Center for Social Innovation

Established in 1992, the San Francisco-based McKay Foundation supported organizations that addressed income inequality and poverty. The McKay Foundation focused on developing long-term, community-based solutions to social and economic problems. Robert McKay Jr. provided the philanthropic vision for the foundation and served as its executive director.

In 1998, the McKay Foundation formed and funded the Living Wage Coalition in San Francisco. In its effort to change public policy, the McKay Foundation had to operate within a series of regulatory constraints imposed as a condition of its tax-exempt status.

The Tax Reform Act of 1969 restricted foundations from: (a) making lobbying statements to a legislator or legislative staff member that contained both a reference to specific legislation and a point of view on that legislation, and (b) engaging in communication with the public that referred to specific legislation, reflected a view on that legislation, and included a call to action. However, foundations still had wide latitude to educate legislators and the public on issues relevant to proposed legislation, referenda, and ballot measures.

The McKay Foundation played a key role in convening the diverse constituencies that had a stake in the living wage issue, while navigating within the lobbying restrictions placed on private foundations. After a two-year effort, Mayor Willie Brown signed the San Francisco Minimum Compensation Ordinance on November 1, 2000, and more than 20,000 low-income workers received pay increases.

After the ordinance had been signed, McKay considered how to sustain the energy and momentum he had helped to mobilize. McKay wondered whether the living wage community could reorient its focus to address other important problems for San Francisco’s low-income residents or whether the fight for a living wage had been so focused that it could not be sustained beyond the coalition’s recent victory.