Building Networks of Opportunity

Recent research by scholars such as Raj Chetty has made it clearer than ever that the neighborhood environment in which children grow up plays a large part in determining life opportunities. And we know that neighborhoods of concentrated poverty do not become so by market forces alone. Rather, deliberate choices in both the policy arena and the private sector disconnect these neighborhoods from economic, political, and social networks of opportunity that can link individuals to jobs and give them voice in civic decision-making. How can we counteract these choices, and activate or reactivate networks of opportunity in poor neighborhoods?

On April 14 and 15, the University of Southern California’s Sol Price Center for Social Innovation convened scholars and practitioners to discuss this question. In the conference’s panels, global experts offered a range of ideas about how help develop networks of opportunity, from sharing retail sales tax revenue across jurisdictional boundaries, to employing tools such as social impact bonds, to scaling social enterprises and comprehensive community initiatives.

The first theme that emerged was that communities must be allowed to imagine for themselves what opportunity looks like. Whether this entails identifying pathways from cradle to career for all residents or engaging them deeply in the political process and the regional economy, the vision should be linked to objectives that the community chooses and can hold itself accountable for achieving. Moreover, as Michael McAfee of PolicyLink noted, programs that produce small benefits are necessary but not sufficient, so a community’s vision should focus on population-level change, such as measurably reducing the number of children living in poverty. Population-level accountability encourages us to look for solutions on a societal scale rather than be content with doing good; it can move us from acting on compassion to seeking justice.

A second theme at the conference was that the people offering new solutions may not be the same ones that can best scale an initiative or prepare a community for change. The panel on comprehensive community initiatives offered a terrific example of how different groups can offer different types of expertise. Dr. Anthony Iton shared how the California Endowment builds capacity and leadership in communities in order to advocate for needed change. Robert Price described how Price Philanthropies has invested in the City Heights community in San Diego to strengthen public services and social connectedness, funding health clinics at local schools, affordable housing, an office building for social services, a joint community center and police station, and a YMCA that bridges diverse socioeconomic communities, to name but a few recipients. And David Edwards shared the strategy of Purpose Built Communities, which brings a working model that includes mixed-income housing, cradle-to-college education services, and community wellness facilities and programs to neighborhoods of concentrated poverty. PBC serves 13 communities that have invited it to enter, but it has identified more than 850 other US neighborhoods in need of its assistance. The need for PBC’s work is so great that if it takes its neighborhood transformation model to 50 or 100 communities, it could achieve population-level progress.

Price Philanthropies, the California Endowment, and Purpose Built Communities all participate to some extent in offering new ways of connecting people and services, building communities’ capacity, and scaling. But I have provided a simplified account of their main methods because it is important to understand that all three strategies are distinct—and, clearly, all three are needed to fully connect communities to networks of opportunity.

Another such strategy discussed at the conference involved pay-for-success models in the United Kingdom and United States. None of these models has directly led to population-level change yet, but they are changing the way that government approaches data-driven decision-making. The conference also highlighted terrific examples of social entrepreneurs scaling successful innovations in the workplace. Jay Banfield, chief officer of innovation and scale at Year Up, described his organization’s national model to train and connect unemployed young adults to tech industry jobs. Michael Peck, the North American representative of Spain-based Mondragon, illuminated the cooperative ownership structure of the corporation, which employs more than 70,000 people around the world. As with Purpose Built Communities, the need for Mondragon’s services currently far outstrips the program’s capacity, and there is a lot of room for it to spread to new communities.

Finally, the conference highlighted tools to bring needed capital into low-income communities. In the United States, the fragmentation of local government has exacerbated regional income inequality, systematically increasing segregation by both income and race. To address this issue, Myron Orfield, director of the University of Minnesota's Institute on Metropolitan Opportunity, advocated for a system of regional sales tax revenue sharing in the Minneapolis-St. Paul region through which more than two-thirds of communities gain tax revenue and overall social welfare is enhanced. Martim Smolka of the Lincoln Institute of Land Policy noted that public investments and zoning decisions create enormous amounts of value, but that unfortunately, in the United States, most if not all of this value accrues to private landholders and not to the public. He discussed a variety of methods, such as charging developers to build at higher densities near new transit investments and creating joint public-private infrastructure development companies, that have been used across the world to ensure that financial benefits go to the communities most in need of investment.

Connecting communities to networks of opportunity is not a smooth process. It is likely that certain segments of the market will respond faster than others. For example, rental prices might rise faster than benefits of community change accrue to residents. This doesn’t mean that social innovators should stop helping build these networks. It does mean that those who are guiding community change must plan for the complications that are certain to occur. Planning will require collaborative network decision-making, not only as the process of community change launches, but also as transformation takes place. 

Read more stories by Gary Painter.