Wealth Gap in Cities Is at Center of $4 Million Kresge Grant

The Kresge Foundation is putting $4 million in seed money behind a group of Washington urban-policy think tanks that will work with a small group of cities to devise new ways to reduce the wealth gap, with more funding likely to come later from Kresge and other grant makers.

The idea for the project, called the Shared Prosperity Partnership, began to take shape shortly after Donald Trump’s victory in the 2016 presidential election, according to Rip Rapson, Kresge’s president.

Rapson said the partnership grew out of concern that the Obama administration’s “full-throated support of urban policy” probably wouldn’t continue under Trump.

“All of the energy that had gone into the renewal and revitalization of American cities shouldn’t stop just because there is a new administration in charge,” Rapson said.

Over the next year, Kresge and urban experts from the Brookings Institution, Living Cities, and the Urban Institute will share their expertise with city officials, nonprofit leaders and local grant makers in about 10 cities to design ways to increase economic opportunities for residents. Participants will meet in a series of local roundtables to discuss ideas that are identified by local leaders.

The first roundtable was held in Minneapolis in April. Fresno and Memphis will participate in the partnership, and seven other cities are in discussions with Kresge about joining.

Larger Investment Coming

The $4 million will go to directly support the think tanks’ work. But Rapson envisioned larger investments, both from Kresge and from other grant makers, as the policy groups and city leaders develop plans.

“This will not be the end of the commitment,” he said. “That would be crazy. We’d be shooting ourselves in the foot.”

Rapson said a lot of organizations saw a similar need to focus on urban issues after the election. Their interest, he says, resulted in a dizzying array of consulting groups and donors that local leaders could choose to work with. In addition to those three groups, the Aspen Institute, Bloomberg Philanthropies, and the Rockefeller Foundation, to name a few, have research and funding agendas squarely focused on cities.

He recalled a conversation with a mayor he declined to identify shortly after the election.

“She said, ‘This is a new world. What I fear now is that we’ll have all of these people knocking on our door trying to be helpful to us.’ ”

“And that’s a problem?” Rapson recalls responding.

The attention would be nice, the mayor said, but national organizations all have their own priorities. A slew of new ideas and grant money from national partners is wasted if foundations and think tanks aren’t willing to work toward common goals.

The partnership, Rapson said, allows local leaders steeped in the idiosyncrasies and unique histories of their region to identify what problems are the most vexing. And it forces the think tanks to work together to identify how they can be most helpful and coordinate their work plans with a broader group.

“This is an unnatural act for” national groups that sometimes have a tendency to parachute into an area and impose a set of solutions to a problem they’ve identified, Rapson said. “It’s a little bit of a mind shift.”

Tailored Approach

All of the participating cities haven’t been identified, but they are likely to be in locations where the partners already have some experience. Similarly, the approaches will vary from city to city, depending on what local leaders deem to be the best course of action.

Amy Liu, director of the Brookings Institution’s Metropolitan Policy Program, said that both her staff and experts at Living Cities are well acquainted with each other’s work trying to increase investment and create well-paying jobs for people in Minneapolis-St. Paul. The partnership can bring those efforts together, showcase collaborative projects that in turn can attract more capital, and streamline the process for local leaders.

“It’s a more powerful single point of contact,” she said. “We’re trying to unify the field more. It’s more efficient.”

In response to the resentment among rural voters that helped propel Trump to the White House, some have called upon philanthropy to support programs outside of major cities. A better plan, Liu suggests, is to concentrate on resources in urban population centers that serve as the economic engines for entire regions.

“The nation is experiencing major political, economic, and social division,” she said. “There’s a sense of urgency for the country to heal those divides. The best way to get that done is through the cities.”

The partnership’s inaugural roundtable in Minneapolis was held in conjunction with the launch of the Center for Economic Inclusion, a group that works to “catalyze shared prosperity and advance an inclusive economy.” The group’s founder, Tawanna Black, says the cachet provided by the national groups helped spur the interest of local donors.

“You can’t imagine the power of that credibility boost,” says Black, who is also the executive director of the Northside Funders Group, a network of 20 corporate, community, and private foundations and individual donors.

Black welcomed the collective work from the group of national organizations, but she hoped that foundation grants wouldn’t be limited to projects identified as part of the process.

“While there’s a lot of strength in them coming together and aligning resources and thinking, there are many ways each of the four organizations can partner with us,” she said. “We wouldn’t want to see that shortchanged.”

Detroit Model

The partnership builds on Kresge’s work in helping to redevelop Detroit, Rapson said. As the Motor City struggled to come out of bankruptcy, Kresge and its partners, including the Ford, Hudson Webber, Knight, Skillman and Kellogg foundations, worked to build civic leadership, inject money into real-estate development projects, encourage entrepreneurship, provide job training, and improve transportation.

In the Twin Cities, the McKnight, Minneapolis, and Saint Paul foundations are participating in the partnership. In Memphis, the Hyde Foundation, Community Foundation of Greater Memphis, and an anonymous donor have stepped forward, Rapson said.

The local grant makers, Rapson said, serve as philanthropic “Sherpas,” warning national groups about pitfalls and identifying community strengths, he said.

“There is a significant role for local philanthropy to help rationalize, make coherent, legitimize, and create the glue for the kind of activity we’re working on,” he said. “This comes directly out of our experience in Detroit.”