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
As farmers, retailers, hospitals and schools strive to meet the demand for local foods, a new report by AGree, a nonprofit supported by leading foundations that fund food and agriculture, international development, and health and wellbeing, examines the growth in local food systems, the hurdles to further expansion, and presents six recommendations that would support their development.
The report, Local Food: Revitalizing Community-based Food Systems, presents the consensus views of diverse stakeholders, dispels common myths about the local food movement and provides a bird’s eye view of projects underway across the nation to aid local sourcing.
“Families Funding Change” explores state of social justice giving within family philanthropy.
Foundations funded and led by wealthy families largely fail to support strategies that address the root causes of political, economic and social injustice. This was the finding of a new study released today by the , an independent watchdog of grantmaking organizations in the U.S.
Co-authored by NCRP researchers Niki Jagpal and Ryan Schlegel, “,” finds that, between 2004 and 2012, only 9 percent of grant dollars from family foundations went toward social justice strategies like advocacy and grassroots organizing. In comparison, private foundations, community foundations and other types of grantmaking institutions gave 14 percent. However, has shown that these strategies are particularly effective in benefitting communities, garnering a return of $115 for every dollar spent.
“It is our hope that ‘Families Funding Change’ will provide valuable insight for family funders into the challenges they may face when they consider adding a social justice lens to their work,” said NCRP Executive Director Aaron Dorfman. “We believe that embracing a social justice framework opens new doors for family foundations, and is compatible with the goals of every funder dedicated to improving the lives of the people they serve.”
Family foundations, often driven by passion, legacy and commitment to their communities, are well-positioned to fund strategies that empower their stakeholders. However, these same attributes subject them to unique challenges when they begin exploring an explicit social justice framework.
Useful tools to start supporting social justice
This report offers three useful tools for family foundations to begin their journey in being effective social justice philanthropists:
No matter the issue area a foundation focuses on, from arts to the environment, the need for foundation funding of community organizing and advocacy is crucial.
NCRP urges trustees and staff of family foundations to read “” and begin supporting efforts to find lasting solutions to the tough challenges faced by the communities they care about. The report is available for free at www.ncrp.org.
Shawn Escoffery, Director of Surdna’s Strong Local Economies program, discusses how equity drives the program’s grant making, what Surdna is doing to prepare small businesses to succeed, rethinking how loans are made to entrepreneurs in low-income communities and communities of color, and applauding grantees’ success at advancing state and city minimum wage legislation.
Read a Q&A with Shawn Escoffery
The Surdna Foundation today announced that Sharon Alpert, Vice President, Programs and Strategic Initiatives, has been named President of the Nathan Cummings Foundation, a 25-year old family foundation committed to democratic values and social justice, including fairness, diversity, and community. Read Nathan Cummings Foundation announcement and Surdna letter to grantees.
"Sharon is the ideal choice to lead such an extraordinary foundation. During her remarkable tenure here, she’s been a thoughtful and dedicated voice helping us to think about, talk about, and deepen our commitment to social justice,” said Phillip Henderson, President of Surdna. “Like Surdna, the Nathan Cummings Foundation is a vibrant, family-governed institution whose culture and practice stand as exemplars within the field of family philanthropy. And, Sharon’s deep understanding of family philanthropy’s contributions—and vast potential—positions her not just as a great foundation leader, but an important voice in the field.”
Sharon joined the Surdna Foundation in 2004 following two years at the Ford Foundation as a Program Associate. She rose from associate program officer to Director of the Sustainable Environments program to her current role as vice president. Earlier in her career, she held positions at the Northern Manhattan Improvement Corporation, a community development organization; Inventure.com, an internet start-up; the Natural Resources Defense Council and the Washington Office on Environmental Justice.
“At Surdna, I have been extraordinarily fortunate to have been surrounded by an incredibly thoughtful and supportive board, talented staff, and innovative grantees for the past 11 years. Together, we have practiced the best kind of philanthropy – that which invests deeply in people, ideas, and organizations and partners with them for the best outcomes for achieving more just and sustainable communities.
Sharon’s many contributions include projects and initiatives she spearheaded that helped to shape the foundation, as it is known today. She was the driving force behind the development of Surdna’s touchstone, living strategic plan known as the Roadmap—now in version 2.0. And it was Sharon, in close partnership with Surdna’s President Phil Henderson, who figured out the best action plan to make good on Surdna’s sharpened emphasis on institutional learning, clarified program strategies, and its emerging appetite for strategic communications. And most recently, it has been Sharon who has led Surdna’s board-staff working groups that are pushing the foundation into new and exciting conversations and actions around redefining the board role vis-à-vis grantmaking and program development. She has helped the foundation consider whether and how it might embark on a mission related investment strategy; and her leadership has informed Surdna’s initial planning for its 2017 centennial year.
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.
In the Surdna Foundation's latest annual report, Board Chair Jocelyn Downie and President Phil Henderson reflect on learning to learn from failure.
