More Cities Get Serious About Community Wealth-Building
For a while now, there’s been a growing interest in what’s called “community wealth-building”. That means strengthening locally-rooted and locally- held businesses and investing vehicles, with worker cooperatives, Community Development Financial Institutions (CDFIs) and impact investors as some of the leading practitioners.
But recently, more city and local governments have been getting in on the act–and that activity is at a point where it’s really starting to take off and, as we say in the business world, scale.
Those are the findings of a new report, Cities Building Community Wealth, just published by The Democracy Collaborative. “City leaders are desperate to try something different,” says Marjorie Kelly, a co-author of the report. “And, now, you’re starting to see more substantial results from their efforts.” The study also looked at relevant activities in 20 cities around the U.S.
As examples, Kelly points to Madison, WI, which recently proposed allocating $5 million over five years for worker cooperative development. Over the past two years, New York City has directed more than $3 million to support such development.
The background to New York’s decision, according to the report: In 2006, the Center for Family Life, a program of SCO Family Services in New York City, launched a housecleaning worker cooperative called Si Se Puede! and then created other cooperatives in handiwork, childcare and painting. Next it joined a coalition which worked with the city council on a campaign aimed at strengthening worker cooperatives. The result, according to the report, was a $1.2 million allocation for 2014-2015 and $2.1 million for 2015-2016.
The report also cites seven “drivers” essential to city involvement in community wealth-building:
- Place. Traditional economic development is agnostic about where investment comes from. Place-based tactics target local players that are tied to the city and interested in ownership over the long-term. “It means not having companies with ownership scattered all over the world, but that is rooted in the city,” says Kelly.