Joseph Sanberg is serious about ending poverty in California, convinced it is no pipe dream.
“We know how to end poverty,” Sanberg says quietly but emphatically, sitting in a conference room at Servite High, his mentor and best friend from his school days at the Anaheim campus to either side of him.
“We just haven’t done it.”
Sanberg chose his alma mater as a venue to talk about his desire to lift the working poor up the economic ladder. Servite, an all-male Catholic school that accepts students of all faiths, helped shape his values.
Here’s what this millionaire entrepreneur and investor who lives in Laguna Beach says is needed to break the cycle of poverty: a guaranteed basic income, job training, universal early education for children, and health care.
Sanberg calls economic disparity “the most severe moral crisis we face as a nation” and concludes, “It doesn’t have to be that way.”
He’s putting both his money and his mouth where his sense of morality is.
Sanberg is working with Gov. Jerry Brown’s office to get word out about the earned income tax credit in California that Brown and state lawmakers authorized for this year.
The tax credit is a cash benefit aimed at the state’s poorest workers.
But the only way to claim the tax credit is to file an income tax return, even if taxes aren’t owed. That’s where Sanberg comes in.
Sanberg not only lobbied for the tax credit, but is leading the statewide publicity campaign known as “CalEITC4Me.”
The slogan is a mouthful, but the effort includes social media blasts, door-to-door outreach, partnerships with ethnic media outlets, and free tax prep help at local nonprofits through mid-April. Orange County United Way is the lead agency here.
California is the 25th state, along with the District of Columbia, to adopt an earned income tax credit. The money from the state can supplement a federal tax credit that dates back 41 years to the Gerald R. Ford Administration and continues to enjoy broad bi-partisan support as an effective anti-poverty measure.
Brown allocated $380 million in the current state budget for California’s tax credit; an estimated 600,000 families in the state would qualify.
Depending on income level and number of children, the state tax credit can put anywhere from $214 to $2,653 in an eligible recipient’s pocket.
The publicity campaign is a project of the Golden State Opportunity Foundation that Sanberg founded with the goal to “improve the lives of lower and middle-income Californians through a program of research, analysis, public information and education.”
He’s committed $1.5 million of his own money to CalEITC4Me. But for all his involvement, Sanberg remains largely unknown to most Californians.
Ask him who he is, and he answers like this:
“I’m a Jew, and I’m a son, and I believe really passionately in trying to help others.”
Those characteristics drive both his ambition and his altruism.
Sanberg went from Orange County to Harvard to Wall Street. He made his fortune in the financial sector during the heady, and then dark, days of the last decade, returning to Southern California in 2010.
At the age of 36, gray creeps into the beard that gives Sanberg a scholarly look. On his visit to Servite in early February, he dressed in worn jeans and a black leather jacket zipped up over a blue checkered shirt, scuffed dress shoes on his feet.
He could be dismissed as some rich guy who grew up in Villa Park, attended a private school and has no clue what it means to struggle.
Except, he does.
Sanberg’s father was absent most of his childhood, he says, leaving his mother to raise two boys on what she earned as a substitute teacher and a book editor with a freelance practice.
Their nice house high up on Smoketree Circle was a legacy of better times when his father successfully sold real estate. His mother lost the house to foreclosure in 1997, the year Sanberg graduated Servite and left for Cambridge, Mass.
So, he says, “I understand how economic turmoil can make you feel less than human.”
Sanberg says he hasn’t seen or spoken to his father since he was 17. But his maternal grandfather, Abraham “Manny” Rice, “more than made up for that.”
The youngest of 15 children in an immigrant family, Rice was a furniture retailer who lived a few minutes away in Orange. Sanberg remembers sharing dill pickles wrapped in cheese on afternoon visits, trips to Watson’s drug store in historic Old Towne, and long drives to a Jewish deli in Los Angeles.
Rice died in 1994. Sanberg honored him last year by funding two-year scholarships in his name for seven students at UC Riverside’s fledgling master of public policy program. Sanberg, who has a keen interest in the economics of the Inland Empire, also sits on the advisory board for UCR’s School of Public Policy.
Back in the days when he was still “Joey” Sanberg, the name beneath his freshman yearbook picture, he found another mentor in Larry Toner, a longtime instructor at Servite who taught religion and coached the football team. They remain close.
Toner only had Sanberg in one class – freshman religion. And Sanberg played basketball, as a guard, instead of football. But he knows his former student well.
“He was way too gentle for football,” says Toner, who describes himself as someone who is not warm and fuzzy. As he did with all his students, Toner pushed Sanberg to define himself and his faith.
Sanberg, who also served in student government while in high school, was always upbeat, persistent, and prepared in class, says Toner, who is not surprised by Sanberg’s philanthropic endeavors.
“A lot of those ideas have probably been in his head for 15, 20 years … He’s able to deal with kings and the commoner. He has that unusual grace.
“He doesn’t forget.”
Sanberg relied on student loans and financial aid to get through college, where he majored in government and served as president of Harvard College Democrats. He didn’t go to college to pursue a career in the financial sector, he says, but headed to Wall Street after he graduated in 2001, one goal in mind at the age of 22.
“I needed to make money to support my mom.”
He rode the boom of the stock market, working 90 hours a week as an analyst and investment manager, too busy, he says, and too nerdy to indulge in the wild hedonism portrayed in films like “Wolf of Wall Street.”
Still, Sanberg says he was lured by the opportunities to make “amounts of money I didn’t even know existed” while working at Tiger Global Management, Bain & Co., and the Blackstone Group, an investment firm that once held a stake in The Orange County Register’s parent company.
Sanberg found Wall Street exciting, but hollow.
The free market, he insists, can be a powerful source for good, “but the problem was the rewards were going to people who created no value, and were even destroying value.”
Sanberg won’t disclose how much he walked away with, but it affords him the means to invest in startup companies with a social purpose and public efforts, like the earned income tax credit.
In 2013, he co-founded Aspiration, a Los Angeles-based digital financial services company that provides savings and investment options to middle class investors. Clients determine a “fair price” fee to pay the firm, which donates 10 percent of its revenue to charity. The company motto: “Do Well. Do Good.”
Locally, Sanberg sits on the board of Casa Teresa, an Orange-based nonprofit that provides support to pregnant women, and started an international leadership program at Servite that will send students to China this summer.
But for now, it is the earned income tax credit he’s focused on most keenly.
Research indicates the initiative has lifted more than 5 million children nationwide out of poverty, more than any other anti-poverty program, according to a report by the Center on Budget & Policy Priorities, a nonpartisan research and policy institute based in Washington, D.C.
But at fourth worst in the nation, California has not had a good track record when it comes to wage-earners claiming the federal tax credit.
Sanberg recruited a mentor from Harvard, Ricki Seidman, to lead his Golden State Opportunity Foundation and spearhead the CalEITC4Me publicity campaign. Seidman, a dynamo in communications and strategy, worked in the Clinton White House and on the Obama campaign, and served as director of Rock the Vote.
Sanberg interned for Seidman one semester during his freshman year at college when she led a study group as a fellow at Harvard’s Institute of Politics. Then, as now, Sanberg’s focus was on the middle class, she says.
“He’s remarkably true to where he started from.”