Anchor institutions are corporations, nonprofits or other entities that are “anchored” in their communities. That is, they are rooted in places or neighborhoods and tend to control significant assets, including real estate. The typical anchor institutions are universities and hospitals – the so-called “eds and meds” – and are among the largest employers in the American economy.
In a September 2017 presentation for the International Economic Development Council, LISC Economic Development Director Elizabeth Demetriou noted there are 7,000 colleges and universities in the United States, spending $500 billion annually on goods and services. A quarter of these are located within inner cities and in the 20 largest cities, they are among the top 10 private employers.
Neighborhoods like West Philadelphia and Roxbury in Boston are home to large universities, but they are also among the most challenged communities across the country. In the past, these entities tended to isolate themselves within their campuses and remain disengaged from the communities around them. Some even had antagonistic relationships with their neighbors. But LISC and others are tapping the potential these large and resource-rich institutions can offer. LISC is helping shape and guide neighborhood-based work with anchor institutions in several cities, including Toledo, Boston, Philadelphia and Indianapolis.
Anchor institutions can contribute to their local communities in several ways. Experts sum up the three major roles as “Hire, Buy and Live”: Anchors can hire employees from the local community, buy needed goods and services from local small businesses, and develop and preserve real estate in their surrounding neighborhood to create places for local residents and anchor employees to live and shop. LISC’s experience working with anchor institutions touches each of these roles.
Universities and hospitals are large institutions and necessarily have thousands of employees. But such anchors are often located in areas where unemployment and poverty are high. The Mercy Health system, the largest health system in Ohio and one of the largest nonprofit health systems in the country, has 32,000 employees in more than 450 facilities, including 23 hospitals throughout Ohio and Kentucky. In the Cherry Street neighborhood adjacent to Mercy’s St. Vincent campus in Toledo, however, unemployment exceeds 26%. This might seem paradoxical, but we know that people in low-income neighborhoods are often hampered in the job market by a lack of essential skills. Connecting with a local workforce or economic development nonprofit can help anchors establish a pipeline of trained workers and help community residents find opportunity with a large and stable employer.
LISC Toledo has engaged with Mercy Health and with ProMedica Health System, another major healthcare system with hospitals in the city. Mercy Health is working with LISC and neighborhood partners on an array of programs in the Cherry Street Corridor, adjacent to its Mercy St. Vincent’s campus. ProMedica is concentrating in Downtown, having moved its headquarters to Downtown Toledo and committed to investing there. Two years ago, ProMedica invested in a long-vacant building to bring a supermarket, Market on the Green, to the Uptown neighborhood, which lacked access to fresh food. ProMedica is operating the supermarket itself, hiring personnel from the surrounding neighborhood, and views it as a training site, providing a pipeline for residents to entry-level jobs within the health system. LISC partnered with ProMedica to establish a Financial Opportunity center at the market, which provides financial coaching, benefits access and workforce training skills to hospital employees and neighborhood residents alike.
Large institutions are also significant purchasers of goods and services. Their purchasing power can be a boon to small businesses in their communities, especially minority- and women-owned businesses. Winning a contract from a large institution can be world-changing for a small enterprise, but getting the opportunity can be difficult. That is where a local champion or intermediaries can help smooth the way. A community group with knowledge of and ties to local vendors can help connect the anchors to options for purchasing that may be right under their noses.
In Boston, LISC has teamed with Northeastern University to develop a procurement strategy connecting small businesses in Dorchester, Mattapan and Roxbury to business opportunities with the university. A local LISC partner is holding procurement training to teach local businesses and entrepreneurs how to navigate the purchasing system. With Northeastern’s financial support, LISC has developed a lending program that provides accessible and affordable capital to small businesses in the surrounding geography.
The neighborhoods surrounding many anchor institutions are communities of opportunity. They have the potential to house university or hospital employees, to establish businesses that serve them and to thrive and grow by doing so. Universities and hospitals began in the last decade to recognize this potential and invest in real estate and housing in their neighborhoods. Helping transform the physical environment creates opportunities for employees to live close to work, and makes the neighborhoods their employees work in and their clients visit safer and healthier.
In Philadelphia, the University of Pennsylvania represented the leading edge of neighborhood revitalization efforts by anchor institutions, investing in the West Philadelphia Initiative starting in the late 1990s. LISC Philadelphia has worked with the University of Pennsylvania and, more recently, with Drexel University to create and preserve housing options near the campuses. LISC Philadelphia helped connect the University of Pennsylvania with local neighborhood organizations and develop a broader comprehensive approach in the early 2000s. The University raised more than $50 million to create a Neighborhood Housing Preservation and Development Fund as part of that broader effort. In a community where neighbors had long viewed the universities with distrust, LISC helped community groups and Drexel come together in 2011 for a collaborative community engagement effort that resulted in a Transformation Plan built around a Choice Neighborhood grant to a local nonprofit housing developer.
Anchor institutions’ engagement with their communities is seldom single-purpose. In Philadelphia, LISC is working with universities not only on housing development, but also on procurement and workforce strategies, early childhood education and out-of-school time programs. Drexel University has demonstrated its commitment by establishing the Dornsife Center for Neighborhood Partnerships, which provides an array of community programs and services on which Drexel faculty and students work alongside neighborhood nonprofits and service providers.
In Toledo, Mercy Health and ProMedica are partnering with LISC on comprehensive community development strategies in the Cherry Street corridor and Downtown/Uptown neighborhoods, including housing and health programs. LISC Toledo Executive Director Kimberly Cutcher notes that these efforts have had both tangible and intangible impacts. When the anchors really “get” community revitalization, they have the assets and ability to move the needle effectively. Through its work with LISC, Cutcher says, ProMedica “understand the importance of site control in moving comprehensive community revitalization efforts forward” and has therefore focused on actively acquiring property in Downtown and adjacent neighborhoods. As a result, “the conditions of the neighborhood have improved” by working with community partners to develop strategies to purchase and remediate blighted lots and buildings.
As for Mercy Health, a focus on community engagement is paying off. The institution’s St. Vincent’s campus now hosts Cherry Street community meetings, as well as business classes for minority and women entrepreneurs. Cutcher says, “I think the work that Mercy has done has gotten the residents around the hospital used to seeing [it] as a community space they have access to, and that has built so much goodwill with the residents.”