Part 3
Federal and Philanthropic Funding Trends in Economic Mobility

Annually, trillions of dollars from the federal government and philanthropic institutions have the potential to support Americans in accessing the Mobility Experiences.

However, funding could be more optimally directed towards the Mobility Experiences proven to have greatest impact on income or prioritized by the most economically excluded.

Even where capital is optimally mobilized and directed, its impact can be constrained by limitations in accessibility or program design. There are near-term opportunities to mobilize more impactful capital as a means of equalizing economic opportunity for all.

We find that over $6 trillion in federal and philanthropic capital flowed to the Mobility Experiences in 2022 and 2023 — the most recent years for which comprehensive data exists. Although funding to the Mobility Experiences as a whole grew by 16 percent (adjusted for inflation) from pre-pandemic levels (2019), there remain opportunities to better align funding to the Mobility Experiences that are most effective at boosting income and meeting the stated needs of Americans, especially for those who are most economically excluded.

This report uncovers how the federal government and philanthropic institutions invest in the Mobility Experiences and identifies areas primed for additional investment.

Key takeaways include

Understanding How Capital Flows to the Mobility Experiences

Federal capital was the source of over $6 trillion in annual investment into the Mobility Experiences in fiscal year 2023. Broadly, federal capital for the Mobility Experiences is:

• Critically important: The vast majority of funding into the Mobility Experiences, over 99 percent, was provided by the federal government.

• Highly concentrated: 90 percent of federal funding into the Mobility Experiences was clustered into two Mobility Domains — Financial Well-being and Physical & Mental Health.

Philanthropic capital was the source of $8.4 billion of funding into the Mobility Experiences in 2022. Though fractional in size relative to federal funding, philanthropic capital flowed to the Mobility Experiences in notably different ways. Comparatively, philanthropic capital is:

• Responsive: Flexible and timely in meeting gaps in accessing the Mobility Experiences.

• Broad: Dispersed across the Mobility Experiences, compared to federal funding.

• Future-Oriented: Focused on driving upward mobility, particularly through funding to the Mobility Experiences within the Education domain.

Improving How Capital Flows to the Mobility Experiences

Federal capital is, comparatively, channeled more towards Mobility Experiences with weaker impact on lifetime income but is more aligned to the Mobility Experiences prioritized by economically excluded Americans. On the other hand, institutional philanthropy is directing a larger share of its funding toward Mobility Experiences with a high proven impact on lifetime income and is more aligned with the priorities of the American public as a whole, rather than specifically those living under 200 percent of the federal poverty level.

There are opportunities for both the federal government and philanthropic institutions to better target their funding by investing at the intersection of impact and demand. By analyzing the lifetime income impact of and demand for each Mobility Experience layered on current federal and philanthropic funding levels, we identified a subset of Mobility Experiences with high proven income effects and strong public interest, yet currently receive comparatively lower amounts of funding, including: graduating with a degree in a high-paying field of study, receiving job/skills training, avoiding involuntary unemployment, obtaining a first full-time job with opportunity for advancement, owning a business, receiving mentorship in adolescence, and having strong social and professional networks.

• Continuing to fund the experiences falling within the Physical and Mental Health Mobility Domain, such as having low exposure to traumatic experiences and accessing care for mental and physical health conditions, given high public interest in those experiences; and

• Improving the effectiveness of funding to the Mobility Experience pursuing/completing postsecondary education by prioritizing college-readiness and affordability of postsecondary education for Americans from low-income households.

Making Capital More Effective

We can improve the efficacy of federal and philanthropic investments by directing funding towards interventions grounded in design elements that have been shown to be most effective. Based on an analysis of over 200 program evaluations, funders and other economic mobility practitioners should consider:

• Channeling funding towards programs that offer sustained support over time, including funding for program extensions;

• Using funding to introduce or expand wrap-around services or comprehensive support for existing programs; and

• Designing programs that source and incorporate beneficiary input throughout the project lifecycle.

Across programs, stakeholders can amplify the impact of interventions by:

• Reducing silos to improve coordination and achieve cross-sector impact; and

• Prioritizing equity in decision-making to ensure funding and interventions reach Americans poised to benefit most from upward mobility out of poverty.

Substantial portions of federal funding into the Mobility Experiences have the potential to be administered and allocated at the local level. This greatly hinges on local leaders’ ability to effectively access this capital. Six capacities appear to influence how effectively localities are able to access and deploy federal funding to improve economic mobility:

• Local and Regional Governance Capacity

• Strength of the Financial Sector

• Presence and Priorities of Major Employers and Institutions

• Robustness of the Local Service Ecosystem

• Scale and Focus of Philanthropy

• Capacity of the Real Estate Development Sector

Funders should consider investing in:

• Strengthening local government staffing and funding additional analytical support;

• Supporting and attracting financial institutions and place-focused philanthropies;

• Partnering with anchor institutions to sustain support for initiatives that improve access to the Mobility Experiences; and

• Supporting evaluations of local capacities in cities that are struggling to access federal funding.

Future research should focus on identifying adequate funding levels to meet the needs of Americans in accessing all 28 Mobility Experiences, while also exploring how private sector funding can play a role in access. In the coming years, monitoring funding trends to the Mobility Experiences will also be critical for identifying areas of success and opportunities for continued growth, as will articulating the optimal combinations of policies, programs, and governance approaches that allow some localities to outperform their peers in providing access to the Mobility Experiences.

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