Center for American Progress

Bloomberg Tackles Poverty Differently: With Venture Capital-Driven Philanthropy
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Bloomberg Tackles Poverty Differently: With Venture Capital-Driven Philanthropy

Bloomberg combines venture capital incentives with philanthropic aims to alter poverty cycles with educational opportunities and financial rewards.

New York City Mayor Michael Bloomberg yesterday unveiled what his administration called a “nationally unique” poverty-prevention program that could serve as a model for other states and municipalities and provide an additional tool for U.S. congressional leaders considering new ways to combat poverty in America.

The prominent Republican city mayor announced his new $150 million annual commitment to combat the City’s pervasive poverty standing alongside New York City Democratic Congressman Charles B. Rangel, who will become the chairman of the powerful House Ways and Means Committee next month. The program, called the Center for Economic Opportunity, will administer and oversee programs that will provide tax credits and financial incentives to motivate those in poverty—or at risk of falling into the cycle—to pursue their education, learn sound financial practices, and become more self-sufficient, thriving adults.

The new poverty-prevention program departs from traditional governmental methods to tackle poverty. The mayor’s venture will function as a hybrid venture capital company with a philanthropic aim. Bloomberg’s new program draws from the recommendations of a high-profile panel he created earlier this year to develop strategies to address poverty, which included leaders (subscription required) in business, nonprofit, and philanthropic organizations. They include Richard D. Parsons, chairman of Time Warner, and Geoffrey Canada, author and CEO of Harlem Children’s Zone.

The Center’s programs will be geared toward addressing the five factors that have traditionally been considered contributing factors that lead to cycles of poverty:

  • Early childhood care
  • Education of at-risk young adults
  • Employment for disadvantaged young adults
  • Working poor adults that lack benefits, assets, and savings
  • Working poor adults that lack job skills

Individual programs instituted by the Center for Economic Opportunity will be monitored and evaluated yearly to ascertain progress. When announcing the initiative yesterday, the Mayor emphasized: “If we find that a certain program isn’t making the grade, we will terminate its funding. Tackling poverty is a big challenge, but by taking a results-based approach, our investments can make a big difference.”

The Center for American Progress, which applauds Bloomberg’s progressive experiment in this critical arena, has launched its own initiative to address poverty. This spring our Task Force on Poverty will release its findings and provide new and creative ways to cut poverty levels in the nation in half over the coming decade. The members of our task force will be examining innovative programs around the country, turning to the research and analysis done by another CAP initiative, State Progress, and looking at intriguing experiments such as those now going forward in New York City.

For more information about State Progress and The Task Force on Poverty, please see:

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