Catalytic Philanthropic Capital Can Supercharge Affordable Housing Nonprofits

The housing crisis in the United States is getting worse. What was already a challenging situation has been compounded by the increasing frequency of severe weather events like hurricanes Harvey and Irma, as well as by proposed federal budget cuts for fiscal 2018 that would slash HUD programs by $6.2 billion. These and other factors are putting great strain on the insufficient resources set aside to help low-income people maintain an adequate standard of living.

This crisis cannot be solved by the public, private, or government sectors alone. A problem of this scale requires innovative, multisector solutions designed to preserve affordable housing, drive system change, and create economic opportunity for those who need it most.

Rising real estate prices and job growth are not signs of housing stability

Rising real estate prices aren't a solution to the problem; if anything, they're exacerbating it. According to a 2017 report by the Urban Institute, the market provides only twenty-one adequate, affordable, and available (AAA) units for every hundred renter households with income at or below 30 percent of the area median income.

Even in places where job opportunities are improving, the housing crisis is worsening. One-third of all U.S. households are paying more than 30 percent of their income on housing, yet between 2005 and 2015 the number of rental units costing less than $800 per month declined by 2 percent, while the number of units costing more than $2,000 increased 97 percent. Cities like Boston have witnessed a booming job market, leading to a population spike, followed by a development boom. Investors are buying land and sitting on it, waiting for values to rise even higher and leaving little to no property for affordable housing. Naturally occurring affordable housing — housing that is affordable without public subsidy — is at risk for acquisition and flipping, resulting in higher risk of eviction for people already living on the edge.

This scenario is playing out all across the country. Naturally occurring affordable housing is being lost at an alarming rate to developers with deep pockets who acquire the properties with plans to raise rents.

Thoughts on ‘As the South Grows’

As someone who has shed plenty of blood and tears after almost twenty years living and breathing Southern philanthropy, I am thrilled with the deep and committed work of Grantmakers for Southern Progress and the National Committee for Responsive Philanthropy (NCRP) on the As the South Grows series of publications. The writers — Ryan Schlegel and Stephanie Peng — spent a great deal of time outside the walls of their offices to capture the authentic voice of residents of six Southern sub-regions that have had small to middling philanthropic investment over the years.

My experience as a locally embedded Southern funder — first with the Rapides Foundation and then the Kate B. Reynolds Charitable Trust — over the past couple decades prompted a reaction to both what is presented and what I hope will be addressed in future reports. The following observations come from a same church/different pew perspective of someone who has spent the bulk of his professional career trying to get philanthropic activity connected to local champions in a way that makes sense to funders and communities alike.

1. Large regional or national funders increasingly want long-haul relationships. For decades, I have observed the lack of large funder investment in the South. In fact, I wouldn’t be surprised if some particularly underresourced and isolated places in the region have never had any formal funder investment — ever.

Southern communities can certainly use financial resources focused on locally produced efforts to drive community development and improvement. But it is just as, if not more, important that large funder involvement focus on: 1) the inclusion of these places as part of national learning platforms; and 2) enabling these communities to tap into the wealth of intellectual and social capital that national funders can access on their behalf.

For example, the Robert Wood Johnson Foundation's Culture of Health prize recognized the small town of Williamson, West Virginia (population 3,100), in 2014 with a $25,000 award. The award paved the way for government funders to support new work around built environment, healthy foods, economic development, and other initiatives designed to benefit this coal-country town.

Most Popular PhilanTopic Posts (September 2017)

September 2017. A month most of us would like to forget. But while folks in Texas, Louisiana, Florida, Puerto Rico, and the Virgin Islands were being pounded by Harvey, Irma, Jose, and Maria, our colleagues here at the Foundation Center were doing yeoman's work tracking the hundreds and millions of dollars (more than $300 million at last count) in corporate, foundation, and individual commitments for relief and recovery efforts. For folks interested interested in doing a deeper dive into who gave what, we posted (and regularly updated) some great tables during the month (see below) — as well as great posts by Michael Seltzer, Surina Khan, Tracey Durning, and Chris Kabel (Kresge Foundation), Amy Kenyon (Ford Foundation), and Sharon Z. Roerty (Robert Wood Johnson Foundation). Check it out...and RIP Tom Petty — our hearts are broken.

• Philanthropy Teams Up With Institutional Investors to Fight Climate Change (Tracey Durning)
• Powered by Women: Philanthropy in the Age of Trump Needs to Address Gender (Surina Khan)
• Harvey Relief: Corporate Pledges/Commitments (Table 1.1) (Foundation Center)
• Keeping the Dream Alive: The Case for Faster Funding (Donna P. Hall)
• SPARCC: Rewriting the Playbook on Equitable Infrastructure Investment (Chris Kabel, Amy Kenyon, and Sharon Z. Roerty)
• The Long Haul: Lessons From Charitable Responses to Previous Disasters (Michael Seltzer)
• Weekend Link Roundup (September 2-3, 2017) (Mitch Nauffts)
• Harvey Relief: Foundation Pledges/Commitments (Table 1.2) (Foundation Center)
• Commitments for Hurricane Irma Relief (Foundation Center)

What have you read/watched/heard lately that got your attention, made you think, or charged you up? Feel free to share in the comments section below. Or drop us a line at mfn@foundationcenter.org.

SPARCC: Rewriting the Playbook on Equitable Infrastructure Investment

Throughout the history of the United States, major public infrastructure investments have spurred economic development and shaped entire regions. From the opening of the Erie Canal in 1825 to the completion of the Interstate highway system in 1992, publicly funded infrastructure has played a critical role in the development of our modern economy.  

Yet the story of major infrastructure investments is hardly all positive: Residents of nearly any city in America can point to a large-scale project that displaced and decimated the wealth and social fabric of communities of color, for example. Interstate 81 destroyed the 15^th Ward of Syracuse, New York, while Interstate 75 dismantled Detroit's "Black Bottom" neighborhood, home to thousands of people and three hundred and fifty African American-owned businesses. In New York City, mega-projects like the Cross Bronx Expressway put a physical barrier between low-income communities of color and opportunities to earn better livelihoods.  

