Coordinated Funding Strategies for Equitable Development
The challenges of population loss and a high poverty rate illustrate an opportunity for collective action among philanthropies in the Mississippi and Arkansas Delta to create a network with a focus on building a thriving region.See Sydney Diavua and Nishesh Chalise’s November 2021 Bridges article “Investing in a Region of Opportunity: The Delta Philanthropy Forum.” St. Louis, particularly the north corridor,See Neelu Panth’s March 2022 Bridges article “A North Star for Revitalizing North City.” has faced similar challenges that can benefit from a coordinated effort to deploy diverse capital sources to achieve deep-rooted impact and foster equitable economic growth.
This article examines and shares the work of the St. Louis Fed’s Community Partnerships and Investment (CPI) team in organizing and convening cross-sector funders representing philanthropy, financial institutions, community development financial institutions and others through its funder forums. CPI has supported the Delta Philanthropy Forum (DPF) since 2019 and launched the St. Louis Community Development Funders Forum (CDFF) in 2021.
Events of 2020 Emphasized the Need for Funders to Coordinate
A 2021 Federal Reserve System report indicated that it may take anywhere from one to three years for low- to moderate-income communities to recover to pre-pandemic economic conditions.See Nishesh Chalise and Violeta Gutkowski’s October 2021 report "Perspectives from Main Street: The Impact of COVID-19 on Low- to Moderate-Income Communities and the Entities Serving Them." Almost a quarter of entities surveyed for the report also noted that pre-pandemic conditions for housing stability and small businesses may never return to the low- to moderate-income communities they serve. While federal stimulus programs provided some relief for organizations and their clients, they were not enough to ensure the long-term health of these organizations or the recovery of communities that were struggling pre-pandemic. The call for racial justice further demanded system-level change in uplifting historically marginalized communities.
CPI convened community stakeholders and funders across the Fed’s Eighth District to understand how capital was being deployed and absorbed for immediate impact and what was needed for equitable and sustainable recovery work. We learned that collective and trust-based grant-making was beginning to gain momentum in many regions, especially in St. Louis and the Delta.
While DPF gave Delta funders a head start, funding organizations and others in the St. Louis community and economic development ecosystem recognized the benefit for a similar forum to organize and develop long-term, coordinated strategies. DPF provided a strong framework for the St. Louis CDFF.
Efforts to Build a Coordinated Agenda for the Delta
As previously mentioned, DPF was launched in 2019 by a group of more than 30 national and regional funders, funding intermediaries and other supportive partners with a shared interest in improving outcomes in the Mississippi and Arkansas Delta. The impact of the COVID-19 pandemic and the need for racial equity further solidified its vision to advance economic resiliency in the region.
Through two pillars of work identified by DPF members—Investing in Capacity: People and Systems and Collective Impact and Collaborative Funding—DPF now seeks to create more sustainable funding pipelines for community and economic development initiatives. As described by Abby Hughes Holsclaw, senior director of Asset Funders Network, “DPF will be the guiding beacon to shine attention on the region’s promise and attract new resources and strategically deploy capital to equitably strengthen communities.”
DPF has advanced these goals over the last four years. In 2021, the steering committee hired a consultant to build out DPF’s core infrastructure, branding and priority areas. One of the action plan’s immediate first steps is the formation of a nonpartisan Philanthropic Advisory Table, which will build, strengthen and institutionalize relationships between state government and the philanthropic sector in Arkansas to identify opportunities to leverage public and private resources. Justin Archer Burch, program director of workforce development at Rural LISC, commented: “By aggregating our resources as a collective, we are better able to create scale in place and to leverage the work.”
A Budding Funders Forum in St. Louis
In St. Louis, community and economic development funders have been exploring ways to communicate effectively and coordinate their efforts. Following the events of 2020, CPI hosted a funders roundtable and several one-on-one outreach sessions with key financial institutions, local foundations and government agencies to understand how they were pivoting and what they needed to meet growing service and funding demands. Through these conversations, it became evident that a funders forum could be very valuable for the St. Louis community and economic development ecosystem.
CPI launched the St. Louis CDFF to strengthen the city’s ability to attract, deploy and absorb capital for sustainable community development. According to Ryan Barker, vice president of responsive philanthropy at the Missouri Foundation for Health, the forum has created a virtual table where a diversity of funders can come together and understand one another’s capabilities and priorities. Another benefit of this model is that it allows the community to voice its needs to many funders all at once instead of one by one.
CDFF currently has more than 20 participants representing foundations, financial institutions, economic development organizations, civic groups and government agencies. CDFF recently identified strategies for co-investment in the areas of building capacity for community development organizations, increasing access to capital for wealth building in historically marginalized communities, and coordinating and aligning capital to strengthen the community and economic development ecosystem in the St. Louis region.
Natalie Self, senior vice president of equitable economic impact at the St. Louis Cortex Innovation Community, remarked that she is excited to pursue these action items in the months ahead and believes that St. Louis is fortunate to have a high number of local funders with interest in creating a better, healthier and more equitable region. She commended CDFF for providing much-needed infrastructure for organizations with resources to move toward solving challenges in a strategic and coordinated way, maximizing the return on local funders’ investment activity.
Through these formal infrastructure and funding strategies, the Delta Philanthropy Forum and the St. Louis Community Development Funders Forum are poised to transform how capital flows and is absorbed for equitable and sustainable growth among historically marginalized communities.
Notes and References
- See Sydney Diavua and Nishesh Chalise’s November 2021 Bridges article “Investing in a Region of Opportunity: The Delta Philanthropy Forum.”
- See Neelu Panth’s March 2022 Bridges article “A North Star for Revitalizing North City.”
- See Nishesh Chalise and Violeta Gutkowski’s October 2021 report "Perspectives from Main Street: The Impact of COVID-19 on Low- to Moderate-Income Communities and the Entities Serving Them."