Episode 14 – Investing in Impact

Lisa Graham (00:00):
We are very excited about today’s episode of Change the Rules. I’m your host, Lisa Graham. And in the studio today, we have Dan Graham, co-founder at Notley. At Notley, we work to build ecosystems that better support and provide resources to our community. And often that means partnering with organizations like the United Way. And in this episode, we’ll be talking by phone with David Smith, the CEO of United Way of Greater Austin, about the work that they do in our community to fight systemic poverty. United Way is a nationwide organization. And by looking at our local chapter, we hope to demystify and better understand the amazing work that they do here and across the country. So thank you so much for joining us, David, we appreciate you calling us.
David Smith (00:37):
Thanks for having me. I’m glad to be here.
Lisa Graham (00:38):
Yeah. So I’d venture to say most of us have heard of the United Way. Many of us have them in our communities. But can you please tell us what the mission is of the United Way and the type of work that you all do here at the Greater Austin chapter?
David Smith (00:50):
Sure. Yeah, I do think most people have heard of United Way. I think you’re right. And I think some people probably have an idea a little bit of what we do, but it may be stuck in an old model of what the national organization once was. And so I’ll really talk more just about what we do. Because it is a national organization. We are a chapter of the national organization. But all of the money that we raise stays local and our mission is local. So our mission at United Way for Greater Austin is we bring people, ideas, and resources together to fight poverty in our community.
Dan Graham (01:25):
I’d like to get the tough question out of the way at the beginning, which is the one that I hear whenever I’m talking to people in the community about why I’m a big supporter of the local United Way. And that is well, isn’t the United Way kind of an antiquated model for giving? You know, they think about it in terms of the traditional withholding from the paycheck, when transaction costs were much higher to do individual giving, and it was harder to do direct giving and find the right causes yourself. And obviously that’s changed a lot. And so what is the response to that question of how is United Way staying relevant in kind of the modern philanthropic age?
David Smith (02:11):
Right. Great question. And I’m glad you asked because it gives me a chance to answer it. Yeah. And you’re right. That old model. I mean, it made sense when we didn’t have the internet and when people didn’t have the kind of connections they have now with their charities they care about. And I would say that that some United Ways have evolved and some haven’t. There are still some United Ways that are stuck in that model of collecting from paychecks and then distributing it out to the community in kind of a benign system of these are the charities that everybody loves, so let’s just give to them, and keep everybody happy. And the way I like to think of this is we are not an intermediary, we’re an investor in impact. And so any organizations that we are investing in, or that we’re giving our donor dollars, which we take very seriously, any of those donor dollars we’re using to invest, we want to make sure that all of those strategies. And so it’s not just investing in an organization. It’s really investing in strategy work and actually make real change, sustainable change, metrics-based change. And so that I think is how we’ve evolved and the difference from the old model and how people used to think of us. And again, we’re not going to put donor dollars into something that doesn’t work. And I think that’s the real difference.
Dan Graham (03:38):
You say we are not an intermediary, which I think is very much what a lot of people believe the United Way to be. And how are you innovating? And how are you redefining yourself to carry that message to the community?
David Smith (03:56):
Yeah, yeah. Well, a lot of ways. So, one, we can just jump right into something we’re doing with you all, which we’re really excited about and that’s Click for the Cause. You can go to clickforthecauseatx.org and it’s a way for people to voice their support for initiatives and local nonprofits that are doing really innovative work. And the way that we brought this to the community, one, thank you all, you all helped us do this and really brought us the idea. But we went to different nonprofits and said, “Hey, if you could fail, what would you at least try for? What would you reach to do that you’re not going to be able to even attempt with your current donor dollars, but with these dollars you would be able to?”, and they brought really, really innovative ideas. And so that’s one area that we’re doing that. The voting is happening right now, I’m not sure when this is going to air, but the voting is happening right now from mid April to the end of April. And then the winner of Click for the Cause will then go on to participate in Philanthropitch, which everybody’s excited about too. So that’s one way.
David Smith (05:08):
Another way is really growing and investing in our 2-1-1 program. So, 2-1-1 gets over 300,000 calls a year from people who just need help with basic needs. And I wouldn’t call 2-1-1 part of just, it certainly was, and is continuing to be innovative, but I think some of the newer approaches we’re taking to 2-1-1 are really innovative. So for example, if the caller will allow us, we will now do follow-up calls. So say someone calls us, you know, regularly and says, “I need to go to the emergency room. I’m having breathing problems.” Well, if they’ll allow us to call them back, we can then get to what the root of the problem is and discover some social determinants of health that where we realized, well, gosh, their apartment is filled with mold or has allergens. Address that issue. And then it stops the need for them to ever call us again for breathing issues.