Major public infrastructure projects can also have harmful impacts on health and climate by increasing our dependence on fossil fuel consumption, increasing CO₂ emissions, exacerbating respiratory illnesses like asthma, and inhibiting people's physical activity. And too often, infrastructure investments in walking and cycling amenities, new transit, improved stormwater drainage, broadband, or parks don't reach the people and neighborhoods that need them most.

Mindful of the high stakes of getting infrastructure right, several leading foundations, working in close collaboration with four national partners, have launched the Strong, Prosperous and Resilient Communities Challenge. SPARCC aims to create opportunities for low-income people and communities of color through strategies that promote equity, better health outcomes, and climate resilience. All three of these goals can be realized by amplifying regional public investments in housing, transit, and other impactful infrastructure so that their benefits can be shared equitably—and by empowering the communities that stand to benefit.  By demonstrating how investments in the built environment can create a path for all of a city's residents to thrive, we aim to rewrite the national playbook for how such projects are designed and implemented in the future.

In this month's edition of the Community Development Investment Review, published by the Federal Reserve Bank of San Francisco, we describe how the Robert Wood Johnson, Ford, Kresge, and JPB foundations and the California Endowment — along with our implementing partners, the Low Income Investment Fund, Enterprise Community Partners, the Natural Resources Defense Council and the Federal Reserve Bank of San Francisco — worked together to develop this ambitious six-site, $90 million initiative. Together, we aim to test a different model for development — one that harnesses a major public investment in infrastructure to prioritize the needs of low-income people for healthy, resilient, and connected communities, rather than cutting people off or displacing them. We hope that SPARCC can point the way toward reversing a series of urban policy and programmatic decisions that kept communities of color out of the decision-making process, and resulted in decades of disinvestment in low-income communities across the nation, fueling enormous disparities in health and economic opportunities between zip codes that are often just a few miles apart.

We designed SPARCC to capitalize on catalytic moments, those rare times in the life of a community when it is ripe for action. While a significant infrastructure initiative (like the buildout of a regional transit system) is often that catalyst, new leadership, population shifts, strong public will, policy overhauls — or even efforts to recover from a natural disaster, like Superstorm Sandy — can also attract a significant pool of private and public capital and accelerate opportunity. SPARCC pursues a multiplier effect in that opportune moment — for example, taking advantage of the buildout of transit to prioritize affordable housing development near transit stops, or ensuring that a major investment in greenways or revitalization offers benefits to low income communities, rather than triggering rising rents and displacement.

After a competitive review process, the SPARCC partners selected six places for SPARCC to support over the next three years: Atlanta, Chicago, Denver, Los Angeles, Memphis and the San Francisco Bay Area. In that period, each region will be awarded $1 million in direct grant and technical assistance funds to support cross-sector efforts to retool policy and development practice. Collectively, the regions will benefit from an additional $14 million for programmatic support in areas including data systems, policy, and communications. A $70 million pool of investment capital — some from the participating foundations, some leveraged through institutions that finance community development — will also be available for community-based projects.

Recognizing that SPARCC's ambitious goals will require more than a three-year grant period to achieve, we will support cross-sector leaders and accelerate change so that the six regions are equipped to carry out the vision over the long term — and share their learning with communities across the country. We plan to share our own learnings along the way, and invite the engagement of new partners who are also interested in learning how to leverage systems to achieve health, climate and equity goals.

Public infrastructure dollars can and should do much more to promote equitable, resilient, and healthy communities. Our aspiration is that SPARCC will begin to provide a new roadmap, based on the experience of these six regions, that can inform policy and practice in cities across the U.S.

Read our full article here.

Chris Kabel is deputy director of health at  the Kresge Foundation, Amy Kenyon is a program officer for equitable development at the Ford Foundation, and Sharon Z. Roerty is a senior program officer at the Robert Wood Johnson Foundation.

Newsmakers: Laura Callanan, Founding Partner, UpStart Co-Lab

In its most recent Arts & Economic Prosperity report, Americans for the Arts found that the U.S. nonprofit arts and culture industry generated $166.3 billion in economic activity in 2015, prompting Robert Lynch, the organization's president and CEO, to comment, "Leaders who care about community and economic vitality, growing tourism, attracting an innovative workforce, and community engagement can feel good about choosing to invest in the arts."

But where were the impact investments? While the economic importance of the arts has long been recognized, arts-related organization and businesses often fly under the radar when it comes to comprehensive community development, and the relative lack of such investment in the creative economy was one of the things Laura Callanan was determined to explore when she established Upstart Co-Lab in 2016. What's more, Callanan — who majored in theater in college and began her professional career in the financial world, working as an investment banker on Wall Street after graduate school before serving as an endowment manager at the Rockefeller Foundation, a consultant to foundations at McKinsey & Company, and deputy chair of the National Endowment for the Arts — was well positioned to find out.

Earlier this year, Callanan and her colleagues at Upstart Co-Lab released Creative Places & Businesses: Catalyzing Growth in Communities (55 pages, PDF), which identified a $1.54 billion pipeline of more than two dozen projects administered by twenty-two creative places and businesses seeking impact capital. The findings came as a pleasant surprise to many in the arts community, and, according to Callanan, who was recently named to the NonProfit Times' Power & Influence Top 50 list, are a clear sign that the creative economy is ready for impact investment on a significant scale.

PND sat down with Callanan earlier this summer to discuss the findings of the report and the role philanthropy can play in catalyzing impact investments in the creative economy.

Philanthropy News Digest: The first thing that jumped out at me in the report was the almost complete lack of impact investment in the creative economy, despite the fact that the arts, in the most recent year of record, generated $704 billion in nonprofit and for-profit economic activity, or 4.2 percent of the country's gross domestic product.

Laura Callanan: Actually, since we published the report in April, the National Endowment for the Arts and the Bureau of Economic Analysis have updated their assessment of how much of the U.S. economy is driven by arts and cultural production. It's still 4.2 percent of GDP, but the dollar total is $730 billion, $26 million more than the figure mentioned in the report.

