Community Gut Check: Not All Anchor Collaborations Are Created Equal

Key questions to consider when assessing the strength of your anchor collaborations.

It’s no secret that anchor institutions (anchors) – those large nonprofit enterprises, such as universities and hospitals, that are unlikely to move due to their mission, customer base, and ownership – are vital assets and economic drivers to local economies.

Read any economic impact report published by such institutions and you’ll discover their significant purchasing power. Collectively, they are spending billions on local goods and services. Dig a little deeper and you’ll find that anchors are (1) often one of the top employers within an area; (2) have significant capacity to acquire and develop property; and (3) at the nucleus of many innovation districts/hubs, making transformative discoveries with new technology.

Yet, not all anchor institutions are the same; not all are addressing issues of great importance to a community; not all communities are benefitting equally.

Anchors are also playing an increasing role in community revitalization – providing capacity for communities to respond more efficiently to local needs and, through collaborative models, ensure pathways toward equity and economic opportunity. Yet, not all anchor institutions are the same; not all are addressing issues of great importance to a community; not all communities are benefitting equally.

Nonprofit Quarterly’s recent webinar on “Remaking the Economy: Leveraging Anchor Institutions” sheds light on some of the challenges that exist for anchors in supporting local objectives, particularly in low-income and minority communities. On one end, anchors whose business models aren’t community-oriented or whose frequent changes in leadership – and subsequently, priorities – can add tension to existing partnerships. On the other end, a lack of consensus among grassroots organizations and/or the inability to frame issues and understand solutions (“the ask”), can deter anchors to get involved.

It will take a cultural shift at all levels, a shared vision and a bold champion whose committed to working together for anchor collaborations to truly be effective. Within this spectrum of difficulty, where do you and your anchor collaborations fit? Lets assess your relationship. Ask yourself these questions:

  • Are your anchors’ investments in real estate contributing to local economic growth, aligning with the economic vision of your area, and/or directly benefiting low-income and underserved neighborhoods?

  • Are you building partnerships with anchors at all levels of the organization? Is there a “community partnership” lead at the anchor? Is the imperative to be a community-oriented anchor communicated and encouraged from executive leadership?

  • Beyond local hiring and purchasing, are your anchors thinking about scaling their impact to address issues that are indirectly related to their mission but are, say, health and/or education adjacent (e.g. housing)?

  • How are your anchor collaborations measuring success? In what ways are they exploring whether or not their investments are on the right track?

  • Does your community have an intermediary, a third-party convener/entity that can help initiate a partnership, liaise with local organizations and anchors, hold one another accountable and ensure the community is at the center of its work?

  • Are anchors engaged at the start and present at the table in community-level strategic planning processes and/or strategy sessions around key areas of concern?

  • Is your anchor collaborative’s business model sustainable? Is there funding available that can support long-term engagement?

Though not an exhaustive list of things to consider when evaluating the strength and impact of your anchor institution collaborations, it’s certainly a starting point. Some of the most pressing socioeconomic challenges still persist today that widen economic disparity. Creating lasting partnerships – and doing them right – can help reverse these trends and lead to lasting change.

Do you know of any anchor collaborations that are doing things well? Let us know!

3 Thoughts for the 20 New Governors

January is an exciting month in many state capitals around the country. There are twenty new Governors being sworn in and starting to announce their teams. There are others who were re-elected and recognize that a second term provides a unique moment to be bold with their agendas. Soon, many will need to submit their first budget request and begin the shift from campaign rhetoric to actual programmatic and policy-driven agenda setting.

We have seen the good, the bad, and everything in between in how these leaders – well, LEAD. Some will seek to lead in a hands-on way, meeting with key constituents and helping to manage the daily agenda of the government. Others will choose to rely on the talented people they hire to carry out the vision.

Most are in agreement that the economy of their state – jobs for residents, happy employers, outsiders interested in moving in – are all important to their political futures. They recognize that a healthy economy makes the other tough issues they must deal with easier.

So how do they ensure economic success?

