On December 7th, Next Street’s Chicago office hosted a lunch as part of our round table discussion series. The topic this quarter was “If Not You, Then Who: A Candid Discussion on Place-Based Community Investment.” The biggest takeaways from the conversation are that communities need large investment dollars to be transformed; investors (including community members themselves) need to define what successful community investment means, and then measure progress toward those end goals; and that community residents must be involved in the investment decisions that will impact them.
As always, Next Street’s goal for the lunch was to provide attendees with the opportunity to connect the dots, and to bring together different perspectives for a thought provoking discussion. Attendees represented a wide variety of institutions, including foundations, academics, financial institutions, community based organizations, and members of the start-up community.
In advance of the lunch, we asked attendees to consider three questions:
- What does place-based community investment mean to you here in Chicago, and if not you, then who/what else is needed for action? According to the Global Impact Investing Network, “Community investing” is a subset of the broader field of impact investing— “investments made in companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return.” When you add “place-based” to the terminology, there are different meanings to different people.
- If “community investment” is also defined as having three core characteristics – (1) A focus on marginalized areas or communities that conventional market activity does not reach (in practice, low-income neighborhoods or regions, communities of color, and underserved geographic regions such as rural communities); (2) A focus on enabling the delivery of explicit social benefits (affordable housing, economic development, provision of needed goods and services at affordable rates, healthier outcomes) to those areas or communities; and (3) A financial product available for investment that can be managed in terms of risk and return – then what can we do to speed up strategies to successfully invest in developing our Chicago community?
- What can we learn from other cities and organizations who are employing a place-based community strategy? There is innovation happening around the country in this field, but what can we learn from the failures and successes.
While the conversation started with a discussion around what actions are needed to move the space forward, the conversation quickly transitioned to focus on defining what success will look like from community investment efforts. Participants purported that we should be able to agree on a baseline set of success metrics – such as increases in income, wealth, and employment rate, which are fairly straightforward to measure – in order to identify whether a community has benefited from investment (or not). Other metrics, such as economic mobility or who holds power in a community are more difficult to measure, but should also help us define success, and should be tracked.
The group also discussed some of the qualities of Chicago that make its community investment opportunities and challenges unique among comparable cities. For example, Chicago is a city of geographically (and some argued politically) well-defined neighborhoods, which gives us the opportunity to clearly track and measure data within a specific area. At the same time, discrete neighborhoods can create momentum and initiatives that sometimes focus on advancing one neighborhood at the expense of others. Because of this, efforts should be made to coordinate and collaborate when considering community investment across the Chicago market.
The group also agreed that place-based community investment should strive to maintain, and uplift, the existing cultural heritage of a community. In doing so, investors should make a valiant attempt to ensure that their efforts do not lead to the displacement of existing community members.
Furthermore, the conversation centered on how strong neighborhood institutions can play a critical role in moving communities forward. Without leveraging existing Community Development Corporations, neighborhood housing organizations, and other local assets and infrastructure, outside investor efforts risk failure.
And lastly, but certainly not least, the group recognized that large amounts of investment dollars – from both public and private sources – are needed to catapult communities forward. For instance, the Chicago Community Trust is one of the largest community foundations in the country, having granted over $236 million in 2016, and JPMorgan Chase recently committed $40 million to Chicago. That said, more dollars are still needed to drive toward the wealth, income, and employment outcomes so needed across all Chicago neighborhoods.
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