That's the best number currently available on the size of the creative economy, of which the arts are a core part. The National Endowment for the Arts emphasizes music, literature, visual art, and activities related to artistic disciplines. That means it's light on things like fashion, food, furniture making, and some other areas that we at Upstart Co-Lab include in our definition of the creative economy.

PND: That only makes the lack of impact investing in the creative economy more surprising. Why hasn't impact capital been flowing to these areas?

LC: We don't yet have dedicated investment products, investment funds, or investment managers with strategies that make it easy for individuals who are impact investors — or for institu­tions like foundations doing mission-related investing — to target their capital to the creative economy. Yes, an individual investor can buy a share of stock in Etsy, which is a public company, and feel like they're supporting the creative economy. And a foundation can make a program-related investment with a nonprofit arts organization or creativity-based social enterprise. But these one-off investments don't equal scale.

Let me give you an example of why that's a problem. Stockade Works and Stockade Studios in Kingston, New York, were started by the actress Mary Stuart Masterson and her business partner Beth Davenport. Stockade Works is structured as a nonprofit. Stockade Studios is structured as a for-profit social-purpose business. They've been approaching foundations about supporting their efforts to create a film/TV/media hub in the Hudson River Valley. This could be through a grant to the nonprofit, or a program-related investment, or a mission-related investment in the social-purpose business. But a foundation has to know that Stockade Studios exists, so it needs to have an active deal-sourcing process. And then the foundation has to do its own due diligence, its own risk assessment of the oppor­tunity. Plus track performance on the investment once it's made. These are things that an investment manager could do once, and then make the information available to any number of potential investors. Not being able to get information easily is a disincentive to investment.

Today, there are products, funds, and strategies that facilitate impact investment in education, in affordable housing, in support of women and girls, in support of the environment. Not surprisingly, those are all big areas where impact investors are directing their money. And it's not that we can't tweak and re-deploy existing investment products and funds and manager strategies for the creative economy. It's just that it hasn't happened yet.

PND: Looking out five or ten years, would you expect impact investing in the arts and the creative economy to be a focus only for larger foundations, or will foundations of any size have opportunities to participate?

LC: Everyone's able to pursue impact investing, from the individuals who invest $20 in a Calvert Foundation Community Investment Note to ultra-high-net-worth individuals, and from small foundations to some of the largest in the country, like the Ford and Gates foundations. Once we have the dots connected, and the products, funds, and strategies are in place, it won't matter whether you're an individual or an institution, or whether you have a modest amount of capital to deploy or a lot of capital to deploy. People and institutions today should be able to support the creative economy with impact investments just as they can support the environment, affordable housing, education, and other important priority areas.

PND: Do the politics of the moment help or hinder what you're trying to do with Upstart Co-Lab?

LC: To my mind, they shine a bright light on the gap we're trying to fill. There was a story in the Wall Street Journal recently that said: "No matter what the Trump administration does to the Environmental Pro­tection Agency, impact investing for the environment cannot be stopped." Of course, we can’t expect that to be the case if the administration pulls the plug on the National Endowment for the Arts, because impact investing for the creative economy hasn't gotten off the ground. But that just underscores the significance of the opportunity.

The NEA deploys $150 million a year for the arts. That's far less than the $17 billion annually that philanthropy puts into the arts. It's certainly a lot less than $8.8 trillion of impact investing assets under management in the United States today. If we can target a small portion of impact investing assets for creativity — as much, say, as currently flows through crowdfunding sites like Kickstarter and Indiegogo — it would be many times more than the budget of the NEA. As a country that cares about free speech, it's important that we support arts and crea­tivity at the federal level. But on a pure dollar basis, there are a lot of resources available in the impact marketplace that can be deployed in support of arts and creativity.

PND: What do you hope to accomplish with the Creative Places & Businesses report?

LC: I hope the report is the beginning of a robust conversation that intro­duces the concept of a "creativity lens" to impact investing and leads, sooner rather than later, to concrete action.

It is incredibly important that any definition of a creativity lens highlights creative places and creative businesses as an important long-time contributor to comprehensive community development. That's why we started the conversation where we did. There's a lot of discussion in the foundation arts community about cultural equity. If we want to shape a creative economy that is inclusive and equitable and sustainable, we have to back up our words with resources.

We know the future of the United States is the creative economy. We're no longer an agrarian economy; we're no longer a manufacturing economy. Today, what we really have is an innovation economy, an ideas economy. But what do we want that economy to look like in the decades to come? Do we want an economy where a few people get paid a lot of money to make apps, and the rest of us are driving for Uber and Lyft and don’t have a retirement plan or health benefits? Or do we want an economy that is inclusive, equitable, and sus­tainable; that is generating quality jobs at every level of the wage scale; and that fully celebrates the imagination and inno­vation that is present in every community in the United States?

PND: Where do you see things going with respect to impact investing and the creative sector?

LC: Upstart Co-Lab has had hundreds of conversations with impact investors and wealth managers over the last couple of years, and they all have clients who have been asking for impact investing opportunities related to arts, culture, and creativity. There's great potential here. Philanthropy did a lot to build the ecosystem of impact investing, social inno­vation, and social entrepreneurship. Arts philanthropy absolutely has a role to play in enabling this new creativity lens for impact investing. The work that philanthropy has done to build thought leadership, technical capacity, and awareness around creative placemaking has been an important early step.

PND: Has it been difficult to build on that early momentum?

LC: It's only just begun! What I'm excited about are the examples, those mentioned in the report and others that I learn about every day. In the last couple of weeks, for instance, I've had a chance to make site visits around New York City and visit Chicago. I see people who are ambitious and thinking big, who see the potential that can be unlocked by connecting impact capital with creative places and businesses. In Chicago, for example, there's an effort under way to redevelop the Avalon Regal Theater. Jerold Gary, an investor-entrepreneur has been actively working in the African-American community on the South Side, investing in residential housing. He had an opportunity to buy the theater — it's a landmarked 1920s property, amazingly detailed, with an ornately painted lobby. In its day, it was a large-capacity venue that drew A-list performers like Ella Fitzgerald and Michael Jackson, but it has been shuttered for quite some time. The good news is that they're on course to re-open the theater by the end of the year.