Lisa Graham (06:08):
Are you all able then to connect them with the resources that they need to help them with that?
David Smith (06:12):
Exactly. That’s exactly what we’re doing. So through the follow-up calls, we are determining and assessing their larger situation and then connecting them with the various services they need to address, you know, what we would think of as upstream issues. So the issues that are really causing their health concerns or any other concerns. Yeah.
Dan Graham (06:30):
One thing I would mention too, that I know you guys do really well, and that’s very different than the traditional United Way model is when you do the direct giving and the filtering of donor dollars into these different programs to provide great impact within the community, you’re providing that expertise – the selection, the accountability, and the guidance of the nonprofits that ultimately are receiving the dollars – rather than the donor themselves having to figure out exactly who to give to, how to measure them, how to make sure that they’re following through on what they said they were going to do. And United Way is a great way to provide all of those pieces to the puzzle, so that the donors feel confident that their money’s being spent to impact the community in the way that they intended.
David Smith (07:23):
That’s exactly right. Yeah. And there’s so many examples of that. One that I really love is there are only, I think now eight federally accredited childcare centers in Austin. All eight of those, we are funding, we’re investing in, and they’re all federally qualified and accredited because of our funding. Our funding allows them to hire the quality of caregivers and educators that they need to be to have that federal accreditation. So everybody wins through that. But you’re exactly right. Yeah. Through our, I would say our community impact leading and convening, a lot of these organizations have better metrics support to really follow whether or not they are really making a lasting impact. And that is invaluable. Yeah, you’re exactly right.
Dan Graham (08:19):
Why do we only have eight? That seems like a low number.
Lisa Graham (08:21):
By the way, you’re not in the studio, David, but I made a shocked face with my eyes really wide when you gave me that number. That was crazy. My hand went to my mouth and I gasped.
David Smith (08:37):
When Sue Carpenter, our Chief Programs Officer, told me that news, I did the exact same thing. I said, how can that be? And we’re working hard to get more. It takes a lot of money and it takes a lot of work, but we are doing that work and we’re raising that money, because we are determined to have a lot more than that.
Dan Graham (08:56):
I bet if we lowered our standards, we’d end up with more than eight.
David Smith (09:02):
So far, we’re not willing to do that.
Lisa Graham (09:02):
This leads into another question that I had for you, which is, you know, being on the front lines of that work, what other issues, like, what would you say are some of the leading issues going on in Austin right now that you all are working to solve?
David Smith (09:18):
Yeah, thanks. You know, I mean, everybody talks about affordability and certainly rightfully so. Everybody talks about mobility transportation rightfully so. But when I think of what are the most pressing issues in Austin and I know everybody talks about this one too, but I don’t think there’s any way to get around that. This to me is kind of the big one. And that is that we are one of the most economically segregated cities in the whole country. Why I think that’s the issue is if we don’t even see or know the need in our very own community, how are we ever going to know how to solve it or fix it? How are we ever going to be moved to be part of the solution or give? And so I really think it is a major issue for us that we stay in our own bubbles and aren’t really even aware.
David Smith (10:13):
I can’t tell you how many people I’ve talked to when I talk about poverty in Austin, who kind of tilt their head and get a curious look and say, “there’s poverty in Austin?” And they’re smart, educated, good people. We just don’t see it. And that’s because we are so economically segregated. And so I think that is a major issue we’ve got to address. I remember very, very early on in my career, someone very instrumental in my life, told me before you get into any of this work, “get to know the poor” is how she said it. And I think we all need to get to know our community, get to know the people in our community who don’t have the same headstart we do, and don’t have the same privilege that we do and are struggling. Working hard and still struggling just to make ends meet.
David Smith (11:14):
I think once we do that, I think people are good, and people will give more, and people will become more involved in the solution. So I really see that as a big part of it. And what we’re doing to address that, of course, is our Hands On Central Texas program that Ray Blue and Tom Whiteside and his team leads, where we connect people from corporations, people from all different groups to come in and actually have a hands-on experience where they’re volunteering with the very people and with the groups that need help so that they get to know them. And we lose this sense of there are other people who need help. We realize it’s, we’re all in this together, really. So, yeah. And I guess I also have to say believing, like we all do it United Way, that the education is really the key out of poverty.
