The Lost Decade. Many people refer to the decade or more that Japan 'lost' after its severe recession and worry that we are in the midst of one as well. Five years after the 2007 recession, with growth at about 2% per year, we may not 'lose' the decade but we should assume that the same economic conditions are likely to last a few more years. Pretty reliable data shows that recovery post-credit bubbles take 5-7 years to overcome. We're on track for that.

The Federal Budget 'Cliff' Coming at Year End. Congress' failure to reach a Grand Bargain on the budget last year put us on a course for automatic budget cuts equaling 4% of the GDP if no action is taken post the November election. Simply put, if no agreement is reached, with only 2% GDP growth expected this year (and next) and a 4% GDP reduction from the budget cuts, we will throw the US economy into a self-inflicted, guaranteed tailspin.

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Our Economy Has Unique Strengths in the Longer Run. Mr. Peters was more bullish on the US in the longer run, especially against other nations, for three key reasons: (1) all data points to a 'normalizing' of wages around the world, making US wages more competitive. He sees a lot of signs of companies moving manufacturing jobs back closer to their markets which would be significant for the US; (2) manufacturing in the US is back on the rise and an important area of focus and growth; and (3) our population and demographic growth. While our 'replacement birth rates' are low like in other countries, our 'household formation rates' continue to rise, largely from our immigration strength.

Unprecedented Exogenous Factors. When asked if there was a chance that the economy could 'surprise' us with greater than 2% growth, Mr. Peters responded that the surprises really are more likely to be on the downside. He said that he had never seen a time when so many 'exogenous', non-economic, factors that could not be estimated, could dramatically affect our economy. He pointed to Congress' own inability to act this year, China's political condition, and Europe's economic crisis, to name a few.

Real good food for thought.

A few weeks ago, as part of our organizational Developmental Evaluation at Living Cities, we convened a meaning-making conversation with our senior staff and evaluation consultants to look collectively at preliminary formative results. The discussion was incredibly “meaty”-- adding context and nuance to this initial interpretation that could not have come from the evaluators alone. It helped reinforce the notion of how valuable such collective interpretation can be, so I want to share more about our process.

Background

I started convening meaning-making conversations a few years ago upon realizing that, what I called my “participatory evaluation practice,” was only truly participatory in the planning/design phases of evaluation. Since then, I have consistently built collective interpretation of findings into the evaluation process in order to:

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• increase transparency,
• put information in front of stakeholders who would not have looked at it otherwise,
• improve the quality and relevance of the interpretation,
• increase use/uptake of evaluation findings and allow for course corrections, and
• increase opportunities for field-building.

Others are finding this practice beneficial as well. At the Grantmakers for Effective Organizations (GEO) National Conference in Seattle in March, the first breakout session I attended was called “Learning in Public”. The session used the David and Lucile Packard Foundation’s Organizational Effectiveness program evaluation as an example of how learning in public can happen as part of an evaluation effort. At the session, Beth Kanter, Jared Raynor (TCC Group) and Kathy Reich (David and Lucile Packard Foundation) shared how they used social media, focus groups, a wiki – to crowd source what they were learning and get a broad group of stakeholders to help interpret the data and give input to the program. What was particularly fascinating to me about this session was how broad of a group they opened their data/findings to—through the wiki anyone was able to see and comment on the data. Indeed, the session challenged participants to think about the value of seeking broad input on data/findings.

The Living Cities Experience

Before I dive in to describing our meaning-making experience, I want to be clear that this isn’t necessarily a useful process in all evaluation efforts. In evaluations focused predominantly on accountability and/or with stakeholder groups who are not open to feedback, the learning process, and/or making the time for reflection, collective analysis might very well be frustrating and ineffective. However, as is the case with the Living Cities, when organizational learning is a core goal of the evaluation, and when the stakeholders are open to learning and feedback, it can be extremely valuable.

In our initial conversation, Living Cities’ senior staff looked across a variety of formative findings that had just come in from our two main evaluation efforts: The Integration Initiative Year 1 formative evaluation and the overarching organizational Developmental Evaluation. The goal of the discussion was to pull out the themes that we saw emerging, look for overlap in themes across the two evaluation efforts, and discuss the implications these themes may have for our work moving forward.