But it's not just about the theater. The Avalon is an anchor for a whole new cultural corridor on the South Side that's going to include retail space, incubator space where people can do creative work, and a museum of black music. The project is crucial to ensuring that the South Side has a stake in the emerging creative economy, because it's not just about nostalgia and the cultural expression of the past, it's about recognizing that creativity exists in every neighborhood, and that every neighborhood deserves places where people can develop and showcase their creativity.

PND: What role do you see for arts foundations in the development of an impact investing market linked to the creative economy?

LC: Philanthropy played a crucial role in establishing impact investing, social innovation, and social entrepreneurship. It was early philanthropic support that made it possible for people to explore these new ideas, build awareness and understanding, and establish standards, tools, and metrics that enabled the impact investing community to coordinate and grow. And now we see philanthropy taking the next step, bringing more endowment resources to bear on critical issues through mission-related investing. Foundations that support the arts, creativity, and innovation can follow this playbook for the creative economy.

For foundations that have been making traditional grants to the arts — but may not yet be ready to embrace impact investing as a tool to advance their mission — there's a lot to be done by supporting the growing ecosystem, investing in new ideas, investing in thought leader­ship and convening activities, in standards-setting and documentation of the types of projects we describe in the report. I wrote for Grantmakers in the Arts ;about what program officers can do, even if they don't have mission-related investing avail­able to them, and that includes things like making grants to build the ecosystem for impact investing in the creative economy and using their bully pulpit and convening power to spotlight what's happening in creative communities around the country.

One key thing program officers can do is bring to the attention of their fellow grantmakers the artists who are social entre­preneurs who are doing great work. They could be artists focused on the environment and climate change, artists who are focused on reforming the criminal justice system, artists who are focused on immigra­tion. You name it. Folks handing out social entrepreneurship awards always overlook the artist social entrepreneurs.

In short, philanthropy can play an important role in jump-starting the new idea of a creativity lens for impact investing and getting it to a place where the market can take it to scale.

PND: Have we reached a tipping point with respect to how philanthropy views impact investments in the creative economy?

LC: I certainly hope so. And we think there are three reasons why. One: creativity is cool. The excitement around creativity is palpable. You have mayors and governors commissioning creative economy reports and plans. They recognize that creative activity is going to be crucial to building wealth, ensuring social cohesion, and creating quality jobs in their com­mun­ities. When you look at surveys that ask corporate CEOs what will drive business success in the future, creativity in their workforce is top of the list. Just look at how many billions of dollars people have put through platforms like Kickstarter and Indiegogo — in small increments — to fund creative projects. Even people who don’t think they are particularly creative themselves are happy to invest $25 in someone else’s creativity, whether that's making a film, starting a band, painting a mural, you name it. Creativity is having a moment.

Two: at the same time, impact investing is having a moment. McKinsey & Company, the World Economic Forum, Forbes — all are telling us that impact investing is going mainstream. And as they launch first-time impact investing portfolios, there's no better time to encourage new impact investors to focus on an area that we know they care about: arts, culture, and creativity. As the field of impact investing becomes more devel­oped, there are more targeted opportunities for impact investors to put their money to work: for women and girls, organic food, education, housing, aging in place, sustainable fisheries. These are things that impact investors can support right now. The creative economy is simply too big to be left out of the picture.

The third reason this is a great oppor­tunity is because creative people gravitate toward solving problems, whether that means bringing jobs to the Hudson River Valley or launching an innovation district on the South Side of Chicago. In our research, we identified $1.5 billion in demand for impact capital over the next five years from creative places and businesses catalyzing growth in communities across the U.S. There are investable opportunities searching for values-aligned capital.

At Upstart Co-Lab, we think this is the right moment to apply a creativity lens to impact investing, and we're trying to bring as much energy, intelligence, and workable solutions to the challenge as we can.

— Matt Sinclair

[Review] 'The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class — and What We Can Do About It'

In The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class — and What We Can Do About It (Basic Books: 2017), urban studies theorist Richard Florida offers a mea culpa of sort for the back-to-the-city movement he has long championed. In books such as The Rise of the Creative Class, and How It's Transforming Work, Leisure and Everyday Life (Basic Books, 2002) and Cities and the Creative Class (Routledge, 2005), Florida argued that, if cities hoped to thrive in a competitive global economy, they needed to attract and retain talent — "[t]he knowledge workers, techies, and artists and other cultural creatives who [make] up the creative class.:

If nothing else, Florida's timing was impeccable. By 2000, the ranks of the creative class in the United States had grown to 40 million — a third of the U.S. workforce — and many of its members had left the suburban or rural communities of their childhood and headed to cities such as New York, Boston, Washington, D.C., San Francisco, Los Angeles, and Seattle, where they moved into neighborhoods that had been written off by the professional class and city officials. That story was repeated around the globe, as knowledge workers and creatives flocked to already vibrant cities such as London, Paris, and Tokyo; booming Asian metropolises such as Hong Kong, Shanghai, and Seoul; and sprawling, emerging mega-cities such as Lagos, Mexico City, and Mumbai.

Indeed, today — in a stunning illustration of the power of urban centers to transform societies through what Florida dubs the "3Ts of economic development" (technology, talent, and tolerance) — more than half the population of the globe lives in cities, and the United Nations estimates that by 2050 upwards of 70 percent of the global population will live in urban areas. Little wonder, then, that in recent decades urbanists have proclaimed "the triumph of the city" (the title of an excellent book by Harvard economist Edward Glaeser), or that the future of humanity is urban.

