The United States’ trajectory of urban development is intertwined with its history of business development. Cities grew up alongside businesses, which served local and national markets, employed workers, paid taxes, and purchased from other businesses. Today, suburbanization, expanded technology, and globalization have contributed to a markedly different role of businesses in cities.

There remains, however, a set of businesses with a strong connection to the places in which they are located, that have also grown in cities over the last 30-50 years. These businesses are the largest employers in 66 of the 100 largest inner cities in the U.S. They serve many of the same functions as their predecessors: they participate in local, national and even international markets, employ hundreds if not thousands of workers, and purchase from other businesses. The only thing they don’t do is pay taxes, because they are nonprofits with social missions—higher education, health, and cultural institutions–often referred to collectively as anchors.

Over the last year and a half, Living Cities has learned first-hand how meaningful a role anchor institutions can play in transforming the cities in which they are located. In particular, we’ve seen it in The Integration Initiative sites – in Cleveland anchors are working together to rethink and rework procurement and small business development, in Detroit they are helping to redensify the urban core through efforts to attract businesses and residents, and in Baltimore they are expanding efforts around local employment. In witnessing this work in action, Living Cities has come to believe that anchor institutions have an important role to play in transforming urban systems and connecting low-income people to economic opportunity.


The power and the complexity of what Living Cities is beginning to learn about anchors led us to focus the first Living Cities Design Lab on the topic of Anchor Institutions. In March, Living Cities hosted 60 leaders who work in anchor institutions or in other public, private, nonprofit or philanthropic organizations engaged in regional economic development and planning, small business development, finance, or workforce development. During the course of the Design Lab, the lab participants developed an idea of how systems function (or don’t) in metropolitan areas, deconstructed those systems and posited how anchor institutions might be able to play a key role with other institutions in reconfiguring these systems for increased economic opportunity.

The Anchor Institution Design Lab was an intense and interactive 24 hours of work, which in the end surfaced as many (if not more) questions as it did answers, but it also crystallized three core ideas that are important to consider when working with anchor institutions, and in all work focused on transforming urban systems.

Where should we target our efforts?

In community and economic development, we often talk about working at the neighborhood, city, county or regional level. One of the profound insights at the Anchor Institution Design Lab, was the rejection of socio-political boundaries, and the need to focus on the “functional geography,” or the geography that makes sense given the specific goal you’re trying to achieve.

In the Twin Cities, this notion of functional geography has come to life in nascent work by 16 anchor institutions along the emerging transitway that will connect the downtowns of Minneapolis and St. Paul called the Central Corridor. In 2011, these institutions were organized through the Corridors of Opportunity initiative, which seeks to build and develop a world-class regional transit system that advances economic development and ensures people of all incomes and backgrounds share in the resulting opportunities. Between the anchors, there are 100 capital projects underway or planned with an estimated value of $5 billion. Now the anchors are learning together and seeing how they can advance the Corridors of Opportunity initiative and their own goals.

Who’s responsible for making systems change?

One of the central principles in Living Cities’ work is that to have impact at scale, we have to move beyond delivering programs to transforming systems. For instance, a workforce program that trains 100 people each year is important, but it doesn’t change the conditions that contributed to 50,000 people being unemployed.

Systems are complex, and changing them requires that actors are brought together and jointly recognize they are working toward the same goal. To change a whole system, actors must learn together, and make changes within their own organization and across organizations that produce better outcomes.

In The Integration Initiative, we’ve seen anchor institutions be catalysts for organizing, learning and helping to change systems. In Detroit, Wayne State University, the Henry Ford Health System, and Detroit Medical Center worked together with the Woodward Corridor Initiative to create the Live Local incentive program to attract employees to buy or rent in the neighborhoods where the anchors are located. The program was so successful that the first round of funding was used in 6 months, and 5 private-sector employers were inspired to copy the program for their employees.

What is the systems change you’re trying to achieve?

At the Anchor Institution Design Lab and in The Integration Initiative, questions about systems and systems change have helped us develop a more explicit way of talking about these concepts. A system is a network of interdependent functions that are connected through a web of relationships that make up the whole. Systems change is the process of naming and reconfiguring those functions and connections to yield better outcomes.

For instance, in Baltimore, the Baltimore Integration Partnership has a goal of reconnecting African-American men in the city to economic opportunity. They’re working to reorient the workforce system by recruiting leaders from government, nonprofits, philanthropy, business and anchor institutions to participate in their systems change process. Now, they’re testing a range of strategies in order to learn what types of policies and practices can change the system as it is and how to yield better results.

At Living Cities, we believe that anchor institutions have an important role to play in the success of cities and their residents. But, anchors are not a silver bullet, just as business was not before them. Anchor institutions can provide a powerful entry point, tremendous intellectual resources, and meaningful leadership for rethinking systems that are central to the success of cities and their low-income residents—small business development, land use and transportation planning, workforce development, health, and education. But they cannot and should not be asked to do it on their own.