Donald Trump will not be president forever, but in his time in office he can do substantial damage in many areas of American life. As one donor told us, “We risk having 40 years of progress in community development unraveled in the next 18 months.”
Principally, that’s because the new administration, along with Republican congressional leaders, is targeting federal spending on social programs and community development — a major bulwark against the consequences of generational poverty and ever-growing wealth inequality. Hundreds of billions of dollars are at risk.
Philanthropy, which awards about $60 billion in grants annually, cannot possibly meet this shortfall. But it can help ensure that when the political winds change, as they inevitably will, the pieces are in place for a progressive agenda. One key way to do this is to support innovative local and regional programs that can be expanded nationally when the opening occurs.
Historians trace the roots of this idea to pre-Depression experiments in state and local “laboratories of democracy.” Farmers formed cooperatives and federations that helped them bear hardships and share prosperity as economic conditions waxed and waned. Visionary leaders in hundreds of cities established publicly owned sewer, water, and electrical systems to serve people better and more efficiently. Alaska developed one of the first state programs to assist elderly people who did not have family caregivers.
These and other efforts became the basis for Social Security, national agricultural investment, and the Tennessee Valley Authority.
Today’s laboratories of democracy include nonprofits and social ventures pursuing approaches that could be widely applied in the post-Trump era. Taken together, they reflect the moral and strategic importance of developing parallel efforts in the three major political-economic constituencies that must be involved in any serious approach: African-Americans, Latinos, and the white working class.
Some promising examples:
- In the 1960s, the Ford Foundation and the federal government invested millions of dollars in community-development corporations conceived as expansive engines for urban economies. Retrenchment in the Nixon and Reagan eras largely reduced these organizations to building low-income housing and helping small businesses. The New Community Corporation harkens back to the earlier model. This neighborhood nonprofit in Newark, N.J., has roughly $500 million in assets and employs more than 500 people. Along with managing 1,800 housing units, its enterprises include a shopping center and a construction company. Proceeds support a broad array of projects and services, including day care, adult learning, a nursing home, and training programs for careers in auto repair, health care, building trades, and the culinary arts.
- The East Los Angeles Community Union is one of the most successful community-based business-development efforts in the country. Established in 1968 with assistance from the United Auto Workers and other unions, it has moved well beyond basic work on housing, education, social services, and job training to achieve far-reaching economic impact, creating and controlling business ventures in banking and finance, construction, real estate, even a restaurant. The group’s college-readiness program prepares 1,600 students a year for higher education, and the organization offers financial support for undergraduate and graduate students and a program to train students for careers in health care.
- Cleveland’s Evergreen Cooperatives has created three closely linked, employee-owned businesses: an industrial-scale laundry that operates at the highest ecological standards; a company that weatherizes buildings and installs solar panels and energy-efficient lighting for residential customers, municipal buildings, and the offices of major nonprofits; and a hydroponic greenhouse capable of producing 3 million heads of lettuce and 300,000 pounds of herbs a year. Community impact is as important as growing the businesses, with “anchor” institutions like hospitals and universities that have significant stakes in the regional economy serving as both partners and key customers. Richmond, Va., and Rochester, N.Y., are among several communities exploring related models.
- Already demonstrating the potential to expand, Cooperative Home Care Associates is the largest worker-owned cooperative in the United States with 2,000 mostly African-American and Latina employees — more than half of them worker-owners. A certified B corporation, the cooperative provides home health care to sick, elderly, and disabled residents in Brooklyn, the Bronx, and Queens. It also maintains a work-force-development program that provides free training, mentoring, and other support to some 600 low-income and unemployed women. In 2000, the organization helped create the Independence Care System, which is now a $500 million managed-care organization that employs 300 people and serves 5,000 elderly and disabled clients.
- Fifth Season Cooperative is a group of family farms, food processors, distributors, and buyers in western Wisconsin that illustrates the possibilities for co-ops in rural areas. Fifth Season collects fruits, vegetables, dairy, and other products cultivated within 150 miles of its headquarters and sells them to food cooperatives, restaurants, and grocery stores. The buyer-members also include major institutions such as school districts, University of Wisconsin campuses, and the Mayo Clinic; as with Evergreen in Cleveland, these institutions’ large-scale purchases help keep Fifth Season sustainable.
Policy and Strategy
New public policy can create a welcoming environment in which such local innovations can flourish and expand. Consider the Community Self-Determination Act of 1968, put forward by a bipartisan coalition of more than 30 senators. The bill envisioned the creation of locally controlled and managed community corporations that would own businesses and provide social services. The approach also included major federal funding for business, management, and legal training; tax breaks for the supported companies until they reached a certain level of development; and the formation of community-development banks.
The bill was much debated and passed only in a weakened version, attached to another piece of legislation, but the expansive design of the original might help inform the development of nationwide, community-based ownership strategies in the post-Trump era.
A round-up of news coverage by The Chronicle of what’s at stake for nonprofits, as well as opinion pieces by charity leaders and philanthropy experts on negotiating this new environment.
Another instructive example comes from Youngstown, Ohio, where in the late 1970s a coalition of steelworkers, clergy, and grass-roots activists sought to buy and refurbish an abandoned steel mill and re-employ thousands of laid-off locals. The effort won backing from both liberal and conservative state leaders, including then-Gov. Jim Rhodes, a Republican, and the Carter administration provided planning money. The project was ultimately undermined by corporate opposition, but elements of its design could inform future community-worker cooperation in industrial development.
More recent years have seen the growth of numerous community-minded alternative structures for businesses and social ventures that could achieve large-scale impact as part of a broader economic strategy. These include worked-owned enterprises like employee stock-ownership plan companies; B corporations; land trusts; and worker-managed factories.
Hundreds of communities have also begun developing municipal-ownership strategies, such as public banks (many based on the nearly century-old, state-owned Bank of North Dakota); community broadband networks (Chattanooga, Tenn., is a pioneer); and publicly owned energy companies (Boulder, Colo.’s “municipalization” of its electricity generation, for instance).
A number of evolving rural models might be fortified and moved to much larger scale. Eastern Kentucky’s Shaping Our Appalachian Region is developing a blueprint for transforming the regional economy as climate-change realities render coal obsolete. Target areas range from tourism and food production to improving broadband access and building digital small businesses. The Cooperative Development Center of New Mexico has helped create a number of agricultural cooperatives in “indigenous, Mexicano, and Chicano” communities and is working to establish a revolving loan fund, governed by co-op members and financed by proceeds from the cooperatives, to provide money for additional economic development.
Donors and foundations looking to support such work would do well to remember that community organizing goes hand in hand with building lasting economic institutions. A good model here is PUSH Buffalo, which is attempting to do both.
Founded in 2005, PUSH (the name stands for People United for Sustainable Housing) seeks to achieve affordable housing, equitable jobs, and ecological sustainability through campaigns aimed at banks, utility companies, large corporations, and government at all levels. It has worked to develop housing and boost community services through its neighborhood center, and it has opened a green-jobs pipeline via its PUSH Green program. That effort aims to create a sustainability and employment loop by organizing customers to generate demand for weatherization and energy efficiency and recruiting residents into training programs for jobs at companies that provide such services.
There is little doubt that the pain of the Trump era will fall heavily on those who are most at risk, whatever their race or ethnicity and wherever they live. In the face of this very real potential, helping communities cultivate political-economic models that not only thrive locally but can be adapted for regional and even national impact is one of the most important things philanthropy can do.
Gar Alperovitz and Ted Howard are co-founders of the Democracy Collaborative, a research and community-development center that works to build a more democratic economy.