And yet this newfound appreciation for the richness, convenience, and stimulation provided by city living has not been without costs, as gentrification, rising rents, and real estate speculation have squeezed blue-collar and service workers out of neighborhoods and livelihoods, contributed to the re-segregation of public schools, and driven huge increases in wealth and income inequality. It is an economic failure that we should have seen but didn't, and from the Brexit vote in England, to the election of Donald Trump, to the growing popularity of far-right populist parties in Europe, we are living with the consequences of that failure. The New Urban Crisis is Florida's attempt to diagnose where things went wrong — and offer a prescription for how we can recover an urbanism that works for all people, not just elites and the creative class.

If that's too conceptual, allow me an anecdote by way of illustration: As I was finishing Florida's book in Washington Square Park in Manhattan earlier this summer, surrounded on all sides by buildings belonging to New York University (where Florida is a fellow), I could see, firsthand, his 3Ts at work. Across the way, diverse crowds of college students walked to their next class or appointment while sending photos to friends on the latest app; on the corner, a well-heeled couple waited impatiently for their Uber driver; and, a group of foreign tourists were listening to their guide about the history of the square. To the "urban optimist," it was a perfect illustration of "the stunning revival of cities and the power of urbanization to improve the human condition," while for the pessimist, it might suggest just how profoundly "modern cities [are] being carved into gilded and virtually gated areas for conspicuous consumption by the super-rich...."

And that's not the half of it. The juxtaposition of boundless opportunity and desperate poverty found in so many cities has led to mounting alienation and resentment. Indeed, Florida, who counted himself among the optimists "not too long ago," argues that to truly understand this new urban crisis (as opposed to the mid-twentieth-century urban crisis of deindustrialization and white flight), we need to recognize and come to grips with the fact that cities are both "the great engines of innovation, the models of economic and social progress," and "zones of gaping inequality and class division."

Florida identifies five key factors that have combined to create this crisis: 1) the growing economic gap between so-called superstar cities — where a disproportionate share of high-value industries, high-tech startups, and top talent are concentrated — and struggling industrial cities, or what he calls "winner-take-call urbanism"; 2) the steep rise in urban housing costs, which has resulted in the displacement of countless numbers of blue-collar and service workers, not to mention the poor and disadvantaged; 3) a rapid increase in inequality and segregation driven in part by "sorting" — a phenomenon in which creatives and the well-off congregate in neighborhoods formerly favored by the working middle class, creating a patchwork of relatively small areas of privilege surrounded by large tracts of poverty; 4) the growing crisis in the suburbs, where problems typically associated with urban areas — poverty, economic insecurity, crime, and segregation — are growing and becoming entrenched; and 5) the urbanization of the developing world, often without the improvements in standards of living that accompanied an earlier wave of urbanization in the U.S., Europe, Japan, and China.

At the core of these challenges, writes Florida, is an economic divide that shapes our built environment and determines where we live. "Simply put," he adds, "the rich live where they choose, and the poor where they can." This reality creates a host of related problems with both short- and long-term consequences (e.g., "people who live in far-flung suburbs and endure long commutes have higher rates of obesity, diabetes, stress, insomnia, and hypertension and are more likely to commit suicide or die in car crashes").

Florida illustrates each of these challenges using the latest demographic and economic data, much of it pulled from the Martin Prosperity Institute at the University of Toronto, which he leads. In fact, the book is filled with interesting graphs and charts, including one showing the number of houses one could buy in various U.S. cities for the price of a single apartment in Manhattan's chi-chi SoHo neighborhood (Memphis, Tennessee, tops the list with 38!). He also highlights his institute's New Urban Crisis Index, which reveals high levels of combined economic segregation, wage inequality, income inequality, and housing unaffordability not only in superstar cities such as Los Angeles, New York, and San Francisco, but in Chicago, Miami, and Memphis. (While interesting, many of the maps and charts could have benefited from better graphic design, and most of the data cited are for U.S. cities — a weakness in a book that purports to be about global trends.)

But what most readers will be looking for is a solution (or solutions) to this complex crisis of inequality. On that score, the glass is half full (or empty, depending on one's perspective). Florida points to the tension between the kind of "urban density and clustering that innovation and economic progress require" — and a "New Urban Luddism" — as the greatest impediment to the kind of equitable development and opportunity needed to overcome rising inequality. He has little sympathy for these twenty-first-century Luddites, who live in well-off communities and neighborhoods and are quick to say no to projects that may pose inconveniences but whose benefits in terms of the greater public good are indisputable. As he writes at one point, "If we are to...enjoy a widely shared and sustainable prosperity, we must become a more fully and fairly urbanized nation."

With that tension in mind, Florida sets out seven strategies designed to foster a "more productive urbanism for all": 1) make clustering work more efficiently by switching from a property tax to a land value tax; 2) invest in urban infrastructure to support greater density and growth; 3) build more affordable housing; 4) convert low-wage service jobs into living-wage work by raising the minimum wage; 5) address urban and suburban poverty by investing in people and places and providing a universal basic income; 6) shift development policies from nation-building to city-building and mobilize behind a global effort to build more resilient, prosperous cities; and 7) empower cities and communities by devolving political power from states and national governments to cities themselves.

As wide-ranging as these solutions are, the recommendations at the core of Florida’s books are fairly straightforward: governments and the private sector need to make investments in new and upgraded infrastructure and adopt tax and land-use policies that encourage increased density. Around the world, he writes, "strategic investments in basic infrastructure can help connect [poor people] to jobs; leverage their talent and productive capabilities and enable them to become more fully engaged; and, ultimately, turn the vicious cycle of urban isolation and poverty into a virtuous cycle of urban progress." In an American context, that means moving beyond the longstanding practice of encouraging suburban sprawl and expansion into rural areas and, instead, putting a new focus on the country’s neglected urban cores — a re-urbanization movement, if you will — that creates jobs and opportunities for all Americans.

While The New Urban Crisis may not be the twenty-first-century equivalent of Jane Jacobs' The Death and Life of Great American Cities or Lewis Mumford's The City in History, it is an interesting and highly readable update of Florida's creative class concept and an excellent introduction, for those not familiar with his earlier work, to how a new generation of knowledge workers and creative class types are shaping our economy, our cities, and, for better or worse, our future. The challenges posed by this development are profound, both in the U.S. and around the world, and The New Urban Crisis is a welcome contribution to the conversation around the best ways to address those challenges.

