Fostering the Role of Anchor Institutions

Recently, the White House announced the second round of applications for the Promise Zones Initiative, the Obama Administration’s signature effort to help high poverty communities increase economic opportunity and strengthen their relationship with the federal government. As one of the co-chairs of the national stakeholder group, along with my colleagues at PolicyLink, I have spent many hours reading through guidelines, talking with leaders in current Promise Zones, and determining ways to strengthen the initiative. Applicants must demonstrate that they are working in cross-sector teams, but I kept going back to the role of anchor institutions—entities rooted in the communities where they are found, such as colleges, universities, and hospitals.

Many current federal efforts, including the Promise Zones Initiative, call on anchor institutions to play a role in community and economic development work—as a real estate developer, purchaser, and employer. But there’s been little discussion about how to leverage the unique relationship between the federal government and these institutions. The government has a long precedent of working closely with anchors, including establishing land grant colleges, supporting scientific research, and providing them with tax-exempt status. As a result of this support, these institutions have grown to control vast economic and human resources.

For instance, hospitals and universities are responsible for more than $1 trillion of the US economy (roughly 6 percent of GDP) and employ 8 million people annually. Further, according to the Initiative for a Competitive Inner City, roughly one in eight colleges and universities (and one in 15 hospitals) are based in an inner city. Given this support, the Obama Administration clearly has a vested interest in enhancing the ability of anchors to increase community revitalization.

While anchors are no silver bullet for addressing the challenges low-income communities face, they can play an important role in this work, and the federal government should help position them to do so. In a recently released report, I outline some of the ways the federal government can ensure that these institutions play a more meaningful role in place-based initiatives. Here are a few:

Rebuilding University Partnerships

In 1994, the US Department of Housing and Urban Development (HUD) established the Office of University Partnerships to encourage and expand the growing number of partnerships between colleges and universities and their communities. However, the government hasn’t funded many of the programs for years, and the office has limited capacity. HUD should rebuild OUP to provide greater technical assistance to anchors located in communities that have been awarded federal grants for community development.

In addition, as the federal government continues to promote transparency and evidence-based strategies, HUD should work to improve anchor performance by encouraging the creation of dashboard indicators that demonstrate community impact and that it can report to Congress and other stakeholders.

Increasing the Impact of Ongoing Federal Initiatives

As mentioned earlier, many federal place-based initiatives call on anchor institutions to participate in community revitalization efforts. However, the involvement of anchors in communities varies greatly. For instance, some current Promise Zone designees have little to no anchor participation in their work while in the Philadelphia Promise Zone, Drexel University leads their educational efforts. As a result, federal leaders must give greater weight to place-based grant applicants that have strong partnerships with anchors to spur greater anchor involvement.

Another opportunity is through the strengthened community benefit requirements under the Affordable Care Act. Nonprofit hospitals are required to provide benefits to the communities they serve to keep a tax-exempt status. Federal leaders should expand the definition of community benefit to cover more of the social determinants of health and direct hospitals to work with local leaders to ensure that resources are spent on shared priorities.

Supporting Workforce and Small Business Development

One of the best ways for a small business to grow is to land a large contract, but local businesses often lack the capacity to handle such contracts. The federal government should encourage institutions receiving research funding to implement programs that mentor local, disadvantaged businesses by offering them additional funding opportunities. In addition, the Small Business Administration should support small-business intermediaries in identifying local and disadvantaged businesses that have the potential to work with anchor clients.

In addition, anchors can play an important role in workforce development, but linkages between businesses and community and technical colleges have historically been poor. For instance, students may have difficulty transferring credits earned during an apprenticeship to a bachelor’s degree program. The Department of Education and the US Department of Labor should work with policymakers, accrediting bodies, and colleges and universities to greatly expand the number of effective articulation agreements in place.

Anchor institutions are inextricably tied to their communities and have a strong incentive to ensure that they thrive. It is important for federal leaders to tap into this interest and ensure anchor institutions work with public, private, nonprofit, and philanthropic leaders in more strategic ways to revitalize high-poverty communities.

Read more stories by Tracey Ross.