Building a Network: State Fiscal Analysis Initiative

The following story is based on the experience of a grantmaker and his grantee partners, working together in the field of civil society, through state fiscal policy reform in the United States. Grantmakers working in other fields will appreciate insights on issues such as:

  • Replicating a promising national idea at the state level
  • Using a focused RFP process to help grantees connect with a project
  • Working with other funders 
  • Making connections among grantees and other groups

Christopher St. John
Maine Center for Economic Policy

This is our effort to try to make the issue of taxes come alive. It’s not just, “Let’s send our money to the state capital,” and not care what’s done with it. But rather it’s that we need things from state government, here’s why we need these things, and here’s why we need the revenues and a fair system of revenue to support these very important investments that state government can make to benefit people’s lives.

Jim St. George
Commonwealth Center for Fiscal Policy (MA)

People ask, “What could be more boring than tax policy?” It turns out some of us find it interesting because it’s the key to any government action. If you care about the programs government runs, you ultimately have to care about how government raises the money to do it.

Dan Gerlach
North Carolina Budget and Tax Center

State and local governments take about 10 percent of our income in North Carolina. If somebody is taking 10 percent of the income out of my pocket I think there should be somebody outside keeping an eye on what’s going on, and communicating this so that people can understand where their money is going, who it comes from, why is it that way, and how could it change for the better.

Michael Lipsky
Program Officer (1991-Present), The Ford Foundation

The story started when I came to the Ford Foundation with a small number of projects that I thought were likely to be worth exploring. One of them was a project to do for the states what the Center on Budget and Policy Priorities in Washington had done for the nation, which was to provide excellent, reliable analysis of budgets and taxes.

The Center on Budget and Policy Priorities was started in the early ‘80s. By the time I got to the Ford Foundation in 1991, it was one of the premier organizations that was relied on to explain to people what was going on in the National Budget, particularly with respect to the implications for poor people and other vulnerable populations. So we could actually have good conversations about what the implications were of different policy proposals and tax proposals for low-income people. One of the first things I did was talk to Bob Greenstein, the head of that organization, about whether he thought we could grow models that were like his organization at the state level. This project became the State Fiscal Analysis Initiative (SFAI).

Getting Started: Requesting Proposals

The fact is that state governments were very powerful in setting the agenda in social policy in the states and financing social policy in the states. So I had this notion that this was a good idea and a need that we could fill. We got a list together of 29 organizations in 29 states that seemed to have the potential for working in this area. We used a variety of sources to identify such organizations including the Center on Budget and Policy Priorities. An interesting thing about the list of 29 we assembled was that they came from a variety of sources.

Some were child advocacy organizations, some were legal services organizations, some came out of a tax justice network that was moribund except for two or three. One was a university. They came from a variety of different places. What we thought was that some would have one strength, some would have another strength, and what we asked the organizations to do was grow toward a common model, but not necessarily start from a common perspective.

Kimble Forrister
Alabama Arise

I think the Ford Foundation was looking for groups at the state level who were doing the kind of work the Center on Budget does in Washington. They called around and one of the people they called was an African-American policy analyst with the Alabama Legislature. He told them that there was this group called Alabama Arise working on tax reform from the perspective of what it would mean for poor people. I think 29 states were invited to send representatives to a meeting in Washington to describe what they did and learn about the program.

Michael Lipsky

We explained what we had in mind and invited them to submit preliminary proposals. 29 did. One of the interesting early developments in the initiative was hiring four consultants to help us understand the experiences and qualifications of the individual grantees. They would also serve as coaches for these groups over the first year of the initiative.

Kimble Forrister

The great thing was that not only did we have the opportunity to put in the grant, but they actually assigned somebody to work with us during a planning year to try to come up with an application that was going to be funded.

Bringing in Other Funders

Michael Lipsky

One of the things we emphasized was bringing other foundations into the project, and I spent considerable time recruiting program officers from other foundations who would be interested in this project. This was to make it clear that this was a broad philanthropic effort and not the inspiration of a single foundation with a political agenda. There were two partners that came into the project to join the Ford Foundation. One was the Annie E. Casey Foundation, which had for a long time invested in child well being at the state level through its Kids Count project. The other was the Charles Stewart Mott Foundation that was interested in issues of poverty and had a very keen awareness of the importance of state politics in the interest of their grantees. A fourth national foundation, the Open Society Institute, joined the project in the last couple of years. So we now have four national organizations.

Mark Schmitt
Open Society Institute

Everybody had slightly different agendas going in, but they were all able to collaborate around a shared agenda and around the idea that this wasn’t our own thing. It was a joint project, and if you’re going to reach 20 states, if you’re going to reach 30 states, if you’re going to be nationwide, you’re going to have to be able to collaborate with other funders.

