Cities Building Community Wealth, a new report from the Democracy Collaborative invites us to imagine: What would happen if economic developers, city managers, mayors, and other caretakers of local economies thought differently? How might local economies be different, if these city economic development leaders discarded the complex algorithms they use in deal making, if they stopped focusing on abstract inputs and outputs, and instead focused on people and community?
Too often in economic development, we look mostly at data: We understand the educational attainment of a city’s workforce; we focus on buildable space; we consider connectivity to transit systems; we measure exports or count square feet of green space. But people and communities are often only referenced as units of measure, or as inputs to make businesses and economies thrive. In many cities, this type of thinking has led to increasing disparities in wealth and prosperity. It has led to certain neighborhoods and populations thriving, as others remain in the shadows, struggling. Yet our frameworks seem to miss this. Economic development operates on an implicit assumption that everyone benefits from a city’s prosperity and economic growth. But that’s a sad fallacy.
There are other fallacies in the traditional approaches of economic development. Like the emphasis on strong downtown development and vibrant commercial districts. Or the belief that big business drives employment and economic growth. These are the very approaches that are failing to reach many of the communities most in need of economic opportunity. There are communities leading the way to a new paradigm of economic development. These communities are putting people first and pushing equity, inclusion, and sustainability to the fore. They’re creating land trusts to ensure equitable development without displacement. They’re creating jobs and wealth through ownership models like worker-owned cooperatives, where the notion of maximizing shareholder value has been replaced with a commitment to workers and often the environment. They’re also looking to anchor institutions as sources of local jobs, and as economic engines that can invest in local businesses and direct purchasing to businesses owned by people of color, women, and immigrants.
This new approach to economic development puts people and community first, and focuses on creating broadly held wealth. The Democracy Collaborative has coined the term “community wealth building” to describe this approach to systems-level change to create a more inclusive economy.
Cities Building Community Wealth showcases successful approaches from cities around the country. At this time of growing inequality, it’s time for people-focused economic development that leads to true community wealth building.
Director, Strong Local Economies
Surdna Foundation, New York, New York
Fall is always a busy time at Surdna. The sprint from Labor Day through Thanksgiving is just that – a sprint. There are dozens of conferences, meetings and site visits that are crammed into about 12 weeks, and Surdna book-ends the period with two board meetings of our own. This is nothing new. But this fall has been anything but ordinary for Surdna. Surdna in late November looked quite a bit different from Surdna at the end of August. Several key leaders have departed, while new ones arrived, and we embarked on exciting new work.
Of course, the details of these changes are where it gets interesting. We start with the expected changes in leadership—the departures of veteran board members John Hawkins and Libby Andrus, two fourth generation descendants of Surdna’s founder John E. Andrus, who between them had served more than 40 years. We have been anticipating this loss and trying to imagine how their absence from our board meetings, from committees, and from working groups will affect us and the quality of our work. We have tried to prepare, and I think we’re ready. Part of what makes us ready is the arrival of new board leadership. The different talents brought by Caitlin Boger-Hawkins and Peter Voorhees, both of the family’s fifth generation are going to be tremendously beneficial to the foundation’s work, and great for the board. We certainly don’t expect our two newest board members to fill the shoes of John and Libby, but we anticipate the unique contributions they can and will make to the foundation.
The unexpected leadership change was the departure of Sharon Alpert to take the remarkable opportunity to be the next president of the Nathan Cummings Foundation. While we have begun to map the post-Sharon future, her contributions were so wide ranging and deep I quickly concluded that trying to find the “next Sharon” is not the right approach. Rather, it’s a time to take a close look at what she’s leaving behind and what the leadership challenges are for the foundation over the coming few years.
The final pieces of this fall’s changes are the culmination of the amazing contributions of two key board-staff working groups—Centennial and Investment Policies and Practices. Both working groups have pointed us towards essential new opportunities for the foundation, work that expresses the energy, creativity, and deep capacity of this institution as we approach our 100th year. We are now stepping forward from theory to action on our centennial year, and beginning to fill in the important details of how we will make good on the board’s decision to move forward with developing a mission-related investing plan.