To prepare for the meeting, our evaluation consultants synthesized the data into key findings. This is an important set-up piece that was reinforced in the GEO session: when holding an in-person, time-limited, meaning-making session – presenting raw data is not effective. Some level of synthesis needs to happen in advance. So we synthesized data into key findings, and then sent this information out to senior staff to read in advance, framing the session with the following key questions:

1. What do you find most salient in the findings?

• What is surprising?
• What is expected?

2. What does this cause you to think about for our next phase of work?

Here is one example of a key finding we discussed that is already informing our work moving forward:

Systems Change – the need to define what it is and how to get there

We are an organization focused on re-wiring broken, complex systems, yet a key finding across our evaluation efforts is that we aren’t clearly articulating what we mean by systems change. This contributes to some of our grantees and stakeholders reverting to thinking, language, and actions that may be appropriate for program level work but not necessarily for systems level work and the scale of change we strive to catalyze. Even though systems change work is inherently difficult to describe, we have learned a lot about what it is and what it looks like over the past few years-- from our work and the work of others. Therefore, now is a good time for us to clarify our systems change vision and language and more clearly tie our message back to the scale of impact we want to see on the ground for low income people.

Following this meaning-making conversation, the next step was to bring a set of key themes that were emerging (including the systems change theme described above) to another important stakeholder group – our members. Through our governance committees, we have already begun engaging our foundation and financial institution members in these conversations; gathering their interpretations and seeing what they think the implications are for Living Cities’ work moving forward—again prioritizing and making meaning. We will continue this practice with our Board of Directors this spring and expect to again cycle through the whole meaning-making process as more data come in.

I want to hear from others: How do you make meaning of findings with stakeholders? How broadly do you open up interpreting findings when you do this collective interpretation? Have you ever used technology such as a wiki to do so? What have you learned about what works and does not work in this process?

Below are some initial takeaways from the convening, which brought together a select group of economic development leaders from over a dozen states and metropolitan areas around the country to explore the topic of how states and their urban areas can align their efforts to better connect metropolitan areas to the economic opportunities created by global trade, including by harnessing the power of immigrant entrepreneurs and their global networks.

Trade and exports provide a significant avenue for job creation and long-term economic strength for states and their metropolitan areas. In 2010 and 2011, exports generated some 46 percent of the growth of the U.S. economy, and export-related jobs tend to provide higher wages and better benefits than non-export-related jobs.

State-metropolitan collaboration is essential in this work, but not straightforward. At the convening, two states discussed their efforts to work with local actors by creating regional economic development councils, which are designed to help align strategies and resources across levels of government. Cities and metropolitan areas, for their part, have civic infrastructure (e.g., mayors, trade associations, chambers of commerce, local economic development staff) which can be leveraged to amplify the impact of limited and declining state resources. While states are exploring how they can be more intentional in utilizing these assets, the political importance of rural areas in state governments can complicate a metropolitan focus.

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State and metropolitan efforts to create economic opportunity by boosting trade are focused primarily on small- and medium-sized enterprises (SMEs). With larger businesses more likely to have their own resources and infrastructure to advance exports to global markets, most of the efforts of governments at the state and metropolitan levels is focused on boosting exports for SMEs.

Better use of data is an important frontier in this work. A growing amount of data is being collected to support states in this effort, but the approaches and systems for making meaning of this data, and for using it to decide how best to help firms export, are still being developed. Some states have made progress in developing these systems, but more work remains to be done.

The limitations of “legacy” systems make it harder for states and metropolitan areas to build economic opportunity through exports. In many of the states represented at the convening, economic development and trade efforts exist in silos sometimes numbering in the dozens. Several states are creating cross-departmental structures and considering more flexible regulations in order to align economic development funding streams to support metropolitan trade and export strategies.