David Smith (12:08):
You know, the fact that 42% of our kids live in low income households, and we know that way too many of those kids are not ready for school by kindergarten. And how that sets them back even before they’ve even gotten started and what that means for their lives. They’re much more likely to end up in the juvenile justice system. They’re much more likely to become pregnant as teens. And they’re much more likely to struggle to ever find employment. And then what it means when we do get them school ready. When we’re working with them, when 90% of their brain is being formed from zero to five. And it means they do go on to have healthy, productive lives. And so, you know, I would be remiss to not mention education as a key need in the community and an area where we’re really focused on.
Dan Graham (12:59):
You know, I love the idea of kind of bursting that bubble that people live in, and connecting them with the poverty that we do have in Austin. And I would imagine most people, maybe they see some of the homeless asking for money downtown or on certain street corners, but have yet to kind of look at the more institutionalized poverty that we have in East Austin, which is now being pushed into Bastrop and Pflugerville and other, other places as, as the East side gentrifies. And Hands On Central Texas, if I’m not mistaken, is more of a general kind of volunteer matching platform. I’m curious, is there a way that you guys have found to be effective to measure or create goals around kind of that introduction of the West to the poverty challenges that we have as a community? Or how do we combat that in a more systematic level or at least measure our progress on that?
David Smith (14:00):
I wish we were in the same room. I’m smiling really big, because I love that question. And I’ll tell you, we’re just now starting that. Tom Whiteside is the new Director for Hands On Central Texas and Ray Blue brought him on because these are the kinds of things that we know we need and want to measure, and he’s ready to do it. So we’re just now at a point in the long history of that program, but just now at the point we’re going to start doing that. So I can’t wait to get with you all again at some point and tell you how we actually are measuring that.
Dan Graham (14:35):
Here’s the answer. We figured it out. It’s right here.
David Smith (14:39):
Because we got to do that and we’ve got to do that with all our programs that we’re investing in. We don’t want to throw $1 towards a nice program, but it’s not working. And so, this one is no different. So we know we’ve got to do that, and we’re excited about it too.
Dan Graham (15:00):
You’re just dealing with a population and not, you know, certainly not speaking for everybody on the West side of Austin, but a lot of people don’t want to have that awareness and exposure to that kind of poverty.
David Smith (15:13):
Right. I think that’s true, but I think it comes from just a little bit of uncertainty or fear. But I have yet to meet one person who once they do have that experience, even if it’s entering, you know, confronting their fear, who doesn’t leave feeling so grateful for that experience. And it doesn’t leave. They’re really different and ready to be more involved.
David Smith (15:31):
I mean, again, we set up these barriers that are really false barriers and think, oh, well, those people are, you know, what different, scary. You can put so many different words in there. But once you actually meet the people who need our help, we see ourselves and we realize we are so much more alike than we are different. And I think a lot of people really also experience, you know, wow. If a few things were different in my life that could so easily be me. And what would I want people, how would I want people to respond? Who would I want to respond if I were in that role? And so it just breaks down so many barriers.
Dan Graham (16:15):
Has your team looked at or been exposed these various poverty simulations that are out there? I know in communities, at least some are here close to Austin, but I haven’t heard of one in Austin.
David Smith (16:22):
Yeah. I haven’t heard of one in Austin either. Actually we just did a little bit of that here at this conference where I am in San Diego. I can’t say we’ve done that specifically, but we certainly talk about that all the time, but we haven’t done any of those simulators. I think it could be something really interesting for us to go through and lead people through, for sure.
Lisa Graham (16:51):
Yeah. I love hearing about what you guys are doing in terms of the data and looking at returns. This is the third conversation I think I’ve had in the last week and a half with people talking about data and its role in nonprofits. And, you know, really talking one-on-one with folks who are data nerds, if you will, and how they can get involved. And I’m like, please get involved and help. And so we can see what the returns are like for a lot of these programs. And, you know, the other program that you guys have that you do a lot of amazing work in is the Success by 6 program, which is this pre-K, which, you know, looking at the returns on that, they’re incredible. But you know, a lot of folks, some of it’s very long term. And so how do you translate that? So can you talk a bit about the work that you guys do and how you all communicate to the community about what those outcomes are?