And, yet, if we only focus on these three significant changes—board leadership transitions, the departure of a key staff leader, and our embarking on new work—we are in danger of missing the remarkable work that is the heartbeat of the institution. Our program teams have been deeply engaged in grantmaking, spreading and learning new ideas, speaking at conferences across the country, appearing in various media, and trying to develop work based on the annual plans they drafted over the summer. I am in awe of the energy and creativity that our program teams bring to the work every day.
Institutions, in the end, are just people. And it’s Surdna’s people that make us who we are. Our ability to attract talented women and men who share our commitment to the values of equity, inclusion, and diversity, and are dedicated to advancing our mission of fostering just and sustainable communities, is an important sign of the health of the foundation. I believe what attracts people to Surdna, whether as board members or staff, are two things. First, we are clear about what we want to accomplish. We have taken the time to name what we care about in our mission statement, and we have built an institution that reflects that mission. We hear time and again that people are attracted to that clarity, and that outsiders observe that Surdna really does try to walk our talk. But just being about important work isn’t enough to attract and retain remarkable people. It’s the second quality of Surdna that I think may be even more important—we give people the flexibility, the room, and the support they need to do what they do well. This starts at the board level, where the trustees have taken great care in creating a culture where every voice matters and an ethos that board work should—and does—continuously add value to the foundation’s work. This means that board members come to Surdna because the work is compelling and they stay because they believe they are truly contributing. And at the staff level, I believe my chief responsibility is to position our extraordinary staff so that they can deliver on whatever their unique skills and talents are. This means that at Surdna, we trust our colleagues, support each other, and push each other to really own the work. In addition to this, the unusually frequent interaction among board and staff, allows all of us to see the contributions we can make to further the mission.
These features of our operations and our culture allow us to contemplate, with great optimism, a future for the foundation not only for the immediate post-John, Libby, and Sharon phase, but a future beyond all of our tenures. Surdna has lived for nearly 100 years, and if it’s to flourish in its next century it won’t be because of a handful of individuals. It will be because of both the current group of us, and the many generations of future board and staff who will care both about the work of the foundation, whatever that may be, and about creating the best possible environment for the people of Surdna to thrive.
Surdna Foundation and Goldman Sachs Program Awards $50,000 to Meda for Accelerated Growth in Lending to Entrepreneurs of Color
Today, the Surdna Foundation, Goldman Sachs 10,000 Small Businesses, and Opportunity Finance Network (OFN) awarded a $50,000 grant to Minnesota-based community development financial institution (CDFI) Metropolitan Economic Development Association (Meda) for excellence in small business lending. Meda accepted the Small Business Leader Award (SBLA) for Mission-Driven Lenders at OFN's annual conference in Detroit. In its second year, the award honors accelerated growth and excellence in mission, impact, and financial sustainability.
Meda has increased small business lending by more than 200% in the past three years and focuses all of its lending to entrepreneurs of color who have historically had a lack of access to capital. The SBLA Selection Committee recognized Meda for its portfolio of services and programs that address these barriers, demonstrated growth in small business lending overall including loan originations, and the lender's outstanding financial performance and sustainability, including high asset quality, self-sufficiency ratio, and positive operating results.
"Meda has a proven history of helping entrepreneurs grow and create jobs, and we are proud to recognize them for their excellence in small business lending," said Esta Stecher, Chief Executive Officer of Goldman Sachs Bank USA. "At Goldman Sachs, we are committed to helping small businesses reach their full potential and together with our partners will continue to highlight leading mission-driven lenders who are providing capital and support to the areas that need it most.”
Meda works hard to assist sustainable minority owned employers that create quality jobs. Meda's small business loans have created or retained nearly 8,000 jobs of which 52 percent are held by people of color; 85 percent of Meda's borrowers' have been able to provide employees a level of income at or above the living wage. The organization's success is a direct response to the implicit bias in the market that creates barriers for diverse business owners.
In 2014, using $4.9 million of its own capital, the organization secured an additional $20.8 in financing. Leveraging its CDFI capital, currently at 6:1, is a performance measure for the organization. As each client business develops and grows a mainstream banking relationship, Meda’s capital is returned to revolve again and meet the needs of its clients.
