If federal Washington’s stew of partisanship and paralysis makes you worry about the country’s future, look instead to the American city, where nonprofits and foundations are acting as problem solvers in ways that go far beyond their traditional roles.
Locals and national experts attribute the city’s turnaround to the “Chattanooga way” — leaders from government, business, and philanthropy working together to improve the community as a whole. Thanks to such collaboration, the city today features robust private investment downtown, a scenic walkway along the Tennessee River, and a growing roster of tech start-ups.
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Chattanooga is prospering again after many years, thanks in part to a philanthropy-fueled riverfront renaissance.
Urban planners flock to Chattanooga to learn how a city that was once dying and dirty became a model of urban progress.
If federal Washington’s stew of partisanship and paralysis makes you worry about the country’s future, look instead to the American city, where nonprofits and foundations are acting as problem solvers in ways that go far beyond their traditional roles.
Locals and national experts attribute the city’s turnaround to the “Chattanooga way” — leaders from government, business, and philanthropy working together to improve the community as a whole. Thanks to such collaboration, the city today features robust private investment downtown, a scenic walkway along the Tennessee River, and a growing roster of tech start-ups.
But the work continues: Low-income and African-American residents too often lack the education and skills to compete for the new jobs.
Two local private foundations — Benwood Foundation (with assets of $102 million) and Lyndhurst Foundation ($140 million) — played key roles in the rebound, and they remain front and center as the city works to spread the benefits of its revitalization. Both foundations are focused primarily on Chattanooga, with grant-making budgets of $6.7 million for Benwood and $5 million for Lyndhurst.
“We were in a crisis for a while, and at that time, any prosperity was so welcomed,” says Sarah Morgan, Benwood’s president. “Now it’s about what kind of prosperity: Are these living-wage jobs? And what does it take to land one of them?”
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Wealth From Coke
The two foundations derive their assets from executives who led Coca-Cola’s first bottling company, which was established in Chattanooga in 1899.
The city thrived as a manufacturing hub, but by 1969 the air had become so polluted that Walter Cronkite called it the “dirtiest city in America.” Lyndhurst led the initial turnaround, helping to organize efforts in the early 1980s that led to the creation of the Tennessee Aquarium and the Tennessee Riverwalk, a 13-mile trail that cuts through the city.
The $45 million aquarium — considered by many the beginning of Chattanooga’s resurgence — was built entirely with private funds, including a combined $20 million from Lyndhurst and Jack Lupton, the son of Lyndhurst’s founder.
Lyndhurst also helped create influential nonprofits like River City Company and Chattanooga Urban Design Studio that rallied the business community and drew up plans for public spaces. River City, which received $12 million from local foundations and banks, used some of the funds to buy 34 acres of land connecting downtown and the river.
Today, Lyndhurst is working to expand bike trails and routes that link to the Riverwalk, and the foundation supports a bike-share program, with 32 stations and more than 300 bicycles.
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“I cannot overstate how meaningful the investment in the Riverwalk has been,” says Benic “Bruz” Clark III, Lyndhurst’s president. “That has generated literally billions of dollars of new investment for our community.”
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A privately funded $45 million aquarium jump-started downtown revitalization.
‘Gig City’
Chattanooga’s revival gained steam in 2010, when the city’s publicly owned power company became the first in the nation to offer gigabit-per-second internet service. The Company Lab (Co.Lab), a nonprofit supported in part by Benwood and Lyndhurst, began aiding entrepreneurs through programs like Gigtank, which helps internet-related businesses gain access to mentors and investors, and 48 Hour Launch, a weekend competition to turn ideas into business plans. Both Benwood and Lyndhurst supported the city when it created a downtown Innovation District, anchored by the 10-story Edney Innovation Center, in 2013.
“The foundations convened people and helped to spur this activity,” says Andy Berke, Chattanooga’s mayor.
The efforts are paying off. Median household income in the Chattanooga area grew 8 percent last year, to $50,250 — the sixth-fastest growth rate among all metro areas.
Tech start-ups Bellhops and Skuid and the new logistics company Freightwaves have each attracted private investment totaling $5 million or more.
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Lunchtime meetings of the 400-member Rotary Club serve as “the city’s lecture hall,” says Tim Kelly, a local car dealer who serves on the boards of River City, Benwood, and the Community Foundation of Greater Chattanooga.
“We’re still at a Goldilocks size,” Kelly says. “People can come here, put their backs into the work, and feel like what they’re doing is making a difference.”