Immigrant entrepreneurs, and the global “diaspora networks” to which they connect, are potential resources to boost trade and economic activity. Immigrant-owned businesses can help overcome the lack of knowledge and relationships in global markets that constitute significant barriers to exporting. Discussions at the convening suggested that there are a handful of places that have more advanced strategies to harness immigrant businesses and exporters, but that in other places efforts are more nascent. To take full advantage of this opportunity, states and metropolitan areas need to figure out how best to support immigrant entrepreneurs, including through specialized structures and strategies.

In all, differentiated strategies are required to leverage these export-related efforts for the benefit of low-income people. For example, an improved linkage to workforce development and education efforts is necessary to ensure that low-income people can access the jobs these strategies create, and in some cases strategies to help small and mid-size firms sell to large exporters may be more effective than strategies to help these firms export themselves.

The network will reconvene in October. In the meantime, we’ll be further exploring the issues above and sharing our learnings with you as they emerge. Stay tuned and share your thoughts and reactions in the comments below.

For philanthropists, policymakers, and anyone who thinks deeply about how to make social progress, the challenge of assessing the potential value of new ideas and tools is a familiar one: we are all trying to figure out which new ways of working and living have the most potential to improve the world, so that we can invest our limited resources in them. A skeptical-but-curious person might ask: what is possible—and fundamentally different—because of a new technology that wasn’t before? Why does it matter? What could help technology have greater impact, (as it was nicely framed in this summary) to move beyond “transactional” change? Through its explorations of “civic tech,” Living Cities is beginning to ask these questions with a specific agenda: to better understand the potential of information technology to change the way that cities work, with an important focus on ensuring that these changes benefit their low-income residents.

For me, someone who lives and works in an urban environment and spends lots of time thinking about the ways cities thrive, one of most exciting and “really different” features of new information technologies, specifically social media, is their ability to create, sustain, and connect communities beyond the limits of physical interaction. There’s been a healthy debate about the effects of increased on-line social interactions on our “real-life” community-building efforts (see April’s Atlantic Monthly cover story: Is Facebook Making Us Lonely?), and future research will likely help us understand the impacts more clearly. But on balance, I see these new media channels as a complement to (not a substitute for) the other ways we get information and connect to people on a daily basis.

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I still learn what’s happening in my hometown, Chicago, in conversations with my neighbors and other commuters on the train and through the many face-to-face conversations I have with friends and colleagues. I still start and end my day with news from broadcast media: Chicago Public Radio and WTTW, our public television station. While the increased volume and speed of information delivery that social media provides is different, it’s not what really matters – if I’m only following celebrities on Twitter, more and faster delivery of tabloid-quality gossip does not add up to a richer information experience. What has been transformational is being able to make direct connections to experts and their networks—public servants, scholars, nonprofits, advocates, community residents—that might otherwise have been more than a few degrees of separation from me. Why does this matter? Because my job as a foundation program officer is to make and strengthen connections. Through social media, I feel closer to the actions of public leaders, and empowered to engage in a conversation with them. I can more quickly and easily see gaps in information and influence that could be bridged, people and ideas that should be connected; in short, I can do my job more efficiently and effectively.

Today’s “civic technologists”—the programmers, coders, data analysts, and app developers who are motivated to build tools that make city living better—belong to thriving expert communities. This is because they’re adept at using web-based channels to organize, to form and sustain their social and professional networks, and because their passion for innovation fuels connections. Like many thriving professional communities, they are made up of like-minded individuals with similar skill sets, interests, and shared language. If we—the policymakers, practitioners, and funders that want to make cities better places to live for all of their residents—want to harness the talents and energies of these expert communities for social change, we need to find ways to build meaningful, sustained connections between civic-minded technologists and other kinds of experts, some that are recognized as such, and some that might not be so obvious.

Experts and their networks can be issue focused. Are we looking for new ways to use technology to improve employment opportunities and build a stronger talent pipeline in cities? To improve access to health care? Experts on these specific issues can help ensure that tech-enabled solutions are practical, relevant, and informed by existing knowledge about what works (and what doesn’t). Expert communities can also be place- or population-focused, with grounded knowledge about particular regions, neighborhood, or the needs of a specific group of people. Whatever their domain of expertise, the members of these communities speak a common language and have a set of shared references that smooth and speed their interactions with each other, but may make it difficult to create meaningful connections to others. Technologists and community developers (or community residents) may have a strong desire to communicate with each other, but language and skill differences can make it difficult to have meaningful interaction without a great deal of effort. Need proof? Just ask a web developer and a community development corporation director to define “TIF” and compare the answers.

