Inner city communities are those core, central, or urban spaces where, many times, low income markets exist, and underserved residents reside. Large metropolitan cities contain these areas, but so do smaller cities and communities as well. Residents that live within these neighborhoods are faced with a daunting number of systemic social issues to contend with. Additionally, there is the dilemma and question of whose responsibility it is to address and solve these social issues in the first place?
Recently, the United Way of Michigan conducted a study on “ALICE” residents, or those that are Asset Limited Income Constrained and Employed in Michigan. The definition for ALICE is those households that earn more than the Federal poverty level, but less than basic cost of living for that Michigan county. For example, in Kent County, Michigan, which has a population estimated near 650,000, the poverty level is 9% and the ALICE households total 28%. Strikingly, for a household of 2 adults, 1 infant, and 1 preschooler, the household survival budget in Kent County is $64,788, which includes monthly costs for housing, childcare, food, transportation, healthcare, technology, taxes and other expenses. From the study, that would mean the required hourly wage to cover these costs would be $32.29! For many residents that live within the City of Grand Rapids and its urban core areas, those higher paying jobs and wages are not attainable, and they must live beyond their means and face great difficulty in making ends meet.
Whose responsibility is it to solve these systemic social issues in our communities? This discussion has been going on for many years. Here is a thought- all of us have the responsibility! The reason lies within the seldom used term of “citizenship” and the rights, privileges, duties, and obligations we all have as being members of our respective community trying to make our greater Grand Rapids, Michigan area the “best place to live, learn, work, and play.” It our collective responsibility to address our own community systemic social issues and improve our decision making and problem solving, not just rely on government programs and philanthropy as the de facto solution.
To date, not all social impact projects, although well intended, have achieved optimal results for the community stakeholders involved and the residents served. Why? Often, there has not been an in-depth understanding and analysis of the “root causes” of specific community issues, using a “deep listening” process within that respective local neighborhood community. Moreover, our inner city and urban core areas will frequently require more resources than the current economic development tools can offer.
Philanthropy has already begun to make the change from donated capital to invested capital within our neighborhoods using community and cultural capital resources. There also is the growing interest in social impact and local investing as future strategies as well. “Doing good and doing well” have become important cross sector community development strategies. What then are additional resources that can be used for community redevelopment and revitalization projects such as, affordable housing, improved healthcare, and new business opportunities that provide access to needed local services. These supplemental resources can then be used in conjunction with traditional economic development tools and best practices.
First, there are additional organizational and financial structures to consider. Some of these ownership structures include Community Development Corporations, Community Land Trusts, Cooperatives, Community Development Financial Institutions, and Community Benefit Agreements to name a few. Next, there are community investment funds that can be utilized such as Charitable Loan Funds, Opportunity Zone Funds, Neighborhood Equity Funds, Opportunity Resource Funds, and Crowdfunding. And there are also a number of local investing strategies such as local investment clubs, lending and giving circles, local banks and credit unions, donor advised funds, program related investments through foundations, and social impact bonds to evaluate.
What process can we use to achieve better social impact returns and results utilizing these tools? The first step is to ensure that the right community stakeholders and local residents collaborate together at the beginning of the community revitalization project. Local resident community voices are often missing at the outset in these discussions. Secondly, co-create the community revitalization project with local residents to obtain their input, commitment, and leadership to confirm and validate success. And third, employ the optimal economic development financing and community revitalization tools available in conjunction with appropriate performance and impact measurements. One compelling strategy moving forward for community revitalization projects will be to create more equity and local ownership opportunities within our urban core spaces!
If these steps are followed, community revitalization projects have the best chance for success, along with the equity opportunity for those interested to invest.
I wish you the best on your sustainability journey!
Norman Christopher
Sustainable Business Practices LLC
August 2019