Beyond Charity

Rethinking mental health investment for systemic change

Recently I read a fascinating New York Times opinion piece on the enduring struggles of public charities in New York City’s Lower East Side. I read it twice, put it down, and started writing. The article highlighted how some of the oldest and most storied nonprofits in the country have spent over a century assisting New York’s most vulnerable; however, despite all these investments, organizations still struggled to stem the significant rising tide of poverty and inequality. Said differently, the missions of these nonprofits couldn’t keep up with the problems they are trying to solve despite billions in philanthropic giving. Economic disparities remain stubbornly entrenched, health outcomes were too low, and a variety of social ills only trending in the wrong direction.

Sadly, this dynamic plays out across the country, particularly in the mental health sector, where even well-funded nonprofits cannot keep up with the vast scale of need.

Leading a foundation gave me firsthand insight into the power—and the limitations—of philanthropy. I saw how a little investment, strategically deployed, can drive real impact, and how communities, when freed from restrictive structures, can be remarkably innovative. It was invigorating. But it was also deeply frustrating. Every day, I found myself asking: “Why isn’t this paid for through policy?” and “Why aren’t we addressing the deeper conditions that make our interventions seem so inadequate?”

In the mental health space, the nonprofit sector has primarily been seen as the financial safety net. Shelters, crisis hotlines, counseling services, and community support groups form the backbone of care for millions of people who cannot access or afford treatment through traditional health care systems - and most of these are supported through philanthropy in some way, shape, or form. Despite the noble efforts of these community organizations, the mental health crisis in the U.S. continues to grow. Even as philanthropy and government funding has increased, the needs always seem to outpace the resources available.

This is a frustrating and yet all to real problem. I keep thinking that this conundrum has to be because we are asking the wrong questions. Instead of wondering how we can funnel more money into nonprofits—though an important step—is there a way to start asking why society creates so much mental distress in the first place, and how we can unlock new capital to support a broader transformation that addresses these problematic underlying conditions.

The Limits of Philanthropy and the Burden on Nonprofits

Mental health nonprofits are often positioned as the solution to systemic failures. I’ve run them. Sat on their boards. They do amazing things like treat the effects of poverty, discrimination, job insecurity, lack of access to services, and the general breakdown of community networks. But just like food banks subsidize poverty wages and environmental nonprofits clean up corporate pollution, mental health nonprofits serve as an inadequate patch for deeper societal dysfunctions and an often inept health care system that’s not capable of meeting the demand.

The numbers make this clear. The economic burden of depression and anxiety alone is estimated at over $1 trillion globally each year in lost productivity. Meanwhile, all U.S. philanthropy toward mental health amounts to only a fraction of that. According to Mindful Philanthropy, only about 1.7 percent of all philanthropic giving goes towards mental health. And even with growing corporate donations and government aid, this amount of support is not only insufficient but often misdirected—aimed at managing symptoms rather than addressing root causes. Throwing more money at a broken system won’t yield different results.

The question of how we finance mental health initiatives is not just about increasing philanthropy but also about rethinking how resources are deployed. A recent report by the Center for Effective Philanthropy, Breaking the Mold: The Transformative Effect of MacKenzie Scott’s Big Gifts, underscores the power of large, unrestricted grants to drive systemic change.

Unlike traditional philanthropy, which often comes with heavy restrictions and short-term program funding, Scott’s approach gave organizations the flexibility to invest in long-term financial sustainability, expand services, and strengthen their operations. The report found that nearly 90 percent of recipient organizations indicated that these large, unrestricted gifts significantly strengthened their financial health, allowing them to scale their impact in ways previously unattainable.

This challenges the conventional wisdom that nonprofits should simply make do with constrained funding cycles and suggests that we need to explore more innovative financing mechanisms—ones that prioritize long-term structural change over short-term, symptom-focused interventions. In addition, the success of Scott’s approach makes it pretty clear that traditional models of charity, especially those where organizations are forced to chase small, restricted grants, are not the way forward.

