In philanthropy we’ve long known that we play a unique role by addressing society’s most pressing challenges at their root. Our work is distinct from charity – focused less on meeting immediate needs and more on tackling the underlying causes. And we’re well positioned to take risks to figure out what strategies work best to solve social problems, something that companies and other players beholden to greater political and consumer pressures can’t always do.
As we progress into the 21st century, the philanthropic sector should leverage this unique position to address an issue that’s increasingly central to individuals’ and America’s prosperity: the talent gap. This challenge affects all of us, and without action, it puts our economic well-being and global leadership at risk.
Consider that by the end of this decade, more than two-thirds of all jobs will require some form of education beyond high school, yet today only 40 percent of Americans have the credentials required to meet those needs. More than 2 million jobs remain unfilled because of lack of skilled workers, and 76 percent of CEOs in the Inc. 5000 report concern over finding the talent needed to meet their company’s labor demands.
In my new book America Needs Talent, I make the case that talent is what happens when knowledge, skills and abilities are honed by education and experience in a way that benefits both individuals and society at large. Just as our society has evolved, so must our view of talent – and our means for developing it. That means thoughtful, deliberate choices must be made to grow talent in America.
Lots of players need to be involved. Educational institutions must take responsibility, especially colleges and universities. Government also has a role, given the public interest in ensuring that individual talent adds up to economic success, productivity, and social cohesion.
But philanthropy has the potential to play an outsize role in meeting this challenge—and not only with our financial resources. Given the scope of the talent problem, we have an opportunity and obligation to be bold in taking strategic risks so that we can help determine what approaches to addressing the problem prove most effective.
Foundations have the ability to leverage significant other investments in addressing the talent challenge. Consider that private capital markets could become close partners in our talent development and deployment efforts. By investing just one hundredth of one percent of the more than $200 trillion in assets that could be tapped from global capital markets, at least $200 billion could be unleashed to address our talent conundrum—a sum that exceeds the total current federal investment in higher education.
We could also work closely with employers in meeting the talent needs of the nation. Firms spend more than $500 billion each year on formal and on-the-job training. Those efforts are critical and have contributed to addressing the talent gap, but training is simply not enough. Companies must go beyond educating the employees they need. They also must work to increase educational access – especially for low-income, minority and other underserved populations -- to meet society’s needs.
Some firms are paving the way for this. Starbucks announced in 2014 that it would cover the full cost of tuition for any employee to earn a degree through Arizona State University’s online program, and students don’t have to pay Starbucks back if they leave the company after graduating. Companies such as Anthem and Chrysler have followed suit with similar programs.
Today the private sector has a myriad of tools that can be leveraged to grow and champion educational attainment. Companies can structure themselves as public benefit corporations, which enter into binding commitments to provide a social return, and therefore don’t make profit their primary motive. Using traditional financial investment tools, including performance-based contracting mechanisms, to drive strategic social innovations can catalyze and optimize social outcomes by bringing private sector capital, efficiency and mindset to social objectives that historically have been left to philanthropy and the nonprofit sector. Foundations have the unique capital that can connect those two worlds to scale impact.
These social innovation strategies could make a real dent in the talent gap by bringing the power of innovation and creative problem-solving to the urgent talent divide. They should be part of a more comprehensive solution, one that involves the participation of all of philanthropy’s partners and co-creators.
Much of this is relatively untested and will require some experimentation and refinement, but these new ways of unleashing a new wave of talent development and deployment are surely worth expanding. By focusing on talent, we in philanthropy have a chance to make a major impact in swaying the outcomes for our nation’s and millions of individuals’ economic and social prospects. Let’s seize the chance to use our unique position— and tackle the great talent challenge.
Jamie Merisotis is president and CEO of Lumina Foundation and author of “America Needs Talent: Attracting, Educating & Deploying the 21st-Century Workforce.”