This is the first article in ongoing reporting on poverty alleviation as part of a listening tour of five Philadelphia neighborhoods conducted by Generocity in partnership with United Way of Greater Philadelphia and Southern New Jersey. It was not reviewed before publication.
Critics argue that Truman-era Secretary of State George C. Marshall’s eponymous plan to distribute economic aid to allied nations following World War II was nothing more than a pretext used by the United States to subvert Soviet influence and the perceived rising tide of communism in post-war Europe.
Others debate the policy’s effectiveness, believing that data from the period show positive economic growth and a natural recovery even without foreign intervention. As bold an intervention as the Marshall Plan was, having injected almost $12 billion into the reconstruction effort throughout Western Europe, some historians still mull over whether or not it was benevolent.
The altruistic nature of philanthropy in an age of unbridled capitalism is something that weighs heavy on United Way’s Bill Golderer as he attempts to shepherd Philadelphia towards its own prosperity during a ongoing war on poverty.
“If you’re not moved by [a] moralist kind of approach, how competitive do you think a city is going to be, economically, that has fully a quarter of its population without any real demonstrated evidence-based pathway to economic prosperity?” asked Golderer, who found the debate over post-war Europe an apt analogy to the current needs of low-income Philadelphians.
“That’s a cold-blooded analysis,” he continued, though a necessary one he told Generocity before stressing that his was a moral crusade.
Golderer understands that those with pure philanthropic motivations need assistance from the economic prosperity crowd if large-scale poverty in the city is to be addressed in a significant way, even as he wrestles with squaring both of those ideas.
Philadelphia is the poorest big city in the nation. Here, neighborhood boundaries and racial inequalities demarcate the lines between poverty and deep poverty. A global pandemic lays bare the issue while killing the most vulnerable communities within city limits.
For years, the complexities of the problem forced many with good intentions to throw their hands up in frustration, Golderer said. The ball of responsibility bounced between politicians, the private sector, philanthropic groups, and community organizations. At the same time, the burden grew heavier on the backs of the poor.
“It took us a long time to get here,” Golderer said. “It’s going to take us a little bit of time, realistically, to move out and it’s going to be a sacrificial investment.”
Golderer, the president and CEO of United Way of Greater Philadelphia and Southern New Jersey (UWGPSNJ) and pastor at Arch Street Presbyterian Church saw that investment begin in earnest last month.
Using Philadelphia’s Poverty Action Plan as a blueprint, City Council unanimously passed two bills, both sponsored by Councilmember María Quiñones-Sánchez, to establish and subsidize a Poverty Action Fund. With $10 million at hand in initial funding, this new public-private partnership, which will be led jointly by city officials and UWGPSNJ, becomes the largest coalition tackling poverty in Philadelphia.
The Poverty Action Fund — an unprecedented coalition of public, private, community-based and philanthropic groups powered by UWGPSNJ and the City of Philadelphia — is a movement to support 100,000 Philadelphians’ rise above the poverty line over the next five years. It is also Golderer’s Marshall Plan for the city — a revolutionary proposition designed to rebuild the city by helping lower-income residents achieve financial stability.
“This is very significant,” said Golderer, noting the powerful statement made by City Council in light of the economic downturn caused by COVID-19. “[Councilmembers] decided we have to move forward on a poverty initiative this year so they stuck to it. Amen.”
According to Quiñones-Sánchez, the coronavirus pandemic demonstrated how great a need there was for the fund, pressing City Council to act decisively and intentionally. Despite depleted city coffers, including the loss of a $400 million budget surplus due to the COVID recession, Philadelphia’s legislative body pushed forward with the plan. As Quiñones-Sánchez told Generocity, City Council had no choice. A growing and out-of-control public health crisis raised the stakes and made tackling poverty an urgent necessity.
“We wanted to show the private partners that we were still serious and committed,” said Quiñones-Sánchez, who also served as co-chair of City Council’s Poverty Action Committee which convened last year. “We want to put a number that we think we can quickly get matched by the private sector.”
“The goal was, we’re serious about this; we’re going to establish the fund,” she added.
Where more people live in poverty and deep poverty
In the early- to mid-20th century, the G.A. Dentzel Carousel Company’s Hunting Park Carousel sat nestled in the neighborhood for which it was named, as the showpiece of German-born cabinetmaker and father of the modern merry-go-round industry, Gustav Dentzel, and his son William.