Michael Weston-Murphy is a writer and consultant based in New York City. For more great reviews, visit the Off the Shelf section in PND.

5 Questions for...Laurie Tisch, Founder/President, Laurie M. Tisch Illumination Fund

Laurie Tisch, whose Laurie M. Tisch Illumination Fund is gearing up for its tenth anniversary and will have given $100 million to support access and opportunity for New Yorkers by year's end, describes philanthropy as something that's in her DNA. Foundation Center's Jen Bokoff, a former employee of the foundation, spoke with Tisch about her recent donation to a new fund, her investment philosophy, and how philanthropy creates impact.

Jen Bokoff: Your family is known for funding major institutions, but your foundation was set up in part to help you make new, innovative gifts. What's a gift you're particularly proud of that defines your philanthropy?

Laurie Tisch: The New York City Green Cart Initiative, which was a $1.5 million public-private partnership. Initially, it was a city government initiative that created new permits for street vendors selling fresh fruits and vegetables in food deserts in New York, and we signed on to it soon after I started the foundation. It was a large amount of money for us, which some might call risky, but I prefer to think of it as following one's instincts. The data was clear: there are tremendous disparities in the rates of diabetes and heart disease among neighborhoods, with epidemic levels in certain low-income communities. Street vending was a way to increase access to healthy foods, and the program would also create hundreds of jobs for entrepreneurs. With our mission of increasing access and opportunity, the idea was just too interesting not to try; we pretty much went all in! For us, it was big on so many levels, from the number of organization involved to the number of vendors we hoped would be involved.

There were a lot of unknowns, though. No city had ever tried a program like this. How would we measure success? How would we let people know about it? I had a lot of questions, but the answers weren't always there. If we were too rigid, we might not have made the grant. But we're lucky to be a small foundation with the flexibility to see something like this through, which is a philosophy that has really defined our grantmaking. If an organization or initiative decides to change course, it's okay with us so long as the course correction is in dialogue with us.

JB: I read about your recent gift of $500,000 to a new fund established by Agnes Gund with the proceeds of the sale of a famous painting from her collection. Had you ever sold a painting with a philanthropic cause in mind? And why do so now?

LT: I've donated paintings to the Tang and to the Whitney, but I've never sold one with a cause in mind. I was invited to lunch at Aggie's about a month ago by Darren Walker, president of the Ford Foundation. The purpose was to meet Ava DuVernay, who directed the film 13th about racial inequity in the prison system. Aggie got up to speak about how the film and over-incarceration made a strong impression on her, and then she announced she was going to make criminal justice her major focus.

When she revealed she had sold her Lichtenstein to establish a new fund focused on criminal justice, it was remarkable. She had a real personal connection to that painting, and seeing her commit so deeply to a cause really showed how serious she was. When Darren later called me to talk about the initiative, I remembered that I had sold a painting a month earlier, and I thought to myself, "This fits perfectly." Max Weber, who painted the painting I had sold, was known for his passion for social justice causes, so it just was bashert! I donated most of the proceeds to Aggie’' fund, because when she and Darren are backing something, trust is not an issue. And the more I think about it, the more I realize there are so many collectors and wealthy people who could do this. It will be interesting to see whether people look at Aggie as a model and start to sell some of the art they've acquired for social justice causes; it really could add up to something significant pretty quickly.

Weekend Link Roundup (July 22-23, 2017)

Our weekly roundup of noteworthy items from and about the social sector. For more links to great content, follow us on Twitter at @pndblog....

Climate Change

According to the best-case scenario — a drastic reduction in greenhouse gases across the world — 48 percent of humanity will be exposed regularly to deadly heat by the year 2100. But "[e]xtreme heat isn’t a doomsday scenario," writes Emily Atkin in The New Republic, it's "an existing, deadly phenomenon — and it’s getting worse by the day. The question is whether we’ll act and adapt, thereby saving countless lives."

Community Improvement/Development

In a Perspectives piece on the MacArthur Foundation website, Tara Magner and Cate A. Fox discuss how the foundation's newly appointed Chicago Commitment team is beginning to think about its work to make Chicago a more connected and equitable city, and the opportunities and challenges that lie ahead.

Education

After twelve years, the Moody's Foundation has dropped its sponsorship of the Moody's Mega Math Challenge, a national math modeling competition for high school juniors and seniors, and the Society for Industrial and Applied Mathematics, which runs the competition, is looking for a new sponsor. Forbes associate editor Alex Knapp has the details.

Environment

According to a new report from international environmental NGO Global Witness, two hundred environmental activists were murdered in 2016, more than double the number who lost their lives defending the environment just five years ago. And the violence continues, with more than a hundred activists murdered in the first five months of this year. On the Skoll Foundation website, Zachary Slobig talks with Global Witness' Billy Kyte about the  “culture of impunity” that is enabling these gross violations of human rights.

Most Popular PhilanTopic Posts (June 2017)

Don't know if you all agree, but it's unanimous here at PND: Whoever invented the four-day weekend deserves a medal. We've got a busy July lined up, but before we get too far into it, we figured this would be a good time to look back at the blog content you found especially interesting in June, including new posts by Rotary International's John Hewko, Battalia Winston's Susan Medina, DataViz for Nonprofit's Amelia Kohm, regular contributor Kathryn Pyle, and the Center for Social Impact Communication at Georgetown University. Enjoy!