Think Beyond Transactions

It’s hard to argue against wanting the press release and the photo op with the big scissors or golden shovels. The announcement of an expansion, a new housing development for millennials, or a major infrastructure project, all attract interest and ‘show’ that things are getting done. I’ve seen too many economic development leaders focus on these wins and ignore what’s bubbling beneath the surface in their communities.

The announcement of these transactions must be accompanied by an understanding of the  short and long term consequences. Often these broadcasted wins fall short of the excitement promised. Economic forces change the narrative and project scope as the growth ramps up; or worse, the face-value excitement is for a deal that will strain the community fabric. For example:

Community Win: Job creation!

Community Loss: All of the jobs pay below the community’s living wage.

Too many communities are losing with this rhetoric, and trust in leadership is lost as excitement deflates.

Announcing improvement in areas like place, investment, diversity, sustainability, and talent are the wins that leaders should aim for to create a lasting impact and to maintain trust and excitement about local development.

The Fourth Economy Community Index is a great resource for economic development officials to start looking into key indicators, like those listed above for each county in their state. The Community Index is a free resource that profiles almost every county by using 19 indicators that we think illustrate what is needed for success.

Quality of Place Drives Economic Development

For years now, I’ve been preaching that the best tool for economic development is a vibrant community that supports diverse lifestyles. There are a lot of people who get paid to tell you how bad your tax system is, why you should throw truckloads of incentives at companies and that your red tape is ‘crushing business’. Our research has shown that in a vibrant community those issues become footnotes and not the lead story. People want to be in communities that have culture, recreation, good education, and a welcoming environment. If you have those things people will stay or move to be there and the jobs will follow.

A few years back we researched the most transformed places in the country and found the quality of place to be the common thread. The message and results of that research are stronger than ever.

Power Comes From Collaboration

The history of governors and economic development leaders is filled with those who have tried the Command and Control approach, and those that pursue Collaboration.

The command and control leaders think that the path to success can be dictated. They fail to recognize that economic development is a team effort that can sometimes involve hundreds of organizations and leaders.

The Collaborative crowd recognize this and use their positions to rally, to leverage, to inspire those in their network to pursue a shared vision. The collaborative leaders will have a longer-lasting positive impact. They are the ones that collect awards and are well-regarded by their peers and communities they serve.  

These are my three pieces of economic development advice to our newly-elected officials:

  1. Don’t get caught up in flashy announcements
  2. Pursue quality of place for all citizens
  3. Work collaboratively with organizations and local leaders.

Governors that uphold these standards will set themselves, and their state, apart from the rest. I hope that all leaders, not just governors, can use this advice to help chart a better course and support vibrant communities in their state.

Regional Economic Development Collaboration 101: Webinar

With much of our work revolving around Regional Economic Development, we decided to host a webinar about Regional Economic Development Collaborations – sharing insights and lessons learned with our panelists:

If you missed the webinar, it’s not too late! See the recording here.

Questions about this topic? Reach out!

3 Examples of the Private Sector Collaborating to Create Great Places

I recently had the opportunity to go back to the Fort Wayne region of Indiana to reconnect with the Northeast Indiana Regional Partnership, who led the implementation of the Road to One Million plan. When we helped them create that plan, there was little precedent for the private sector to support investments in arts and culture, main streets, and outdoor recreation. But three years later, it was amazing to see the impact of $255 million invested in exactly those types of projects, with nearly 70% coming from private investment.

Since that experience we are always on the lookout for other examples of the private sector and economic development community collaborating and investing to create great places to live, especially at the regional level. This year’s American Planning Association conference highlighted a couple of great examples.

The Charleston Resilience Network is a collaboration of public, private, and non-profit organizations seeking to enhance the resilience of our region and communities. Recognizing the need to connect the myriad of puzzle pieces related to climate adaptation and mitigation, the Network was developed to foster a unified regional strategy and provide a forum to share science-based information, educate stakeholders, and enhance long-term planning decisions that result in resilience. Activities range from a bi-monthly happy hour to collaborating to pursue federal funding opportunities. The Charleston Metro Chamber of Commerce is an organizing member of the Network and many private sector companies are participants. Given the stark reality that hurricanes Harvey and Irma wiped out an estimated $200 billion in economic value according to Moody’s, it is critical that the private sector is a part of the conversation around resilience.  