Helping to bridge these gaps of expertise, skill, perspective, and language has been one of the bread-and-butter functions of philanthropy. In the best circumstances, funders connect inspired, socially motivated organizations and individuals to the resources they need to bring their ideas to life. As all funders can attest, it’s a full-time job to make these connections, and not always an easy one. At least one answer to the question, “what could help technology have greater impact?” is this: invest in the brokers and intermediaries that make it their full-time job to play this all-important connecting role. Invest in organizations and individuals that can speak the language of technologists, but have the domain-specific expertise to speak for the issues, places, and people that they aim to serve. Building these connections among and across experts and their networks takes a specialized set of skills. Done well, it requires resources, not just for technology, but to sustain the ongoing, person-to-person relationship building and organizing that technology can help facilitate and accelerate, but will never replace.

Code for America is one intermediary organization that is working hard to formalize these connections across expert communities, in this case between technologists and the municipal governments their Fellows serve. In Chicago, an organization called Smart Chicago is working to create bridges between technologists and multiple experts on particular issues and places that are essential to the vitality of the region. The Chicago office of the Local Initiatives Support Corporation (LISC) is an expert—really a network of experts—on Chicago neighborhoods that, through significant public and private investments in broadband adoption programming, has developed a niche capacity as a very effective translator on technology issues and their relevance to broader community development goals. Living Cities itself is another intermediary that has the potential to do this important framing and translation work, ensuring that these diverse networks of expertise and experience are connected, aligned, and working effectively to implement a shared vision of social change. Funders, both public and private, should do what they can to support these intermediaries—whether they are organizations or individuals—that create the productive spaces where technologists and other kinds of experts can meet, and speak to each other clearly. This won’t guarantee that every tech-enabled innovation is a transformational one, but it should help to filter out the ones that feel too “tech down,” and to ensure that the solutions we’re creating with new tools and technologies will have relevance for the people that need them the most.

Alaina Harkness is a Program Officer for Community & Economic Development in U.S. Programs at the MacArthur Foundation. You can follow her on Twitter @harknessa.

Historically, the public has counted on government for leadership, direction, and solutions to our most pressing problems. However, as our problems become increasingly complex, and we find ourselves in an evolving economic and social landscape, the public has lost its faith in government and has looked to the private and nonprofit sectors to lead the search for solutions. The problem with each scenario is that one sector is anointed the leader while the others are expected to play supporting roles. As a result of this tension, each sector tends to operate on its own, while the others, particularly government, are viewed as an obstacle or external target for lobbying rather than a critical piece of the puzzle.

Through The Integration Initiation, Living Cities is learning what it means to engage the public sector in systems change work. The role of government varies in each site due to the unique histories of the areas and the availability of resources, but having a strong civic infrastructure, one table, where leaders from all sectors work together, remains a core tenet of conducting systems change work that can achieve impact at scale. This figurative and literal table is where leaders build a common understanding of the complex problems they’re trying to solve, and identify how their actions advance or detract from the outcomes they are trying to achieve. In each instance, the challenge is figuring out how to engage the public sector as cities redefine leadership in this era of complex social problems.

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As we have seen from The Integration Initiative, there are a number of roles government can play:

1. Singular Leader – Government officials in this approach hold on to the traditional role of government as lead– serving as the sole author of an initiative, spurring the initiative forward, and recruiting supporting partners. This approach is rarely viable particularly when problems (and solutions) cut across jurisdictions.
2. Spectator – Another role government can take is that of a spectator, with public sector actors disengaged from the work or simply participating as spectators in meetings. Here, government is either absent or their support is tacit at best.
3. Advocate – With constrained budgets, many local governments recognize that they are not in a position to actively drive an initiative, but instead can use the power of the bully pulpit to push an initiative forward. This may entail advocacy on supporting legislation, public displays of support, or ceremonial actions like resolutions or calling for a “day of action.”
4. Full Partner – Works alongside the nonprofit, private, and philanthropic sectors. This role is actually a combination of roles, ranging from convener to fundraiser and cheerleader to advocate. Here, the public sector actors draw on the full range of their capacities and functions to help achieve the results.

