The “American Dream” has long been central to the narrative of American exceptionalism, driving generations of Americans to believe that a ticket to the middle class can be earned through merit and perseverance.
While the dream remains, confidence in its attainability has waned. According to national survey data recently released by Camber Collective, close to two-thirds of Americans still believe that the “American Dream” exists, yet less than half have faith that they will experience economic mobility for themselves. And they are right. Statistically, the U.S. is no longer the land of opportunity. The likelihood of doing better than one’s parents has roughly halved since the 1940s. Half of adults in the lowest income quintile are destined to remain there 10 years later.
Philanthropic funders – and the vast ecosystem of place-based organizations they fund to deliver programs and services to economically excluded Americans – have played a valuable role in mitigating further declines in mobility. Over the past 10 years, related philanthropic investments have grown every year, even after adjusting for inflation. In 2022 alone, nearly $8.4 billion was invested by the country’s largest foundations to expand access to the spectrum of life experiences proven to drive economic mobility.
At Camber Collective – an impact advisory and field-building organization – we have had the privilege of seeing the impact of these investments up close, while contributing to the knowledge, infrastructure and capacity required to strengthen the economic mobility field. Nonetheless, we see scope to further strengthen the impact of economic mobility funding by addressing three limitations to current philanthropic approaches:
- Life experiences thought to be most critical to economic mobility are often limited to the domains of education and jobs, overlooking many others proven to impact lifetime income.
- Philanthropic funding decisions do not always consider the lived experience and stated needs of Americans, particularly of those currently or previously in poverty.
- Most philanthropic funding advances single-issue programs rather than the multi-issue and intersectional programs widely proven to be most effective.
Below, we provide insights and solutions for these issues. We encourage economic mobility funders and program implementers to consider this as a path toward creating a more vibrant and equitable enabling environment for economic mobility.
Which life experiences truly determine economic mobility?
If one were to scan all economic mobility funding from philanthropic institutions today, it would be easy to assume that education and workforce development provide the pathway to mobility. After all, $2.2 billion, or 26%, of all this funding went to the singular goal of enabling Americans to earn a postsecondary degree. Yet, evidence suggests this approach to economic mobility is limited.
This year, we completed a first-of-its-kind meta-analysis that looked at more than 230 impact studies on economic mobility, many of them longitudinal studies that followed participants over decades. From this data, it is clear that boiling economic mobility down to jobs and education is doing Americans a disservice. In fact, we found 28 different life experiences with known, quantifiable impact on lifetime income, or “Mobility Experiences.” This diverse set of experiences spans six domains: career progression, community interactions, education, financial well-being, physical and mental health, and social and familial relationships. They provide a rich and nuanced understanding of what actually drives lifetime income.
Academic evidence: Estimated impact of mobility experiences on lifetime earnings
Many of these experiences will not be surprising. Completing a postsecondary degree, for instance, does have the highest impact on lifetime income at 39%, meaning those with this experience can on average expect to earn 39% more than those without it over the course of a lifetime. The impact of other experiences, however, may be more surprising. For example, being born within a healthy birth weight has a 10% impact on lifetime income, and avoiding repeated school disciplinary actions has a 4% impact. The cumulative impact of multiple experiences is currently being modelled, but indicators clearly show that a postsecondary degree, alone, achieves only a fraction of the impact that many important life experiences together can provide.
We also know that structural barriers have a significant impact on a person’s ability to access these experiences. For example, Black students are 40% more likely than white students to attend high-poverty schools, and given uneven distribution in resources across school systems, that often leads to fewer extracurricular activities and fewer graduations — both of which are Mobility Experiences with quantifiable effects on lifetime income.
In reality, all 28 Mobility Experiences meaningfully contribute to someone’s opportunity to experience economic mobility, but many receive relatively little to no attention from funders. Being born within a healthy birth weight, for instance, is among the experiences that receives the least philanthropic funding, at less than .02% of all funding. Similarly, despite being the third-most impactful Mobility Experience, receiving mentorship during adolescence receives only $98 million annually in philanthropic funding, or approximately 1% of total economic mobility giving.