The Mid America Regional Council’s Creating Sustainable Places consortium is taking a strategic approach to utilizing federal transportation funding to further regional sustainable development goals. Planning and implementation funding is competitively let throughout the region to transportation projects that promote housing diversity, density, healthy lifestyles, historic and cultural preservation, and energy efficiency. The Greater Kansas City Chamber of Commerce is a partner in the consortium, and economic development agencies and private sector partners (such as architecture firms and the hospital) are part of the policy committee, which reviews applications. In order to compete for young, educated talent, it is critical that the private sector support planning that creates these types of livable communities.  

Do you know of a great example of private sector participation in similar collaborations? Let’s talk!

Tackling Economic Inequity in a Resilience Strategy

St Louis 100 Resilient Cities CoLab, February 2018
St Louis 100 Resilient Cities CoLab, February 2018

Earlier this month, Fourth Economy came together with practitioners from various sectors and parts of the country to help St. Louis tackle the issue of economic inequity. We were convened by 100 Resilient Cities – Pioneered by The Rockefeller Foundation, because they have seen so many of the cities in their network identify economic inequity as a key stress. Fourth Economy is a platform partner of the 100 Resilient Cities network, creating tactical recommendations for the planning and implementation of resilience efforts. After two days of intense collaboration, our group of community leaders, Chief Resilience Officers, economic development experts, and other thought leaders developed seven discrete project ideas that St. Louis could implement to impact economic inequity.

St Louis, Missouri

Some of our ideas really focused on the basics. One clear take-away is that before we can implement new, innovative solutions, we need to ensure that we are investing in the basics.

  • Talk to Each Other – First thing’s first…Developers, city agencies, and community organizations need a forum to discuss how all partners enhance the tools, processes, and partnerships to implement equitable economic development.  
  • Equitable Economic Development Strategy – St. Louis is about to embark on creating an economic development strategy; making it explicitly about creating an equitable economy will be key.
  • Resilient CDCs – Like many of our cities, some of our neighborhoods have strong community-based organizing and development capacity, while others are lacking in investment, or quality investment, in part due to this lack of capacity. We recommended an organization that could promote sharing of resources, developing professional capacity, promoting collaboration, and developing a central pool of funding.

One of those other important basics is data. We all know that what isn’t measured, doesn’t count. So 100 Resilient Cities is working with the CUNY Center for State and Local Governance to help cities in the network develop a set of equity indicators. The equity indicators that St. Louis will be using to measure economic resilience and economic equity include:

  • Are residents able to fully participate in the economy?
    • Educational attainment: Enrollment in college or vocational training
    • Education quality: Dropout rate
    • Court reform: Youth adult convictions for nonviolent, nontraffic crimes
    • Court reform: Legal representation
    • Civic engagement: Digital equity
  • Are residents able to access goods and services?
    • Health: Pedestrian deaths
    • Health: Access to healthy food
    • Health: Access to social services
  • Are residents able to invest in their own community?
    • Financial empowerment: Median credit scores
    • Financial empowerment: Home loan denial rates
    • Financial empowerment: Business ownership rates

With these indicators in mind, our group developed ideas around both Access and Investment.

Access to Services and Jobs

  • Hubs of Growth – In cities that have experienced the degree of population loss that St. Louis has (and that’s a lot of us!), we must foster the development and growth of neighborhood hubs of economic and community activity that will drive growth in their surrounding areas. If connected by transit, these hubs can enhance safe access to healthy food and social services, but also create the density needed to support the growth of local businesses.
  • Mobilize – Another common challenge is the mismatch both between where people live and the skills they have, and where and what jobs are available. This idea brings employers and training providers to the neighborhoods to better understand the needs and opportunities of residents, and target services accordingly. Furthermore, micro transit would be used to connect residents to jobs.  

