Anchor institutions are entities or facilities that, when established, typically do not relocate because they cannot easily pack up and leave. The most well-known anchors are universities and hospitals (the "eds and meds"), but they may take on different forms such as museums, sports arenas, municipal governments, and in certain instances, major corporations. Typically anchors are the largest employers in a metropolitan area and represent significant economic influence through their procurement of goods and services.
According to Community-Wealth.org, universities spend $350 billion annually and have a total endowment of over $300 billion. Nonprofit hospitals have assets over $600 billion and collect annual revenues greater than $500 billion. If resources of anchors such as these were leveraged effectively, they could produce a multitude of economic multipliers that positively impact the places in which they reside and the city/region as a whole. As a foundation continually seeking innovative ways to strengthen local economies, Surdna sees anchors and the unlocking of their economic power as an important theme worth exploring.
Given the current economic outlook and continued loss of jobs, we are finding more cities and regions looking internally to uncover untapped resources. The question city and state leaders are asking is, "How do we keep more money in our local economy?" Procurement and hiring policies are essential in maximizing the potential in local businesses and, if anchors' policies and resources are aligned correctly, regions could take great advantage of the economic impact. To do this would require a measure of systems and behavioral change on the part of anchors to adopt practices committed to the procurement of goods and services from local businesses, and to the direct employment of residents from nearby communities. An anchor strategy of positioning their buying and hiring practices at this level can help create and sustain home-grown economies, and may be particularly significant for vulnerable regions confronting capital flight and disinvestment.
The Evergreen Cooperatives in Cleveland, made up of small, employee-owned for-profit companies that are based in the communities in which their employees live, attempt to level the city's economic playing field by aligning their services with local universities and hospitals' procurement practices to effectively capture a sustainable percentage of the local market share. They are also pushing for the development of "local first" procurement policies to ensure that local businesses have access to the purchasing power of anchors. Small businesses such as Evergreen have the ability to expose the level of economic resources that continue to flow out of a city while highlighting adaptable strategies for anchor institutions in other cities seeking to support and sustain their own local small enterprises.
Local production, hiring and material sourcing are at the center of Surdna's Strong Local Economies Program's thinking around how cities and regions can create or revive local economies. As a foundation that seeks to foster just and sustainable communities, we believe that finding ways for anchor institutions to promote and sustain local economies will be an important step in achieving this mission.