• Groundwork for Good Fortune: The Real Power of Strategic Planning (David Allyn)
• President's Budget Proposal Targets Foundations (Tim Delaney)
• The Diversity Gap in the Nonprofit Sector (Susan Medina)
• [Infographic] Navigating the Online World of Nonprofit Storytelling (Center for Social Impact Communication)
• Abdul Latif Jameel: Empowering Communities to Help Themselves (Lisa Philp)
• ‘Justice Matters’ and the Power of Film to Persuade (Kathryn Pyle)
• [Infographic] The Current and Future State of Nonprofit Philanthropy (University of San Francisco)
• A Marriage of Commerce and Cause: How Rotary Is Staying Relevant in the 21st Century (John Hewko)
• Show Me: Why Your Data Should Be Seen (and Not Just Read) (Amelia Kohm)
• Weekend Link Roundup (June 3-4, 2017) (Mitch Nauffts)

What have you read/watched/heard lately that got your attention, made you think, or charged you up? Feel free to share in the comments section below. Or drop us a line at mfn@foundationcenter.org.

Abdul Latif Jameel: Empowering Communities to Help Themselves

At the annual summit of the Family Business Council-Gulf (FBCG) in Dubai, Foundation Center's Lisa Philp led a plenary session on philanthropy in action in Gulf Cooperation Council (GCC) countries. She was joined by Hassan Jameel, deputy president and vice chair, Abdul Latif Jameel Domestic Operations, and Caroline Seow, director of sustainability, Family Business Network International. Philp is working with FBCG and FBN International to shine a light on thoughtful and sustainable philanthropy in the GCC. This post — part of a year-long series here on PhilanTopic that addresses major themes related to the center’s work — is an adaptation of a case study she wrote on lessons learned from Community Jameel.

Abdul Latif Jameel is an international diversified business with operations in seven major industries — transportation, engineering and manufacturing, financial services, consumer products, land and real estate, advertising and media, and energy and environmental services. Founded in 1945 as a small trading business that later evolved into a Toyota distributorship in Jeddah, Saudi Arabia, the company has achieved this scale and market success in just over seven decades.

The company's entrepreneurial founder, the late Abdul Latif Jameel, saw that better personal transportation could empower businesses and individuals and, in turn, advance the economic development of his nation. With that vision to guide him, he established an extensive operations infrastructure and over time built the largest vehicle distribution network in Saudi Arabia. Along the way, the company developed comprehensive expertise across the Middle East, North Africa, and Turkey (or "MENAT"), the region in which it operates, fashioning a reputation for building the "infrastructure of life." Today, Abdul Latif Jameel has a presence in more than 30 countries and employs 17,000 people from over 40 nationalities.

Jameel was a visionary and dynamic entrepreneur who dedicated his family and company to meeting the needs of his fellow Saudis. In 2003, Mohammed Abdul Latif Jameel, who had been named chair and CEO of the company a decade earlier, created Abdul Latif Jameel Community Services, or "Community Jameel," as it is known today. Community Jameel has evolved into a sustainable social enterprise organization focused on six priority areas: job creation, global poverty alleviation, food and water security, arts and culture, education and training, and health and social. From its headquarters in Jeddah, the organization coordinates a rage of programs focused on the development of individuals and communities in the MENAT region and beyond.

A New Interactive Snapshot of the Community Foundation Field

Thanks to the efforts of the 250+ community foundations who answered the call to participate in this year's Columbus Survey, the CF Insights team at Foundation Center is ready to share the results of our fiscal year (FY) 2016 annual survey with the field and beyond. I’m thrilled to announce that the findings can be accessed through our brand new, interactive Columbus Survey Results Dashboard.

Known among community foundations as the field’s "annual census," the Columbus Survey provides a current, comprehensive financial and operational snapshot of the community foundations that participated. Their responses, in turn, allow us to report on community foundation activity and general trends in the field over the last year, as well as better understand how community foundations are sustaining their work.

The new dashboard captures the activity of over 90 percent of the estimated asset dollars held by the field and represents an exciting step forward, as it allows community foundation leaders, staff, and others to view snapshot data in a format that’s intuitive and easy to understand. In addition, the interactive environment provides users with greater control over which subsets of data are displayed, while the platform itself makes it easier for us to get the data and our analysis to those who need it, more quickly.

Xavier de Souza Briggs, Vice President, Economic Opportunity and Markets, Ford Foundation: Changing the World Through Mission-Related Investing

In April, Darren Walker, president of the Ford Foundation, the second largest foundation in the United States and one of the most influential in the world, announced a billion-dollar commitment over the next decade to mission-related investments (MRIs). In making the announcement, Walker expressed a belief widely shared within his organization that "MRIs have the potential to become the next great innovation for advancing social good." Walker further suggested that foundations needed to expand their imaginations and tools if they hoped to successfully address "the large-scale problems facing the world today" and added that they shouldn't "neglect the tremendous power of markets, including the capital markets, to contribute."

Ford isn't the first foundation to commit itself in a significant way to mission-related investing, although its commitment would appear to be the largest by a foundation to date. Since the late 1990s, the F.B. Heron Foundation in New York City has distinguished itself as a pioneer in the field, and under the leadership of its president, Clara Miller, has become increasingly willing to challenge others "to jettison outdated operating models that leave resources untapped in the face of systemic social ills." Foundations such as Kresge, Packard, and Surdna have followed suit.

Shortly after Walker's announcement, PND spoke with Xavier de Souza Briggs, vice president for economic opportunity and markets at the Ford Foundation, about the foundation's decision, how and where the funds will be allocated, and what the move means for the field of impact investing.

De Souza Briggs joined the foundation from the Massachusetts Institute of Technology, where he was a professor of sociology and urban planning in the Department of Urban Studies and Planning. An award-winning author, commentator, and educator, he served from January 2009 to August 2011 as associate director of the Office of Management and Budget in the Obama White House. His most recent book, Moving to Opportunity: The Story of an American Experiment to Fight Ghetto Poverty, was published by Oxford University Press in 2010.

Philanthropy News Digest: Let's start with a question I'm sure many of our readers are asking.What are mission-related investments?

Xavier de Souza Briggs: MRIs are investments that pursue both attractive financial returns and social impact, also known as social returns, and they are made from a foundation's endowment, rather than counted against its program payout. That's the IRS definition, not ours, and private foundations have been making them for a while, albeit not on the scale of a billion dollars.

