Kresge-Brookings Summit: Washington, D.C

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Thank you, Alan. And thank you to your extraordinary team for pulling together this very ambitious event. It promises to be fascinating and productive.

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For the last two years, the philanthropic biosphere, think tanks, and local governments have been – appropriately – transfixed by the question of how to land federal dollars in place.

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We’ve seen a proliferation of efforts within philanthropy, among federal agencies, and across national trade organizations to facilitate, accelerate, or otherwise enhance the ability of localities to draw down those federal dollars.

• Think the Local Infrastructure Hub masterminded by Bloomberg Philanthropies and the National League of Cities, which prepares small cities and towns to make successful applications for competitive federal grants . . .
• Or Hyphen, an effort to devise approaches for philanthropy to co-invest alongside government . . .
• Or the What Works Plus collaborative, which serves as a central information clearinghouse for creative and effective local draw-down strategies . . .
• Or countless others focused more narrowly on the nuances of accessing the funding flows aimed at public health, water infrastructure, public transit, or workforce development.

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All of this is tremendously important and worth every ounce of the time, money, and brain power dedicated to it. Individually and collectively, they are a powerful jump-start to a process of
unfathomable complexity and profound import.

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And yet, they are just a jump-start. It can be argued that the more difficult challenges lie ahead.

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Accessing those dollars may be a necessary ingredient to positioning our communities for the waves of challenges rolling in – upgrading essential infrastructure, moving catalytic dollars into climate preparedness, training our workforce for the next-generation tech and energy economy, eliminating health, education, and income disparities among communities of color.

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But they are not sufficient. They themselves simply won’t do the trick. We accordingly need to talk as much about imagining . . . and implementing . . . and sustaining as we do about drawing down.

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That is the substance of the next hours we’ll spend together – how to ensure that these dollars become more than one-time spikes in civic expenditure and instead take on qualities of community transformation.

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Those topics run the risk of falling a bit short of stirring our souls. They often don’t generate press releases. But without smart implementation and without adopting approaches that can be generative over the long-term, we will be coming together in 5 years, 10 years, or 15 years and asking ourselves, “What happened? How on Earth did we manage to let this opportunity slip through our fingers?”

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From Kresge’s perspective – based on our team’s deep local work in Detroit, Fresno, Memphis, New Orleans, and other cities – three elements appear to be essential to getting it right: First, activating – or building – cross-sector and cross-disciplinary capacity to plan for, absorb, and distribute these funds.

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Second, reverse-engineering the right forms of capital . . . in the right doses . . . in the right sequence . . . and through the right channels to stimulate market investment.

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Third, unpacking and redistributing risk based on who can take more and who should bear less.

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And arching across all three is the understanding that these imperatives must be placed in service of mitigating and adapting to climate vulnerability and pursuing reparative racial equity.

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Now, there’s not enough coffee in the building to keep you awake while I populate each of those buckets with examples. That’s the charge of our panels. So, let me instead unpack each of the three at a slightly higher altitude.

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So, first, activating cross-sector and cross-disciplinary responses.

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No single entity – no matter how dedicated, how experienced, how high in capacity – can activate these federal dollars all by itself. Although local governments hold the election certificates, they also have to struggle with the regular churn of personnel and the cadence of local elections marching on without regard to federal spending deadlines. And that is not to mention that the nonprofit sector is often the execution arm of the municipal public policy apparatus.

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The bottom line: you need a big, distributed team now more than ever.

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That is certainly one of the messages you’ll hear from Ashley Swearingen, the head of Fresno’s Central Valley Community Foundation, when she describes the monies flowing into the Fresno DRIVE plan, a blueprint that emerged from more than 300 individuals representing more than 150 civic, community, and business stakeholders.

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Places that have built the muscle to work across disciplines and across sectors are the ones who not only draw down the dollars, but also have a tremendous advantage in both spending them well and effectively extending the implementation horizon.

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The best time to build that muscle was 10 years ago. The second-best time is now.

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It is not too late – it is ALMOST too late, but not quite too late – to build the team with the capacities to spend federal funds for transformation. You’ll notice I said capacities, plural.

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Because:

• You need: an alignment among organizations to ensure that the full spectrum of civic capacities is well positioned, well-resourced, and well-informed about the opportunities potentially moving in their direction.
• You need: the people who can reset not only what elements of infrastructure are built, for whom, and to what purpose, but also who designs that infrastructure . . . who builds it . . . what roles nonprofit delivery systems and local procurement policies can play.
• You need: a range of actors to invest in the community-based capacity to hold the decision-makers accountable.

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Next, the second bucket: re-imagining capital configurations and deployment channels.

