This week, we’re sharing a round-up of articles and information that examine different perspectives on capital and private-sectors approaches to systems change. These are #GoodReads you won’t want to miss. Happy Reading!
In Defense of Financial Innovation - By Andrew Palmer, Foreign Affairs
Since the financial crisis of 2008, banks and other financiers have often been demonized. Some critics wax nostalgically for the days of George Bailey’s Savings & Loan in “It’s a Wonderful Life.” Andrew Palmer reminds us of the numerous financial innovations that have benefited society and points out that finance is still the home of visionary innovators looking to solve some of the world’s grizzliest problems.
Recommended by Eileen Neely, Director of Capital Innovation
Can Social-Impact Bonds Really Have Big Impact? - By Clara Miller, The Chronicle of Philanthropy
Clara Miller offers an insightful look into Pay for Success projects and their potential value, and limitations, in addressing our most pressing social issues. Her point of aligning incentives is a great one. While I think the projects we’ve invested in at Living Cities appropriately share risk with the providers (while also giving them upside potential), it’s important to make sure the risks are shifted and the benefit is realized by the people served. (Note: You will need a subscription to view this article.)
Recommended by Ellen Ward, Senior Investment Associate, Capital Innovation
Turning Empathy into Action - By Kate Hanisian and Shiloh Turner, Stanford Social Innovation Review
Collective impact initiatives often struggle to integrate the voice of the “end user,” or people they seek to help, into their programmatic design. One tool developed by the private sector—design thinking—can help build in a sense of empathy to community engagement approaches used by collective impact initiatives. This blog post highlights several examples of how design thinking was used to strengthen different collective impact partnerships.
Recommended by Juan Sebastian Arias, Program Associate, Collective Impact and Jeff Raderstrong, Program Associate, The Integration Initiative
Racial Equity and Inclusion
Philanthropy’s Misguided Ideas for Fixing Ghetto Poverty: The Limits of Free Markets and Place-Based Initiatives - By Peter Dreier, Nonprofit Quarterly
One of the best reads on social justice philanthropy. I find that the argument is strengthened by adding in historical context:
Indeed, since the 1980s, most discussions within the philanthropic world of the “urban crisis” or of what to do about “ghetto poverty” miss the larger picture of economic inequality and the concentration of income, wealth, and political power. When most philanthropists and policy experts look at low-income neighborhoods, they miss the broader picture—that these places are part of a system of economic segregation resulting from government policies that embrace free-market ideas.
Recommended by Daniela Pineda, Associate Director, Evaluation and Impact
Another Reason to Promote Social Equity in U.S. Metros: Job Growth - By Tanvi Misra, CityLab
ICYMI (or in case you missed it!): Metros with greater racial and economic integration seem to have better economic performance, according to new research from UC Davis.
Benner and Pastor found that a 1 point increase in a measure of income inequality called the Gini coefficient was associated with a 21 percent rise in the likelihood that the metro region fell out of its growth spell. So the higher the local income inequality, the more likely that region’s employment growth spell was interrupted. (While the new study establishes such notable correlations, this analysis can’t prove causative links.)
Recommended by Brian Nagendra, Senior Investment Associate, Capital Innovation