TAMI CHAPPELL/The New York Times
Once a manufacturing hub, the area now attracts start-ups such as Bellhops, a tech-based business that matches homeowners to companies that provide moving services.
Prosperity for All
The city is now turning to harder work: ensuring that all residents benefit from the resurgence.
As downtown has gentrified, African-Americans have been pushed out. Ken Chilton, an assistant professor at Tennessee State University in Nashville who formerly worked in Chattanooga, says census data shows that from 2000 to 2016 more than 4,500 white people have moved into neighborhoods in and around Chattanooga’s downtown core, even as more than 2,600 African-Americans left.
A 2016 report by Chilton found a lack of diversity on many foundation and nonprofit boards and argued that “the benefits of Chattanooga’s renaissance have disproportionately accrued to local economic elites.” Some residents, Chilton says in an interview, modify Chattanooga’s “Gig City” branding campaign in a way that sums up their own experience: “rigged city.”
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“There are too many people who feel like they’re stuck,” acknowledges Mayor Berke.
Maeghan Jones, president of the Community Foundation of Greater Chattanooga, says a hot topic locally is how to make the economy more inclusive.
“What are the strategies and tools we need to put in place to create pathways to economic mobility?” Jones asks.
552,000
Metro population
1.2
Nonprofits per 1,000 residents (Hamilton County)
$487 million
Itemized household charitable giving
Key charities: River City Company and Chattanooga Design Studio (economic and urban development); the Enterprise Center, the Company Lab, Launch Chattanooga (business development and entrepreneurship)
Key philanthropies: Benwood Foundation (assets of $102 million), Community Foundation of Greater Chattanooga ($150 million), Lyndhurst Foundation ($140 million)
“People can come here, put their backs into the work, and feel like what they’re doing is making a difference.”
In 2014, the Benwood Foundation paid $78,500 for a pilot program to help low-income people gain technology skills. Run by the nonprofit Enterprise Center, the 15-hour curriculum has been completed by 3,500 residents. The city and county now provide the majority of the program’s support.
“Everybody says you need to be connected,” says Ken Hays, president of the Enterprise Center, “but just being connected doesn’t mean much if you don’t have some education about how to use it to benefit your life.”
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Launch Chattanooga, founded in 2010 to address widespread unemployment after the recession, helps low-income Chattanoogans start businesses. African-Americans make up about a third of the city’s population but own only about 10 percent of its companies, according to Launch.
Launch is supported by Benwood, Lyndhurst, and the Maclellan Foundation (Chattanooga’s largest private foundation, with assets of $400 million, primarily focused on global poverty). The charity has helped 230 businesses start — and 88 percent are still operating.
Felicia Jackson, an African-American who grew up in a depressed neighborhood in East Chattanooga, attended a Launch course on entrepreneurship after coming up with the idea for a product that would guide users through CPR and make it easier to perform. She came up with the device, which includes a hand-compression guide and mouth valve, after her son, then 2, began choking; she says she “forgot what to do” even though she was CPR-certified. Her husband saved the child’s life.
“At the end of that course, I went from a drawing on a piece of paper to actually having my first prototype,” Jackson says.
Jackson’s company, called CPR Wrap, now has two employees and is looking to hire a director of sales. The company is working on sales and distribution deals with Delta Airlines, Walmart, and Ace Hardware, Jackson says.
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Many Launch clients start service businesses, such as food trucks, and struggle to obtain financing. In October, Co.Lab opened an office of the Kiva business microloan program — with support from Benwood, Lyndhurst, and the Community Foundation of Greater Chattanooga, among others — to connect online lenders with locals who have trouble getting conventional loans.
Chris Wolfe
Foundations are helping entrepreneurs like Felicia Jackson, founder of CPR Wrap, start businesses.
In 2015, a coalition of business and community leaders started Chattanooga 2.0, a cradle-to-career effort aimed at nearly doubling the percentage of county adults with a college degree or technical training certificate. The group wants to see that percentage rise from 38 percent to 75 percent by 2025. Benwood is among the organization’s backers.
“We’ve done the low-hanging, shiny, pretty stuff,” says Kelly, the car dealer who serves on the Benwood and community-foundation boards. “Now our work relates to economic mobility and education and breaking down the historical legacy of racism. That’s the hard work, and the work we need to do.”
Ben is a senior editor at the Chronicle of Philanthropy whose coverage areas include leadership and other topics. Before joining the Chronicle, he worked at Wyoming PBS and the Chronicle of Higher Education. Ben is a graduate of Dartmouth College.