The shift to full partner is challenging for the public sector as participating deeply in a process without control creates significant, real, and imagined reputational risks. To increase the likelihood that government actors will take such a risk, the stakeholder table has to meet a few important conditions: the purpose of the table needs to be powerful; the opportunity for the public sector to advance its own agenda needs to be clear; and the risk needs to be shared. This is what I witnessed at work in Newark where the government is shifting from a long history of singular leadership towards that of a fully engaged partner with the private, nonprofit, and philanthropic sectors. When these conditions are met and we see the public sector take on the full partner or even advocate role, the results are extraordinary and these tables are proving to be worth the effort and risk.

One of the most effective ways that government can fight poverty is to help individuals and families prepare for and manage financial distress – when a job disappears, or wages are cut, or the bills pile up too high. And right now, with unemployment above 8%, and with many families struggling to make ends meet, we are a nation still in the throes of financial distress.

When people find themselves in financial distress, too often they don’t know where to turn. This can lead to desperate decisions – including borrowing through high-interest pay day loans or turning to bogus “debt settlement” shops – decisions that inevitably make a bad situation worse. It is estimated that the average American household is carrying about $16,000 in credit card debt, with many struggling to pay it down. While many of the people who turn to fringe financial products and services have credit cards, they do not have a bank account. According to recent data, there are 9 million American households that do not have a checking or savings account. The “unbanked” – are concentrated in cities. And so it is only natural that cities, like New York, are now taking a leading role in tackling this issue.

Traditionally, financial literacy services have been an ad-hoc mixture of classes and workshops run primarily by non-profit providers, and some government agencies and financial institutions, with no common standards, no measurable goals, and limited accountability for results. More importantly, the information is often general and not targeted to the specific (and often complex) financial challenges that individuals and families face. In New York City, we set out to change that in 2008 by creating Financial Empowerment Centers. We hired, trained, and certified a skilled staff to offer free, one-on-one financial counseling to clients. The professional counselors help clients to manage their money, reduce debt, plan their financial futures, improve their credit, and find affordable banking services.

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Over the past four years, our professional counselors have conducted over 28,000 individual sessions, helping New Yorkers pay down over $7 million in debt – and increase their savings by over $900,000. We’ve also helped many clients recover from incidents of identity theft – and, perhaps most importantly, open mainstream bank or credit union accounts.

Our Financial Empowerment Centers are directly improving residents’ bottom lines. But there is also a multiplier effect that is making other government programs more successful. For instance, we’ve seen how we can achieve better and quicker results for participants in social service programs when financial counseling is inserted into the mix. And when we speak with staff at our workforce development programs, they say that financial counseling is helping to remove one of the most common barriers to job retention: running out of money for subway or bus fare. Integrating financial counseling into our service delivery helps citizens to better manage their budgets, reducing the likelihood they will miss work and lose earnings.

When we initially launched the Financial Empowerment Centers, we did so as a pilot project with private funding. But because the Centers have been so successful, the City now is publicly funding them. When I speak with mayors around the country, it’s clear we are all facing the same challenge: doing more with less to help low-income families get through these tough times – and put them on the path to financial stability and independence. The purpose of Financial Empowerment Centers is not to provide temporary relief, but lasting knowledge. Give a man a fish, the old adage goes, feed him for a day; teach a man to fish, feed him for a lifetime.

The Mayors Project at Bloomberg Philanthropies will make Financial Empowerment Centers its next investment. The Mayors Proiect spreads effective programs and strategies between cities and helps mayors work together in new ways around solutions. Other Mayors Project investments include Cities of Service, Innovation Delivery Teams and the Young Men's Initiative.