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Even more than the ARPA dollars, the dollars flowing from the infrastructure law and the inflation reduction act need steering – steering away from the projects bound up by the inertias of traditionally-conceived and -executed public works projects.

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It is all too tempting for cities default to civic auto-pilot, ensuring that the dollars move in channels of least resistance – channels that meet the needs of rapid deployment or political expediency, not the imperatives of advancing equity or facing down climate change.

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And yet, scores of examples are emerging in which cities are reimagining those channels in bold and innovative ways – braiding together multiple forms of capital from various sources to carry federal dollars the critical last-mile to projects that deliver for low-income communities.

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Just a quick example from our hometown of Detroit, where the city is using federal dollars to create a 30-mile greenway circling the city, a la the Atlanta BeltLine. The city is paying to clear the right of way and lay the pavement. But to catapult from concrete to community-building will require an investment of philanthropic dollars, community sweat equity, CDFI financing, and other sources of creative capital to build out safe, inviting, and connected communities along the greenway’s edges.

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Finally, the third bucket: redistributing risk.

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People in this room, and indeed around the country, are being called on to navigate a trifecta that simultaneously advances racial equity . . . contributes to a carbon neutral future . . . and puts dollars to work within an aggressively tight expenditure window. That ambition is unprecedented. So too is the level of risk.

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We can be assured that things will not go as planned . . . that decision-makers will make some bad decisions . . . that there will be front page stories – and partisan vituperation – about failed projects and unrealized visions.

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Opting for caution – for the default setting – in the face of that risk is all too tempting. But it is unacceptable.

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Reinforcing and fortifying the status quo – one of perpetuated inequalities in health, education, economic mobility, and every other dimension of community life . . . one of flooded streets, incinerated forests, unbreathable air, and crushing heat – is to relegate our children to a dystopian, unjust, and unsustainable future. It is crystal clear who will be left holding the bag for our non-performance.

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So, the choice is not whether to embrace risk, but how.

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Philanthropy has a suite of tools we can use to lower the perceived risk of public and private investment in communities, including grants, loans, guarantees, equity investments, and any number of other tools. But our role needs to be played in the context of a civic framework of interwoven and mutually assumed responsibility among all the sectors.

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Let’s think about what that might look like in the context of a new manufacturing plant built with federal subsidies from the CHIPS and Science Act.

• We could imagine a robust and rigorously enforced community benefits agreements.
• We could expect a variety of federal, state, and local subsidies that serve to de-risk the private sector investments in the plant.
• We could foresee companies making commitments to job creation, prevailing wages, and worker and community investments.
• And we could foresee various sectors contributing to building regional capacity for the kind of training and supply chain enhancements necessary to generate a healthy pipeline of workers to hire and businesses from which to purchase.

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The goal should be a methodology in which every sector – public, private, philanthropic, or non-profit – contributes to the success of a regional economy, an industry, and businesses and families – rather than the one-sided giveaways that have too frequently characterized these investments in the past. Each part of the calculus is connected to, and bolstered by, the others in pursuit of genuinely shared prosperity.

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Let me close by acknowledging the very practical pressures you all are facing.

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Because the federal stopwatch is ticking, local governments must make big decisions in the near term. That creates an acute tension.

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On one hand, if cities move too fast, they risk spending the money in ways that won’t achieve the ambitious goals they and the Administration have set – staggering sums that cities are unlikely to see again.

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On the other hand, if cities move too slowly – paralyzed by the high aspiration and degrees of difficulty of transformation – they could readily bog down, surrender to overwhelm, and revert to the quick and easy.

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The only escape route, it seems to me, is to sight against a more distant time horizon.

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The transformation we seek doesn’t happen in a moment, or a single presidential administration. If we – all of us and all our partners – can step back and contribute to a decision-making framework that comprises both short-term victories, intermediate milestones of progress, and long-term recalibration of public systems, we have a shot at getting this right.

• That approach helps us to be accretive, with each new infusion of federal funds opening new pathways for investment.
• It enables our actions to be compounding, with each project holding the potential for exponentially higher impact.
• And it contributes to civic efficacy, with each milestone bolstering the capacity of a place’s private, public, nonprofit, and philanthropic sectors to take on increasingly complex and difficult challenges.

A tall order to be sure. But the panels we’ll hear from today should make you feel good about our prospects of creating local structures that pull down and land federal resources in an equitable way. I think they will.

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Thank you.

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And now I have the honor of introducing our first panel: How Federal Investments Can Spur Equitable Growth. We will hear from the formidable team of Heather Boushey of the Council of Economic Advisors, Diana Lim of the Treasury Department, and Robert Simpson of CenterState CEO.