Minnesota is the most charitable state in America. But despite our generosity, there are 650,000 residents of the Twin Cities living in poverty, a number that has risen by 60% over the past two decades. Our communities of color have borne the brunt of this trend: for example, you are nearly six times more likely to be poor in the Twin Cities if you are black than if you are white, the largest such disparity of any major metropolitan area in the country. This all adds up to a startling reality: one-in-five residents of the Twin Cities is currently living in poverty.

How can the country’s most generous state also be home to some of the country’s worst inequities? This startling juxtaposition compelled us to rethink our approach as a philanthropic community.

The philanthropic landscape is a marketplace of ideas filled with committed organizations offering many different types of poverty-fighting interventions. In the commercial world, the goods that sell in a market are sorted and ranked by the interaction of supply and demand, and with key indicators like profits and losses. In the philanthropic world, by contrast, competitive forces cannot be relied upon to select the interventions having the largest impacts. The task of sorting is left to the judgment of the funder. At Constellation, we believe that this judgment should be informed by the best possible information, and that smart philanthropy is kind philanthropy.

Here’s how we do it.

Constellation invests in and empowers organizations that demonstrably raise the living standards of individuals living in poverty in the Twin Cities. To do this, we focus our support on four key issue areas and, importantly, the intersections between them: education, employment, health, and housing. These are broad categories, so Constellation prioritizes the evaluation of organizations addressing the key drivers that local data and research indicates are exacerbating inequities in each impact area.

Once a grantee is selected, Constellation conducts a collaborative goal-setting session with the organization’s leadership, identifying areas for improvement over the year ahead. Grantees are then provided not only with funding, but also with connections to best-in-class pro bono partners to provide services and expertise otherwise inaccessible to most poverty-fighting organizations. 

At the end of the grant cycle, we conduct an updated benefit-cost analysis and qualitative evaluation, which together serve as an application for renewed funding. If progress has been made, the process is repeated, with the goal of building long-term partnerships focused on scaling poverty-fighting impacts in the Twin Cities.