Through a partnership with Living Cities, Bloomberg Philanthropies will invest $16.2 million over the next three years, through a competitive grant process, to launch Financial Empowerment Centers in five other cities. We expect these investments will yield the same great returns that they have in New York City, professionalizing the field of financial counseling and helping tens of thousands more people gain control of their financial futures. And if successful, the Financial Empowerment Centers in these five cities will make a powerful case for cities around the country – and the federal government itself – to begin taking up this important work.

Public-private partnerships have been critical to New York City’s ability to pioneer innovative new policies and programs. And just as we look to other cities to learn best practices, we hope that our experience in professional financial counseling and empowerment will show that - even in a time of tight budgets – giving people the tools they need to help themselves is not only a compassionate policy, it’s a smart investment in our future.

Read the full press release here.

State policy and practice exert significant influence on how economies develop in cities and metropolitan areas, and on what local and metropolitan governments can do to shape those economies. States make, allocate and shape the terms of major investments in areas including education, economic development and infrastructure; set the ground rules for local governments on issues such as taxation; and shape the structures, such as metro planning organizations (MPOs) through which local governments coordinate policies. Cities and metropolitan regions, meanwhile, are also critical for the economic well-being of states – cities and metropolitan areas are centers of population, economic activity, and innovation.

Despite these realities, systematic collaboration between states and metropolitan areas is not as robust or widespread as it needs to be. Mechanisms and processes to coordinate the pursuit of opportunities and to address areas of conflict among local, metropolitan and state policymakers are often lacking. In the absence of a deeper understanding of how collaboration between states, metropolitan regions and localities can best be approached, public leaders are left with inadequate support to position their places for prosperity.

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As a step toward addressing this challenge, we are partnering with the Brookings Institution to create the Brookings -Living Cities State-Metropolitan Prosperity Collaborative, a peer exchange forum intended to promote deeper collaboration between state and metropolitan leaders on issues critical to creating economic opportunity. The Collaborative will convene twice this year, with the first session taking place this week in Washington, DC. This week’s convening will bring together a select group of economic development leaders from over a dozen states and metropolitan areas around the country to explore how states and metropolitan areas can align their efforts to better connect metropolitan areas to global trade and harness the power of immigrant entrepreneurs and global networks.

Finding better ways for states, metropolitan areas and localities to collaborate is essential to our ability to compete and create opportunity for all. Stay tuned for our takeaways from this week’s convening and other learnings and insights, and please share your thoughts in the comments section below.

These missed opportunities are undergirded by the assumption that simply locating affordable housing near transit will result in greater opportunities for low-income people. Stephanie Pollack, Associate Director of Northeastern University’s Kitty & Michael Dukakis Center, points to the ways in which approaching TOD without specific equity outcomes in mind can actually result in increased car use, less job connectivity for core transit users, and, in many cases, displacement of long-term residents.

Bridging equity and the economy in TOD was the theme of Living Cities’ most recent TOD Learning Community. This convening brought together over 40 participants, including our newest TOD grantees from the Bay Area and Denver, and created an opportunity for these new sites to share, learn, and work alongside Living Cities Integration Initiative grantees from Baltimore, Detroit, and the Twin Cities. Each region brought a team of equity advocates, employers, developers, and financial institution partners. Discussions from the two-day convening resulted in three important insights:

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1) Articulate the Return on Equity (ROE) AND the Return on Investment (ROI). Developers, planners, and advocates need to intentionally focus on the ROE alongside the ROI. This requires a “one-table” approach where decision-makers from across sectors can learn and work together to clearly articulate community and investment outcomes. Most developers and financial institutions spend time considering the return on investment in order to understand the risks and rewards to capital investments. This is necessary on the equity side as well. Equity advocates need to understand and articulate the risks and rewards they are seeking on behalf of communities. As communities start to pencil out the financial resources necessary to roll out projects, they should simultaneously build a realistic plan for the equity gains they hope to make.

2) TOD is not the Panacea. Throughout the Learning Community, we heard one consistent message: TOD is one of many tools available to revitalize and reconnect the economic fabric of our cities and regions. Each of the participating sites is moving beyond the traditional approach, which has prioritized linking affordable housing and rail. These sites are looking for a more comprehensive approach that uses multi-modal and adaptive transportation networks to connect the places people work, learn, and live.