Through our advisory work, we have seen the consequences of nonprofit organizations working in a paradigm where funding tends to be concentrated in perceived “silver bullet” solutions, limiting dollars from reaching other issues. There are 1.5 million nonprofit organizations in the U.S. today — nearly 60% of them compete for a similar pool of funding across social services, health and education. Almost all of them, about 92%, operate on budgets of less than $1 million a year. For the majority of direct service organizations, this fosters competition rather than collaboration, resulting in siloed programming.
We encourage philanthropy to broaden its understanding of economic mobility, taking a more holistic approach that incorporates all 28 Mobility Experiences. Targeting only one or a few issue areas is not enough to capture the full range of experiences that affect Americans and their communities.
How can economic mobility funding be more effective?
As part of our research, we also surveyed more than 4,000 Americans to understand their lived experiences, stated needs and perspectives in relation to each Mobility Experience. While all experiences garner some level of “demand” for support, certain ones have higher demand, especially among people in poverty. When we map this demand with the potential impact of each experience on lifetime income, we see clear opportunities to increase resources to many of the Mobility Experiences. These include helping Americans own a business, have strong professional and social networks, and receive mentorship during adolescence. Combined, these receive less than 4% of philanthropic funding, even though there is significant interest in receiving support for these experiences.
Philanthropic funding to mobility experiences, by impact on lifetime income and public interest, 2022
Understanding people’s perceptions of, and demand for, programmatic support will help us expand resources where there is greatest promise for uptake. Further, we know that programs designed with beneficiary input are many times more likely to achieve desirable results. We encourage philanthropy to make investments that are responsive to the lived experiences and stated needs of economically excluded people, as the primary experts on their own lives.
How can we achieve more effective programs for economic mobility?
Over two decades, we have worked with or evaluated more than 200 economic mobility programs. One recommendation is clear — effective interventions provide access to multiple Mobility Experiences, concurrently, to overcome structural barriers. Organizations can achieve this through wrap-around services and longer-duration programs (>12 months). When we surveyed Americans, having access to stable, affordable housing and to nutrition were among the most important experiences across demographics. Even though these experiences might not immediately increase income, they are essential for achieving the stability required to earn income consistently.
To take one example, EMPLOY is a second-chance worker re-entry employment program implemented by the Minnesota Department of Corrections. The program is designed to support those formerly incarcerated before, during and after release — providing a “continuity of care” that is often not available at the state level. EMPLOY programming starts 60 to 90 days prior to release and is sustained up to 12 months after release with personalized job retention services. Over the course of a year, participants are supported with multiple Mobility Experiences, including job/skills training, access to financial education, strong social and professional networks, and many others. As a result, EMPLOY participants were 281% more likely to obtain and maintain employment compared to their peers who did not participate in EMPLOY programming.
Another example is Sanctuary for Families, a nonprofit that works with domestic violence survivors in New York City. They provide wrap-around services including emergency shelter, counseling, legal assistance, child care and professional training for career advancement. Participants also receive transit cards, professional clothing, nutritional support, and stipends to help them succeed in the job market. Through their programming, 65% of participants who graduated retained their jobs after one year. Further, graduates have attained jobs with wages averaging about 57% higher than New York State’s average.
The examples above speak to the importance of building power, autonomy and a sense of community as part of economic mobility programming. In essence, programs designed to provide access to multiple Mobility Experiences help address the structural barriers that prevent people from fully accessing intended benefits.
Conclusion
It is time for us to expand our understanding of what contributes to economic mobility for Americans. We must venture beyond jobs and education and invest across the full spectrum of life experiences that enable upward mobility. Doing so will not only reap impact dividends; it will also meet the needs of Americans, mirroring how they envisage their pathway to economic advancement in this country. As one of our research participants so astutely stated, echoing a human chorus reflected in a thousand data points: “At its core, the American Dream is about living your best life, and one of the ways we can promote that is being inclusive of lived experiences in our [programs and investments].” The opportunity to respond to this chorus must be seized.
Marc Allen is Director of Shared Prosperity at Camber Collective, Joseph Zhang is an Engagement Manager at Camber Collective, and Amari Huang is an Analyst at Camber Collective.
