We’ve all heard the story: Great programs with great results hit political gridlock and fail to grow. Some philanthropists throw up their hands in frustration when encountering this dysfunction. But rather than accept the “inevitable,” the James Irvine Foundation led a collaboration of philanthropists in a bold effort to tackle the underlying causes of California’s political challenges.

The Irvine Foundation, which supports California Democracy as a key program area, led this collaborative series of discussions with four other large California-based foundations: The California Endowment; The Evelyn and Walter Haas, Jr. Fund; the William and Flora Hewlett Foundation; and The David and Lucile Packard Foundation. Their conversations highlighted how California’s governance and fiscal problems were impeding each philanthropist’s ability to work toward its respective goals.

In 2007, these five foundations responded by pooling almost $16 million to form California Forward, a bipartisan organization focused on reforming state government to promote effective, fiscally sound public policy that would be responsive to Californians. After three years, the foundations re-upped their commitment to the tune of another $16 million.  California Forward attempted a radically different kind of politics—one that relied on compromise and problem-solving to forge a broad-based consensus.

In keeping with the collaborative principles on which it was founded, California Forward has been an active part of an extremely diverse coalition of supporters—including education leaders, city mayors, local chambers of commerce, and religious and cultural organizations. California Forward has been actively involved in forming a nonpartisan vision that has gained traction among California voters, with two successful ballot initiatives now transforming California’s redistricting and electoral processes. The work is far from over, but the funders see the seeds of a historic shift that will enable the Golden State to solve pressing problems in the decades to come.

Tackling California’s Broken Government

America’s shrinking public budgets and rising political polarization hit the state of California, home to one in eight Americans, particularly hard. Rapid economic swings, punctuated by the dot com bubble and the housing crisis, also wreaked havoc on the state’s revenues, which rely heavily on income taxes. These changes created a perfect storm of government dysfunction in a state whose legislature at the time required a supermajority to approve a budget or pass a tax increase. “The ungovernable state,” as a 2009 Economist article labeled it, became known for marathon budget battles that paralyzed its legislature every year and created uncertainty for social services organizations that depend on public funding.

For the five California Forward founders, this political and fiscal paralysis was a major barrier to progress. Although Irvine was the only foundation to focus explicitly on California’s government, all five believed that fixing the state's broken government was critical to their goals. “These foundations are working in different fields—education, health care, environment and others—but they came together because they felt that progress in any of them was limited until some fundamental problems with the functioning of state government could be fixed,”  explained Amy Dominguez-Arms, Director of Irvine’s California Democracy program.

“We all have our different policy priorities,” noted Zabrae Valentine, deputy director of California Forward. “But whether your priority is economic development, climate change, youth, education, or health care, at some point you begin hitting a brick wall. People who care deeply about reform or improving performance began to realize it is not possible unless we address these fundamental issues.

It was a risky idea, but the foundations believed it was worth it. “We could do things that would be lower risk, but they’re not going to solve the problem,” Valentine said. “If we want better policy, we have to go to the root of the problem.”

A Unique Role for Foundations

The California Forward founders were not the first to try to change California’s government, but these foundations had a unique advantage. Unlike legislators or interest groups, who have a strong stake in the outcomes of specific policies, the foundations could act as relatively neutral outsiders. They could fund an independent voice that would focus on improving government processes, rather than focusing on specific outcomes.

It was a role that nobody else had the resources, or the motivation, to take on. Communicating with people in such a large state is extremely expensive, and most interest groups had other concerns. “Governance is nobody’s first priority,” noted Jim Mayer, executive director of California Forward. “Not business, labor, or the PTA. We have to build understanding and affinity around how these issues connect to what those advocacy groups are trying to accomplish.

Building a Bipartisan Consensus

To reform a hyperpolarized system, California Forward would need a bipartisan constituency. “If you’re serious about lasting change, it has to be bipartisan,” explained Valentine. “We wanted to create a culture of change so dramatic that people will still be talking about it in 50 years. That requires a strong and diverse coalition of support.”