With handpainted horses that each took a week to craft, the popular attraction stood near Germantown and Erie Ave.’s until 1967, when current owners at the time sold it to an amusement park in Sandusky, Ohio. Though put on the National Register of Historic Places in 1990, the Hunting Park Carousel no longer bears the name of its original neighborhood, having been renamed the “Kiddy Kingdom Carousel” by its new owners at Cedar Point Amusement Park.
“It’s not even what [poverty] does to a neighborhood, it’s what does it do to all of us,” said Latesha Sims, chief of staff at North 10 Philadelphia, which is dedicated to helping residents in Hunting Park and East Tioga better their lives socially, civically, and economically. As she told Generocity, hers is the Lenfest Center‘s parent organization, opened by HJ Lenfest about 13 years ago.
“[Poverty] really creates barriers for being able to tap into the greatness in communities like Hunting Park and East Tioga,” she said.
By the numbers, Philadelphia has more people living in poverty than any other major city in the country. According to data gathered by City Council’s Poverty Action Committee and the Pew Charitable Trusts, almost one-quarter of city residents, or 400,000 people, meet the federal guidelines for living in poverty, defined as earning under $26,000 for a family of four in 2020. Upwards of 50% of Philadelphia’s low-income earners, or 11% of all city residents, live in deep poverty, defined as earning an income below half the federal poverty level.
The numbers include 40% of city residents living in Council District 7, which encompasses Philadelphia’s poorest neighborhoods, including Hunting Park.
“We had one of our scholars and our OST program ask if he could take an extra meal with him,” recounted Sims, putting a human face to the numbers. “I told staff [to] make sure he gets two and literally before the kid could cross the street he gave the extra box to his father, and both of them were eating before they even crossed the street.”
“And I was heartbroken,” she continued.
Compared to cities like Houston, Dallas, Chicago, New York, and Los Angeles, Philadelphia has no equal when it comes to systemic poverty. Economic inequality rages from Center City to West Philly, and from the Far Northeast to the gentrified neighborhoods in North and South Philly.
According to the report put out by City Council, poverty decreased in 15 zip codes surrounding Center City — neighborhoods such as Northern Liberties, Fairmount, and Graduate Hospital — and increased in 31 others.
At least 12 neighborhoods have poverty rates above 30%, while five live in absolute deep poverty, with rates above 40%. Colloquially touted as a city of neighborhoods, Philadelphia has always been a city of haves and have-nots.
“When I talk about the institutional racism, our policies are hostile towards poor people,” said Quiñones-Sánchez, explaining the deep divide between Philadelphia’s neighborhoods. “We’ve concentrated poverty in certain geographies, sort of like this containment strategy, and we have to move around that. Diverse, mixed-income neighborhoods will not happen unless we make them happen.”
As the Councilmember told Generocity, she loves the individual character of each neighborhood in the city, but it’s time to move away from the Trumpian mindset of “us against them.”
Where a history of redlining still lives on in consequence
When Franklin Delano Roosevelt proposed a new deal to bring the country out of poverty following the Great Depression, he focused most of his policies on white Americans.
Most egregiously, his administration created the Home Owners Loan Corporation in 1933, an agency tasked with assessing the financial risk of aiding those homeowners whose mortgages were close to default. Their key tool in this effort was a group of maps with red lines drawn around African American neighborhoods, which were labeled as “hazardous.”
The infamous practice, known as redlining, still lives on in consequence in cities like Philadelphia today. One can place a redlined map of the city from 1937, place it over an impoverished map from today, and find them to be a perfect match.
“We have to look at racism,” said Dr. Roberta Rehner Iversen, associate professor and faculty associate at the University of Pennsylvania’s Institute for Urban Research. Iversen was named to City Council’s Poverty Action Committee and spent years working on the city’s previous effort to combat poverty, Shared Prosperity Philadelphia. She’s done ethnographic and qualitative research on welfare-to-work programs and published the book Jobs Aren’t Enough: Toward a New Economic Mobility for Low-Income Families on a five-year grant for the Annie E. Casey Foundation.