David Smith (17:38):
Yeah. That’s a great question, Lisa. Yeah. It is tough. I mean, it is so different from how a lot of people now are more wired and geared to give, and that is, you know, I’m going to obviously oversimplify. But give me $10 a month and we’ll save 10 puppies lives. And you think like, oh, okay, I’m doing that. But we’ve also got to invest. I mean, Dan, you were just talking about structural issues. I mean, poverty is systemic and we have to invest in things that we know have a great ROI in reversing that. And that’s what we’re doing with both Success by 6 for the early childhood work and then with our 2-Generation work. But it is trickier because you’re asking people to give to something that they may not see the ROI immediately.
David Smith (18:30):
And to be fair, we also know that some of these issues are so huge. We’re not going to get out of them 100% through philanthropy. We have to change some of the systems and structures and policies to really make the lasting difference that we know we can make. But, for example, we do know that for every $1 we invest in early childhood work, we reap at least – the most conservative estimates – $8 and future costs associated. So I just talked about, you know, a child who starts starts behind is going to go on through life costing the system so much more than if we just invest now and get them the early childhood care and education that they deserve and need to give them that leg up to be ready for school, to be ready for kindergarten, and go on and succeed in school. I mean, what that does alone in that child’s life, but then also their family’s life. It’s just all the research is so off the charts of what that means for the whole family. And then combined with the 2-Generation approach is the key to really finally breaking generational poverty.
Dan Graham (19:47):
Just to give a little bit of a plug to Sue Carpenter, who’s on your team you mentioned earlier, in a book that she recommended to me maybe five years ago. I think it’s called How Children Succeed. And it goes into depth about a longitudinal study, which means it took place over a long period of time, about 40 years, I think. And early childhood three, four year olds, just half a day of pre-K three days a week for a year. And they didn’t let everybody in the program. And they tracked the kids who were in that half day, three times a week, a pre-K class throughout the next 40 years of their life, and the results are almost unbelievable if it hadn’t been such a well done study. They were earning on average two times the salary. They were half as likely to have been arrested. And just a ton of statistics like that, that make it a no brainer. But for the fact that, of course, the benefits take longer than a political cycle to realize. It’s amazing the obvious and data proven ROI you get from helping kids out at that early age.
David Smith (20:48):
Yeah. It’s so true. And then bring up a political cycle. I mean, this is, you know, to me, one reason I really love the work we’re doing because for a lot of reasons. But one is, it is completely bi-partisan in that it makes sense for the leftist leaning, just bleeding hard that this is absolutely the right thing to do. Everybody should have a fair start. But it also makes sense for the most fiscally conservative, more right-leaning person, because it saves us money. I mean, in the long term, it saves us so much money. We don’t obviously lobby – we’re nonprofit – but part of what we’ve got to do is inspire other people to lobby and advocate for these issues, because that’s what’s really going to change things. When the state legislature cuts early childhood development and education funding drastically, it was exactly five years later that school readiness plummeted. So it’s an obvious key that we’re not going to solve all of this philanthropically, but we can make a huge difference. But we’ve got to also convince our politicians and government officials to invest in this, along with us. Yeah, absolutely.
Lisa Graham (22:23):
Yeah. It seems too that just raising that level of readiness at such a young age would also then raise the level of education for each grade going forward. Just in terms of how they can, the time they have to take preparing all students to get to the same level, being able to teach at a higher level. So, I kind of view it as like this as a silver bullet in a way, but just how do you get people on board? And it sounds like you all are talking about that. Can you talk a little bit about the programs you all offer? You all support some preschools or what else does Success by 6 do?
David Smith (22:57):
Yeah, yeah. And really a lot of what Success by 6 is doing, and continues to do, is convene and bring the community together around this issue, so that we are educating the community around this issue and then letting them go out and educate others about the importance of this issue. But one of the huge things, and thanks for giving a plug to Sue Carpenter, we couldn’t plug her enough. She’s an amazing person. But she has really led the community in this school readiness action plan. And if you think about everybody coming together and all the different ideas and definitions that would have been brought on what does it mean to be school ready, Sue and her team led the community in coming up with, okay, we all agree that this is what school readiness means. Which actually then getting back data, let’s us all measure according to the same metrics. What does it mean when someone is school ready?