Philip Henderson, President of the Surdna Foundation said, “Meda understands that equity is a recipe for growth. The entrepreneurs of color to whom they’re lending and offering their know-how, are growing small businesses and creating quality jobs in their communities.”
“Our work starts with the minority entrepreneurs who display grit and determination, despite major obstacles, to fulfil their goal of owning and successfully running a business. They persevere in order to have a better future for themselves, their family and community,” said Gary Cunningham, President and CEO of Meda. “It is a true honor to have the work of our staff and volunteers recognized. They make Meda happen. Receiving this award lets us continue our work and will open doors to expand our resources and cultivate relationships that will allow us to help more entrepreneurs of color.”
"Meda is helping to create equity in a market that has a long-standing history of excluding entrepreneurs of color," said OFN President and CEO Mark Pinsky. "Their continued success proves that delivering responsible and affordable capital where it can have the most impact is a sustainable and successful business model."
To learn more about the Small Business Leader Award for Mission-Driven Lenders, visit http://ofn.org/small-business-leader-award.
About Goldman Sachs 10,000 Small Businesses
Goldman Sachs 10,000 Small Businesses is a $500 million investment to help small businesses in the United States create jobs and economic growth by providing entrepreneurs with a practical business education, access to capital and business support services. The program is based on the broadly held view of leading experts that greater access to this combination of education, capital and support services best addresses barriers to growth. The program is active in urban and rural communities across the United States. Sites include Chicago, Cleveland, Dallas/Fort Worth, Detroit, Houston, Long Beach, Los Angeles, Miami, New Orleans, New York, Philadelphia, and Salt Lake City, as well as a National Cohort at Babson College. Access to capital is also available in parts of Georgia, Kentucky, Maine, Minnesota, Montana, Oregon, Virginia and Washington. For more information, visit www.gs.com/10000smallbusinesses.
About the Surdna Foundation
The Surdna Foundation seeks to foster sustainable communities in the United States -- communities guided by principles of social justice and distinguished by healthy environments, strong local economies, and thriving cultures. For five generations, the Foundation has been governed largely by descendants of John Andrus and has developed a tradition of innovative service for those in need of help or opportunity. Learn more at surdna.org.
Opportunity Finance Network (OFN), the leading national network of private financial institutions, creates growth that is good for communities, investors, individuals, and the economy. Members of OFN are community development financial institutions (CDFIs) that deliver responsible lending to help low-wealth and low-income communities join the economic mainstream. Through 2014 OFN's network originated $42 billion in financing in urban, rural, and Native American communities. This financing has helped to create or maintain more than 934,000 jobs, start or expand nearly 143,000 businesses and microenterprises, and support the development or rehabilitation of nearly 1.5 million housing units and 9,800 community facility projects. For more information, visit ofn.org.
Meda is a nonprofit organization that serves businesses owned and managed by entrepreneurs of color. Meda provides consulting expertise, access to capital, financing, leadership development, corporate networking, mentoring and educational opportunities. Its services include valuable resources that are open to all Minnesota businesses pursuing government contracting and funding opportunities through the Procurement Technical Assistance Center and the Small Business Innovation Research program.
For more information, visit http://meda.net/.
Strategies rooted in broad ownership and stronger local economies emerging as an alternative to traditional subsidy-driven economic development
In an era of persistent urban inequality and chronic unemployment, new alternatives to the traditional economic development strategies that have failed to bring broad and evenly distributed prosperity to America’s cities are clearly needed. The Democracy Collaborative’s new report, Cities Building Community Wealth, responds to this challenge by highlighting best practices in inclusive innovation from twenty cities across the country, and offering a unified vision of the underlying new paradigm of community-focused economic development. The report was produced with the support of the Surdna Foundation
The authors of the report, Democracy Collaborative Senior Fellow and Executive Vice President Marjorie Kelly and Sarah McKinley, Democracy Collaborative Manager of Community Development Programs, name this emerging approach “community wealth building,” which they define as: “a systems approach to economic development that creates an inclusive, sustainable economy built on locally rooted and broadly held ownership.” Community wealth building “calls for developing place-based assets of many kinds, working collaboratively, tapping large sources of demand, and fostering economic institutions and ecosystems of support for enterprises rooted in community. The aim is to create a new system that enables inclusive enterprises and communities to thrive and helps families increase economic security.”