3) Recognize Private Sector Diversity. In order to build a bridge between equity and the economy, it’s necessary to understand the diverse interests of both our communities and the sectors we are hoping to partner with. More often than not, equity and transit advocates apply a single undifferentiated strategy to engage developers, financial institutions, and businesses. However, though all of these are private sector entities, they have divergent interests and needs. Planning and implementation teams need to develop targeted and differentiated strategies to encourage employers to locate along transit lines, to make the case for financial institutions to invest in transit, and to encourage developers to build along transit. Similarly, supporting the different small, mid-sized, and large businesses during transit construction requires different resources.

Equitable TOD requires making explicit the various economic aspects of TOD, especially the trade-offs. In order for this body of work to have real impact, we need to establish a consistent forum for exchanging learning, sharing opportunities, and highlighting challenges in implementing TOD. Living Cities’ TOD Working Group, which guides this work, hopes that these communities will help the field move more fully towards identifying infrastructure and planning tools that create social and economic benefits for every resident of the cities in regions we live in.

Social innovation has been a hot topic for a number of years now, but never more so than today. Conferences, awards, magazines, even a White House-led Social Innovation Fund, are dedicated to it. And for good reason. People have lost confidence in the institutions that they historically relied upon to solve our most pressing problems. Leaders have realized that if they want to change the status quo in their lifetimes, they need to stop waiting and start building their own solutions. More often than not, however, when we refer to social innovation, what we really mean is innovation sponsored by the social sector ("social sector innovation"). We're talking about nonprofits created to fill gaps in a terribly broken system, such as connecting patients and their families with the basic resources they need to be healthy (HealthLeads) or providing urban young adults with the skills, experience and support that they need to reach their potential through professional careers and higher education (YearUp). Organizations like Echoing Green, Ashoka and New Profit, have accelerated the creation of a social sector innovation field by supporting the emerging leaders of these organizations with grants, business planning and connecting them to a network of similar 'social entrepreneurs.'

As I stood atop the trading floor of the New York Stock Exchange (NYSE) last Wednesday however, I realized how incredibly self-defeating this narrow definition of social innovation is if large scale change is our goal. I was literally witnessing one of the most effective and lasting social innovations in the U.S. and it had been done by the public sector. The more I thought about it, the more I realized that public sector-led social innovation ("public sector innovation") differs from social sector innovation in one absolutely fundamental way: it actually has a much better chance of having permanent, lasting impact from the outset. Many social sector innovations, like ones I've helped lead over the past 20 years, toil for years to build a successful model and then struggle for years thereafter to both get the attention of government and the adoption of the model by the public sector. In contrast, public sector innovation is undertaken with the assumption that if it is successful, it will go straight, "intravenously" into effect. No annual fundraising or advocacy necessary. The innovation and related funding will quickly displace the old way that government did business.

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For instance, what Linda I. Gibbs, New York City's Deputy Mayor for Health and Human Services, has done in New York is one example of the extraordinary power of public sector innovation strategies. After her appointment, Gibbs created the Center for Economic Opportunity (CEO) to design and implement evidence-based initiatives to reduce poverty. On the policy side, the Center developed an updated poverty measure that it not only adopted but has also been adopted by the Obama Administration. On the program side, for example, CEO created Financial Empowerment Centers to help citizens take control of debt, improve credit ratings, deal with debt collection and learn to create budgets. After serving over 13,800 residents, helping them to reduce over $6.9 million in debt, build more than $900,000 in savings and achieve financial stability, the innovation went straight into the mainstream -- it's now the way the city does business. Not a pilot.

Nice but that's not all especially given how cities compete with their peers. In 2008, Mayor Michael Bloomberg of New York City and then-Mayor Gavin Newsom of San Francisco, two mayors committed to this issue, created the Cities for Financial Empowerment (CFE) Coalition. Since then, a dozen cities have come together to share promising approaches, build a unified policy program and adopt innovations into their mainstream operations.

