October 17, 2010 | Read Time: 5 minutes
Richard Florida, the economic-development expert and author, refers to the financial meltdowns that have occurred throughout American history as Great Resets. He argues that they create a pathway for innovation and encourage new ways of doing business.
As examples, he points to the urbanization and rapid industrialization that followed the Long Depression of the late 19th century and the more recent technological expansion that followed the Great Depression in the 1930s. Without these crisis points, he contends, innovators would not have had the push necessary to move beyond their staid approaches to create something new.
Today, we clearly are in the midst of another reset and with it a once-in-a-generation opportunity to create meaningful change in the way that we deal with the concerns of our cities. For the first time in decades, the promise and prominence of our cities have been acknowledged through the emerging work of the recently created White House Office of Urban Affairs. The economic-stimulus bill made billions of dollars available to jump-start urban economies, in programs that seek to transform how we address transportation and schools, create green jobs, and reduce the problems that stem from housing foreclosures.
Yet at the same time, America is facing extreme levels of unemployment, and the two industries that led us out of prior recessions, construction and automobiles, remain stalled or in free fall. Americans have lost trillions of dollars in the stock market and housing wealth, and for the first time in generations, homeownership cannot be assumed to be the best path to accumulation of wealth.
Those contrasts have created an environment ripe for change. This is our opportunity, as Matt Miller says in his book, The Tyranny of Dead Ideas, to “expose the conventional wisdom as obsolete and open people’s minds to a new vision of what is possible and necessary” for cities. Part of this is a growing recognition that we have put the hard choices off for too long and must act now to build a foundation for lasting prosperity.
Philanthropy must play an important role in this recalibration. In today’s dynamic environment, responsive philanthropy requires that we move beyond what is comfortable, disrupt entrenched systems, and make investments that solve complex problems. As the Monitor Institute report titled “What’s Next for Philanthropy” points out, “Philanthropy today takes place in a context that is radically different from the environment in which many of its current practices and behaviors were developed.”
We face turbulent political and economic contexts and are challenged to engage people across broad boundaries with unprecedented immediacy. Gone are the days of business as usual.
My organization, a collaborative of 22 foundations and financial institutions that have invested almost $1-billion of their own money in cities over the past 20 years, is seeking to demonstrate how philanthropy and the key players in America’s cities can create game-changing innovations to solve problems long considered intractable.
In this new approach, which we will unveil next week, called the Living Cities Integration Initiative, we will provide a bundle of grants, loans, and program-related investments to five regions totaling $80-million, where government, business, philanthropic, and nonprofit organizations have agreed to take on some of our nation’s most challenging urban problems including jobs, business creation, housing, health care, transit, and education.
Building on the lessons Living Cities has learned as well as those of other organizations seeking to solve the nation’s biggest problems, we’re trying to:
Create a new framework for solving complex problems. Leaders from business, nonprofits, and government often do not work together, and people work to solve problems in silos created as a result of both policy and tradition. We are trying to remove those barriers so that decision makers from different governmental entities and from foundations, business, and the nonprofit arena can work together as true partners to tackle the challenges that impede progress for low-income people.
Challenge obsolete conventional wisdom. Recognizing that many of the systems critical to our communities—and especially to low-income people—were built decades ago, we will clear the space for innovation and will support bold new approaches for breaking through critical impasses and disrupting these antiquated systems.
Drive the private market to work on behalf of low-income people. Poor people and communities have often been isolated from the workings of the mainstream markets. We will provide a means to attract private capital and bring mainstream market goods and services to these communities.
Create a “new normal.” Too often, innovative work to improve the lives of low-income people has consisted of a series of pilots. Even when those pilots are considered successful, they often remain stranded on the periphery—a single neighborhood, school, or business—and not brought to the mainstream. We seek to permanently drive government and private financing away from obsolete approaches and apply them to these new solutions.
We are helping cities reimagine what can be done with underinvested neighborhoods and find new ways to connect low-income people to economic opportunities. We are supporting efforts to align local, state, and federal policies so these resources can make a real difference in people’s lives. Instead of trying to work around long-broken public systems, such as education, we are helping to re-engineer them for the 21st century.
What’s more, we are investing strategically in the emerging green economy to ensure that its benefits help low-income people and the planet.
We have intentionally sought to serve as the spark for innovation when appropriate and as the glue for slower-going efforts designed to knit together disconnected fields, such as housing, transportation, and jobs.
In the midst of the rapid change that we are witnessing, philanthropy must not squander this opportunity to reinvent itself. We are in a time of crisis. We cannot center our work on practices and principles from a century ago. We must address our contemporary reality. And our efforts must go far beyond a scattershot approach. They must become the new normal.