The report builds from promising developments and key innovations on the ground in cities across the country. For example, a coalition of economic justice advocates in New York City worked with city council leaders in a campaign that resulted in the city allocating millions to develop worker cooperatives in underserved neighborhoods: $1.2 million for 2014-2015 and $2.1 million for 2015-2016. This coalition also helped pass a new law requiring the City’s economic development arm to track the level of municipal contracts awarded to such cooperatives.
In Portland, Oregon, officials from the Portland Development Commission worked with community partners in low-income areas to launch a Neighborhood Prosperity Initiative, in which six districts were created in areas with high concentrations of people of color and high poverty, allocating $1 million to each district to help implement participatory visions for improving local commercial areas to foster economic opportunity and neighborhood vitality. Meanwhile, in Burlington, Vermont, the city government provided key support for the creation of the nation’s largest urban community land trust, which ensures a supply of permanently affordable housing. And in Richmond, Virginia, the city has created an Office of Community Wealth Building to provide a unified home for integrating and advancing such transformative approaches to community economic development.
Drawing from examples like these, the authors identify seven key drivers underlying these new strategies:
|Place||Mobilization and use of underutilized local assets for the benefit of all residents|
|Ownership||Promotion of broad-based, local ownership, rooted in cooperation and community|
|Inclusion||Focus on living wage jobs providing economic security for all families|
|Multipliers||Development of buy-local strategies to keep money circulating locally|
|Workforce||Connection of training to real jobs, focusing on barriers to employment|
|Collaboration||Cooperation between stakeholders—nonprofits, philanthropy, and anchor institutions|
|System||Creation of institutions and support ecosystems to build a new normal for the economy|
The Democracy Collaborative hopes this report will help amplify and strengthen the work of the local officials who are developing innovative paths forward for America’s cities in a time of great challenges, but also incredible possibility for a shift to a more equitable and sustainable economy. As Shawn Escoffery, Director of the Surdna Foundation’s Strong Local Economies Program, writes in his preface to the report: “What would happen if economic developers, city managers, mayors, and other caretakers of local economies thought differently? How might local economies be different, if these city economic development leaders discarded the complex algorithms they use in deal making, if they stopped focusing on abstract inputs and outputs, and instead focused on people and community?”
About Cities Building Community Wealth:
The Democracy Collaborative’s report, produced with the support of the Surdna Foundation, will be available on 11/9 as a free PDF download at: http://democracycollaborative.org/cities
The report includes profiles of innovative municipal policies in:
|Austin, TX||Cleveland, OH||Madison, WI||New York, NY||Portland, OR|
|Boston, MA||Denver, CO||Minneapolis, MN||Oakland, CA||Richmond, VA|
|Burlington, VT||Kansas City, MO||Newark, NJ||Philadelphia, PA||Rochester, NY|
|Chicago, IL||Keene, NH||New Orleans, LA||Pittsburgh, PA||Seattle, WA|
About The Democracy Collaborative:
The Democracy Collaborative is a national non-profit research and consulting institution dedicated to developing new ways to build community wealth and stronger local economies, including through transformative partnerships with city governments and other municipal stakeholders. For more information, visit: http://democracycollaborative.org
The Surdna Foundation today announced the election of Caitlin Boger-Hawkins, a college administrator, and Peter Voorhees, a corporate finance lawyer, to the foundation's Board of Trustees. Ms. Boger-Hawkins and Mr. Voorhees are fifth generation descendants of John Emory Andrus who established the foundation in 1917. They join a 12-person board of directors which includes three non-family members.
Voorhees and Boger-Hawkins each served on the board of the Andrus Family Fund (AFF), a fund of the Surdna Foundation, which manages its own grantmaking focusing on supporting organizations that advance social justice and improve outcomes for vulnerable youth.