“The areas that have the deep poverty and really major amounts of poverty, they are predominantly Black or brown or immigrant,” she continued. “They have been under-invested.”
According to a 2017 report from the Pew Charitable Trusts, Philadelphia’s Black, Hispanic, and foreign-born residents have some of the city’s highest poverty rates. The poverty rate for Hispanic populations in the city continues to hover around 40%, as it has done so since 1970. And while they are a diverse group with ethnic roots from across the globe, Pew notes that the majority of Philadelphia’s Hispanic community comes from Puerto Rican ancestry. As per Peew’s report, the story of Hispanic poverty in Philadelphia is mostly the story of Puerto Rican poverty.
Black communities in the city have a 30% poverty rate, up four points from where they were in 1970. The numbers place a higher percentage of Philadelphia’s African Americans in poverty than in eight of the top 10 largest cities in the country, putting them even with Chicago. Foreign-born residents had a poverty rate of around 23%, slightly less than the city overall.
In predominantly Black neighborhoods like North 10’s Hunting Park-East Tioga section, the average yearly income is about $21,000 per year, and only 35% of residents own their homes. Ninety-one percent of children in the neighborhood go to a Philadelphia public school, but only 71% earn a high school diploma.
“A lot of it has to do with the plight of the African American male,” Sims said. “Folks that have been unjustly processed in our racist, oppressive criminal justice system that have found issues with employment and just with re-entering society the way different things have happened. I think that’s been a huge part of what’s impacted, in particular, the Hunting Park-East Tioga neighborhood.”
And then there’s the issue of gentrification.
According to the Center for Urban and Racial Equity, a report from the National Community Reinvestment Coalition shows that over the decade-plus between 2000 and 2013, gentrification caused the Black population to decline in 16 census tracts across Philadelphia. The cost of living increased, and affordable housing units became sparse. Over 20,000 low-cost housing units disappeared from the city since the turn of the century.
“[Philadelphia has] the least equitable distribution of economic mobility of impoverished people,” said Golderer.
“[For] the top 80 percent it’s better to live here than anywhere in terms of rent costs food costs and opportunity to create greater mobility,” he continued. “[For] the bottom quintile in Philadelphia, it’s the only city in the United States where people actually went backward their earnings.”
Where people, not programs help narrow the gap
Councilmember Allan Domb understands that the simplest way to lift people out of poverty is to put money back in their pockets.
And the easiest way to do that is to roll back the city’s oppressive wage tax. According to Domb, Philadelphia’s budgetary needs are built on the backs of poor and low-income families with a one-of-a-kind wage tax that accounts for almost 45% of the city’s annual revenue.
Last year he proposed legislation to give rebates of anywhere between $360 to $1,700 to those who need it most.
When the bill first passed, Mayor Jim Kenney’s office held it until the end of the session, effectively vetoing the legislation. The following term, it passed again, with a veto-proof majority.
“We did a study showing that of the top 50 cities, people earning less than $35,000, what percentage of their income is taxed and we found that a majority of the cities are anywhere from 10 or 11 percent to 14 percent. We’re the only city that’s at 18.1 percent,” said Councilmember Domb, who also served as a co-chair of City Council’s Poverty Action Committee.
“The people making less than $35,000, they’re challenged to pay any bills,” he continued. “We’re taxing them the highest and they can least afford it.”
Though it’s not the first time that it’s been proposed, Domb’s plan to offer residents wage tax rebates is a bold idea in line with some of his more innovative efforts to tackle the poverty issue within the city. Coupled with other initiatives that he’s championed, such as a push to have financial literacy taught to public school students at Hancock Elementary in Northeast Philadelphia, the wage tax rebate encompasses the adage of the Poverty Action Plan, “People, Not Programs.”
But, “People, Not Programs” has its critics. As research shows, when focused incorrectly, such as towards training programs for the poor, person-centric policies designed to tackle poverty can backfire. As Iversen noted, the data doesn’t back them up.
“All their emphasis is on the worker,” Iversen said. “And the reality is that there just are not enough jobs for the workers.”
City Council’s Poverty Action Plan, which laid the foundation for the public-private partnership that became the Poverty Action Fund, took a more holistic approach. Born of an assessment report called Narrowing the Gap, the plan itself resulted from thousands of hours of work from over 100 stakeholders in both government and philanthropic agencies, private corporations, and community organizations.
