Creating economic opportunity for people who live in distressed communities is by necessity place-based, or if you prefer, place-conscious, work, because the obstacles to opportunity vary depending on where exactly people live.
For HOPE, our place is the Delta, a region that includes three states–Arkansas, Louisiana, and Mississippi–that are home to 97 of the nation’s 384 “persistently poor” counties. Even here, where the story of struggle permeates the region, the challenges in New Orleans’ Central City neighborhood are very different from those in Itta Bena, Mississippi, and similarly, the resources available to address those challenges vary from place to place.
So, the long-term solutions we design must be grounded in local realities and buttressed by partnerships between diverse entities with varied interests and capabilities, including government, business, and philanthropy.
A recent study examining place-based initiatives and their potential for transforming places with concentrated poverty called this bringing together of various interests, “braiding.”
Strands that are woven together create a whole that is stronger than any single strand and, once braided, are less likely to fray or unravel.
Braiding boosts impact significantly, enabling diverse groups to assist more people in more places, and in a more substantive manner than they could using their resources singularly. For our CDFI, braiding has meant identifying areas where our interests and those of other entities converge. Over the years we’ve been able to bring sectors together around some of these intersecting interests:
- Government: wants to incentivize investments that create good jobs in high poverty areas; stimulate affordable housing for low-income residents; and otherwise promote development in distressed areas.
- Business: wants a productive workforce; wants strong markets for its products and services; wants to boost reputation; wants tax breaks; and wants to meet regulatory requirements (i.e., the Community Reinvestment Act mandates that financial institutions invest in certain low income communities).
- Philanthropy: has a mission that either broadly or specifically aligns with development goals–(i.e. helping families achieve economic self-sufficiency or supporting health care in rural areas).
However, aligning community interests with those of each sector presents particular challenges.
With government, we interface at the local, state, federal, and at the legislative and executive levels, often across incongruent political philosophies. This means our staff must be equipped to navigate a myriad of government programs where the people and requirements are constantly changing. Elected officials respond best to constituencies, so this means that part of our job is to make clear to both people in underserved communities and to the broader public how inequality harms all, and increase the capacity and political will among them to make government accountable to everyone’s needs.
For example, HOPE’s preliminary analysis of recent U.S. Treasury data showed that of the $7.2 billion in New Markets Tax Credit investments made in the nation’s 384 persistent poverty counties, roughly 70 percent went to only six areas. With seemingly very limited resources available to high-poverty areas, we have to educate and hold accountable executive agency officials and members of Congress about the actual (and sometimes head-scratching) allocation of government resources.
A primary challenge with regard to the corporate sector is countering the mindset that the work of fighting poverty is not the job of business, which we all know is a difficult task. Our job is to be a persistent reminder to private industry that “high-road” business practices such as paying a living wage, using local suppliers, and partnering with local institutions to strengthen the workforce and otherwise improve economic conditions contribute to their long-term profit and stability.
Within the philanthropic sector, foundations tend to fund short-term projects. This dynamic, combined with shifting program priorities, make it difficult for development organizations to implement long-term strategies. Philanthropy also sometimes favors the new over the proven (and perhaps, less attention-grabbing) strategies, but the nurturing of durable institutions that have the scale, cross-sector relationships, and staying power to effect long-term change is vital to effective community development.
As communities across America grapple with the broad consequences of poverty and inequality, it is increasingly important that all hands of government, business and philanthropy “braid” with intention to collectively address these challenges to America’s economic future.
(Photo courtesy of Hope Enterprise Corporation)