"We are very excited to welcome Caitlin and Peter to the Surdna Board of Directors," said Jocelyn Downie, Chair of the Board and a Professor in the Faculties of Law and Medicine at Canada's Dalhousie University. "Caitlin will bring to the board a deep commitment to working with diverse populations and valuable experience as a strategic planner and program evaluator. And Peter is an experienced international lawyer whose deeply analytical mind and understanding of complex financial transactions will be of tremendous help as we continue to expand our thinking about mission related investing."
The Surdna Foundation retained the executive search firm Isaacson Miller to recruit and vet candidates from among the more than 400 eligible descendants of John Emory Andrus.
"Peter and Caitlin will become board members at a very exciting time for Surdna," said Phillip Henderson, President of the Surdna Foundation. "In 2017, we will celebrate our centennial which will be an important moment during which we will take stock of the foundation's history, learn from-and share-lessons from 100 years of board governance, and grantmaking. And, think deeply about how we want to continue to invest our capital to create economic and social value."
Henderson added that the appointment of Peter and Caitlin to the board is yet another testament to the foundation's successful process of identifying, recruiting, and vetting new voices. "They are now stewards of the Andrus family's philanthropic legacy," said Henderson, "but that does not imply that Caitlin and Peter will simply inherit or accept and sustain a way of doing things. Over time they will introduce new ideas and experiences to the foundation's grantmaking. They will preserve, but reinterpret, the mission within the context of the time."
Caitlin Boger-Hawkins, 45, is Director of Planning, Research and Institutional Effectiveness at Northwestern Connecticut Community College, a position she has held since 1998. Her leadership in strategic planning and advocacy of data-driven decision-making support the college's mission of serving students with limited access to higher education by identifying and reducing the multiple barriers that threaten their ability to succeed. She is also an experienced program evaluator whose work includes collaborating with faculty to design a process for the collection and use of outcomes data to improve student learning. She serves on the board of corporators of the Maria Seymour Brooker Memorial, a nonprofit whose services include a mixed income family daycare center, pre-school, and dental center for uninsured children. She holds a bachelor's degree from Wesleyan University and a master's degree from the Center for the Study of Higher and Postsecondary Education at the University of Michigan, Ann Arbor.
Peter Voorhees, 42, is a New York State-qualified attorney and partner in the Amsterdam office of international law firm Simmons & Simmons LLP, where he practices corporate finance law. Over the course of his career, first in New York then in the Netherlands, Peter has advised financial institutions, corporations and governmental organizations with respect to numerous corporate finance matters in various jurisdictions throughout the world. Peter's client base includes several of the most significant issuers and underwriters active in the international capital markets. He routinely advises clients on conflicts of interest, anti-corruption and reputational risk matters and the related public disclosure required in response to these considerations. Peter has been acknowledged for his outstanding work by organizations, including Chambers, Legal 500 and the International Finance Law Review. Peter received his bachelor's degree from Tufts University, and a law degree from Tulane University.
Boger-Hawkins and Voorhees replace long-time board members Libby Andrus and John Hawkins both of whom are retiring from the board.
About the Surdna Foundation
The Surdna Foundation seeks to foster sustainable communities in the United States -- communities guided by principles of social justice and distinguished by healthy environments, strong local economies, and thriving cultures.
Food Systems Investments Benefitting Families, Farmers, Rural Communities; PRI to Generate Financial, Social, and Environmental Returns.
The Surdna Foundation today announced a $500,000 Program Related Investment (PRI) to Fair Food Network. This low-interest loan will support Fair Food Network’s Fair Food Fund (the Fund), which provides financing and business assistance to Northeast-based good food enterprises that connect small and mid-size farms with consumers who want more local, sustainably grown food.
This investment, along with an earlier $750,000 Surdna PRI to RSF Social Finance, is part of the foundation’s broader effort to encourage a more effective deployment of capital needed to rebuild a regional food infrastructure with benefits for local entrepreneurs, area families and farmers, and rural communities. The investment is also an example of how philanthropy is creating new asset classes for capital seeking financial, social, and environmental returns.
“Efforts like Fair Food Fund provide a crucial link between funders who want to catalyze change in our food system and good food entrepreneurs who are creating innovative social enterprises,” said Alison Corwin, a Program Officer in Surdna’s Sustainable Environments Program. “Too often such businesses find it difficult to access the right mix of capital, or even identify lenders who understand their businesses and unique financing needs. Fair Food Fund is filling that gap, along with providing needed business assistance to help entrepreneurs translate their passion into success in the marketplace.”