President Obama highlights a new program to aid local organizations in building and implementing creative placemaking strategies to shape the social, physical, and economic fabric of their communities. (Anchorage, AK--Aug. 31, 2015) Today, President Obama announced that ArtPlace America – a national collaboration among private foundations including the Surdna Foundation, federal agencies, and financial institutions – will invest $18 million in six place-based organizations, including the Anchorage, AK-based Cook Inlet Housing Authority. Each organization will receive $3 million over the next three years through these Community Development Investments (CDI) to incorporate arts and cultural strategies into their core work.
“Arts and culture are too often left out of community planning conversations,” said Jamie Bennett, ArtPlace’s Executive Director. “These six organizations will demonstrate the unique value that artists and arts organizations can bring to the full spectrum of community development priorities, including community resiliency, economic development, housing, open space, public health, and youth opportunity.”
Since 2011, ArtPlace America has invested $67 million in 227 creative placemaking projects in 152 communities of all sizes across 43 states and the District of Columbia. ArtPlace will draw from these projects, as well as its philanthropic, federal, and financial institution partners to support the six CDI participants along their organizational change journey.
Zuni Youth Enrichment Project, Zuni Pueblo, NM
“Our fundamental proposition is that arts and culture must be at the core of every conversation we have about community development in this country,” said Rip Rapson, President and CEO of the Kresge Foundation and chairman of the ArtPlace collaboration. “When this happens the dialogue is richer and more inclusive for the long-term visioning a community needs to remain vital and healthy.”
ArtPlace will work with the national research and action institute PolicyLink to identify, organize, and share the best practices, processes, and insights for any community looking to work in this more comprehensive and inclusive way.
The organizations selected as part of the CDI program represent a diverse range of place-based organizations working across a broad spectrum of community contexts:
Each organization will host a public forum in October to introduce the CDI program to its community. For more information on the organizations, forums, and CDI program, visit www.artplaceamerica.org.
ABOUT ARTPLACE AMERICA:
ArtPlace America (ArtPlace) is a ten-year collaboration of foundations, banks, and federal agencies that exists to position art and culture as a core sector of comprehensive community planning and development in order to help strengthen the social, physical, and economic fabric of communities. Visit www.artplaceamerica.org for more information.
PolicyLink is a national research and action institute advancing economic and social equity by Lifting Up What Works®. PolicyLink connects the work of people on the ground to the policy changes needed to build an equitable economy—one in which everyone, including low-income people and people of color, can participate and prosper. Visit www.policylink.org for more information.
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. Learn more at surdna.org and follow us on Twitter
Presidents of Six Foundations Discuss Opportunities for Future Investment. As New Orleans marks the tenth anniversary of Hurricane Katrina, major foundations active in the region came together on Friday to share their vision for how philanthropic investment can unlock the city’s potential.
As part of a daylong event hosted by the City of New Orleans, the presidents of six foundations investing in the region held a panel discussion to offer their unique perspective on what’s happened in New Orleans over the past decade, and what still needs to happen for New Orleans to become a more just and resilient city. The panel featured The Rockefeller Foundation and members of the Greater New Orleans Funders Network, including the Ford Foundation, the W.K. Kellogg Foundation, the Surdna Foundation, The Kresge Foundation and the JPMorgan Chase Foundation. In breakout sessions, local and national funders discussed ways New Orleans can adapt to physical and environmental stresses, create prosperity for all residents and promote inclusion, equity and justice.
“Philanthropy has played a major role in moving New Orleans forward since Hurricane Katrina,” said Moira McDonald of the Walton Family Foundation. “We are committed to the region and determined to see New Orleans become stronger, more equitable and more resilient for the long term.”
Together, the foundations that make up the Greater New Orleans Funders Network have invested nearly $570 million since 2005 to support New Orleans’ recovery and growth. They released a paper on Friday that explores the progress and challenges facing New Orleans in a variety of areas where philanthropy plays an important role, including education, economic development, affordable housing, environmental restoration and public health. The paper highlights the significant public, private and philanthropic investment in the city that will provide a unique opportunity for New Orleans to move forward in those areas, and invites other funders to be a part of the city’s transformation.
“This is a pivotal moment for New Orleans,” said Flozell Daniels of the Foundation for Louisiana. “The unprecedented combination of resident leadership, political will, evidence-based plans and dedicated funding is our best opportunity to deliver on equitable outcomes as the major priority in strengthening New Orleans.”
“Philanthropic investment can be the key that unlocks New Orleans’ potential,” said Jerry Maldonado of the Ford Foundation. “We can make New Orleans a model for cities across the country. But we need more funders to be a part of this effort.”
To learn more about New Orleans’ progress since Hurricane Katrina, please visit www.katrina10.org.
About the Greater New Orleans Funders Network
The Greater New Orleans Funders Network is a coalition of local, regional and national grantmakers committed to equity and economic opportunity in the Greater New Orleans region. The network is managed by Grantmakers for Southern Progress, a project of Neighborhood Funders Group. Members of the Greater New Orleans Funders Network include: Baptist Community Ministries; blue moon fund; Ford Foundation; Foundation for Louisiana; Greater New Orleans Foundation; JPMorgan Chase & Co; Kresge Foundation; Surdna Foundation; Walton Family Foundation; and W.K. Kellogg Foundation.
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.