Investing in Small Business

  • Scale up STL – This program would increase access to capital and supportive services for small businesses that want to scale in targeted neighborhoods. This could include discounted land/space, collateral back stops, regulatory relief, and right-seed lending products.
  • Small Business Portal – St. Louis is making investments in its open data portal. But once they have all of their data available, how should it be used? This proposal is to engage small businesses to understand how the data can best be utilized to support their growth.
  • Women of STL – St. Louis could use a grass-roots organization run by women that strengthens the social fabric and supports the creation and growth of women-owned businesses. This organization would provide workshops, business incubation to address how to start a business, how to access credit, and technical training, e.g. use of internet resources.

As the City of St. Louis develops its resilience strategy, these ideas will be further developed. If you know of best practices in any of these areas, send them our way so we can help St. Louis create equitable economic development faster!

Fourth Economy’s Chris Ellis Contributes to Robert Wood Johnson Foundation Publication

Fourth Economy’s Social Innovation Strategist, Chris Ellis, recently had a contribution published in a Robert Wood Johnson Foundation (RWJF) book, Knowledge to Action: Accelerating Progress in Health, Well-Being, and Equity. This book is the inaugural volume of a publication series from the RWJF intended to catalyze discussion, engage new partners, and inspire action to build a Culture of Health in America. Chris’ contributions are included in a chapter that focuses on public, private, and nonprofit partnerships. The chapter examines the impact of these partnerships by highlighting Utah’s Pay for Success transaction that expanded access to high-quality preschool services for low-income children; a program that Chris managed before working at Fourth Economy. More information about the book, including ways to purchase it, can be found here.

Pioneering a New Approach to Economic Development

A core principle at Fourth Economy is that economic development works best when it works at the intersection of environmental, social, and economic issues—a concept referred to as sustainable or triple bottom line economic development. A recent article published in Economic Development Quarterly by one of our Fourth Economy Pioneers gives some background into this concept.

Janet Hammer of The Collaboratory, the lead author of this research, notes that while traditional economic development delivers programs, policies, or activities designed to create or retain jobs and wealth, sustainable economic development does so in ways that also contribute to environmental, social, and economic well-being over time. This triple bottom line approach recognizes that economic development both influences and is influenced by a spectrum of factors like quality of life, fiscal health, resource stewardship, and resilience. Continue reading “Pioneering a New Approach to Economic Development”

Pay for Success Explained (and Illustrated)

By Chris Ellis and Sara Blumenstein

At Fourth Economy, we are interested in—and experts in—a new generation of funding mechanisms that are enabling the expansion of interventions with proven results. (See these posts from last year introducing Social Impact Bonds and Three Questions to ask to demonstrate impact.)

The key stakeholders involved in a Pay for Success transaction

 


Continue reading “Pay for Success Explained (and Illustrated)”

The Four Keys to Effective Collaborations

The Fourth Economy team strongly believes in the power of partnerships in improving community and economic development outcomes. Through our work, we have managed numerous collaborations and identified four keys that lead to effective partnerships.

Patience, Participation, and Partnership

Effective collaboration can be difficult and often takes time. Therefore, it requires that all stakeholders have patience throughout the process of building partnerships and developing solutions. As partnership groups face challenging times, it is critical that they overcome these difficulties together and remain engaged in the effort. One difficulty that may arise is that as individuals and organizations collaborate to further a common purpose, they are typically guided by their own self-interest. These motivations are not always negative and can often support the success of collaborative groups when they are aligned with the goals of the larger partnership. In addition to acknowledging these self-interests, during initial conversations, these groups should identify outcomes and boundaries to focus their work. The group should allow for some flexibility in these areas as issues can change, but too much flexibility will impede the group’s ability to effect change and could cause stakeholders to leave the group. Continue reading “The Four Keys to Effective Collaborations”

5 Lessons From the MLB All-Star Game for Economic Opportunity Pursuits

Overmoyer-MLBIt’s All About the Distance. Or is It?

Sure, power contributes to your ability to hit a home run, but it’s also the mechanics of how you swing that can take the ball farther. Many community and economic development initiatives throw a lot of money (power) at an issue without an understanding of the underlying issues and opportunities. A better approach is to use community input combined with real-time data to better understand the current local mechanics and what forms of investment (money and time) it will take to support change. Continue reading “5 Lessons From the MLB All-Star Game for Economic Opportunity Pursuits”