Led by five co-chairs, including Councilmembers Quiñones-Sánchez and Domb, Eva Gladstein of the Philadelphia Managing Director’s Office, Sharmain Matlock-Turner of the Urban Affairs Coalition, and Mel Wells of One Day At A Time, Inc., the committee produced a comprehensive report that hopes to lift Philadelphians in need up towards prosperity.
“What we were trying to do is make sure people have their basic needs met,” Gladstein told Generocity. “Right now, you could work one, two, or even three jobs and not be above the poverty level — not be able to afford your rent or be overly-rent-burdened or… food insecure.”
According to Gladstein, the goal of the Poverty Action Plan was to find ways to put money directly into the hands of those that need it. She mentioned a three-fold plan that included instituting a basic income, raising the minimum wage, and maximizing federal and state resources.
On that last point, she and many others noted that Pennsylvanians leave upwards of $450 million in safety net benefits, including medical assistance, SNAP, and TANF, unclaimed. All of it is money that belongs to people in need that goes right back to the Federal Government.
Committee-members broke the plan down to seven basic strategies, from the aforementioned basic income and wage tax refunds to rent subsidy, property tax relief, adult education, and more. They split the solutions up between those that could increase income and reduce costs for people living in poverty.
After that, the real work began.
“And so that’s what we’ve been trying to do in this space, understanding that we’re disrupting some people,” said Quiñones-Sánchez. “We have to be a little bit delicate with that stuff, but put out a challenge to ourselves and to our partners that you got to come to the table willing to be uncomfortable.”
“That’s why I call it now the accountability table,” she said.
Where a global pandemic increases the struggle
As COVID-19 decimated Philadelphia last spring, especially the city’s Black communities, which accounted for 50 percent of cases and deaths, the resulting economic recession due to stay-at-home orders and business closures wiped out city coffers.
Mayor Kenney’s ambitious budget that he proposed at the beginning of the year, including free community college, expanded street sweeping, and no tax hikes, now had a gaping $649 million hole. As did most executives this year, the Mayor pared back his budget, put his hat in hand, and looked to raise taxes on everything.
But, as Domb and others protested at the time, raising taxes is the least acceptable option during a pandemic. In his opinion, more support for training and entrepreneurship is needed now more than ever.
“I think the COVID-19 has absolutely illuminated for all of us the absolute need for more education for residents in the area of technology,” he said.
According to Antoinette Kraus, the founding Director of the Pennsylvania Health Access Network, growing unemployment caused by COVID-19 continues to put on display the difficulties faced by those in poverty when it comes to applying for benefits. The system, which is not that easy to navigate in the first place, suffers from years of being maligned and starved by bad political actors.
According to Kraus, Pennsylvania does what it can to help eligible beneficiaries, but the bureaucracy can overwhelm people who already come to it in a vulnerable state.
“After the emergency declaration is over, folks could end up losing benefits because of additional paperwork, they have to submit or things like that,” Kraus said. “It’s really a patchwork fragmented system that has a lot of hoops and barriers for folks to be able to master.”
In addition, Kraus referred to a Federal Reserve study that found upwards of 44% of households can’t pay an emergency expense of $400 or more. As stimulus money and pandemic unemployment run out, the situation becomes precarious for many people.
“Where we are now is, we need action as things start to shut down again,” she said.
Golderer called COVID-19 the economic challenge of a lifetime, but he worries whether or not the city can keep a singular focus on the issue. In the end, he’s grateful to councilmembers Quiñones-Sánchez and Domb, and all of City Council for pressing forward on the Poverty Action Fund amid a global pandemic but understands the reality of the situation.
Golderer said he knows the city can focus; he’s seen it happen on Sundays during an Eagles football game. Now, he’s hoping it can happen when it counts.
“We have this group of folks called air traffic controllers, and if one plane goes down in the United States … the entire world is like ‘what happened?’” Golderer said. “And yet, a 25 percent — frankly — societal failure rate, we’re like ‘that’s where we are.’”
“What I believe is one of the leading attributes of this effort is a deep commitment to measurement, evaluation, and learning,” he added.
Fidelity to betterment may be the ultimate benevolence of his Marshall Plan for Philadelphia.