On February 8-10, Living Cities brought together the five winners of the Integration Initiative’s three-year, blended capital award on the campus of Harvard’s Kennedy School for the first of their seven in-person learning communities. The Integration Initiative is designed to demonstrate how the public, private, philanthropic and non-profit sectors can improve the lives of low-income people in urban communities by tackling problems long considered intractable. It provides $85 million in grants, loans and Program-Related Investments (PRIs) to five urban regions that are challenging traditional ways of doing business in order to improve access to education, housing, health care, transit and jobs for their residents.
The following article summarizes the highlights from this dynamic session.
Each of the five cities – Baltimore, Cleveland, Detroit, Newark, and Twin Cities –fielded a team of five to seven key partners from the philanthropic, public, financial intermediary and nonprofit sectors as well as their local evaluator. The three days of peer-to-peer exchange provided participants with the opportunity to discuss common challenges and innovative ideas being pursued in each of their jurisdictions. The presence of a number of Living Cities members offered the site teams a chance to engage informally with leading foundations and financial institutions, and in turn gave our members a unique lens through which to view the problems and opportunities facing our nation’s cities.
A number of Living Cities members, including Phil Henderson, Surdna Foundation; Debra Schwartz, MacArthur Foundation; Dudley Benoit, JPMorgan Chase; and Christa Velasquez, Annie E. Casey Foundation, shared their expertise through presentations to the group. Others, including Patrice Cromwell, Sted Garber, Tom Kelly, and Scott Spencer, Casey Foundation; Laura Sparks, Citi Foundation; Lillian Kuri, The Cleveland Foundation; Alex Allen, Skillman Foundation; Laura Trudeau and Benji Kennedy, Kresge Foundation; Lee Sheehy, McKnight Foundation; and Kim Ostrowski, Prudential Foundation; provided their insights throughout the discussion sessions.
DEFINING & MEASURING IMPACT
Ongoing learning and reflection are critical components of the Integration Initiative. In keeping with our effort to make evaluation an integral part of our work, Day One was devoted to a meeting of our national evaluators – Mt. Auburn Associates and Mathematica – and the local evaluators from each site. The group discussed how to develop a fruitful partnership between the national evaluators, who will focus on systems change, social networks, and the financing component across the Initiative, and the local evaluators, who will collect site-specific data, systems change outcomes and site-specific learning.
Sites also presented their local theories of change, and highlighted some of the specific system change and project outcomes that they aim to achieve. The group discussed the challenges and rewards of evaluating systems change initiatives. For instance, a three-year time horizon is too short to capture direct impact on low-income people (such as changes in educational level or income across a neighborhood). However, in this time frame we may see system changes, such as new policies, practices, coalitions and funding patterns, that lay the groundwork for achieving better long-term outcomes.
In his dinner keynote, Phil Henderson, President of Surdna Foundation, provided a compelling introduction to the Initiative, recognizing the importance and complexity of the work each site is tackling. Phil highlighted these complexities by comparing the Integration Initiative to a recent project in woodworking he had undertaken. In crafting a beautiful piece of furniture, the methods are known, the work can be carefully planned, and craftsmanship is expressed in careful realization of details. In the Integration Initiative, the challenge is to lead diverse participants to a shared understanding of the problem and together, to create new solutions. This theme—of joint problem-solving, or adaptive leadership, that goes beyond known, technical approaches, was a recurring theme of the entire three-day session.
Day Two began with remarks by Judith Kurland, former Chief of Programs & Partnerships for Boston Mayor Tom Menino and current Director of the Center for Community Democracy and Democratic Literacy at UMass. She told the story of how the Mayor’s initial concern about out-of-school time ultimately seeded much more robust and long-term work on education system reform in Boston. This resonated with participants who have often begun with one distinct problem, only to find that larger issues come to dominate their work. Boston’s experience demonstrated the importance of carefully staging work so it builds upon itself and achieves critical scale.
POWER & PROMISE OF CITIES
In order for the sites to learn more about one another’s work, we challenged participants to present their initiatives as creatively as possible to the full group—and they rose to the occasion even more impressively (and entertainingly) than expected. From Cleveland’s economic inclusion rap to Twin Cities’ transit corridor skit to Baltimore’s a cappella performance of Hairspray’s “Good Morning Baltimore” to Newark’s parody of ESPN’s “Pardon the Interruption” sports talk show, each presentation vividly captured the character, challenges and opportunities of each city.
Perhaps most affecting was Detroit’s coupling of its team members’ personal stories as long-term Motor City residents and champions with the “ Imported from Detroit” commercial that had premiered just days before on Superbowl Sunday.
Overall, the presentations brought the power and promise of cities to life and strongly made the case for concentrated strategic reinvestment in our urban cores. We left this session with a greater understanding of our common difficulties—urban disinvestment, racial discrimination, economic disparities and our strengths—as well as commitment, pride and determination to make a difference.