The Real Cost of Externalized Mental Health Burdens

Modern economic structures prioritize efficiency, productivity, and profit at the expense of human well-being. Consider how workplaces operate: long hours, stagnant wages, job insecurity, and lack of work-life balance all contribute to burnout, stress, and mental health deterioration. Similarly, the housing crisis, student debt, and racial disparities in economic opportunity exacerbate anxiety and depression, placing even more pressure on already strained mental health services. It’s like a broken record that keeps playing the same line in the song over and over again.

Mental health challenges do not occur in a vacuum. They are inextricably linked to the way we design our economic and social systems. When corporations prioritize profit over worker well-being, when housing policies create instability, when social safety nets are underfunded, mental distress is a predictable outcome. But instead of addressing these issues, we rely on our underfunded network of nonprofits to absorb the fallout and act surprised when our investments don’t get us what we want. I have to imagine that we would have less frustration that outcomes aren’t being achieved as quickly if we understood this point.

A New Approach: Investing in Structural Change

If we are serious about addressing mental health, we need a radically different approach and investment strategy. This is an approach that does not merely expand access to services, does not merely rely on the same foundations over and over again, but really works to both prevent crises from happening in the first place and unlock new financial resources that can be supportive of the broader work. There’s a ton of space here to get creative. For example:

1. Workplace Reform: Companies could be required to internalize the mental health costs they create. This means enforcing fair wages, reasonable working hours, paid leave policies, and mental health protections. Workplaces may need to be evaluated not just on productivity but on employee well-being. To me, this is one heck of a recruitment and retention tool. “I like where I work, get meaning from what I do, and oh yeah, they take care of me, too!”

2. Economic Policies that Reduce Stress and Instability: Affordable housing, universal health care, getting people out of poverty, and robust social safety nets would do more for mental health than any number of grants to increase access to therapy. Beginning to see how these economic policies directly impact mental health should be a case made more often and perhaps in more creative ways.

3. Mental Health Infrastructure Beyond Charity: Public funding for mental health should not be treated as a secondary concern, or a “nice to have,” but a fundamental aspect of our national health and well-being. Investments in hyperlocal innovations like community initiated care, school mental health programs, and treatment options that occur far outside the walls of a clinic should be prioritized and seen more as public goods rather than left to philanthropy to pick up the tab.

4. Unlocking New Capital for Mental Health: Beyond philanthropy, we need to explore impact investing, social bonds, and public-private partnerships that bring more resources into the mental health sector. I’ll write more about this in the future as it’s an area that deserves more attention. Governments, corporations, and investors should all be engaged in financing solutions that go beyond charity. The broader field should spend time and go much deeper on the economics of mental health helping make a stronger business case for investment.

5. Corporate Accountability: While this may seem ambitious, accountability for corporate practices impacting mental health is long overdue. Just as environmental regulations hold polluters accountable, we need similar mechanisms to hold corporations accountable for the mental health consequences of exploitative labor practices, manipulative marketing, and toxic work cultures. I am not the expert here, but think there’s something here that we should be focus in on.

Conclusion: Moving Forward

The more I think about this, it doesn’t feel like just theory - there’s growing evidence that rethinking mental health investment can yield tangible results. A recent paper, Financing Mental Health Innovation, highlights the urgent need for new financial models beyond traditional philanthropy. The paper outlines three pathways to scale: integrating mental health into other societal sectors, innovating mental health metrics for greater accountability, and leveraging financing mechanisms—such as impact investing, social bonds, and public-private partnerships—to unlock sustainable capital. With the global mental health market projected to exceed $500 billion by 2028, the case for engaging both private and public stakeholders in systemic change has never been stronger.

However, undergirding all of this is our need to show how true mental health investment require us to rethink the systems and conditions that create problems in the first place. We need to unlock new capital that expands the resources available, rather than continuing to ask the same organizations to do more with less. Until that happens, no amount of philanthropic generosity will ever be enough.