Sometimes foundations feel that if something is going to happen, they have to be the ones to create it or invent it. They want to call it their own initiative on X. Sometimes you have to drop that and recognize that Michael Lipsky’s already invented that thing. Right now it’s reaching 16 states. It’s got capacity to reach many more states. Let’s go with that.

Michael Lipsky

We got together the foundations and people at the Center on Budget, and one or two other people that we brought in as consultants. We evaluated the initial proposals and identified 15 that seemed to be very strong. Using four consultants that we had identified for the project, we then visited all of the projects.

Kimble Forrister

When Ford came to town, they first met with some of our board members and me. Then they went out and met with some representatives at the legislature to try to get an idea of whether Alabama Arise really did have any credibility out around the State of Alabama.

Michael Lipsky

In the end we chose 12 to be the founding members of the State Fiscal Analysis Initiative. Even though all of the organizations are different from one another, what they share is a common commitment to the three primary expectations of the groups: that they produce analysis and research that’s accessible, that’s timely, and that’s reliable.

Promoting Equity and Fairness

Michael Lipsky

Alabama Arise is a distinctive SFAI grantee. The Arise people have been very successful in drawing their agenda from the interests of their members through listening sessions.

Doris Smith
Alabama Arise Member

They’re asking us what our issues are and we never really had that before. If the listening session
wasn’t there, the programs wouldn’t know what the community needed. That’s why I think the
listening session is very important.

Kimble Forrister

We take the issues that the members identify as critical, such as transportation in their communities or tax reform. For instance, “Why is our state not doing something about tax reform?” We come back and try to put policy proposals together that’ll meet the concerns that they’re talking about. There’s that constant give-and-take between the policy issues and the budget issues as they’ll be understood at the legislature and then what that’s going to work out to in the community when it’s actually put into effect.

Rep. John Knight
Alabama State House of Representatives

Alabama Arise is extremely important to members of our legislature, particularly the Alabama Legislative Black Caucus. They’re not lobbyists down here representing poor people, people that are underserved in the community. We rely on them for research. We rely on them for advice. What they provide is research. They provide information. They provide knowledge. They provide the things we need that we didn’t have before Alabama Arise was here. They are very effective in terms of addressing the issue of those people who are not served by the special interest groups, or what we call the “big mules” in the State of Alabama.

Kimble Forrister

I think that because of SFAI, Alabama Arise is able to have a higher level of credibility at the legislature. They know that our understanding of policy issues goes below skin deep. We’ve got a much deeper knowledge on particular issues than even most of the folks on their staff. Gradually, as they ask us questions and we know the answers, or we’re able to get back to them with the facts, we’ve built a great deal of credibility that makes poverty advocacy a notch higher on the legislative agenda than it ever was before.

Michael Lipsky

State by state, the best evidence we have that these organizations are making a difference is from newspapers, columnists, and even legislators. When they want to talk about what the impact of particular budget or tax proposals is, the reports of our state groups are regularly cited to give a perspective that takes into account the interests of low-income people.

Building a Network

Michael Lipsky

I think one of the most important things we can do as grant makers is bring people together. People learn how to do their work when they see comparable work being done by others, and when they can make contacts with other people so that they can call upon them when they have questions.

Iris Lav
Center on Budget Policy and Priorities

The Center runs an annual conference that brings together not only the groups in the State Fiscal Analysis Initiative, but a lot of other groups that are interested in beginning to do this kind of work, or who do this work otherwise. At this conference we have speakers who will stretch people’s ideas about what might be possible. We have workshops that give people very specific skills that can help them do analysis. There’s an opportunity to trade thoughts and ideas and learn what’s happening in other states, and see if in a particular state you can build on something that is happening elsewhere.

Michael Lipsky

The other important thing about getting people together is that this is lonely work. If you are an analyst in Alabama, you’re one of four or five people who even know what you’re talking about. So when you meet people from all over the country who share an interest in what you do, it is a major contributor to your morale.

Dianne Stewart
Center for Public Policy Priorities (TX)

It’s hard to keep your inner resources going, and I think having a network of peers in other states working on similar issues, trying similar things, facing similar barriers, and having similar trials and tribulations is just an incredible strengthening thing for us. It’s been really important.

Michael Lipsky

Other foundations and Ford Foundation — and other people at the Ford Foundation — are looking to work at the state level. When they think they want to work at the state level, they look to the State Fiscal Analysis Initiative either to find potential grantees or to find a model of how you might work at the state level.

I’d like to see a day when every state has one or more organizations that regularly report on the implications for low-income people of state budgets, taxes, and other public policies. So far we’ve got some pretty good organizations that are doing this but it’s in a minority of states. We have not realized the future potential of this initiative. We don’t know where the boundary is. 

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