Reflections on Anchor Collaboratives: Lessons from the Baltimore Integration Partnership
On November 28th, the Economy League convened over 170 nonprofit, government and business leaders to announce the launch of Philadelphia Anchors for Growth and Equity (PAGE). PAGE is a partnership between the Economy League, the City of Philadelphia and more than a dozen Philadelphia-area institutions that works to increase local purchasing by large institutional buyers to grow Philadelphia businesses, strengthen the local economy, create jobs, and build wealth. The strategic plan for PAGE was informed by similar initiatives operating in Baltimore, Chicago and Cleveland.
The PAGE Launch Keynote Speaker, Kurt Sommer has served as director of one of these anchor collaboratives, Baltimore Integration Partnership, for eight years. He spoke to the audience about his experience and lessons he learned as a result of his work. The post below summarizes his speech, including BIP's goals, case for economic inclusion and lessons that Philadelphia could learn from Baltimore's experience.
PAGE Launch Keynote
By: Kurt Sommer, Director of Baltimore Integration Partnership
CONGRATULATIONS – It is very challenging to set a vision and goal that is beyond the means of one organization. You have set forth an amazing objective to support the social and economic needs of a city. I’m very excited to see the number of institutions and partners that are part of the effort. I love Philadelphia and our work has been influenced by some amazing Philadelphia based organizations. This first step is one of the hardest and its pivotal for the work to flow forward from here. Collaborative approaches like this are critical to the success of community needs. There are more needs than resources and success requires leadership, partnership, and an alignment of stakeholders to get to scale.
Coupled with community demand for economic inclusion in Baltimore, it is the recognition that we have more to gain by working together than by individual efforts alone that keeps many of our institutions going and actively part of the work. I’m grateful for the opportunity to share remarks tonight, highlight some of our work, lessons learned, and reflections as you move forward.
Background of the Baltimore Integration Partnership
The Baltimore Integration Partnership is an 8-year old collective impact initiative launched as part of the Living Cities Integration Initiative – a 5 city strategy to pilot work to transform the lives of low income residents in urban areas. The BIP’s mission is to connect low income, predominately African-American residents, to economic opportunity. Our work is focused on economic inclusion leveraging the buying, hiring and investment powers to create jobs.
Our work has taken on two distinct phases. In 2011, when we launched, we had a broad agenda focused on capital, workforce, and anchor institutions. The efforts of 18 partner organizations were focused in on targeted areas of Baltimore City including central and east Baltimore. Through our initiative, we helped Philadelphia’s own CDFI, The Reinvestment Fund, expand their lending operations into Baltimore leveraging grant and capital dollars made available from Living Cities through the initiative. We also launched strategies in targeted neighborhoods to connect area residents to workforce services, job training, and jobs. Finally, with Hopkins and the Maryland Institute College of Art as two of our cofounding organizations, we began our anchor institution strategies. Part of our orientation in the anchor institution work included a trip with institutional, civic, and political leaders to the University of Pennsylvania to learn more about their 20+ year old efforts in West Philly.
Overall, we had a very successful first three years. The Reinvestment Fund supported about 13 development projects. We helped 1200 residents access job services, trained over 500 individuals, and collectively the partners and training providers placed 800 in jobs. We also helped support advocate partners who advanced some changes public policy and launched new programs.
The anchor agenda is important for cities like Baltimore and Philadelphia because the institutions are our largest employers, are deeply invested in our neighborhoods, and are already agents of influence. In Baltimore, the institutions have also recognized that their health is tied to the health of the city and for them to attract students, faculty, staff, and patients, they need a vibrant, healthy and safe city. We also see the institutions as catalysts and test agents to scale economic inclusion to the private sector where the spend is deeper and the jobs more plentiful.
Focusing on Reducing Inequity
Our work is focused on the City of Baltimore with some regional work; we ask institutions to look at areas where the largest gaps are in inequity and access to opportunity particularly for people of color.
What does that gap look like? In workforce, in 2016 according to U.S. Census Data, the unemployment rate for African-American residents was 13.2% compared to 3.4% for white residents. Further, if African-American residents has the same unemployment rate and labor participation rate as white residents, 47,000 additional individuals would be working today. We see these same challenges in small business data. In 2012, according to Census of Small Business Owners (the most recent available data is 2012, 2017 data will be available in 2021), minority-owned firms constituted 54% of all businesses in Baltimore but represent only 3.7% of sales and 5.9% of employees.
These gaps are similar in Philadelphia. There were 104,000 firms in Philadelphia in 2012. Minority owned firms grew by 46% between 2007 and 2012 constituting 47% of all businesses but only captured 2.8% of sales and 4.8% of employment.
