Small logo Subscribe to leading news on impact investing. Learn More
The Brief Originals Dealflow Signals The Impact Alpha Impact Voices Podcasts Agents of Impact Open
What's Next Capital on the Frontier Measure Better Investing in Racial Equity Beyond Trade-offs Impact en las Americas New Revivalists
Local and Inclusive Climate Finance Catalytic Capital Frontier Finance Best Practices Geographies
Slack Agent of Impact Calls Events Contribute
The Archive ImpactSpace The Accelerator Selection Tool Network Map
About Us FAQ Calendar Pricing and Payment Policy Privacy Policy Terms of Service Agreement Contact Us
Locavesting Entrepreneurship Gender Smart Return on Inclusion Good Jobs Creative economy Opportunity Zones Investing in place Housing New Schooled Well Being People on the Move Faith and investing Inclusive Fintech
Clean Energy Farmer Finance Soil Wealth Conservation Finance Financing Fish
Innovative Finance
Personal Finance Impact Management
Africa Asia Europe Latin America Middle East Oceania/Australia China Canada India United Kingdom United States
Subscribe Log In

Moving from community development to community wealth

ImpactAlpha, Oct. 29 – With inequality at an all-time high, cities are rethinking their decades-old approach to community revitalization.  

A “quiet revolution” is transforming their work, particularly in underinvested urban areas, according to a new report. Out: top-down, one-size-fits-all, debt and subsidy-dependent solutions. In: locally-driven, collaborative solutions that foster community ownership and prosperity.

Opportunity Zones legislation, aimed at long-term equity investments in neighborhoods, is accelerating the shift. The emerging community wealth model focuses on “developing people rather than buildings, with a blend of public, private, civic and community leadership and capital,” write Ross Baird and Daniel Palmer of Blueprint Local, Accelerator for America partner Bruce Katz and Jihae Lee of the Nowak Metro Finance Lab at Drexel University in Towards A New System of Community Wealth.

The approach “has the potential to bring hundreds of billions of market and civic capital off the sidelines and spark transformative outcomes for disadvantaged communities.”

Among the strategies the authors suggest:

Uncover community assets

Big data can  reveal hidden economic potential, for example, by identifying street corners that are ripe for market rejuvenation or categorizing the nation’s 8,762 opportunity zones into distinct typologies, facilitating investment. 

Expand businesses owned by people of color 

Increasing the number, size, and scale of businesses owned by their residents is central to the new community wealth building. Key ingredients: capital, physical spaces, rich ecosystems and the support of anchor institutions. In Chicago, where just 2% of local businesses are Black-owned and less than 6% are Latinx-owned, Accion Chicago and Small Business Majority have stepped up to take on the role of ecosystem builders.

Integrate capital 

The ‘two-pocket” divide between philanthropic giving and market investment is beginning to give way as investors align their investments with their values. That’s especially important when it comes to place-based investment. “One-pocket investment marries private and civic capital and channels the vast stores of local wealth back into local communities,” write the authors. 

Spread the wealth  

New structures and mechanisms are needed to enable residents to share in the value created by investments in their neighborhoods. Rent-to-own models, employee stock ownership, and ‘neighborhood trusts’ build local ownership and control. One example: Shift Capital is looking to test the idea of a neighborhood trust, a mashup of a community development corp. and community land trust, in Philadelphia.

You might also like...