PND: Why did Ford decide that this was the right time to allocate a billion dollars to MRIs?

XSB: Well, first of all, we felt it was important, at this particular moment, to align as many of our assets as possible with our mission. That includes our grantmaking, of course, and our program-related investments, which, again as defined by the IRS, is the other kind of impact investment that foundations can make. Our building in Manhattan, where we've convened changemakers and social sector leaders for many years, is an important asset, too. But we've never made investments toward our mission out of our endowment, and we felt that, at this moment, the impact investment market was ready for us to take this step. And the board agreed, which is why it approved MRIs of up to a billion dollars over ten years. Now, we're going to be careful and gradual about how we put those funds to work, but we're quite excited about the opportunity.

PND: Did the board have any reservations?

XSB: The board had a set of smart questions. Are the investable opportunities really there? Are we confident that we can generate social return in addition to financial return, which is better understood and more easily measured? They were good, smart questions, and the board was very prudent in its approach to oversight. But ultimately it concluded, based on the foundation's many years of experience with impact investing, that we were ready and the market was ready, and that by stepping up now we could help catalyze a broader movement in the impact investing field, which includes not only foundations but other major institutional investors such as pension funds, sovereign wealth funds, and university endowments. That's where the really big pools of investable capital are, and that's where the larger promise lies.

Most Popular PhilanTopic Posts (March 2017)

Maybe the nicest thing we can say about March was that it came in like a lion and went out like a lamb. If the lion's share of your media consumption during the month was devoted to March Madness (of the sports or political variety) and you missed out on your regular PhilanTopic reading, well, here's your chance to catch up.

• Time for Philanthropy to Take Bold Action: Invest in Policy Change (Surina Khan)
• The Future of African-American Philanthropy (Gasby Brown)
• Apocalypse Later? Philanthropy and Transparency in an Illiberal World (Brad Smith)
• Foundations Engaging in Policy: Not an Option But an Obligation (John Mullaney)
• We Fund What We Value (Chris Massi)
• Putting Communities First: A Collaborative Fund for the San Joaquin Valley (Chet P. Hewitt )
• Weekend Link Roundup (March 4-5, 2017) (Mitch Nauffts)
• Moving the Needle on Youth Violence (Toni Irving)
• Weekend Link Roundup (March 18-19, 2017) (Mitch Nauffts)

What have you read/watched/heard lately that got your attention, made you think, or gave you a reason to feel hopeful? Feel free to share with our readers in the comments section below. Or drop us a line at mfn@foundationcenter.org.

Weekend Link Roundup (April 1-2, 2017)

Our weekly roundup of noteworthy items from and about the social sector. For more links to great content, follow us on Twitter at @pndblog....

Arts and Culture

The National Endowment for the Arts, which has been targeted for elimination by the Trump administration, is a "uniquely American [institution]: diverse and independent, with a significant part of the budget distributed to state and local organizations. It also collaborates with nonprofit and private donors." Hillel Italie reports for the AP.

Civil Society

There's a lot of noise out there these days and not nearly enough signal. A reminder, writes Kathlyn Mead, president and CEO of the San Diego Foundation, that "change starts with dialogue. [That before] we act, we must listen and attempt to understand each other. What are the challenges others face that we might not? How do our actions impact people both inside and outside our community? How does the past affect the future?" Good questions, indeed.

Community Improvement/Development

"Compared to many places around the world, [the U.S.] has developed an enviable community development finance system that productively uses public resources to leverage private investment, incentivizes banks to invest in underresourced communities, and fosters a sophisticated network of organizations and practitioners who excel at revitalizing places where others deem investment too risky," writes Kimberlee Cornett, managing director of the Kresge Foundation's Social Investment Practice. But for "all their positive impact, these strong, productive programs still [aren't enough to] meet the real need of our low-income neighborhoods, friends and families."

Black or white, economic pain is economic pain and lack of opportunity is lack of opportunity. Which is why, argues Bill Bynum, an Aspen Institute trustee and chief executive officer of HOPE, a credit union, loan fund, and policy center in Jackson, Mississippi, that "[n]o purpose is served toward the goal of creating broad prosperity by building barriers between oppressed groups."

Moving the Needle on Youth Violence

According to the Giving USA Foundation and Indiana University Lilly Family School of Philanthropy, Americans gave as generously as ever in 2015, setting a record for the second year in a row with total giving of $373.25 billion. That wasn't enough, however, to prevent problems such as income inequality, racism, and, here in Chicago, gun violence, from becoming even more entrenched. Which is why it is so important for donors and funders to do whatever they can to ensure that their charitable donations are making a measurable difference in addressing these and other challenges.

At Get IN Chicago, we use an evidence-based approach to move the needle on youth violence and, since 2013, have provided feedback and capacity-building support to community-based organizations providing a range of youth-focused services and interventions, from mentoring and parenting programs to community sports leagues and trauma-focused therapy.

Thanks to over two years of research and data collection and our work with more than sixty community organizations, anti-violence experts, and donor partners, we have developed five key recommendations for organizations looking to fund anti-violence initiatives and maximize the impact created by that support. Using these criteria to ensure programs' effectiveness, in 2017 we will be collaborating with more than twenty agencies to bring intensive case management, intake, mentoring, and cognitive behavioral therapy programs to high-risk youth in seven Chicago neighborhoods.

Based on that work, here are our recommendations for funders and donors:

1. Make sure the program you are thinking about funding actually addresses the needs of the target population you want to help. Our research shows that while most anti-violence programs work with at-risk youth, participants in those programs are not all subject to the same type or level of risk (i.e., violence or gang activity). That's why we have worked with programs to focus their efforts specifically on acutely high-risk youth — those at the greatest risk for gun violence, based on such factors as school absenteeism rates, mental health issues, justice system involvement, and the presence of a previously or currently incarcerated parent. Along the way, we've learned that it is essential to clearly define the population you are looking to help — not least because it makes it easier to develop a tailored strategy with respect to recruiting, engaging, and retaining participants from the target group, boosting your chances of success.