Setting Ambitious, but Realistic Goals
We recognized that it is important to set a big goal and number to guide the collective work. It is also important for individual institutions to set goals relative their strengths and the size of their portfolio. The later enables individual accountability as well an opportunity for the institutions to lift up their work, track their progress transparently, and take credit for it where it is appropriately deserved.
As a result, the BIP moved forward with a collective wide goal of creating 5000 jobs over 10 years and we have also pushed the institutions to set their own goals. To date, eight institutions have set goals for hiring, 8 have set them for purchasing, and 6 have set them 8 for hiring, 8 for purchasing and 6 on capital / CD investment
In terms of outcomes, seven institutions recorded an increase in minority and/or local spend over the past year. The work is led by Hopkins which has been very transparent about their goals and spending outcomes recording about a 20% increase in local spend reaching $109 million and a share of 20% of construction spend – about $61 million that reached minority, women or disadvantaged businesses.
We are also tracking about 22,000 jobs linked to 9 institutions reporting employment data. Six institutions saw local hiring increase which total over 1000 city residents a year. We have also seen “intentional hiring” grow, which is hiring based on defined strategies or partnerships to foster opportunities for local residents. That figure reached nearly 400 individuals last year. It is also important to note that 3 institutions saw a decline in their total number of employees.
Collectively We Rise: The Business Case of Economic Inclusion in Baltimore.
Building on our premise that the institutions can be catalysts for economic inclusion and growing the work to the private sector, we wanted to find some ways to lift up their work for others to replicate and build from but also gain some insights into some of their lessons learned and keys to success. So this past summer, we published, “Collectively We Rise: The Business Case for Economic Inclusion in Baltimore.”
We found that any business or anchor institution can contribute to economic inclusion and can engage in the work without negatively affecting their bottom lines. Economic inclusion efforts involve trial and error, but experienced partners can guide and facilitate the work and help overcome challenges to inclusion such as
changing the internal culture of anchors and businesses, community engagement, staffing to undertake inclusion, finding qualified firms and finding qualified labor. Similarly, there are benefits of inclusion for communities. Economic inclusion promotes city as healthier community, fosters increased productivity and benefits, keeps more money in local neighborhoods and helps respond to demographic and policy change.
Finally, there are also benefits of inclusion for businesses and institutions that take this work on creating self-interests. They include more positive community relations, greater customer and employee satisfaction, an expanded customer base, better capacity to attract talent/build a diverse workforce, wider access to qualified vendors/prices and increased responsiveness from government.
Lessons Learned
The report also picks up numerous lessons learned but I’d like to share others tonight that are more focused on my experiences in managing an anchor collaborative that will hopefully help guide your work and thinking.
Setting an “agenda of learning” can help build mutual trust and increase collaboration.
Trust is important because there also things that won’t work – and you have to - as they say, “fail forward” and learn from things that didn’t work out and why. Sometimes that is the true catalyst for innovation. Sharing what works and doesn’t work is why I’m here tonight. Our initiative has been influenced by leaders in numerous cities who are all taking on different strategies and approaches to support urban reinvestment and economic opportunities. Lucy Kerman kindly provided introductory remarks. We brought her down to Baltimore to share her work and success. One of our anchors, University of Maryland Baltimore, replicated the Dornsife Center and created their own hub of community engagement and programming. Our work has also been influenced by anchor strategies in Detroit, Cleveland, Chicago New Orleans, Newark, and Memphis.
The work is hard, without a doubt, and it a takes a long time to get it into motion so its important that we continue to share best practices and lessons across institutions and cities to save us all time, money, and brain damage.
Think about sustainability of strategies
I found that many of the anchor institution division leaders were not from Baltimore, commuted in from surrounding jurisdictions, and were not familiar with community needs or the availability and types of businesses. We needed to educate them about city, workforce, and local small business needs. We have found that if you inform and educate decision makers and build good partnerships, they can do this work on their own.
Sustainability is also about modifying processes and policies and I’m glad to see that it is one of the buckets of work you have planned to focus on. One of my favorite examples that I like to share about why this is important – we had an institution that only reviewed the first 50 resumes that came in the door and posted jobs only online and at midnight. In a city where a large share of the residents do not have a home computer and internet access, this approach automatically puts them at a disadvantage.
Sustainability and policy is also important because of turnover. The work needs to be led by dynamic individuals in institutions, but inevitably there is turnover in leadership. This has been a particularly challenging problem. It takes significant time for a new human resource leader to get acquainted with their direct job duties and even longer to get them to understand the anchor mission, community context and the need to restructure their policies and practices.
Partners are also critically important. Work to position partners and intermediaries that can naturally take on the roles of helping matching opportunities with residents and businesses while supporting capacity building. If you can find a way to turn the institutions and partners into champions for this work and modify their approaches, the ideas you are moving forward ultimately sustain themselves and the work happens on its own.
