Reform of "Devolution": Federally Funded, Locally Run

The Eisenhower Foundation has estimated that the cost for beginning to replicate what works to scale for the poor is $50B to $60B per year. (See: A Budget for the Truly Disadvantaged and the Inner City.) We believe that the private sector should finance as much as possible. However, the private sector has failed the poor in trickle down supply-side economics, the Job Training Partnership Act and Enterprise Zones. Highly paid lobbyists have secured enormous amounts of corporate welfare and affirmative action for the rich. Within these priorities, it is unlikely that the private sector will take the lead in replicating to scale what works for the poor. Instead, the public sector must take the lead, at the local, state and national levels.

For its part, the federal government should, we have concluded, raise funds -- but then re-target them, so that most programs are not carried out from Washington, D.C.

What institutions do the best job delivering what works? There is no clear-cut evidence that state government works best when it comes to the truly disadvantaged and the inner city. There is some basis for saying that states have been "creative laboratories for change," to use language that frequently is used today. One illustration we have discussed is Arizona's diversion of nonviolent offenders from the prison system. Another is the success of southern states in reducing infant mortality. Yet experience also has shown that, when the federal government makes block grants to states that affect high-risk children, youth and minorities, governors do not always distribute the block grants proportionately to the populations in need. For example, there have been years when California did not grant Los Angeles nearly its proportionate share of drug block-grant money. The same has been true for Wisconsin and its distribution to Milwaukee. And there is great variability among states. There are relatively innovative states -- like New York. There also are states which are much less innovative. Some states, like Vermont, have true participatory democracy, while other states are entrenched with cronyism.1

By contrast, for the truly disadvantaged, scientific evaluations suggest that local, private, nonprofit grassroots programs and local governments are more successful than state bureaucracies. Public opinion surveys tend to support the scientific evidence. For example, a recent national survey by the Pew Partnership for Civic Change found that only twenty-eight percent of persons interviewed thought the federal government was a major problem solver in their communities. However, respondents identified issues like jobs, health care and drugs as the biggest problems in their communities; Pew staff cautioned that such problems cannot be solved by state and local action alone. Only thirty three percent of those interviewed saw state government officials as particularly helpful. Closer to home, forty three percent saw local government as helpful and over fifty percent considered nonprofit organizations and religious organizations as helpful.2

Such survey findings coincide with our conclusion that federal funds are needed -- but that those funds should be targeted to the grassroots and localities, not through the states, for the day-to-day operations and administration.

For us, then, "devolution" means federally funded, locally run.

Robert F. Kennedy recognized that federalism needs to be diverse. We already have too much funding through state houses and even city halls. The powerful governors' and mayors' lobbies in Washington will not easily allow what is in place to be reversed. But we can add diversity and create, in Robert Kennedy's words, an atmosphere of constructive tension by launching new initiatives that more directly flow to the grassroots nonprofits that the citizens of this country find so helpful.3 The process can be facilitated by allowing federal funds to flow through national nonprofit intermediaries that can be accountable to Congress, provide much needed technical assistance for capacity building and replication, and direct public funds to the most cost-effective neighborhood organizations. Specifically, we need these new national intermediaries:4

  • A National Youth Development Corporation (which includes crime and drug prevention).
  • A National Safe Passage Corporation (for public school reform).
  • A National Job Training and Poverty Reduction Corporation (to link training, jobs, economic development and poverty reduction).

For details on these intermediaries, see The Millennium Breach.

The Administration and most in Congress argue for further devolution to states -- in spite of the Pew findings that only thirty-three percent of Americans consider state officials helpful.5 We urge reconsideration of this policy -- a policy that also adds a dimension of race. Almost all governors are white. There are few minority governors and no African-American governors. Inner-city grassroots organization leaders and big-city mayors come disproportionately from the ranks of minorities who often don't receive their fair share of state block grants and who were disenfranchised in some states in the 2000 election. Some of the Founders of the nation, like James Madison, were concerned with precisely this kind of violation of minority rights at the state level.6

Notes and Sources

  1. R. W. Apple Jr., "You Say You Want a Devolution," New York Times, January 29, 1995, p. E1.
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  3. Richard Morin, "Nonprofits, Faith-Based Groups Near Top of Poll On Social Woes," Washington Post, February 1, 2000, p. A19.
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  5. Peter Edelman, Searching for America's Heart (Boston and New York: Houghton Mifflin Company, 2001).
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  7. For more information on these intermediaries, see Alan Curtis and Fred R. Harris, The Millennium Breach (Washington, DC: Milton S. Eisenhower Foundation, 1998). This publication is posted in its entirety on
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  9. Richard Morin and Robert Pear, "Shifting of Power from Washington is Seen Under Bush," New York Times, January 7, 2000, p. A1.
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  11. Jack Ravoke, " A Nation Still Learning What Madison Knew," New York Times, March 11, 2001, PWK 15.
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