David Smith (23:48):
And that’s huge. That lets us go back to it and say, we’re all playing from the same playbook about what this means, and this is where we are in school readiness and how we need to do better. So definitely I think the convening and educating the community on school readiness and early childhood. And then another program, of course, 2-1-1, that I’ve talked about a little bit. But then 2-Generation too. The dual generation to generation work we’re doing. I’ll give you one example of how this works. One of the organizations that we invest in is American Youthworks. Are you familiar with them?
Lisa Graham (24:32):
Yes. Can you explain what they do?
David Smith (24:34):
Yeah, they do great work in training and educating at-risk youth, but older at-risk youth like 18 to 22, with skills and job placement. So it’s basically helping in workforce. So they are training and educating at-risk youth to have the skills they need to go out and get a job. Well, in their program, they were finding that they had a lot of people dropping out and the attrition rate was really high. And so they did what they should do, find out why. And they found out that a lot of those 18 to 22 year olds have kids and babies of their own. And if they’re baby is sick, if their baby has any need, they don’t come. They don’t come to the training that they need. So we invested with Child Inc.
David Smith (25:23):
We brought Child Inc in – our headstart provider – to have an early childhood care center there on the grounds of American Youthworks. And now they really don’t have an attrition rate. People do come and graduate and have a job. So everyone wins. I mean that their kids are getting the kind of quality childhood care and education they need, while their parent is getting the skills training they need to have a job. And that’s when I talked about, you know, that really is the key to breaking that family cycle of poverty. It’s beyond just job training. It’s also how do you open a bank account? How do you balance a checkbook? All those things that everybody needs to know to have some financial stability in their life, so that those same kids who are getting quality care don’t go home to a situation where they’re moving for the third time in six months because they can’t pay their rent and that kind of thing. That’s just one example of how we’re convening, bringing people together, fostering, meaningful collaborations where Child Inc and American Youthworks hadn’t necessarily done this before. And so those are the kinds of things I’m really proud of that we’re doing. And again, that’s Sue and her team just do amazing job there.
Lisa Graham (26:40):
So you touched on this a bit with different organizations that have come together for that particular program, but how does United Way seek out partnerships and work with other organizations?
David Smith (26:49):
Yeah. Well I’m sure you all know this yourself, but I mean, when you’re a funder, people definitely come to you a lot. But really it goes back to a little bit what I was mentioning in the very beginning. We seek out partners who we know are doing innovative work. We certainly don’t want to fund programs that have been around for a long time, but they’re not measuring it. They don’t really know. It’s just everybody likes it. And it’s popular. We want innovative work that is completely metrics based, where we are accurately and fairly gauging what kind of difference they’re making. We engage partners and seek out partners who we think that and know that the change they’re making is sustainable, so that we’re not just pouring the same dollars in year after year, but it’s actually a sustainable change.
David Smith (27:44):
And then of course, right along with that would be seeking out partners where, yes, they can report outputs, but really what we’re much more interested in is outcomes. Whereso it’s not how many people came and learned about it. It’s what kind of difference did it make in their lives and them going forward. So that’s how. And that’s a great example of y’all’s question at the very beginning of how we evolved. That’s definitely the way United Way has evolved. That was not happening. And again, thanks Sue Carpenter and team for really working with the organizations and the strategies where we’re investing to make sure that they know that’s our litmus test. It’s not whether or not you have a powerful board of directors or everybody likes you and knows you. It’s is the work you’re doing really making lasting sustainable change.
Lisa Graham (28:38):
Well, David, thank you so much for joining us today. This has been really fun, and we look forward to all the exciting things that you guys are working on. Thank you for all the work that you do.
David Smith (28:48):
Thank you. I’ve really enjoyed talking to y’all. Always do. And thanks for what y’all are doing too. It’s been really fun to talk to you.
Lisa Graham (28:54):
Great. So if you are interested in getting involved with the work of the United Way for Greater Austin, please visit unitedwayaustin.org. The Change The Rules podcast is sponsored by Chez Boom Audio and the talented Shayna Brown. You can find her studio at https://chezboomaudio.com/. That’s C H E Z Boom Audio dotcom and Change The Rules is also on iTunes. And you can find every episode by searching Change The Rules. Thank you again, David, this has been really fun. Thanks for calling in and taking the time.
David Smith (29:20):
Thank you so much. It’s been great. Appreciate it.
Lisa Graham (29:27):
And if you are listening to this podcast before April 27th, and you visit the unitedwayaustin.org website, please click on the Click for a Cause tab and vote for your favorite nonprofit to win Click for the Cause.