You may need to foster supply side capacity building strategies as well as the strategies you are focusing on with the institutions.
We found a mixed capacity of businesses ready to work with institutions and a need to match spending strategies with business development supports to increase the level of success. Several of the institutions have invested in entrepreneurship and business development programs. The BIP has supported 4 with funds we have raised and there are currently 7 business development programs underway that are expected to serve about 200 businesses this year.
And on the supply side, consider and work to understand the health and connectivity of the small business ecosystem and encourage partners to work on solutions to any challenges. I can’t stress this enough. This an important supply side strategy that will extend outcomes from this work considerably.
Community voice is important to success.
Make sure there are voices from communities who you are intending to benefit from the work, be a part of the work. We have turned to a variety of representatives of the workforce and business communities including the Chamber, public partners, workforce development organizations and advocacy groups to ensure the strategies reflected community needs and challenges.
There is no silver bullet with purchasing.
Purchasing is complex with many authorities responsible for a variety of different purchasing types spread throughout the institutions. You need leadership at the CEO Level for authority and commitment but ALSO buy-in and leadership by middle managers and purchasers is key to success. And these representatives are under budgetary pressure to keep spending down to manage the affordability of tuition and healthcare costs. Often, they are asked to do more and more with less which makes buy local strategies challenging because of additional time and resources sometimes needed. You have to make the case and keep making the case about the value and importance of this work to multiple levels of buyers and leaders within each institution. For example, if you focus on food, there are food service providers, gift shops, chefs, students, staff as well as the administrative assistants who ultimately make the orders for catering.
Multiple purchasing strategies are needed.
This past year we moved forward three distinct strategies focused on three very different sets of buyers. They included an event with the chamber of commerce that focused on larger upcoming contracts; a demand driven local foods strategy supported with business coaching; and an initiative focused on connecting the spend of gift shops, books stores, marketing and promotions departments with products that are Made in Baltimore. This last strategy also includes workshops to help with capacity building. And there are other spending structures in the institutions for sure. Construction activities are very different.
Balance quality with quantity
Don’t just measure your spend with big dollars. My colleague Kim Bryden noted recently that we often measure the spending power of institution by the $10s of millions of dollars. But its small purchases, such as a monthly $2000 purchasing order, that can be transformative for a small business. Getting the institution to think about how it can break out the million-dollar contract into smaller digestible parts is an important part of the work in front us. A large multi-million-dollar firm, depending on the size of the contract, might just absorb the new spend and not yield new net benefits for the community.
A collaboration offers some very distinct advantages in procurement.
Small institutions may not have the big dollars but I’m finding they can do some of the most meaningful work because their procurement may be more in-line with smaller businesses and their processes are often less bureaucratic. Similarly, consider how to engage the private sector also as buyers in your strategies particularly if you have vendor fairs and matchmaking strategies. There will be some businesses that are not a fit for the institutions but they might be a fit for other private sector needs.
The spending and hiring power of one institution may not be enough to sustain a strategy but 5 or 10 can be. Using the collective hiring demand, we helped create an administrative assistant training program that works with about 30 individuals each year. The anchor HR leaders participate on a steering committee guiding the curriculum, help with mock interviews, job shadowing, and consideration of candidates for jobs. 96% of the graduates were placed last year. Similarly, spending from four institutions and a foundation has helped to create a social enterprise, City Seeds, focused on grab and go food available at the institutions as well as catering. They incorporate workforce development for individuals with barriers to employment, they incorporate local food from area businesses, and have also launched business development classes focused on the needs of food businesses.
Be clear about who you intend to serve by your work as it will guide your work, efforts, and engagement.
Buy local strategies can create some very strong net benefits. In Baltimore, some of our largest businesses would qualify as a local business but supporting them is not the intention of the work. I would rather have those large businesses buy more from small and particularly minority owned suppliers. Set intentional strategies for disadvantaged and particularly minority owned firms and surround yourself with diverse leaders to ensure the strategies consider needs and approaches unique to racial and ethnic businesses. Consider training to address implicit bias – that is an approach we have taken on. Our cities have been divided by decades of racialized policies and that legacy can still affect institutional and partner policies and practices. We don’t know what we don’t know!
Lastly, Celebrate Success and Have Fun.
This work is hard and it is predicated on many different actors. Strive to recognize their work and lift it up. Consider the various ways to embrace and support the work of your partners to give credit where it is due.
Don’t just focus on numbers - highlight the work and opportunities created for people and tell that story. There is no better joy than to see workforce training program participants graduate, with tears in their eyes, and get good jobs. And to see small businesses land that first contract and grow. Those stories aren’t always the successes that make the headlines but they are ones most meaningful to the city you are here to serve.
THANK YOU and Good Luck!
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