STIMULATING CATALYTIC INVESTMENT
One of the core tenets of the Integration Initiative is that deploying a blend of capital – including grants, PRIs, and commercial debt – is vital to creating change on a large scale. Yet producing catalytic deals that balance financial return and social equity is challenging, particularly in this difficult economic time and these particular markets. It takes the combined will and resources of the public, private, philanthropic, and nonprofit sectors to craft and execute investments that will spark revitalization.
Participants were guided through some of the complexities of community development finance by a premier team of experts from lenders (JPMorgan Chase), foundations (MacArthur, Casey) and CDFIs (NCB Capital Impact, The Reinvestment Fund). Dudley Benoit, Vice-President at JPMorgan Chase, opened the session with inspiring remarks about his personal commitment to achieving social impact through lending and why the integration of private capital is so essential to neighborhood revitalization.
Debra Schwartz, Director of Program-Related Investments at the MacArthur Foundation and instructor at the University of Chicago presented an engaging “No Money, No Mission” crash course in basic financial concepts, understanding and managing risk, and the key tools used to make community development deals work.
Having grasped the basics, the group turned to a discussion of a case study – Financing the Auburn – that described a complex investment underway in Detroit. The Auburn, an abandoned brownfield site on the Woodward Corridor, is being developed with a mix of local retail and affordable and market rate housing and financed with nine different sources of funds. Site teams were challenged to reflect on the project, identify the tools they had available in their own jurisdictions to make difficult deals work and discuss what might make a deal particularly catalytic in their own cities.
Christa Velasquez, Director of Social Investments at the Annie E. Casey Foundation, facilitated a discussion between the site teams and an expert panel comprised of Annie Donovan, Chief Operating Officer of NCB Capital Impact and Don Hinkle-Brown, President of Community Investment and Capital Markets at The Reinvestment Fund, as well as Debra and Dudley. Critical insights from the discussion included the need to resist the “romance” of a particular project in order to focus on the big picture outcomes; the idea that in cities like Detroit, where capital has not been flowing, just completing a transaction can represent system change; the importance of being able to rely on partners behaving responsibly when confronting the challenges of financing in difficult markets (lenders called this “the real faith-based lending”); and the ongoing challenge of achieving social and financial equity simultaneously.
Not only did the session increase the knowledge and comfort level of the non-finance specialists in the room, but it also demonstrated how all of the players—from lenders to PRI makers to intermediaries–are working toward the same mission goals as the program champions. This shared agenda must form the basis of close, trust-based relationships that can weather the difficulties encountered in investments that aim to achieve both social good and financial return. Finally, the session highlighted the need for leaders to learn to speak both the language of finance and the language of program in order to maximize their contributions to the overall mission.
CULTIVATING LEARNING ACROSS SITES
The inaugural Learning Community aimed to create a learning cohort and peer network among the sites, which have many challenges in common yet have unique local innovations to share with each other. Two small breakout sessions fostered targeted discussion: a “role-alike” session that matched participants with their sector peers from other jurisdictions and a content-focused session that covered sector-based workforce strategies, small business development, anchor institutions, transit-oriented development, increasing community health, and systems thinking. Many conversations begun that afternoon continued through the evening reception and dinner or flowed into the breakfast roundtables the next morning.
CREATING COLLECTIVE IMPACT
On the final day, Marian Urquilla led the sites through a discussion of how to “lead through wicked complexity.” Through site-specific and large group discussion, she helped participants distinguish between the technical problems within their Initiatives, which can be solved by an authority or expert and have a known solution and the adaptive challenges for which solutions must be invented. Such challenges require new thinking and behavior to solve.
Marian also introduced the framework of _collective impact _– gaining “the commitment of a group of important actors from different sectors to a common agenda for solving a specific social problem.” Breaking into their city teams again, the sites grappled with how “common” their common agenda was for their initiative and to what degree initiative activities were mutually reinforcing and moving toward this desired impact. Sites then shared their discussion with the larger group. We learned that some cities are grappling with high levels of alignment among policy makers, but not at the implementation level. Other sites realized the need to step back and create a broader shared vision as a fundamental building block for their initiative.
Several themes emerged that will be addressed in future sessions: the need to increase communication and understanding across sectors and issue areas (one needs to be tri-lingual to succeed in the Integration Initiative—able to articulate initiative goals in programmatic, financial, and evaluative terms); the desire to increase involvement of the private sector in helping to solve long-term urban issues; the impetus to move past a focus on specific methods and techniques (orthodoxies) and toward a “balcony view” that allows us to reframe the problem and develop new strategies for achieving collective impact; and the acceptance of the ongoing challenge of creating economic opportunity for low-income populations – social equity – while boosting overall economic investment in weak market cities – financial equity.
As we move forward, each learning session will kick-off with a “deep dive” in a content area critical to the on-the-ground impact of the local initiatives. Our June convening will begin with a one-day conference on anchor strategies, providing an opportunity for the Integration Initiative sites to learn from one another as well as interact with other leading practitioners and researchers in the field. In an effort to help the sites set their foundation for success, the June session will also address the issues of civic engagement and data management.