At the National Fund for Workforce Solutions, we catalyze our network to co-invest in a set of integrated solutions that enable workers, employers, and communities to advance a skilled workforce, promote good jobs and invest in equitable outcomes. By using a co-investment model that leverages both private and public funding, our network of communities have greater resources to do the work. In this blog series, we will dig into some of the different co-investment models being used in the National Fund’s network of regional collaboratives.
The following conversation with Matt Bruce, Executive Director of the Chicagoland Workforce Funder Alliance, highlights the unique strategies for co-investment in Chicago. This conversation was edited for brevity.
What does co-investment look like in Chicago?
Number one is pre-consensus pooling. Funders pooled dollars together in the same place, and they’re saying, “we will figure out together what those dollars go to.” And that gives them the flexibility and the power to do different things.
Number two is what I call post-consensus pooled. This is pooled money, it’s in the same place, but we already built the consensus on what that fund is going to do. Our project funders can see what an initiative is going to be and then they can invest towards that.
The third way is aligned funding. Apprenticeship 2020 is a good example of that. We have a plan; we’re going to invest in city colleges. We’re going to invest in one million degrees. Our funders sort of split their funding. Some of the funding came to the Trust, but a lot of it was just aligned and went directly to city colleges, which is still part of the plan, but the dollars didn’t pass through here.
The fourth way is direct employer collaboration. We have a financial services pipeline initiative. They have their own separate donor-advised fund, with their own steering committee, their own structure set up to determine how they use that donor-advised fund, and we manage that here. That’s how they co-invest with each other and with us.
The fifth way is public co-investment. We will invest in a public initiative. We don’t ever take public dollars here. We don’t go after public grants. But if there’s a public initiative, and we invest private dollars towards it, we’re co-investing with them.
Tell us about your collaborative’s funding model and the types of resources that you’re leveraging in the Chicago region. How much is pooled vs. aligned funding?
We use a donor-advised fund. On the incoming side, philanthropy or corporations make grants to a donor-advised fund, and then we manage that fund. Out of that fund comes a set of initiatives, some of which we run ourselves and others we help facilitate with staff or financial support.
In terms of the types of resources we’re leveraging, there’s private and corporate philanthropy coming in, public dollars that can be aligned to what we’re doing, and employer dollars from sources other than corporate philanthropy and CSR.
As for our funding streams, pre-consensus pooling has stayed around $1 million per year. That’s our core group of funders — 12 funders or so. Depending on the year and the number of initiatives we’re doing, post-consensus funders pool between $2 and $3 million each year. Aligned funding is actually difficult to calculate. It depends on how much you want to count as aligned funding and the time horizon for when you’re counting it. Aligned funding is probably about $3-5 million per year, as a conservative estimate.
Describe how you’ve been able to braid or blend private philanthropy and National Fund resources with state and federal funding. What are the benefits of this approach? Challenges?
We try not to take public dollars directly for ourselves at the Funder Alliance, but we will try to leverage public dollars when it serves one of our initiatives. Two National Fund grants, Better Skills Better Jobs and the Boeing OJT initiative, have both been great examples of our being able to do that.
In the case of the Boeing OJT initiative, we saw a way to help our partners do greater on-the-job training by using National Fund funds. Our partners were able to draw down more WIOA OJT dollars because they had the National Fund support through us to cover administrative costs, and expand OJT resources to populations that would have been excluded.
Another great example is the Better Skills Better Jobs grant. What’s great about the National Fund dollars, is that they trigger a federal match. So, when you’re able to give more resources to the collaboratives, they’re able to draw down more resources from the federal government. Now, our partners are able to work with six employers as a cohort, which is something they have wanted to do for a while. They wouldn’t have taken that risk without the National Fund’s investment.
The biggest challenges are administrative, mostly around logistics. With public and private funding, braiding doesn’t just happen with a snap; you have to do the work administratively to blend the funding streams.
How are employers investing in the work?
One is just time and people. Taking time to come to a meeting or be on a call, that’s not nothing. We shouldn’t just say that’s free.
The second way is CSR and corporate philanthropy. You don’t want the employer using CSR for something that should be funded operationally, because it’s not a great sustainability strategy for a new employer effort. But CSR can be an integral part of getting things going.
The third way is HR policies, the way employers invest in the skilling or upskilling of their people. There’s all sorts of benefits that employers can use to invest in their workforce. A really popular one right now is tuition reimbursement or advanced tuition payment.
The fourth way is pure investment through operations. Employers can set up a program as part of their operations that invests in a community college partnership, or invests in a training partnership with a community-based organization, or dedicates wages for a work-based learning program. That’s the purest form of employer investment and that’s the thing we’d like to see the most. If they’re investing in their operations, they’re doing it as a strategy for their company.
What keeps funders engaged in the collaborative? How important is the co-investment model to your success? Is it seen as a strategy to reach scale?
There are the four “L’s” of collaboration.
- Leverage. The fact that we are enabling funders to do more together than they would otherwise, that’s the basic appeal of funder collaboration.
- Leadership. There’s a leadership aspect of coming together. Twelve foundations speaking with one voice to the mayor’s office or the state of Illinois is different than one funder on their own.
- Learning. For some of our smaller funders, this is the main reason they’re at the table. They want the relationships. They want to be at the table learning about what we’re doing.
- Logistics. We enable funders to do things together that they couldn’t do on their own.
And there’s a couple more that don’t have L’s.
- Risk. There’s a real desire to do things that are a little more risky than they would tolerate in the rest of their portfolio. We give them a place to do things that they’re not sure will work.
- Engagement. Another is engagement with initiatives. We don’t just make a grant and forget about it. We keep engaged with that grant and we keep looking for ways for the funder community to make that grant succeed.
How important is co-investment to the model? It’s essential. It is the model. There is no success without co-investment. It is the strategy to reach scale. The only way we affect things at scale is by coming together as funders, and also working with public sectors and institutions to change behavior.
What advice would you give to other communities interested in diversifying the types of resources they leverage?
Start. This is the work. You have to build trust. You have to build relationships. And, you need a blend of two very different things. One part of the blend is quick wins. The other is the big picture view of the need to come together and see why systems need to change. Only by coming together can we change things.
Learn more about co-investment in other collaboratives in the National Fund network: CareerEdge Funders Collaborative, PACES (Preparation for Advanced Career Employment System), Workforce Solutions Collaborative of Metro Hartford, and West AlabamaWorks!
ABOUT THE CHICAGOLAND WORKFORCE FUNDER ALLIANCE
Since its founding in 2012, the Chicagoland Workforce Funder Alliance (CWFA) has engaged over 30 funders to advance its shared mission of collaborating with employers and other workforce stakeholders to increase employment, earnings and racial equity for underprepared workers in the Chicago region. The Funder Alliance is known as the region’s major convener of the philanthropic community interested in workforce development and employment. Through a combination of grant making and civic leadership the Funder Alliance has used this role to carve out a unique position at the complex intersection point of workforce development, social justice, education and economic development. Learn more about CWFA and its initiatives at www.chicagoworkforcefunders.org and follow us on: Twitter or LinkedIn.