I was standing atop the NYSE because I was celebrating, with CFE co-chairs Jonathan Mintz, NYC Department of Consumer Affairs Commissioner, and José Cisneros, City of San Francisco Treasurer, the announcement of The Cities for Financial Empowerment Fund (CFE Fund) at Living Cities as part of NYSE's Financial Literacy Week. The Fund will institutionalize this loose-knit collaboration of cities interested in financial empowerment. In essence, it will help cities to skip a generation of innovation and go right to intravenous adoption of what works.

We need to do more to celebrate and replicate these types of successes. We need to honor the vision of public sector innovation trailblazers like Linda Gibbs, Jonathan Mintz and Jose Cisneros as much as we honor the extraordinary efforts of social sector innovation leaders like Wendy Kopp and Geoffrey Canada. The more the better.

We are convinced that if asset-building efforts are to reach scale, part of the answer will rest with the ability of practitioners to institutionalize the asset building framework and practice within public sector social service delivery systems. Our Income & Asset Working Group grants will test this hypothesis.

The Income & Assets Working Group recently awarded two 18-month grants to Seattle’s Housing Services Department and the Louisville Metro Department of Community Services and Revitalization to organize the integration of financial counseling into their homeless services continuum. The goal of this effort is for clients within the homeless services continuum to have support in achieving increased financial stability. What makes this approach especially exciting is the potential to re-engineer a full social services continuum to empower individuals to build their own assets. Implementation teams will establish a base-line practice, develop and ratify standards for the delivery of asset building services, and reorient public contracts to embed financial education and asset building into their core requirements.

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The implementation teams will take the form of meaningful cross-sector partnerships. Rather than a top down prescriptive approach implemented by the public sector, financial coaching experts and seasoned service providers will work alongside municipal leaders to reorient the existing approach to homeless service provision.

Team building kicked-off in late February when we convened multi-sector teams from both sites to Washington, DC for a two-day Municipal Asset-Building Learning Community. Both sites participated in an emergent learning session that allowed them to critically re-examine and reformulate their initial work plans based on critical reflections about prior innovation and reengineering efforts in their home cities. Supported by Living Cities staff and a graphic recorder, the teams worked their way through the emergent learning cycle developed by Fourth Quadrant Partners, LLC. This was a promising start to these grants as it provided and opportunity for them to engage with a framework to measure scale, develop an understanding of how another site is approaching this work, and reflect on their work plans and teams

We’ll keep you posted on what we’re learning from Louisville and Seattle.

This framing paper serves three primary purposes:

1. To introduce the concept of alignment between anchors and the broader regional systems with which they interact – including a typology of different levels of alignment;

2. To describe some of the key regional systems and stakeholders with which the efforts of anchors would need to be better aligned in order to increase anchors’ economic impact; and

3. To outline some key considerations that Design Lab participants should keep in mind as they work together to build a framework of action to advance this alignment.

Deutsche Bank Americas Foundation instigated this project to encourage the financial industry to scale up financing of building energy efficiency retrofits. Deutsche Bank has a long history of supporting multifamily / affordable housing through its community development finance capabilities, and throughout the world the Bank has played a leadership role on climate issues. Scaling up building retrofits has become a compelling aspiration for the Bank, because of the alignment between our carbon reduction and community development goals.

Building scientists, auditors, enlightened building owners, and contractors have been retrofitting multifamily buildings in New York City for many decades, but the retrofit industry has largely relied on public subsidies, a limited resource that has constrained the industry’s ability to scale. Private capital, if deployed for retrofits, could prove transformational in achieving significant carbon reductions while upgrading multifamily buildings and stimulating much-needed job creation. This study has tried to address a key bottleneck for private capital: the lack of confidence in energy savings for lenders to underwrite loans against.

New York City proved an exceptional laboratory for commencing the study. A long tradition of public private partnerships enabled the project to be stewarded by hands-on group of practitioners from city and state housing agencies, community development intermediaries, utilities, energy program incentive providers, and other mission-driven nonprofits. (A full list of organizations represented can be found in the Approach section of this report.) A key partner in the effort is Living Cities, a national community development collaborative, which is helping propel the study’s findings to a national audience.