“The demand for local and sustainably grown food is soaring,” said Oran B. Hesterman, President and CEO of Fair Food Network. “But the infrastructure connecting famers to eaters—including aggregation, distribution, processing, and marketing—needs to be reinvigorated. Fair Food Fund is helping grow this middle to support strong regional food systems and economies.”
“Surdna can help achieve greater impact, and collaborate in new ways to accelerate our mission by using market forces to drive social change,” said Phillip Henderson, President of the Surdna Foundation. “Providing funds at below-market rates, can be particularly effective when capital is needed to start-up, grow, or sustain a social enterprise, or when results cannot be achieved with grants alone.” Henderson added that greater coordination of public-private financing, including grants, equity investments, loans, and loan guarantees, can help fuel the growth of regional food economies.
The Fund supports projects often overlooked by traditional financing sources. It provides multiple financing options—including loans, royalty financing, and convertible debt—to meet the needs of entrepreneurs it serves. Loans and investments range from $50,000 to $250,000.
The Fund recently closed a $200,000 convertible debt investment to Radicle Farm Company, which grows and distributes “living salads” that continue producing fresh greens up to two weeks past purchase date. A previous investment includes a 2014 $230,000 loan to Northern Girl, which minimally processes root crops including seconds from Maine farmers to sell to retail and institutions across New England. Additional investment opportunities are in the pipeline.
The Fund’s financing is bolstered by business assistance focused on helping entrepreneurs prepare for financing. Since launching in 2012, the Fund has supported nearly forty enterprises through its Consulting Corps and annual Business Boot Camp, which will take place this December 1-3 at Babson College in Wellesley, MA. A complete list of Fair Food Fund investments and consulting projects can be found at here.
“From debt to grant support, food system investments are a great opportunity for funders to make a meaningful difference for local entrepreneurs, family farmers, rural communities, and regional food economies at large,” said Corwin.
The Surdna Foundation seeks to foster sustainable communities in the United States -- communities guided by principles of social justice and distinguished by healthy environments, strong local economies, and thriving cultures. For over five generations, the Foundation has been governed largely by descendants of John Andrus and has developed a tradition of innovative service for those in need of help or opportunity. Learn more at surdna.org and follow us on Twitter @Surdna_Fndn .
FAIR FOOD NETWORK
Fair Food Network is founded on the belief that vibrant local food systems can create health and economic opportunity for all. A national nonprofit, it works with a diverse network of partners and pioneers solutions that support farmers, strengthen local economies, and increase access to healthy food—especially in our most underserved communities. Central to its mission is designing programs that create on-the-ground impact and serve as replicable models that inform public policy. Dig deeper at fairfoodnetwork.org and join on Facebook and Twitter @FairFoodNetwork + @OHesterman
Kelly Terrie, a program officer in the Sustainable Environments Program at the Surdna Foundation, has been appointed to the Cultural Affairs Advisory Commission. The Commission is comprised of appointees from a diverse array of cultural and artistic organizations and practices, and will advise Mayor de Blasio and Commissioner of Cultural Affairs Tom Finkelpearl on issues impacting NYC’s cultural community. The Commission will be chaired by Susana Torruella Leval, Professor at Hunter College and Emerita Director of El Museo del Barrio, and Ben Rodriguez-Cubeñas, Program Director for the Rockefeller Brothers Fund’s Pivotal Place program, will serve as Vice-Chair.
Read full release.
Governors and state legislators routinely praise small businesses for their contributions to economic growth and job creation, but states actually give big businesses the dominant share of their economic development incentive awards.
An analysis of more than 4,200 economic development incentive awards in 14 states finds that large companies receive dominant shares: 70 percent of the deals and 90 percent of the dollars. The deals, worth more than $3.2 billion, were granted by programs that are facially accessible to both small and large companies. More than 500 other state incentive programs were disqualified for analysis because they have barriers to entry that exclude small businesses and favor big businesses.
