In 2010, the philanthropic collaborative Living Cities launched the Integration Initiative, an effort to transform the systems that shape the lives of low income people in five U.S. metropolitan regions – Baltimore, Cleveland, Detroit, Minneapolis-St. Paul, and Newark. A key goal of the Integration Initiative was to learn what is needed to move beyond piecemeal approaches to vital issues, and to engage multiple sectors – public, private, philanthropic and non-profit – in work that creates an integrated platform for stakeholders to work together on systemic change.
Central to the Integration Initiative was the investment of significant capital, in the form of grant dollars, below-market and market-rate loans, in projects that would catalyze the revitalization of under-served communities by supporting the development of businesess, jobs, housing and transportation in these regions. But as Living Cities moved from design of the Integration Initiative to implementation, it found that a number of implicit assumptions about how community investment capital gets deployed did not match the reality on the ground. For instance, the design assumed that:
Cities would have a local community development financial institution (CDFI) with at least $50 million in assets, sufficient scale to absorb $10-15 million of debt capital;
The local CDFI would have relevant expertise in the program area(s) chosen by the sited as their focus (i.e. not only affordable housing, but also small business, health, and mixed use transit-oriented development);
The CDFI would already be an active participant in an integrated civic leadership that included the public and private sectors, philanthropy and community groups.
As a result of this experience, Living Cities is developing a research agenda meant to illuminate the political, social, cultural, and financial elements that create capacity for the effective deployment of investment capital in under-served communities. Our focus is not on the supply of capital, although an adequate supply of capital is clearly fundamental. Nor are we focused specifically on the nature of, and ways to build, investment intermediaries that meet certain criteria of scale and sectoral reach. Instead, we are looking at how communities themselves deploy investment and create an environment that puts dollars to work on behalf of low income people. We intend to examine a variety of places, sectors and approaches and try to understand what actions can be taken—by public, philanthropic, non-profit and private sector leaders—to facilitate the flow and usefulness of community investment dollars.