collaborative nonprofit community. Finally, we recognize that policy is the language spoken here, and we are geographically and temperamentally positioned to inform pivotal policy decisions in the District, in two states, and nationally.
  • Apply investment principles. We’re not going to get anywhere without the participation of those with the most resources. High-net-worth individuals are more likely to embrace models that treat their philanthropic dollars as investments rather than charity. That means they want to see the rate of return. Applying the system of metrics outlined in The Robin Hood Rules for Smart Giving (Michael M. Weinstein and Ralph M. Bradburd, 2013), we monetize the value of outcomes, using best estimates of the aggregate benefit to poor people (measured in part by the projected boost in future earnings). This unified approach measures different ways to tackle a multifaceted problem.

  • Explore new models. Effective grantmaking strategies alone aren’t enough to bring about change for the estimated 1 million people in need in our region. So we’re also exploring public-private strategies (such as social impact bonds) and private instruments (such as impact investing) that generate financial returns for investors and, simultaneously, social returns, in the form of educational achievement and jobs. That’s how to create a sustainable, virtuous cycle where everyone profits.

  • Make sure it’s about people. In New York City, the Robin Hood Foundation runs an annual summer camp for the teenage children of major donors. Participants visit and volunteer at grantee organizations, but more importantly, they meet people from a socioeconomic world entirely different from their own. The resulting dialogue is an all too rare commodity in our society, and the repercussions are felt long after camp is over. The Lever Fund is actively planning similar encounters, bringing neighbors together for the good of the region.

In order for more of our neighbors to learn and earn their way to a better life, it’s going to take innovative thinking and cross-sector collaboration. The Lever Fund is looking to incorporate the best ideas from across the country into our evolving start-up, and Living Cities is a vital resource in this enterprise.