New & Next: Social Investing Goes Local

If the last half of the 20th century was about "bigger is better," the early part of the 21st century is about "smaller is smarter." The movement for all things local is igniting all over the nation. Whether it's what you eat, how you get around, where you live, or when you work, many people across the age spectrum are yearning for simpler, greener, more connected lives. Yet the economic systems now in place often favor businesses with long commutes, big-box consumerism, and low-wage/no benefits jobs over homegrown enterprises that foster local ownership and nurture the surrounding community.

At The Denver Foundation, we are helping change the conversation about economic development. Building on long-established relationships with organizations and residents involved in our Strengthening Neighborhoods Program over the past 17 years, the Foundation is developing partnerships with and investing in neighborhood-based enterprises that have the potential to create jobs, build ownership, and meet community needs.

We, and a growing number of partners around the country, call this work community-wealth building. The term refers to efforts that help communities become economically strong by keeping assets and resources within the community.

One strategy we employ is to encourage worker ownership of an enterprise by helping to foster the growth of worker-owned cooperatives. If you are a worker-owner in a cooperative business enterprise, you build up a stake in the company. In addition to your wage, you receive a patronage dividend which can be used for retirement, college, a home purchase, or training.

We've developed many allies in this world, one of which is Rocky Mountain Farmers Union (RMFU). Founded in 1907, RMFU's rural roots have spread into the city, partly because of the burgeoning interest in urban agriculture, and also because of its expertise in forming cooperative enterprises. RMFU helped organize the Westwood Food Cooperative in the low-income neighborhood around Morrison Road, a food desert. Neighbors now are growing produce on their properties and working to start a local co-op grocery store as well as other food-related businesses.

RMFU has also helped a small group of Latinas organize a worker-owned translation and interpreting business called Community Language Cooperative that allows the worker owners to charge for services they were previously performing informally as volunteers. Altogether, RMFU is working with eight different groups of low-income community members that are planning cooperative businesses.

Employee ownership through Employee Stock Ownership Plans (ESOPs) is another way for workers to build equity at their jobs, but without as much involvement in the day-to-day operation of the company. The Rocky Mountain Employee Ownership Center, another grantee of The Denver Foundation, helps companies create the financial and legal framework for employee groups to purchase businesses from owners. There is a tsunami of closely held businesses in the Denver area with owners who want to retire, and if they can't find a buyer, they will go out of business. The message to the owners is this: the Rocky Mountain Employee Ownership Center can help you sell to your employees so your business will survive and your employees will keep their jobs.

Anchor institutions such as medical centers and universities also offer powerful opportunities for local economic development. Unlike many businesses, anchor institutions rarely move and are relatively unaffected by economic ups and downs. Typically, these institutions don't consider the economic impact they can have on their surrounding neighborhoods, so we are encouraging them to think differently about that. The Anschutz Medical Campus in Aurora, with 17,000 employees, is a prime example of an anchor institution that could stimulate and support stable, locally-owned businesses nearby -- restaurants and catering facilities, medical clothing, specialized laundry services, and much more. The nearby East Colfax corridor has long been connected with Strengthening Neighborhoods, and our relationships in this community are strong.

The Denver Foundation supports the Community Campus Partnership at the Anschutz Campus, a group of nonprofits, government agencies, educational institutions, and community-based groups working to spread economic opportunity by building a job pipeline, including specialized training, and establishing local purchasing links between the campus and the surrounding neighborhoods.

The concept of community-wealth building is becoming an integral part of urban and regional planning. Governments and businesses are beginning to witness the migration of the emerging, diverse millennial workforce away from sprawling suburbs and toward higher-density urban communities. The tide is turning. Efforts to spur economic development, particularly in low-income communities, need to be in sync with the new opportunities and strategies that are emerging to anchor people-centered development in neighborhoods.

Patrick Horvath is director of economic opportunity and deputy vice president of programs at The Denver Foundation.