To that end, California Forward launched with a leadership council that spanned the political spectrum, including bipartisan Co-Chairs Leon Panetta (at the time a prominent former Congressman and former White House Chief of Staff under President Clinton, and currently the U.S. Secretary of Defense under President Obama) and Thomas McKernan (former Chairman of the California Business Roundtable). Then this council set out to model the behavior they hoped to promote—the tough work of forging consensus among a chorus of diverse opinions. They focused on nonpartisan information sources, and they only moved forward when they had come to an agreement.

It was not easy. “The reality is that this is a pretty diverse group, and all the tensions that at times exist outside the organization also exist inside California Forward,” Mayer said. “If you can’t deal with it internally, you can’t solve it externally.”

Valentine agreed. “It’s very hard work to actually be bipartisan,” she said. “You have to have truly bipartisan leadership, board, and staff, and you have to do the very hard work of finding common ground and only promoting ideas that achieve that ideological common ground.”

But the organization maintained its commitment to represent the full diversity of Californians, and that meant consulting with many others. They organized a Stakeholder Roundtable that brought together civic leaders, academics, business groups, elected officials, and community advocates to discuss tough issues. They convened sessions with civic leaders to hear their reactions to the Roundtable’s ideas. They organized a weekend-long dialogue with some 400 demographically representative Californians to gather feedback on proposals and discuss how government could earn back the public’s trust. “We haven’t tried to shut down the partisans, but rather we have very deliberately and hopefully effectively tried to provide a different narrative,” Mayer said.

Their efforts have begun to pay off. Years of statewide conversations, research, and debates eventually crafted a detailed framework for a renewed system of governance that included fiscal, structural, and democratic reforms. Most important, the concepts are supported by a broad coalition of business, labor, faith, and community organizations. “When bipartisanship starts to work, it’s incredibly powerful and very energizing for the people who are involved,” Valentine noted.

From Vision to Reality

Mayer acknowledges that progress has been incremental. As the coalition has moved forward with specific proposals, it has been harder to maintain the broad support, particularly because the proposals have become part of a broader political debate. But there have been successes; one early victory came from a redistricting initiative on the 2008 ballot. Historically, legislative district boundaries were redrawn after each census by legislators themselves, creating “a true conflict of interest,” said Valentine.  More impartial district boundaries had the potential to help create more competitive elections and promote more moderate representatives to the state legislature. In 2008, California voters passed a ballot proposition to turn redistricting over to an independent citizens’ commission. While California Forward did not initiate the idea, it was a strong supporter of the ballot measure and worked for years to facilitate its successful implementation.

Two years later, California Forward’s Action Fund played a role in the passage of Proposition 14, which created a top-two “open-primary” in state elections that may help to elevate the voice of moderate voters. In 2011, the organization helped to rally California’s state legislature around performance-based budgeting, leading to a bill that passed unanimously in both houses of the legislature but was vetoed by Governor Jerry Brown.

In 2012, California Forward tackled an ambitious new target: a package of governance and fiscal measures that would reform the state’s budget process, increase accountability for spending, and encourage cooperation among local governments. This effort has gathered enough signatures to be put to voters in November 2012 as Proposition 31: “Government Performance and Accountability Act.” However, passage is far from certain; opponents are lining up against the measure, from some unions to some legislative leaders.

Whatever the outcome, organizers are determined to keep pushing for progress. “There is a long list of problems, and you can’t solve them all at once,” Mayer conceded. “So we are championing over time a system where there are political rewards for compromise, civility, and problem-solving.”

Key takeaways

• When progress is repeatedly impeded by government systems, donors can work creatively on systems-reform.
• Philanthropy can play the honest broker role: taking a long-term view and focusing on bi-partisan solutions in a way other interest groups often cannot.
• The pursuit of fundamental systems change is high-risk, but potentially high reward. This work is for donors in it for the long haul.