That is the key finding of Shortchanging Small Business, a study released today by Good Jobs First at: www.goodjobsfirst.org/shortchanging . It was funded by the Surdna Foundation and the Ewing Marion Kauffman Foundation. All findings and policy conclusions are solely those of Good Jobs First.
“State economic development spending is profoundly biased against small, local and entrepreneurial businesses,” said Greg LeRoy, executive director of Good Jobs First and lead author of the study. “Our findings definitively confirm what many small businesspeople have long believed.”
The 14 states where the awards were analyzed are Florida, Indiana, Kansas, Kentucky, Louisiana, Missouri, North Carolina, New Mexico, Nevada, New York, Pennsylvania, Vermont, Virginia and Wisconsin.
There is slight variation in the degree of big-business dominance among the states (80 to 96 percent of the dollars) but that is meaningless, since the programs vary as do the industrial profiles of the states. The key finding is how consistently the programs grossly favor big businesses.
The study, based on a close examination of the recipient companies, designates businesses as large or small based on their employment size as well as their total number of establishments and whether they are locally or independently owned.
“As a policy solution, we do not recommend simply reallocating deals and dollars,” said LeRoy. “These tax-break deals often mean little to small businesses. Instead, states should reform their incentive rules by tightening eligibility to exclude large recipients. The resulting savings could better fund public goods that benefit all employers and help small businesses with the persistent credit crunch.”
Short of excluding big businesses, the report recommends states spend much less on large companies by using safeguards such as dollar caps per deal, dollar caps per job, and dollar caps per company.
Good Jobs First is a non-profit, non-partisan resource center promoting accountability in economic development. Founded in 1998, it is based in Washington DC.
Innovative Deal Structure Builds Capacity among Developing Lenders .
The Surdna Foundation today announced a $2 million investment in the growing Latino small business sector through a low-interest loan from its Program Related Investment (PRI) fund to VEDC, a national financial intermediary, on behalf of a consortium of five Community Development Financial Institutions (CDFIs).
The CDFIs are all members of the National Association for Latino Community Asset Builders (NALCAB) that make loans to entrepreneurs in predominantly Latino communities. Surdna is also providing a $300,000 grant over two years to NALCAB to allow for an increased level of support for the local lenders.
This consortium approach is an innovative solution and model for other funders that has enormous potential to move to scale both by attracting additional capital and expanding the consortium to include lenders in additional markets.
The Surdna Foundation seeks to foster sustainable communities in the United States -- communities guided by principles of social justice and distinguished by healthy environments, strong local economies, and thriving cultures. To learn more visit www.surdna.org
NALCAB - National Association for Latino Community Asset Builders, represents and serves a geographically and ethnically diverse group of more than 100 non-profit community development and asset-building organizations that are anchor institutions in our nation's Latino communities. NALCAB's mission is to build financial and real estate assets as well as human and technology resources for Latino families, communities, and organizations. For additional information, visit www.nalcab.org.
VEDC is a leading non-profit small business lender that is changing the way small business lending is done by making it more available and impactful. With a growing footprint, VEDC has lent $380 million in direct and guaranteed loans to over 104,000 small businesses and created more than 28,000 new jobs. VEDC's mission, as a certified Community Development Financial Institution (CDFI), is to help create jobs and promote small business development in under-served communities. It provides loans and micro-financing options to small businesses, particularly those owned by women and minorities, that don't qualify for traditional financing. VEDC's expanding portfolio is composed of community-based loan funds in California, Illinois, Nevada, Utah, New Jersey, Connecticut, Florida and New York. For more information, visit www.vedc.org.
The Surdna Foundation’s Marc de Venoge, the family foundation’s CFO, speaks with journalist John Maden from Perspectives magazine about the legacy of John E Andrus, Surdna’s founder; the foundation’s grantmaking; and Surdna’s approach to investing.
Surdna’s Chairman Emeritus, John E. Andrus, III, shown with CFO Marc de Venoge, celebrated his 100th birthday in September 2009 at the Woodhill Country Club, Wayzata, Minn. (2009)
Read the interview
Fostering sustainable communities in the United States — communities guided by principles of social justice and distinguished by healthy environments, strong local economies, and thriving cultures.